Open Postal Service to Competition and Privatize Canada Post

It is time to consider liberalizing the postal market as well as privatizing Canada Post.

Canadians have long benefited from the competition existing in the market for parcels and letters over 500 g. There are simply no reasons to protect Canada Post’s monopoly for letters weighing less than 500 g, whose volume continues to decrease year by year, by 6% last year only.

The choice is clear between the two models. Monopolies have less incentives to reduce costs and improve services. Postal services should operate in a competitive environment, just like any other sector of the economy. Opening to competition and privatization are the keys to reducing costs and ensuring that Canadians are never again denied services when there is a labour dispute at the Crown Corporation.

June 22, 2016
For Immediate Release

 Ottawa, ON – Maxime Bernier, Leadership Candidate for the Conservative Party of Canada, today called upon Liberal Prime Minister Trudeau to roll-up his sleeves and get a softwood lumber deal signed with President Obama. He is making this call one week before the American President is set to address Canada’s Parliament in Ottawa.

Bringing together his experience as both the former Foreign Affairs Minister and Industry Minister, Mr. Bernier knows what it takes to negotiate with the US Government. 

The previous deal has expired and the grace period given to Canadian forestry producers to avoid punishing US tariffs will be over in October, 2016. This would devastate an industry that pumps $20 billion a year into the economy and provides over 230,000 jobs.
 
Key Quotes by Maxime Bernier:
 
“The Trudeau government has had months to get a deal done and has failed to deliver for the hundreds of thousands of Canadians employed in the forestry sector.”

“The solution is simple – Trudeau needs to put our softwood producers first and make this the top priority of the Canada-US relationship.”

Toronto – Maxime Bernier, leadership candidate for the Conservative Party of Canada, today criticized policies promoting “artificial competition” imposed by the CRTC on the telecommunications industry, and called for various reforms that would increase real competition.

During a keynote speech at the Canadian Telecom Summit in Toronto, Mr. Bernier recalled the decisions he took a decade ago as Industry minister to deregulate the telecommunications industry, including the adoption of a Policy Direction to the CRTC to direct it to rely on market forces to the maximum extent feasible.

“The CRTC seemed to take the Policy Direction seriously for a few years. And then it reverted back to its old ways,” deplored Mr. Bernier.

The MP for Beauce denounced various CRTC rulings ostensibly aimed at increasing competition in the sector, but that actually have the effect of discouraging investments and harming consumers. These include decisions to force some providers to share their advanced fibre networks with competitors, as well as potential CRTC plans to tax and regulate the industry as a way to ensure that all Canadians have access to broadband Internet.

He accused the regulator of being “behind the curve.” “While the CRTC is studying the matter, the industry is investing billions of dollars deploying even more efficient networks. This is happening because there is real competition in this sector, not because of CRTC regulations. Canadian consumers are best served when telecom providers are free to compete and invest, not when bureaucrats tell them what to do.”

Maxime Bernier also criticized his Conservative successors at Industry Canada for adopting the same type of policies promoting artificial competition in the wireless sector. He said that this led to spectrum being misallocated, underused or unused for many years, a situation which did not benefit consumers.

Mr. Bernier made a series of proposals to increase “real competition” in the industry, including the phasing-out of the CRTC in its role as telecom regulator, as well as a full opening of the industry to foreign investments. “The telecom industry is a mature, competitive and normal industry, and it should be treated as such. It’s not a playground for bureaucrats,” he said.

Maxime Bernier’s speech did not cover the various questions related to the CRTC’s role as broadcasting regulator, a topic he plans to address later.

The full text of the speech can be found at MaximeBernier.com.

Good morning everyone.

Thank you very much Mark and Michael for inviting me to the Telecom Summit.

When Mark contacted me a few months ago, I was still the Opposition critic for Innovation, Science and Economic Development. He was kind enough to keep me on the program after I had to resign from that position, when I declared my candidacy for the leadership of the Conservative Party.

Don’t worry, I’m not going to try to sell membership cards! Although you’re welcome to go to MaximeBernier.com to learn more about my campaign!

I must say I feel a little bit in a time warp. I was on this very podium almost exactly ten years ago, on June 13, 2006, as the new minister of Industry. Some of you may remember that at the time, I was planning a major reform, the deregulation of local telephone markets.

