Should the government take steps to lower your cellphone bill?

November 30, 2011 12:09 PM
By Community Team
Canadians should expect more competitive rates for their cell phone services after a decision on foreign ownership in the sector, indicated Industry Minister Christian Paradis.

But the minister said he needs more time to study the issues, despite speculation that he would make an announcement to an industry convention today.

The minister also said he wants rural customers to receive the same wireless service as those in large, urban centres.

Some analysts' predicted that Paradis would announce the removal of restrictions on foreign investment for smaller players - those with 10 per cent or less in market share - in the mobile playing field.


Globalive chief executive Tony Lacavera, operator of the Wind Mobile, speculated that the major telecom companies - Rogers Communications (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T) - would lobby against any changes to the current model due to their dominance in the field.

Currently, telecom operators in Canada are restricted to a maximum 46.7 per cent in direct and indirect foreign investment.

http://www.cbc.ca/news/yourcommunity/2011/11/should-the-government-take-steps-to-lower-your-cell-phone-bill.html

Ottawa sees wireless prices falling after upcoming call on ownership, auction

Posted on Tue, Nov 29, 2011, 8:16 pm by Julian Beltrame

Canadians should expect lower prices after Ottawa announces its decision on foreign ownership in the wireless sector and sets ground rules for the next sale of broadband space, Industry Minister Christian Paradis indicated Tuesday.

But, despite wide speculation that Paradis was ready to announce those rules in a speech to an industry convention, the minister said he needed more time to study the issues.

“Some of you may be looking for an early Christmas present today, but I am afraid I am going to be a bit of a Grinch,” he told the conference.

“Given the importance and the serious impact this will have on the lives of Canadians for years to come, this is not a decision that I nor this government will be taking lightly.”

While Paradis did not say directly which way he was leaning, he did say he expected the decisions the government makes will lead to more competition.

“We expect that globally competitive prices for consumers will flow from these fundamentals,” he added.

The minister also said he wants rural customers to receive the same wireless service as those in large, urban centres.

Globalive chief executive Tony Lacavera, operator of the Wind Mobile startup established after the last spectrum auction in 2008, had scheduled a news conference in Ottawa after the minister’s speech.

Lacavera speculated that the government may be divided by intense lobbying from industry players, which have different interests and do not agree on the best way to proceed.

Many analysts had expected the government to announce that smaller players — those with 10 per cent or less market share — would be freed from any restrictions on foreign investment.

They also expected they would receive an effective set-aside in the new auction of 700 megahertz of spectrum. That would make it easier for small and new entrants to bid for spectrum to operate and compete in the sector dominated by Rogers Communications, Bell and Telus.

“If they don’t have a set-aside, we’re going to be forced to fold into one of the new incumbents and you’ll see all the new entrants do the same thing,” said Lacavera.

“We all saw what happened between 2003 and 2008, pricing in Canada rose to the highest level in the world when there wasn’t competitive pricing out there.”

Mobilicity head John Bitove, another new entrant, said in an interview that the government should go ahead with the auction anyway — if it hasn’t made up its on foreign ownership rules — because Canada is falling behind on the desirable 700-MHz frequency, which was vacated by the conversion of television signals to digital.

“The fact is you’ve got four new entrants soon to be five, and we’re all going to need more bandwidth,” he said.

Currently, telecom operators in Canada are restricted to a maximum 46.7 per cent in direct and indirect foreign investment.

Last year, Ottawa announced it was looking at three options on ownership. Removing all restrictions, removing restrictions for small players, or upping the foreign ownership limit to 49 per cent.
http://ca.news.yahoo.com/ottawa-sees-wireless-prices-falling-upcoming-call-ownership-222425054.html

Analysis: Rio Tinto faces new hurdles on Canadian uranium

By Julie Gordon

TORONTO | Tue Nov 29, 2011 12:05pm EST

(Reuters) - Rio Tinto's (RIO.AX) battle to secure its foothold in Canada's uranium-rich Athabasca region has only just begun now that it has apparently won a bidding war to gain control of Hathor Exploration (HAT.TO).

While the path is now clear for Anglo-Australian giant to acquire the exploration-stage company, a whole new set of rules will apply to Rio once Hathor's flagship Roughrider project nears production.

