September 7, 2000

OTTAWA-HULL — Today, the Canadian Radio-television and Telecommunications Commission (CRTC) announced it will be holding an oral public hearing in Winnipeg to examine in detail the exact amount the Manitoba Telephone System (MTS) will need from its customers to recover income tax expenses for the years 2000 and 2001.

The CRTC will conduct a public hearing in Winnipeg on January 10^th and 11^th 2001, at a location to be announced. The first day of this hearing will be conducted in an informal setting where subscribers can provide their views to Commissioners. On the second day MTS and registered interested parties will conduct cross-examination of expert evidence that will already have been filed with the Commission.

In 1997, MTS was privatized and thus became subject to income tax. At that time, it received a tax deduction that offset its then income tax liability. Income tax is an expense that is factored into the telephone companies’ costs of providing service.

In 1999, the Commission denied a request by MTS to pre-collect its income tax expense by increasing residential rates. The Commission concluded that residential subscribers should not have to pay for this expense until it was incurred by MTS.

Reference documents:  Letter decision dated September 7^th, 2000; Public Notice CRTC 2000-108,
                                   Order CRTC 2000-677 and Telecom Decision CRTC 99-2

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Copies of today’s documents are available through our Internet site (http://www.crtc.gc.ca) or by contacting the public examination room of any CRTC office. These documents are available in alternative format upon request.