Budget sows confusion over telecom rules

The federal budget has confused opposition politicians and industry observers alike as to whether Canada will open its doors to foreign telecommunications companies.

The federal budget has confused opposition politicians and industry observers alike as to whether Canada will open its doors to foreign telecommunications companies.

In Thursday's budget, the government said it will increase competition and investment in the telecommunications sector, which will lead to greater innovation and lower prices for consumers by removing foreign ownership restrictions on satellites.

"This will allow firms to access foreign capital and know-how and to invest in new and advanced technologies," the budget said. "The removal of restrictions will also allow Canadian firms to develop strategic global relationships that will enable them to participate fully in foreign markets."

The budget did not say that foreign ownership restrictions on other telecommunications firms — cellphone and internet providers, for example — will be lifted, which was strongly hinted at Wednesday in the throne speech and by Industry Minister Tony Clement in interviews afterward.

Critics weren't clear on how allowing foreign companies to buy Canadian satellites would result in lower costs for consumers.

"They might have said great words in the speech from the throne yesterday but when you look at the details today, they're very thin. The actions are pretty underwhelming," said Liberal science and technology critic Marc Garneau. "On television, [Clement] sounded like, 'Yes we're definitely going to push for more foreign investment... We'll see what comes of that."

University of Ottawa internet law professor Michael Geist said the move on satellites may be the first step in a broader loosening of ownership rules, but the government's overall motives are still unclear.

He also said the budget wasn't consistent with the message delivered the day before in the throne speech, or with the government's previous moves on foreign ownership in telecommunications.

In December, Clement overturned the Canadian Radio-television and Telecommunications Commission on Globalive, a company the regulator had prevented from starting up because of its close ties to Egypt's Orascom.

"It does have the effect of creating a little bit of uncertainty as to how far the government is willing to go," Geist said. 

Garneau said he was disappointed by the budget overall, and was hoping for action on a national digital economy plan. The government continues to be vague about how it plans to ensure that all Canadians have access to fast and affordable broadband internet, which is the most important aspect of the future economy, he said.

"They've talked about the digital economy, so I thought maybe there'll be something good there today. But what they're going to do is study it," he said. "We're getting caught with our pants down. We were leaders 10 years ago and now we're being overtaken."

Charlie Angus, the NDP's spokesman on digital issues, said the government "just doesn't get it" on technological issues. The budget made more mention of spending on outdoor recreational infrastructure than on high-speed internet in rural areas, he said.

"Our grandkids are going to be paying off the money they spend fixing ball fields and there wasn't even discussion of broadband as key infrastructure," he said. "My daughter was in Rwanda in the summer and had better wi-fi wireless than she did in Ottawa."