In 2006, strong cable companies had entered the local telephone market. Cellphones were quickly becoming ubiquitous. There was obviously more and more competition.

However, many regulations were still preventing incumbents from lowering their prices and offering better bundles of services without the CRTC’s approval, on the ground that the new players had to be protected.

Think about how absurd this is for a minute: Presumably in order to protect competition, the CRTC was preventing some providers from really competing and offering better deals to consumers. That’s what I call a policy of false competition.

I had to fight hard to get this reform accepted within Industry Canada and in Cabinet. It was finally adopted several months later. The CRTC followed our policy and deregulated the local telephone markets where there were at least three telephone service providers, including a wireless provider. Prices did not explode, as opponents had predicted. There was no reason to wait several more years to have this deregulation, as the CRTC wanted.

This is an old story, but I think there is an important lesson here. Which is those who task it is to regulate this industry tend to be behind the curve. They don’t want to let go of their regulatory control. Meanwhile, the industry has actually moved on, with new innovations. We’ve had plenty of other examples of such behaviour since then.

When I was addressing this crowd ten years ago, I announced that the federal government had tabled in Parliament, for the first time, a Policy Direction to the CRTC. Its goal was to direct the CRTC to rely on market forces to the maximum extent feasible within the scope of the Telecommunications Act.

It was supposed to be the solution to the CRTC’s control freak mindset. I, and many others at the time thought that it would force the CRTC to change its ways, to become more flexible and adapt to the new competitive reality. We were wrong.

The CRTC seemed to take the Policy Direction seriously for a few years. And then it reverted back to its old ways.

For example, it just spent a whole year consulting stakeholders and the public on the issue of broadband Internet. The purpose was to debate if broadband is to be considered an essential service. And consequently, if new regulation and taxes should be imposed on the industry. To me, this was an obvious waste of time and money.

According to the CRTC’s own figures, 96% of Canadians already have access to 5 Megabits per second download speeds, which is considered an acceptable minimum to do almost everything you want. It’s true that there are still Canadians in rural areas and in the North who don’t have adequate service. But there are solutions being deployed as we speak, including new satellite services. And there is a federal government program to deal with these specific areas.

While the CRTC is studying the matter, the industry is investing billions of dollars deploying even more efficient networks. Already, 71% of Canadians have access to 100 Megabits per second. One gigabit service is already available in some areas and will probably become the new norm within a few years.

This is happening because there is real competition in this sector, not because of CRTC regulations. Canadian consumers are best served when telecom providers are free to compete and invest, not when bureaucrats tell them what to do.

I was especially shocked by the CRTC ruling that will force the telecom companies to share their fiber networks with so-called “independent” Internet providers. This is a new technology that has been deployed only in recent years, well after the opening of the market to competition.

Yet, the CRTC treats fibre-to-the-home as if it was part of the incumbents’ legacy networks. Once again, it wants to impose a kind of artificial competition instead of letting market forces bring about real competition.

Canadians are among the largest consumers of data in the world. The only way to ensure that they will get the broadband services they deserve in years to come is to deploy world-class infrastructure using the latest technologies.

Forcing some providers to share their networks with others will not do anything to encourage investment. It won’t do anything to increase real competition. And ultimately, it won’t do anything to sustainably bring better and cheaper services to consumers.

I will repeat what I said here ten years ago: It is not the role of the CRTC or the government to decide how this increasingly complex market should evolve. It is up to producers and consumers.

When I tabled the Policy Direction in 2006, I believed that it would send a strong signal to the CRTC to exercise restraint when it intervenes in such matters, and to let market forces play their role. But it seems unable to realize that we have a dynamic and competitive industry, with some of the best wireline and wireless networks in the world.

Perhaps it cannot accept this reality because of its very nature as a regulatory bureaucracy. As Ronald Reagan said, “A government bureau is the nearest thing to eternal life we’ll ever see on this earth.” As the industry evolves, the CRTC finds new reasons to continue to regulate it, in order to justify its existence. In doing so, it is not protecting consumers, it is only protecting its own power.

The Telecommunications Policy Review Panel, in 2006, made several proposals to modernize the regulatory approach. One would have wide-ranging consequences if applied.

