As noted in the last Telecommunications Law Update, the Speech
from the Throne delivered on March 3 raised expectations by
revealing the federal government's intention to "open
Canada's doors further to venture capital and to foreign
investment in key sectors, including the satellite and
telecommunications industries, giving Canadian firms access to the
funds and expertise they need." Combined with subsequent
comments made by Industry Minister Tony Clement, it appeared that
the government was finally ready to take steps to liberalize
Canada's foreign ownership restrictions in the telecom
It was expected that the budget, to be delivered in the House of
Commons the following day, would provide more detail about those
plans. To some degree, the March 4 budget did provide additional
details, confirming that the government plans "to remove the
existing restrictions on foreign ownership of Canadian
satellites." However, no details were provided regarding the
government's plans to liberalize foreign ownership restrictions
in the telecom sector more generally.
The initial announcement of the government's intention to
liberalize foreign ownership restrictions in the "satellite
and telecommunications industries," followed the next day by
the budget's reference to removing restrictions for
"satellites" created some confusion about the
government's liberalization plans for the telecom sector as a
whole. While this confusion is understandable, it is unlikely that
the narrower scope of the liberalization referred to in the budget
reflects a change from the broader liberalization plans set out in
the Speech from the Throne.
In a television interview following the Speech from the Throne,
Industry Minister Tony Clement confirmed the government's
desire to liberalize foreign ownership restrictions in the telecom
sector. Asked how it will happen and when we will see details,
Minister Clement said that the government is in the process of
examining the necessary legislative changes and that people should
"stay tuned." At the same time, the Minister acknowledged
that the recommendations of the Competition Policy Review Panel
would be "part of the mix."
What is clear, therefore, is that the government intends a
liberalization of the foreign ownership provisions in the satellite
and telecommunications sectors. What is not clear is the process
and timetable for achieving this liberalization. As Minister
Clement said, "stay tuned."
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