TORONTO - Federal Industry Minister Tony Clement says opening up Canada's telecom sector to allow more foreign investment will help Canadian companies get access to the money they need to be their best and will also facilitate competition to the benefit of consumers.
"We will be confirming that we are intending to move ahead with telecom reform when it comes to foreign direct investment and the need of having that reform," Clement told an audience Monday at the Canadian Telecom Summit.
"In the next few days I will be releasing a consultation paper on this subject as well and I will be looking forward to hearing your views on this issue. We will have a relatively short but important discussion period commencing with the release of that report in the next few days so we can get the feedback from both the industry and Canadian consumers."
Clement added that the ministry has set up a website to gather comment on the subject at Digitaleconomy.gc.ca.
Clement's speech comes as Canada's wireless sector begins to see more competition from some smaller players.
Cellphone service operator Globalive Wireless -- which is funded by an Egyptian firm -- began selling wireless services late last year, Mobilicity and Public Mobile began rolling out there services in May and Public Mobile, and other players, including Quebecor's Videotron unit, plan to enter the business as well.
However, analysts say it may be some time before increased competition makes any appreciable dent in the level of Canadian cellphone costs, which are higher than those in the United States and Europe.
Current telecom regulations limit direct and indirect foreign investment to 46.7 per cent.
At this point, federal regulators require telecommunications companies to be controlled by Canadians, and that includes all cable, satellite and wireless services, as well as television broadcasters. The exception to the rule is that a majority foreign, non-voting stake is permitted.
"None of this will involve changing the broadcasting rules or relaxing those rules," Clement said Monday.
"The focus is on the telecom side."
The government has said it wants to alter foreign ownership rules while maintaining the existing non-voting stake rule.
Some critics have found problems with Clement's plan, saying companies like Rogers Communications (TSX:RCI.B) and Quebecor (TSX:QBR.B) are both content providers and distributors, which makes it difficult to separate their functions.
CRTC chairman Konrad von Finckenstein said that both broadcasters and telecoms work hand-in-hand, which would make it very difficult to separate their functions through regulation.
Communications, Energy and Paperworkers union president Dave Coles has said he sees problems with easing restrictions on foreign investment.
"Privacy for individuals and security for the nation are both threatened by placing our critical telecommunications infrastructure into foreign hands," Coles said in a statement.
