Political wrangling will block reforms

The federal Liberal and NDP parties have announced they are prepared to oust Conservative Prime Minister Stephen Harper and form a coalition government.

And recently Bell Canada Enterprises (BCE) Inc., announced its corporate auditor, KPGM, is unable to deliver, by Dec. 11, “an opinion that BCE would meet the solvency tests.”

Despite the uncertainty over who is going to run BCE and who is going to run the country, one thing is for certain. The restrictions on foreign ownership continue to dog the Canadian telecommunications industry.

The Telecommunications Act requires that carriers have at least 80 per cent of their voting shares held by Canadians. This is one reason no single firm had deep enough pockets to buy BCE for $50 billion, and the consortium that did buy it relies on loans from four banks (only one of which is Canadian).

It’s not as if the mainstream political parties agree with the status quo. Nearly three years ago, the Telecommunications Policy Review Panel recommended a “phased” liberalization of the foreign ownership restrictions. The Industry Minister at the time, Conservative Maxime Bernier, said he would “carefully review the report.”

Three years earlier, when the Liberals were in power, the House of Commons Standing Committee on Industry, Science and Technology, recommended that foreign ownership limits be lifted. But the Standing Committee on Canadian Heritage recommended the opposite.

If the NDP and Liberals reach an agreement on a coalition and defeat the Conservatives, it’s a safe bet the Liberals won’t risk alienating economic nationalists by lifting foreign ownership restrictions. If Harper prevails, easing of foreign ownership restrictions is unlikely to be a priority.

Either way, serious reform of the Canadian telecom industry remains elusive.

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Jim Love, Chief Content Officer, IT World Canada

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