Federal NDP Leader Jagmeet Singh is urging Industry Minister François-Philippe Champagne to block Rogers Communications Inc.’s RCI-B-T $20-billion takeover of Shaw Communications SJR-B-T, citing concerns that it could lead to higher cellphone bills and job losses.
In a letter sent to Mr. Champagne on Sunday, Mr. Singh noted that an analysis by the Competition Bureau, an independent law enforcement agency, concluded that the deal would likely result in higher prices for wireless services.
“That’s despite our telecommunications already being among the most expensive in the world,” Mr. Singh wrote.
The bureau attempted to block the takeover but lost after a month-long hearing in front of the Competition Tribunal. The tribunal, a quasi-judicial body that adjudicates cases brought by the bureau, concluded that the deal, with the divestiture of Shaw’s Freedom Mobile to Quebecor Inc. for $2.85-billion, would create a “more aggressive and effective” wireless competitor.
Mr. Singh’s letter adds to the political pressure on Mr. Champagne, whose department is reviewing the transfer of Shaw’s wireless licences to Quebecor’s Videotron Ltd.
Late last month, several Conservative members of Parliament published an open letter urging Mr. Champagne to wait for the outcome of an investigation by Canada’s telecom regulator before signing off on the licence transfer and permitting the takeover to go forward.
The Canadian Radio-television and Telecommunications Commission has already approved the transfer of Shaw’s broadcasting assets to Rogers. However, the regulator is now reviewing whether a series of agreements between Rogers and Videotron, which underpin the Montreal-based telecom’s ability to offer wireless and internet bundles in Western Canada, are so favourable toward Videotron that they give the telecom an unreasonable advantage over its competitors.
Rogers, Shaw and Videotron are aiming to complete their two-step deal by Friday.
In his letter, Mr. Singh accused the Liberal government of putting the interests of “massive corporations” ahead of those of “everyday Canadians.” He also noted that Rogers has said it expects to generate $1-billion in synergies from the takeover.
“Workers and experts, including [the union] Unifor, expect that to mean hundreds of workers will lose their jobs,” he wrote.
Rogers chief executive officer Tony Staffieri has said that while some overlapping positions will be eliminated as a result of the deal, overall there will be “a net investment in more jobs.”
Mr. Singh suggested the Competition Tribunal and the Federal Court of Appeal, which upheld the tribunal’s decision, had their “hands tied” by weak competition laws. Ottawa is in the midst of reviewing Canada’s Competition Act, with the aim of modernizing the legislation and potentially increasing penalties for engaging in anti-consumer practices. Mr. Champagne is not similarly constrained by competition law, Mr. Singh suggested.
“I urge you to put regular bill-paying families and small businesses first, this time. Act now in the interests of the millions of Canadians that will ultimately be affected by your decision,” he wrote.
The Globe previously reported that Rogers and Videotron were in negotiations Friday over a number of commercial issues, including domestic roaming rates, in hopes of winning Mr. Champagne’s blessing.
Mr. Champagne has asked for firm commitments to maintain affordable wireless services, including written undertakings that impose consequences if the telecoms break their promises.
A spokesperson for Quebecor said in a statement Friday that the company is confident it will be able to satisfy the minister’s conditions.
Alexandra Posadzki