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New industry minister means all bets are off

19 May

Last week, I sat down with the students who run the TEDxRyerson conference to talk about Canada’s new majority government and what it might mean for tech and telecom issues. The chat followed on a post I wrote on election night earlier this month, wherein I outlined some of what might happen under the new paradigm. If you’re curious, video of that chat is here.

In a nutshell, I thought the initial good news was that under a majority government, things would finally get done – for good or for ill. There was reason for optimism too, given that Industry Minister Tony Clement – the guy who was ultimately in charge of such issues – showed an understanding of some of Canada’s problems, as well as a desire to act on them. What never was clear is what he meant to do, particularly in regards to improving telecom competition.

On the contentious copyright issue, Clement also played good cop to Heritage Minister James Moore’s bad cop. While Moore insisted that tough copyright reform is necessary to preserve Canadian companies’ ability to innovate, Clement seemed considerably more willing to take all views into account. In the end, Clement talked the talk but he never got the chance to walk the walk on either front.

With yesterday’s announcement that he is moving on to become Treasury Minister and Quebec MP Christian Paradis taking over as Industry Minister, all bets are off on those two key issues. Those hoping for swift action, particularly in telecom – where Canada’s protectionist foreign ownership restrictions are stifling competition and causing uncertainty for Wind Mobile, not to mention the wireless industry as a whole – are probably going to have to wait a while longer.

As some industry observers point out, Paradis is going to need some time to get up to speed on what’s going on. That means the likelihood of a long-overdue “digital strategy” being introduced any time soon is probably zilch. Same goes for those much-needed reforms to foreign ownership. Rushing either would be a bad move for Paradis, as he’ll doubtlessly want to put his own stamp on them.

As UBS analysts suggest, this is good news for the likes of Bell, Rogers and Telus:

Since we believe the removal of telecom foreign ownership restrictions would create greater competition for the sector, we believe a delay in the process could help the sector by postponing the new entrants’ access to foreign capital, the potential entry of new foreign competition, and spending on new spectrum.

Moreover, getting up to speed on the industry can also be translated into: let the lobbying begin. With an industry that already has some of the highest per-capita lobbying in the country, who knows what that will result in.* With the big bucks the incumbents spend on lobbying, one thing is for sure: their views will get unfair weight in any consideration of the issues. Then again, that’s always been the problem.

On copyright, MP Dean Del Mastro says the legislation the Conservatives introduced last year will be coming back in largely the same form, which is surely a blow to anyone who hoped that Clement would have served as a moderating force in forming the bill. One of the key complaints with that bill is a clause that would make it illegal for anyone to break a digital lock placed on content or devices. Copyright watchers have been hoping that this tough measure gets an important exception – that breaking said locks for purposes other than willfully infringing copyright, like copying a CD to an iPod – would be okay. It’s hard to tell whether this key addendum ends up in the bill, but it’s worrisome that it won’t now that the good cop is off the beat.

As much as Paradis has to get the know the industry, the industry – journalists included – also need to get to know him. He isn’t starting out on the greatest foot – he’s already been involved with a scandal regarding interference with access to information requests, all of which was related to rewarding contracts to companies that fell under his previous jurisdiction.

That doesn’t sound good, especially in the context of all that lobbying mentioned above.

Over all, it’s tough to remain optimistic that things will improve or move forward any time soon in light of the cabinet shuffle. Here’s hoping the new Industry Minister gets up to speed quickly and is able to retain a balanced view on the various tricky issues he has inherited. In other words, let’s hope he remembers the consumer – as Clement seemed to – in light of the heavy lobbying he’s about to face. Paradis could very well end up the good cop, but he could also end up the bad one.

(*Back in early 2010, I was working on a special project for CBC that studied lobbyist records. Four of the top five lobbying companies in the country were oil and gas related – the fifth was Bell Canada, with other telecom companies – including Wind – also posting strong showings. I never ended up finishing that project because it proved to be too depressing.)

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5 responses to “New industry minister means all bets are off

  1. Jean-François Mezei

    May 18, 2011 at 7:41 pm

    One thing one must not forget is the “leadership” provided by the Prime Minister’s Office. Whether it was Clement or Paradis holding the title of the Minister, the policy probably still comes from the PMO, so perhaps not much will change and Paradis could still forge ahead.

    My main concern is what infuence Bernier will have on policies. Being ministerds of state for small business might help small ISPs against incumbents, but his philosophy of letting businesses duke it out without government intervention (combined with lobbying) may end up returning the regulatory philosophy to “Let Bell do as it wishes”.

     
  2. Chris

    May 19, 2011 at 6:48 am

    That is TERRIBLE news as far as stopping the telecom gouging is concerned. And I say that from the perspective of someone living in the province of Quebec, which has traditionally one of the least educated population when it comes to the internet and the fight against telecom industry gouging.

    Guess where most of the criticism in the PC party came from against Tony Clemnet’s pro-consumer and anti UBB stance came from: none other than the La Belle Province’s Maxime Bernier’s pro-status-quo and pro-industry policy advisers. Paul Beaudry and Martin Masse http://opinion.financialpost.com/2011/03/08/clements-confusion/

     
    • Hub

      May 19, 2011 at 11:09 am

      Calling Tony Clement pro consumer is a bit of a stretch I would never make. He is not pro consumer. His stance on UBB was just election work… making sure the uproar is contained. We knew about UBB more than 6 month before and he had done nothing. He could already have said to the CRTC to think again. But no.

      As for the case of WIND, he didn’t do it for you either. He was just well lobbied by Mike Harris, his former boss that ruined Ontario back in the days, on behalf of WIND to have it go through. But had he been keen on fixing the problem he would have tabled a bill in Parliament.

       
  3. Chris

    May 19, 2011 at 12:18 pm

    Hub, thanks for your response, and for the heads up. I am indeed upset and ashamed med having been tricked by the promises he made, because he seemed sincere telling that industry bulldog, von Finkenstein, to go home and do his homework regarding UBB. In any case, the opposition parties aren’t much better either, as they didn’t move on this issue until openmedia had collected 500,000 plus signatures on their petition to oppose UBB. Furthermore, the NDP has made it quite clear they don’t want to open up the telecom industry to foreign ownership.

    *Sigh*… I’m afraid we’re back to square on on this issue yet again.

    As for myself, I strongly believe that lobby should not not even been allowed because it is clearly undemocratic influence peddling. Unfortunately, this is the general state of affairs in our so-called western ‘democracies’. What hypocrisy it is that western countries are so quick to point the finger at so-called corruption in other countries, when in reality it is just the same here, but in a much subtler, sneakier way.

     
  4. Russell McOrmond

    May 20, 2011 at 10:50 am

    I think I’m not going to second-guess the changes. A majority government behaves differently than a minority, and thus we will likely be surprised by a few things. Some will be helpful to the general tech sector and competition, and some will be protectionist (IE: Canada adopting US-protectionist Copyright).

    I’ve also stopped expecting consistency or adherence to core stated values in politics. I’m still looking for the equivalent of Candice Hoeppner for technology owners.

     
 
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