Under current Canadian law, foreign companies are barred from owning more than 49 percent of an operating uranium mine. That could throw a wrench in Rio's (RIO.L) plans to turn Roughrider into a producing asset.

"They have two options," said Salman Partners analyst Raymond Goldie. "Either they hope that the law changes, or they hope that they will find a Canadian partner to own 51 percent."

If it is the latter, that would be good news for Cameco Corp (CCO.TO), Canada's top uranium producer. Even though it backed out of the bidding war for Hathor, the company could end up owning half of Roughrider, located just 25 kilometers (15 miles) from its Rabbit Lake mill in Saskatchewan.

In partnering with Cameco, Rio could comply with ownership restrictions, while gaining access to a mill with spare capacity to process ore from Roughrider, said Goldie.

"I would be willing to make the bet that when the mine comes into production, Cameco will own more than half of it," he said.

But others feel uranium's days as a protected resource in Canada are numbered. The ruling Conservatives have already said they are reviewing the restrictions, and policy experts say the government will likely push to relax the legislation.

"Once upon a time there was a very clear reason for this (restriction), and there was also a climate of concern about foreign investment and foreign ownership in Canada," said Jeremy Rayner, a professor at the Johnson-Shoyama Graduate School of Public Policy at the University of Saskatchewan.

"It looks like an anomaly now," he said.

Canadian uranium first gained notoriety during the Second World War, when it was used to develop nuclear weapons as part of the Manhattan Project. In subsequent years, the government began to restrict uranium to safeguard domestic supply and to ensure it was only used for peaceful purposes. Today, Canadian uranium fuels nuclear power plants around the world.

Easing ownership restrictions on uranium mines would show that Canada is open to foreign investment, say experts, despite a controversial move last year to block a hostile $39 billion takeover of fertilizer producer Potash Corp (POT.TO) by BHP Billiton (BHP.AX), another Anglo-Australian mining giant.

"Both the federal and Saskatchewan governments are right-of-center governments that have declared that they are open for business," said Rayner. "They were, I think, frankly embarrassed by what they had to do with Potash Corp."

Rio's bid for Hathor has cleared the Competition Bureau, but still faces an Investment Canada review, required of all foreign purchases over a certain size. Because its projects are all exploration stage, there are no uranium-specific restrictions on ownership at this time.

BIG IN THE BASIN

While Rio's exact plans for Hathor remain unclear, analysts speculate the miner is using the explorer as a jumping-off point to gain a much larger foothold in the Athabasca basin.

France's Areva (AREVA.PA), which is undergoing a strategic review, could sell some of its uranium assets, including part of its Canadian mining portfolio.

"If the Areva rumors prove grounded, then Rio Tinto may end up with significantly more assets in the basin in short order," wrote Dundee Securities analyst David Talbot in a note to clients.

That could raise some alarm bells with groups that are opposed to foreign ownership of Canadian resources and become a "political hot potato," said Carmen Diges, a natural resources lawyer and partner with Miller Thomson.

"There's an overarching set of views that Canada - being so dependent on natural resource production - how much foreign ownership of our natural resources do we want?" she said.

Rio is already a major player in Canada's mining sector, producing diamonds, iron ore, titanium dioxide and aluminum from projects across the country. Other mining giants like Xstrata (XTA.L) and Vale (VALE5.SA) have taken over Canadian companies in recent years, often in face of public opposition.

But the Canadian government is eager to show it is open to business, and with a friendly deal with Hathor in place, Rio could be ideally positioned to challenge Canada's uranium ownership restrictions.

"Companies, if they want to be strategic players in an area, they'll figure out all possibilities to do that," said Diges. "Laws are a roadmap and creative business people have always been really good at getting to their destination using the road map in new and creative ways."

http://www.reuters.com/article/2011/11/29/us-riotinto-hathor-idUSTRE7AS1RB20111129

Canada May Be Ready To Ease Telecom Foreign-Investment Limits

By Paul Vieira and Ben Dummett Of DOW JONES NEWSWIRES
NOVEMBER 28, 2011, 11:30 A.M. ET

OTTAWA (Dow Jones)--The Canadian government could signal this week it's ready to accept increased foreign investment in the country's telecommunications industry, in an effort to spur competition in the fast-growing and profitable wireless sector.

