Telecom Titans Merger: My Initial Reactions to the Rogers-Shaw Merger
Plus explosive testimony on the WE Scandal, Conservatives push for environmentally-friendly export ban, the Supreme Court carbon tax ruling, and Conservative push for a plan to re-open the economy
Rogers-Shaw Merger: Initial Reactions
On March 15th, Rogers Communications announced its intention to purchase Shaw Communications for a reported price of $26 billion. If executed, this deal would dramatically reshape the face of telecommunications in Canada, particularly Alberta. I have received correspondence from many (I mean, a lot!) constituents asking me to share my opinion on the proposed merger. The short answer is I have not read the details of the deal yet and there remains many hurdles for the companies involved. I want more details before I weigh in either for or against on behalf of constituents.
Under normal circumstances, the government should stay out of the way of business and allow the competitive free market to drive the decision-making process for companies. Telecommunications companies in Canada, however, are not exposed to the same market forces from consumers as other Canadian industries. Federal legislation has long protected telecom companies from foreign competition and effectively created an oligopoly. There also is not much competition to begin with in the telecommunications industry and reducing the number of competitors in that pool could potentially lead to unwanted consequences to prices and consumers. For example, Canada’s three largest mobile service providers account for over 90% of the Canadian revenue market share in that industry, and the merger of Rogers and Shaw would result in the second-largest telecommunications enterprise in the country, second only to Bell. A handful of large companies controlling an overwhelming share of the fields related to telecommunications without any viable avenue for future competition gives pause for concern over a telecom oligopoly in Canada that could lead to high prices and other anti-competitive behaviour. A successful merger could result in increased prices for Shaw users in Alberta as well, potentially creating an additional financial burden on families who have been struggling to make ends meet these past few months and years. These concerns are real; however, there are also some potential positives that are worth considering.
A Rogers-Shaw merger would result in more jobs in Alberta. Rogers has proposed a new regional headquarters, and a successful merger is expected to result in 1800 net new jobs. There is discussion of a new R&D centre including over a thousand high-tech and high-paying jobs for Calgarians. Rogers has also stated that they would seek to improve rural, remote, and Indigenous communities’ connectivity to high-speed internet service across Western Canada, an issue that has been repeatedly raised for many years. Rogers would also invest an expected $2.5 billion in 5G networks over the next five years in Western Canada. Premier Kenney has stated that a successful merger would be good news for Alberta and that the plan outlined by Rogers and Shaw would “make significant net job growth in Alberta, especially in high-paying high-tech jobs.” Alberta is open for business, and an influx of investment and new jobs would be a much-needed shot in the arm for our economy.
Ultimately, it is too early to render a definitive verdict on this proposed merger. Not all deals are made equally. There are many unknown variables. Shaw and Rogers have to clear three important regulatory hurdles and obviously getting a majority of shareholders onside. The merger needs to be reviewed by the Competition Bureau, the CRTC, and the industry minister before going ahead. The deal could be agreed to entirely or partially at every stage. The new consortium could be obliged to give up parts of their spectrum or parts of the company could be spun out into independent companies because of too much concentration in a sector. The undertakings for thousands of jobs or the regional headquarters details could be found wanting.
All to say while I have not decided yet, I will be closely following the industry committee proceedings as Shaw and Rogers are called to testify and explain this buyout agreement. This is an important matter for consumers, and this should not simply receive a rubber stamp. There must be a thorough and public review of this deal to ensure that consumers in Canada get a fair shake and that the potential for net new jobs are indeed created in Alberta, and that we take advantage of another opportunity to diversify our economy in Alberta.
Explosive Testimony on the WE Scandal at the Ethics Committee
On March 15, 2021, the Kielburger brothers, the founders of the WE Charity organization, appeared before the House of Commons ethics committee after the committee issued an official summons in relation to the WE Scandal. The Kielburgers admitted that they never advised the Prime Minister, or then Finance Minister Bill Morneau to recuse themselves from the discussions surrounding the creation of the Canada student service grant, despite the obvious conflict of interest. The Kielburgers criticized the Liberal government for hiding behind a children’s charity in a scandal of their own making. Under questioning from Pierre Poilievre, the Kielburgers stated they had paid members of the Trudeau family a total of $427,750.92 in speaking fees or expenses. The Kielburgers have not been contacted by the RCMP.
