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RoW Update

News | 02/24/2003 5:00 am EST

Foreign ownership hearings continue as unions, university professor clash
Parliamentary hearings surrounding the review of Canada’s current rules governing foreign ownership limits in the telecom sector continued last week as a coalition of unions opposed to changes in the rules went head-to-head with a McGill University professor advocating a tiered approach to foreign investment. In what was at times a heated exchange, the National Alliance of Communications Unions (NACU) told members of the House of Commons Standing Committee on Industry, Science and Technology on February 19 that important knowledge jobs would be lost if rules were changed to give foreigners control over telecommunications firms. On the other side of the debate, McGill professor Richard Schultz made an equally compelling, but contrary argument, saying that there is no hard evidence to prove that the removal of foreign ownership limits would have harmful effects on the Canadian telecommunications sector.
This isn’t the first time the Industry committee has heard the "maintain the status quo" message. A couple of weeks ago, a coalition of broadcasters told the committee that maintaining current rules was the only way to protect Canadian programming (RoW, Feb. 18/03). The NACU, with its five brothers seated at the table, advocated for the same holding pattern. As the broadcasters did, NACU raised several fears over the negative impact of the removal of the current limits.
Schultz, a noted telecom law professor, countered with a three-pronged argument as to why foreign ownership restrictions should be removed as quickly as possible. "The first is that the fear of negative consequences that presumably flow from foreign investment in telecommunications has been greatly exaggerated, unsubstantiated and contradicted by Canadian telecommunications history," Schultz told the committee. "The second is that the existing restrictions are not only demonstrably harmful for some of the current and potential players, especially new entrants, but more importantly may undermine the development of a vibrant, sustainable competitive telecommunications system in Canada. If this happens, it is my submission, the government’s innovation strategy will be hostage to the few telecommunications providers that remain."

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