Two government-commissioned panels have recommended liberalization in recent years, and the Conservative government of Prime Minister Stephen Harper has promised to boost competition, in order to lower prices. Canada's Industry Minister, Christian Paradis, has said recently the government hasn't yet made any decision on its plans for the sector, in which foreign ownership has long been circumscribed.

Still, industry watchers say that two high-profile appearances this week by Paradis could be opportunities for the government to signal its intentions. The minister is slated to deliver remarks at a major industry conference in Ottawa on Tuesday. He then meets with Wall Street analysts Friday. Representatives for Paradis didn't return requests for comment.

Telecoms is among a handful of industries--along with broadcasting and airlines--that are subjected to specific limits on foreign investment in Canada. Foreigners are prohibited from owning more than 46.7% of the voting shares of a telecoms company.

Senior Canadian executives say they expect the government to liberalize somewhat. They say rules could be eased to allow 100% foreign ownership in Canadian wireless companies with less than a 10% market share.

While such a move would go some way in fulfilling the government's pledge to boost competition, it would have limited impact on the country's big, incumbent telecom providers - BCE Inc. (BCE), Telus Corp. (TU) and Rogers Communication Inc. (RCI). Together, these giants control 95% of the wireless market. Easing foreign ownership rules - even for smaller companies - could pressure prices. New entrants in recent years have already driven down prices.

Small Canadian wireless players, such as Wind Mobile, Mobilicity and Public Mobile, argue they need greater access to foreign capital to compete against the incumbents, because Canada's available pool of capital is just too small.

"The system is built against new entry and loaded in favor of the incumbents," said Eamon Hoey, managing director at Hoey Associates, a consultancy that advises clients in Canada's C$41 billion (US$39.2 billion) telecoms sector.

Incumbents argue foreign-ownership restrictions should only be eased if applied equally to the industry as whole.

The Canadian government is under pressure to change its foreign telecoms investment rules following a clash in 2009 with the chief telecoms watchdog over Wind Mobile.

The Canadian Radio-Television and Telecommunications Commission initially ruled Wind Mobile didn't meet the country's ownership requirements because it had too much financial backing from Egypt's Orascom Telecom Holding S.A.E. (ORTE.CI)

The Conservative government overruled the CRTC's decision, arguing Wind Mobile met the ownership requirements because voting control rested with Canadians, and Canadians managed the company on a day-to-day basis. A Federal Court of Appeal upheld the government's decision. The Supreme Court of Canada has yet to decide whether it will hear an appeal.

The telecoms industry is also awaiting government details about its next wireless spectrum auction. Both big and small players want access to more spectrum, as they scramble to offer more video and other broadband services. New entrants want the government to set aside a portion of the spectrum for which only smaller firms can bid.

Without such a carve-out, they argue, they can't compete against the financially stronger incumbents. Incumbents say setting spectrum aside would create an unfair playing field.

http://online.wsj.com/article/BT-CO-20111128-709062.html

Lemieux highlights support for supply management

Media Release

Office of MP Pierre Lemieux

Ottawa - November 26, 2011 - MP Pierre Lemieux highlighted the Conservative Government’s strong support for Canadian farmers and Supply Management, shortly after Canada expressed a formal desire to join the Trans-Pacific Partnership.

 "Our position has not changed on supply management - we have always supported, and we will continue to support, the supply management system. It is good for farmers, it is good for consumers and it is good for Canada," said Mr. Lemieux. "This was clearly stated in our 2011 election platform, in our Throne Speech and in speeches given in Parliament by Conservative MPs"

 Agriculture Minister Gerry Ritz reminded Opposition MPs that the current Conservative government has a "tremendous working relationship with the supply managed sector," and that they have successfully defended supply management in every trade deal that they have implemented since having been elected government.

 Mr. Lemieux also emphasized the need for Canada to negotiate international trade deals, as these agreements strengthen the Canadian economy, including the agricultural sector.