As the Panel wrote:

“It is time to reverse the current presumption in the Telecommunications Act that all services should be regulated unless the CRTC issues a forbearance order. This should be replaced with a legislative presumption that services would not be regulated except in specified circumstances designed to protect end-users or maintain competitive markets.”

I agree with this proposal. The telecom industry is a mature and competitive industry, and it should be treated as such. It’s not a playground for bureaucrats.

What this means concretely is that we should phase out the CRTC in its role as a telecom regulator. The department of Innovation, Science and Economic Development could take over its remaining essential functions, including social regulation. And the Competition Bureau would deal with competition issues, as it does with all other industries.

There is one more area of your industry where I think government policy has not been optimal over the past few years, and where we can once again contrast attempts to impose artificial competition with what should be real competition. That area is wireless policy.

In 2007, I was consulting on what kind of rules to adopt for the coming AWS spectrum auction. There was one major debate: Should we have rules that treat all companies the same, or should we set aside a portion of the spectrum for new entrants, who could get it cheaper?

Many people argued that we should have a set-aside to favour the entry of more competitors. A set-aside, as you know, is essentially a subsidy to new entrants. Companies that rely on subsidies to compete do not make strong competitors.

My preferred solution was to have no set-aside, and to open the sector to foreign investments.

With an opening of the sector to foreign investments, we could have had a lot more competition. Real competition. Perhaps a big American or European company would have decided to enter the Canadian market, or buy a Canadian provider. The threat of such an entry would have been enough to bring competitive pressure.

Unfortunately, my successor decided to go with the set-aside option. And during the following years, every spectrum auction had rules favouring new entrants.

That policy was a mixed success. Well-established regional companies like Videotron, Eastlink, SaskTel and MTS bought spectrum and launched wireless services. But we could argue that they did not need the special rules and the indirect subsidy, and would have bought spectrum anyway. New entrants like Public Mobile, Mobilicity and Wind never succeeded and were finally acquired by other companies.

The result is that billions of dollars in unprofitable investments were wasted. Spectrum was misallocated, underused or not used at all for many years. For example, Shaw did not use its spectrum until it was sold last year. The spectrum bought by Videotron outside of Quebec is still not being used.

This is not to the advantage of consumers. Consumers would have benefitted a lot more if all the spectrum had been bought by companies strong enough to use it and deploy advanced technologies right from the beginning. This is another typical case of trying to foster artificial competition instead of getting the government out of the way so that we have real competition.

Almost everyone agrees that more competition is good for consumers. It’s easy to understand that when companies are forced to compete, they tend to offer better services and lower prices. The problem is to determine how to foster competition. Interventionist policies that are meant to bring more competition actually do the opposite.

Competition does not increase when you prevent some players from competing, as the CRTC was doing in the local telephone market.

Competition does not increase when you force some players to share their networks with others, as the CRTC is doing with fiber to the home technology.

Competition does not increase when you tax and regulate instead of encouraging investments, as the CRTC is planning to do with broadband Internet.

Competition does not increase when you prop up small and weak providers with subsidies, as my successors at Industry Canada did in the wireless sector.

Competitive markets don’t need government intervention to work. They only need to be free.

So here are some suggestions for the current minister responsible for this file—or perhaps they will be part of the mandate letter for the one who will be in charge after the next election!

Get rid of bad policies such as the mandated sharing of networks.

To ensure that more such policies will not be implemented, phase out the CRTC in its role as telecom regulator.

Hold spectrum auctions without preferential rules, so that everyone is on a level-playing field.

And finally, open the sector fully to foreign investors.

If we implement these reforms, our telecommunications industry will be even more competitive and stronger, to the benefit of Canadian consumers.

Thank you! Merci!

Published on June 07, 2016

Government bureaucrats and the CRTC have been pretending to create more competition.

In reality they’re just giving subsidies to poorly-funded startups.

Instead of opening up our cell phone industry to foreign investment, they have blocked major telecom companies from being able to buy more spectrum, and reduced the incentive to invest in Canada.

The CRTC and government bureaucrats have messed up our cell phone industry for long enough.

It’s time to cut the CRTC.

We need more foreign investment, more competition, better services, and lower prices.

All Canadians should have access to affordable, nutritious food – grown in a way that allows our farmers to not be under the thumb of cartels and their Ottawa based lobbyists.

