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No decision yet on foreign investment in telecom: Harper

Conservative Leader Stephen Harper speaks during a campaign stop in Sault Ste. Marie, Ont., on April 25, 2011.


Stephen Harper has vowed to allow foreigners a bigger ownership stake in Canada's telecom sector, but with an election a week away the Conservative Leader says he has not made up his mind precisely how much he'd let outsiders buy.

"We've not made a final decision on the nature of what we're seeking there," Mr. Harper said during a campaign stop in Northwestern Ontario.

The Harper government pledged to open the door to more foreign investment in the telecom sector last year during its Throne Speech. This change could affect everything from Canadians' cellphone bills to employment in the wireless industry.

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But they appeared to lose enthusiasm for the matter in late 2010 as a possible election approached and they endured a backlash over a proposed sale of Potash Corp. to a foreign-held firm.

Should Mr. Harper win the majority he's seeking, the Tories could easily push through changes that would reshape the Canadian telecom sector.

The Conservative Leader promised Monday he wouldn't injure the Canadian incumbents in anything he might do.

"I can tell you this: we're guided by two things: first of all to ensure whatever changes we make, they are oriented towards providing more choice and options and competition and competitive prices for consumers," he said.

"And also that we do not lose a strong telecommunications sector here in this country. So we are proceeding very cautiously."

The telecom liberalization option the Tories are believed to favour is allowing foreigners to own 100 per cent of new market entrants or existing players who have a market share of 10 per cent or less.

Current restrictions limit direct and indirect foreign investment in a Canadian telecom firm to a combined total of 46.7 per cent.

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The Tories appeared to get cold feet last fall, however, after a political backlash over the possibility that Ottawa might allow a foreign firm to buy a cherished Saskatchewan institution: Potash Corp.

Faced with the threat of losing as many as six seats in Saskatchewan, the Conservatives nixed the sale.

Shortly afterward, Industry Minister Tony Clement announced he was also postponing a decision until sometime in 2011 or 2012 on precisely what kind of changes he'd make to foreign investment restrictions on telecom ownership.

This effectively buried a possible lightning rod for criticism during the 2011 election campaign, ensuring the Conservatives didn't head to the polls facing partisan accusations of selling out Canadian companies.

The growing wireless market and foreign ownership questions collided last year when the Harper government overruled the CRTC to approve the wireless licence of Globalive Wireless Management Corp. The wireless company operates Wind Mobile, a cell phone company that is largely financed by a Cairo-based communications giant.

Globalive was among the most aggressive bidders for the new licenses that came up for grabs, spending $442-million during a government-held auction - with much of that money coming from the Egyptian firm.

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Canada's incumbent cellphone companies argued that allowing that structure would open the door for other firms to seek large amounts of foreign investment, thereby altering the landscape of the Canadian industry. Rogers Communications Inc., Telus Corp. and BCE Inc. all opposed Globalive at CRTC hearings in September.

A federal court judge later threw in question Globalive's Wind Mobile cellular service by striking down the Harper cabinet's decision to let the new competitor operate.

Federal government lawyers are due in court in mid May to defend the Conservative decision on Globalive.

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