 He stated, "If the U.S. were to put in place a trade deal with Asia-Pacific countries that did not include Canada, then our Canadian farmers would be disadvantaged and they would lose access to these foreign markets because they could not compete against the favourable measures within the trade deal that would benefit U.S. farmers."

 Mr. Lemieux explained that establishing a trade deal will offer Canada a strong competitive advantage: "These are challenging economic times and we need to strengthen our export markets for our farmers. Farmers know that we want to see farmers succeed."

 He also clarified the process followed in trade negotiations by explaining that when Canada indicates its interest in a trade agreement, it is not prudent to categorically list all the sectors which are non-negotiable before it has even arrived at the negotiating table.

 Mr. Lemieux commented, "Once Canada is at the table and the negotiations have commenced, then as part of those negotiations, Canada and the other countries involved in the negotiations identify the commodities or sectors they want to protect."

 Mr. Lemieux went further by saying, "Rest assured that we will defend Canada’s interests - we always do."

 Mr. Lemieux concluded, "The farmers of my riding know that I am a strong defender of Supply Management. They also know how strongly I and our Conservative government defend and promote supply management both here in Canada and internationally. We have a strong track record!"

http://www.ourhometown.ca/news/NL0797.php

Top court turns down U.S. Steel request for hearing over Investment Canada Act

By The Canadian Press | November 24, 2011

OTTAWA - The Supreme Court of Canada has cleared the way for a Federal Court hearing on Ottawa's claims that U.S. Steel failed to live up to jobs and production promises it made in 2007 when it bought steelmaker Stelco.

The top court said Thursday it will not hear a U.S. Steel appeal seeking to overturn a lower court's decision supporting the constitutionality of the Investment Canada Act, which governs foreign investments. The Investment Canada Act, the company claimed, created a punitive environment that infringed upon its protections under the Charter of Rights and Freedoms.

In challenging the law, U.S. Steel argued then federal Industry Minister Tony Clement hadn't given a reason for rejecting company claims it couldn't meet promised Canadian levels of production and employment.

U.S. Steel said it couldn't live up to those promises made when it bought the Hamilton steelmaker because demand for its production had been destroyed by the recession that started in 2008.

It also argued the fact it could face contempt of court charges for not paying fines levied under the act entitled it to Charter protections not normally engaged in an administrative case such has this one.

The government's suit against the company seeks penalties of $10,000 a day retroactive to Nov. 1, 2009.

The decision Thursday followed a failed attempt by U.S. Steel at the Federal Court of Appeal to overturn the trial judge's decision upholding the Investment Canada Act.

When it was given Canadian approval to buy Stelco, U.S. Steel made a package of promises that included maintaining an average 3,105 jobs in its Canadian operations until Oct. 31, 2010.

Starting in March of 2009 it shut various parts of the Canadian plants in response to collapsing demand for steel. It later locked out its Lake Erie workers for eight months in a dispute over pensions.

Hamilton workers were locked out for 11 months in a similar dispute before a deal was reached last month.

If the steelmaker is found to have illegally broken promises it made to Ottawa when it bought Stelco in 2007, it could face a multimillion-dollar fine or be forced to sell its Canadian assets.


http://www.canadianbusiness.com/article/58735--top-court-turns-down-u-s-steel-request-for-hearing-over-investment-canada-act

Canada Min: No Decision On Telecom Foreign Ownership Rules

NOVEMBER 23, 2011, 3:18 P.M. ET

OTTAWA (Dow Jones)--Canada's industry minister said Wednesday the government has yet to decide on whether to liberalize the country's foreign-ownership rules as they apply to the telecommunications sector.

"No decisions with regard to the upcoming spectrum auction or on investment have been made yet," Christian Paradis told legislators during the daily question-period session in parliament. "Once a decision is made ... we will announce it clearly and directly."

He was responding to rumors and published reports that the Canadian government could issue a decision shortly on the future of Canada's foreign investment rules for telecom. Any changes to the rules would likely be accompanied by guidelines governing the sale of much-vaunted 700 megahertz of wireless spectrum.

Canadian law dictates foreigners cannot control more than 46.7% of voting rights in a telecom concern.

Paradis is scheduled next week to deliver a keynote address at a major telecom conference in Ottawa

http://online.wsj.com/article/BT-CO-20111123-712723.html