Supply management is a system that keeps the prices of dairy, poultry and eggs artificially high through the control of production, the banning of imports, price fixing by bureaucrats, and the prevention of competition in the market. 

Conservatives are not credible when we talk about principles and then defend policies that squarely contradict these principles.

It’s time to see this policy changed in a way the benefits both consumers and farmers. 

Good morning,

Since I announced my candidacy for the leadership of the Conservative Party, there is one question that I have been asked by almost every journalist, as well as by many Conservative members: “How do you reconcile your free-market principles with your support for supply management?”

There is of course no way to reconcile it. Supply management is a system based on keeping the prices of dairy, poultry and eggs artificially high through the control of production, the banning of imports and price fixing by bureaucrats. It is a government cartel. It is the opposite of free markets.

However, article 117 of the Conservative Party Policy Declaration affirms the party’s official support for supply management. As an MP and minister in a government that supported supply management, I was not in a position to question the party’s democratic decision, or cabinet solidarity. And so I went along with it, even though I had grave misgivings about it for all these years.

Today, I am running for the leadership of my party. I have said repeatedly that for conservative principles to win, we must defend them openly, with passion and conviction. I cannot defend supply management with passion and conviction. And I think we Conservatives are not credible when we talk about principles and then defend policies that squarely contradicts these principles.

Why should we change this system? Because it is inefficient and fundamentally unfair to Canadian consumers and to our farmers.

I understand that there are advantages to the supply management system. One is that in a world where agriculture is being subsidized everywhere, Canadian supply management production does not require any subsidies on the part of government.

However, it does require much larger subsidies placed on the backs of Canadian consumers 2.6 billion of dollars each year, by fixing prices above the world price and preventing competition from foreign imports. In order to protect 10% of farmers, we are forcing all Canadian families, especially those with children and low-income families, to pay hundreds of dollars more every year for dairy, eggs and poultry products. This system is fundamentally unfair to Canadian families.

Another advantage is that it provides stability for farmers, in terms of prices and quantity of production. But the flip side of this is that it doesn’t adapt to changes in demand and it discourages innovation and productivity. The current crisis in the dairy sector with diafiltered milk is just the latest illustration of what happens when a system is too inflexible.

Supply management is also unfair to the other 90% of farmers who cannot develop their export markets as much as they otherwise could. Canada has always focused, when negotiating trade agreements, on protecting those sectors covered by supply management instead of trying to open new markets for the other sectors.

In order to satisfy one small, but powerful lobby, we restrict the development of thousands of other farming businesses across the country, and prevent the creation of thousands of jobs in these other sectors.

Supply management is unfair to all those businesses in the food processing sector and food preparation sector like restaurants that are forced to pay more for basic products and are therefore less competitive.

Of course, we cannot simply abolish the system and abandon those farmers who have played by the rules imposed by successive governments and have invested in those production quotas. They must be properly compensated.

The best solution would be to follow the successful example of reform in Australia. There would be a multi-year phase-out of import barriers and elimination of the domestic quotas and price control system. A temporary levy on these products would be raised to compensate farmers for the value of their quota. After that transition period, we would have a free, open and fair system to all, with lower prices, innovation, and more growth in the whole agricultural sector.

For all these reasons, I think it is time to have a debate. I am respectfully asking the members of our party to reconsider their position on this issue. During the coming year, I will try to convince Conservative Party members, as well as my fellow leadership candidates, that we should adopt a new position. We should use the occasion of the leadership race to have a real debate on this issue instead of maintaining this taboo.

There are very powerful lobbies in the supply management sector. My own riding is among those with the largest number of farms under supply management in Canada. But political leadership is about tackling difficult issues, not avoiding them.

Two years ago, our former Prime Minister Brian Mulroney said it is time to consider ending the supply management system. He compared the challenge to his own fight for Canada-U.S. free trade in the 1980s. Reform, he said, calls for bold leaders willing to endure short-term political risk for the sake of longer-term rewards.

I am willing to take that risk, because I believe that this is the right thing to do for all Canadians and for the Canadian economy. Thank you.

Ottawa – Maxime Bernier, leadership candidate for the Conservative Party of Canada, today called on Conservative members to reconsider the Party’s official support for supply management in agriculture.

