Keep telecom industry Canadian, unions warn

Canada might lose control of its telecom industry if the federal government fumbles during the “foreign ownership” debate, the nation’s high-tech unions warned Friday.

The Communications, Energy and Paperworkers Union (CEP), alongside the Telecommunications Union, the Atlantic Communication and Technical Workers Union and other labour-minded groups said in a Dec. 6 statement that lower foreign ownership restrictions might lead to the Americanization of Canada’s telecom and cultural institutions.

The collective calls on Industry Minister Allan Rock to step lightly when considering lower foreign ownership restrictions. According to James Kinkaid, the CEP’s spokesperson, greater foreign investment could have a “devastating effect” on Canada’s communication’s industry.

Whereas certain telcos argue that lower foreign ownership restrictions spell greater investment and ultimately a more stable industry, the CEP predicts lost jobs, a weaker sector and a blow to Canada’s cultural identity.

Kinkaid said if Canada lowers the foreign ownership barrier, U.S. investors might purchase and dismantle Canadian companies, and port jobs south of the border.

Instead of investments, “we think there would be some buyouts,” Kinkaid said, indicating that U.S. investors would scoop up Canadian firms such as the newly merged 360-Group Telecom, move headquarters stateside and use U.S. fibre-optic networks for transport, rather than build more Canadian infrastructure.

“In terms of jobs, we don’t see any advantage to opening or lifting the restrictions,” Kinkaid said. “On the contrary, we think we could lose a lot of technical and service jobs. And in terms of research and development, there too we might see a brain drain to the States. That’s a major impact.”

The unions argue that Canada’s cultural institutions are at risk as well. Kinkaid notes how BCE Inc. owns not only Bell Canada and various other communications interests, but also the television broadcast network CTV and the national newspaper The Globe and Mail.

If a U.S. company bought BCE, the new owner would claim a major stake in Canada’s media sector as well as the telecom industry, Kinkaid said.

The unions suggest Industry Canada should be careful when mulling foreign ownership options.

“The government hasn’t done any real study on the implications of allowing greater foreign ownership in the telecommunications sector,” Kinkaid said, adding that the feds should consider potential problems associated with lower restrictions.

The unions requested a meeting with Industry Minister Allan Rock, but as of press time the coalition had received no response from the cabinet member.

“We only sent the letter two days ago,” Kinkaid noted.

Industry Canada announced in November that it would reconsider the nation’s foreign ownership restrictions in light of arguments from some telecom companies. Firms like AT&T Canada Inc. suggested greater foreign investment would allow them to further develop data and voice networks across the country. Meanwhile Bell Canada’s spokespeople argued that greater foreign investment does not necessarily spell salvation for the sector. Foreign ownership rules currently say investors from outside of Canada cannot own more than 30 per cent

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Jim Love, Chief Content Officer, IT World Canada

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