Craig Kielburger initially stated that the Prime Minister’s chief advisor, Ben Chin, had no role in establishing the Canada student service grant program with WE Charity, but Pierre Poilievre brought up a LinkedIn message sent from Craig Kielburger around the time of the program to Ben Chin which stated, “Thank you for your kindness in helping shape our latest program with the government, warmly Craig.” You can be the judge on this one.
Conservatives Continue to Push to Ban the Export of Plastic Waste
At the beginning of this parliamentary session, MP Scot Davidson tabled Bill C-204 that would ban the export of plastic garbage. On February 3, 2021, this common-sense bill passed its second reading without the support of a majority of Liberal MPs. Bill C-204 was referred to the Standing Committee on Environment and Sustainable Development.
MP Davidson appeared before the committee and spoke to his bill, but in an unprecedented move, he was called back again to the committee to testify a second time. This is unheard of in recent parliamentary memory, and a stall tactic never used on private member’s business. The only political party to oppose this common-sense ban is the Liberal government. Canada should be responsible for the disposal of its own waste, and Conservatives will continue to push for this common-sense export ban.
Carbon Tax Ruled Constitutional in 6-3 Decision, Dissenting Justices Offer Insight
This week, in a 6-3 decision the Supreme Court ruled that the Liberal carbon tax is constitutional; however, the best law is often made in dissenting opinions. Justices Côté, Brown, and Rowe each wrote dissenting opinions stating their belief that the carbon tax is unconstitutional. In her opinion, Justice Côté stated of the Greenhouse Gas Pollution Pricing Act that, “The GGPPA as it is currently written, employs a discretionary scheme that knows no bounds,” because it grants the executive branch the power to set different treatment of industries at the “executive’s whim.”
In his opinion, Justice Brown states, “The provinces clearly have jurisdiction to establish standards of GHG price stringency in the province,” and he further explains that,
“To accept that allocation national targets or minimum national standards can serve as a basis for recognizing that some aspect of an area of provincial jurisdiction is distinctly national in scope, and therefore lies outside provincial jurisdiction, would be to accept a model of supervisory federalism by which the provinces can exercise their jurisdiction only as long as they do so in a manner that the federal legislation authorizes. This would open up any area of provincial jurisdiction to unconstitutional federal intrusion once Parliament decides to legislate uniform treatment.”
Just because the Supreme Court majority has ruled the carbon tax as constitution, does it mean it is good policy for Canadians and their families. After the decision, Conservative Leader, Erin O’Toole reaffirmed his commitment to scrap the carbon tax should the conservatives earn the right to govern in the next federal election.
Want the Government to Respond Directly to You on an Issue? Start a Petition.
Tabling a petition in Parliament is a longstanding Westminster tradition and forces a government to formally respond with their position, and really successful petitions often change government policies. If constituents have concerns I am happy to sponsor a petition on their behalf.
I recently received a government response to a petition I tabled from Calgary Shepard residents calling on the government to address the fairness in the equalization regime. You can read their response to the petition here:
I currently have two e-petitions open for signature, the first calls on the Government of Canada to scrap Bill C-21 and the May 1, 2020 Order in Council that unfairly targets law-abiding firearms owners. I also tabled two other petitions today calling on Magnitsky Sanctions against human rights violators in the People’s Republic of China and another petition calling for an investigation of Trinidad and Tobago for its treatment of Venezuelan refugees fleeing socialist dictator Maduro’s destruction of the Venezuelan economy. The second open petition calls on the government to condemn the arbitrary and unlawful detention of activists in Cuba. You can sign both petitions below.
If you would like to submit a petition, you can contact my office at tom.kmiec@parl.gc.ca