Canadians should think long and hard before dropping the remaining foreign investment restrictions in the telecom sector because the current “model” enables this country to have a robust industry, says the deputy chairman of Rogers Communications Inc.
“I, personally, don’t want to just sell that,” Edward Rogers, son of the company’s late founder, Ted Rogers, told a CIBC investor conference on Thursday. Mr. Rogers’s personal views, however, conflict with the company’s previously stated support for relaxing the remaining foreign investment rules for large telecoms.
In 2012, the federal government made legislative changes to enable 100 per cent foreign ownership of small telcos that have a revenue market share of 10 per cent or less. Incumbents, though, still face restrictions that prohibit non-Canadians from owning more than 33.3 per cent of their voting shares. As a result, Rogers, along with fellow incumbents BCE Inc. and Telus Corp., have contended the same foreign investment rules should apply to all players in order to create a level playing field – especially since larger companies make the biggest infrastructure investments. (BCE owns a 15-per-cent stake in The Globe and Mail.)
Two blue-ribbon panels since 2006 have recommended Ottawa pursue a ‘broader liberalization’ of the foreign investment rules for both telecom and broadcasting after giving smaller telecom carriers a head start.
Mr. Rogers, however, warned that allowing full foreign ownership of large telcos would only benefit shareholders and “maybe the richest executives” but could lead to the “hollowing out of Canada.”
He later continued: “I think there’s a lot you could argue that if we were a branch plant that Canada would be last … Is Canada going to continue to innovate? Are we going to have wireless coverage in rural areas if we’re owned outside of Canada? My belief is we are not.”
Industry Minister James Moore recently told the Globe that relaxing the remaining foreign investment rules is not on the government’s “radar” right now – but did not rule out such a move down the road.
“If that’s seen as a useful pressure for more competition then it’s certainly something that we can consider,” Mr. Moore said during an interview in December.