TORONTO, November 19, 2002 — Industry Minister Allan Rock today announced that he is seeking the views of Canadians on the foreign investment restrictions in the telecommunications industry and has asked the Chair of the House of Commons Standing Committee on Industry, Science and Technology to undertake a review. To support the review, Minister Rock released a discussion paper outlining the key issues and identifying questions to be considered.
“As we have made clear in the Innovation Strategy, Canada's marketplace policies must be world-class and encourage firms to invest in the people and capital vital to an innovative economy,” said Minister Rock. “The telecommunications industry is critical to the development of the knowledge-based economy. We need to be assured that all aspects of its regulatory regime are world-class.”
The Committee has been asked to determine whether Canada can secure access to a larger capital pool for investment in infrastructure without comprising its national interests.
The Standing Committee has been asked to provide its analysis to Minister Rock by the end of February 2003. “This is an issue on which many Canadians have views,” added Minister Rock. “I believe the Committee will provide an effective forum for Canadians to make their views known.”
This initiative builds on the Government of Canada's commitment to smart regulation made in the Speech from the Throne. Smart regulation will help sustain economic growth, create jobs, foster innovation and keep Canadian companies competitive with the rest of the world.
Interested parties can read the discussion paper, which is posted online at http://innovation.gc.ca/gol/innovation/site.nsf/en/in02151.html
For more information, please contact:
Selena Beattie
Office of Allan Rock
(613) 995-9001
Media Relations
Industry Canada
(613) 943-2502
Backgrounder
The Telecommunications Act of 1993 established foreign investment restrictions. Section 16 of this Act requires that in order to be eligible to operate in Canada, a telecommunications common carrier must be a “Canadian-owned and controlled corporation,” incorporated or continued under the laws of Canada. Subsection 16(3) of the Act specifies that a corporation is Canadian-owned and controlled if:
a) no less than 80 percent of the members of the board of directors of the corporation are individual Canadians;
b) Canadians beneficially own, directly or indirectly, in the aggregate and otherwise than by way of security only, not less than 80 percent of the corporation's voting shares issued and outstanding; and
c) the corporation is not otherwise controlled by persons that are not Canadians.
In 1994, the Government of Canada announced the Canadian Telecommunications Common Carrier Ownership and Control Regulations, which set the minimum Canadian ownership level for ownership at the holding company level at 66 and two-thirds percent of voting shares.
Section 10 of the Radiocommunication Regulations, to the Radiocommunication Act, requires that persons or entities eligible to be issued a radio license as radio-communication common carriers must meet Canadian ownership and control requirements identical to those established for telecommunications common carriers.