Supply management is a legislated cartel based on control of production, on the banning of imports, on price fixing by bureaucrats, and on preventing competition and entry into the market. It forces families, especially those with children and low-income families, to pay hundreds of dollars more every year for dairy, egg and poultry products. It is 2.6 billion of dollars more that Canadians pay each year for these products.

Maxime Bernier believes it’s time to adopt a position on this issue based on free-market principles. “Conservatives are not credible when we talk about principles and then defend policies that squarely contradict these principles,” he said at a press conference in Ottawa.

The policy is not only unfair to consumers, but also to the 90% of farmers in other agricultural sectors who cannot develop their export markets as much as they otherwise could, because the protection of supply management has always been the focus of negotiations in trade agreements.

“In order to satisfy one small but powerful lobby, we restrict the development of thousands of other farming businesses across the country, and prevent the creation of thousands of jobs in these other sectors,” Mr. Bernier declared.

The Beauce MP proposes to follow the successful example of reform in Australia. There would be a gradual phase-out of the system with a temporary levy on these products to compensate farmers for the value of their quota. After that transition period, Canada would have a free, open and fair system to all, with lower prices, innovation, and more growth in the whole agricultural sector.

Several commentators and personalities have concluded over the years that supply management is an inefficient and unfair system, including former Prime Minister Brian Mulroney who said it’s time to consider ending it. Maxime Bernier believes the leadership race is a good occasion to have a real debate on this issue instead of maintaining this taboo, despite the political risk it implies. “I am willing to take that risk, because I believe that this is the right thing to do for all Canadians and for the Canadian economy” he concluded.

Maxime supported removing the definition of marriage as being the union between a man and a woman in the Conservative Party of Canada Policy Declaration. He voted for the change at the party’s convention in Vancouver in May 2016. 

Maxime supports constitutional equality for all regardless of race, religion, sexual orientation, or gender.

Published on May 11, 2016

Beware protectionism
9 July 2009

Hi,

In times of crisis, people have a normal reaction: they want to protect themselves. And many believe that one way to protect our jobs is to make imports more expensive through tariffs and quotas. They say that we should force consumers and businesses to buy goods and services produced here. This would increase economic activity and maintain jobs that would otherwise disappear.

This solution may be based on good intentions. But it is short-sighted and can only have disastrous consequences. All economic history teaches us that protectionism makes us less prosperous, not more.

Why is trading beneficial? It’s easy to understand. I will explain with a small economic unit that you are familiar with: your family.

Imagine that you and your family cut their links to the outside world. You have to grow all your food, make your own clothes, create your means of transportation, and even build the computer which allows you to watch me right now. It’s obvious that you would not be able to do all this and that you would be much poorer.

If instead you concentrate your efforts on one type of work, the one you chose as a trade, and you exchange what you make for other stuff that other people make, you will then be able to access all the goods and services available on the market.

This is what we call the economic advantages of the division of labour. When each of us specializes in what we do best, it takes fewer resources to produce more stuff, more efficiently. That benefits everyone. Of course, we lose these advantages when we close our borders to goods from elsewhere.

The logic of the division of labour is the same when you apply it to larger entities like a region, a province or a country. Those who believe that protectionism is good for the economy should ask themselves this question: why apply it only at the national level? Should we close the borders of Manitoba or New Brunswick to foreign products? Or perhaps restrict commercial exchange between Kitchener and Hamilton?

It’s also inevitable that as we close our borders, we encourage other countries to do the same to our own exports. One of the measures that contributed most to the Great Depression is the adoption of the Smoot-Hawley tariffs by the American government in 1930. Other countries then retaliated and international trade collapsed by two thirds within a few years.

At the end of the day, protectionism means that we prevent people from buying what they want. It means limiting freedom of choice. And it means making everyone poorer in order to protect some businesses that cannot face competition from abroad. It may help save jobs in some industries in the short term, but we’re going to lose at least as many in other industries that depend on foreign markets.

Our government firmly believes in the benefits of trade, including in times of crisis. This is why we are currently negotiating an ambitious free-trade agreement with the European Union. And why two weeks ago, the minister of International Trade, Stockwell Day, asked our American friends to enlarge NAFTA, in order to also cover spending by states, provinces and cities.

Protectionism is an illusion. Let’s not repeat the errors of the Great Depression. Let’s keep our markets open and leave people free to decide what they want to buy.

Talk to you again soon.