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Industry Minister James Moore responds to a question during Question Period in the House of Commons, Wednesday, October 23, 2013 in Ottawa.Adrian Wyld/The Canadian Press

Industry Minister James Moore is dismissing criticisms the Conservative government is fuelling a climate of uncertainty for telecom investors due to Canada's ever-shifting regulatory landscape.

In particular, Bay Street analysts and industry executives have taken aim at Ottawa's handling of the wireless file over the past year, alleging its erratic rule-making has left investors, particularly foreigners, feeling spooked about investing in this country.

"I think that's slain by the facts," Mr. Moore said in a telephone interview.

"There is one of the largest wireless firms in the world … currently in the Canadian marketplace backstopping Wind. And whether or not they stay in the marketplace or not is certainly their choice. Verizon certainly gave a serious look at entering the Canadian marketplace. And ... their decision to come or not come into the marketplace had nothing to do with the investment climate."

Continued Mr. Moore: "We've liberalized foreign investment rules, as you know, and people have come into the marketplace. So, I don't think that is a critique that carries much weight. I think it's more nuanced about why competition isn't at its maximum potential in Canada and it has to do with, I think, some of the things that we're addressing in today's [domestic roaming] announcement."

But critics say Ottawa's latest moves on domestic roaming stand in sharp contrast to its years-long view that those deals ought to be based on commercially negotiated rates with the option of arbitration if parties fail to agree on a deal.

In March, Industry Canada reduced the timelines for arbitration, while also expanding domestic-roaming and tower-sharing obligations for incumbents.

Those same critics say the problem stems far beyond domestic roaming. They also point to new rules on spectrum transfers that were introduced in June.

"We believe investors require regulatory certainty and the freedom to transact. In Canada, neither condition exists," wrote Jeff Fan, a telecom analyst with Scotia Capital Inc.

Last year, Ottawa relaxed foreign investment restrictions for telcos with a market share of 10 per cent or less.

Soon after, U.S.-based Primus Telecommunications Group Inc. announced a deal to take full control of Canadian-based Globility Communications Corp., but other telecoms haven't proven successful in taking advantage of the new rules.

The government most recently blocked the sale of MTS Allstream Inc. to Accelero Capital Holdings over national security concerns, while Vimpelcom Ltd.'s Cairo-based subsidiary, Orascom Telecom Holding SAE, abandoned its bid to take formal control of Wind Mobile Canada. Sources say the government had delayed the approval process over national security concerns.

"Even if an investor gets lured by the [Government of Canada's] proposed legislation(s) and the promise of spectrum availability in the future, the investor would still have to invest significant amount of capital to improve the existing network and compete effectively," added Mr. Fan.

"Furthermore, there is no option to sell if the plans do not come to fruition, which is entirely possible given the incumbents' willingness to compete aggressively. This is Vimpelcom's current dilemma: its investment in Wind is effectively stranded."

For his part, Mr. Moore said foreign firms consider a multitude of factors before entering the Canadian wireless market, and better domestic roaming policies certainly help.

"This is an industry that seems to have more speculation and guessing about it than the NHL," he added.

"I'll leave it to observers to speculate and talk about it [whether any foreign carriers plan a Canadian entry] and for firms to talk about their aspirations."

When asked whether the government is contemplating more regulations for the sector, Mr. Moore said: "We'll see. Our watch-word, of course, is competition … It is not just more regulation, sometimes it is deregulation. You know, we deregulated to allow more foreign investment. We liberalized foreign investment into the Canadian marketplace, so we have different levers of influence."

And while relaxing the remaining foreign investment restrictions is not on the government's "radar" at the present time, he noted: "If that's seen as a useful pressure for more competition then it's certainly something that we can consider."

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