ublished on August 22, 2016

LET’S RESPECT THE CONSTITUTION

Maxime Bernier Announces Plan for Free Trade within Canada

August 22, 2016

For Immediate Release

OTTAWA – Maxime Bernier, Leadership Candidate for the Conservative Party of Canada, today announced his plan to break down needless trade barriers between Canadian provinces.

As Prime Minister, Bernier would adopt the radical notion of respecting Article 121 of the Canadian Constitution, which says:

“All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”

The first concrete step to respect the Constitution will be the introduction of legislation to establish the Canadian Charter of Economic Rights. This Charter will lay out the rights of Canadians to pursue their own economic prosperity, without needless red tape getting in their way.

The second step will be to establish the Economic Freedom Commission. This Commission will have the power to investigate breaches of the Charter by the provinces, to recommend arbitration, to help citizens and businesses take court action or to take legal action on Canada’s behalf.

According to a recent report from the Standing Senate Committee on Banking, Trade and Commerce, breaking down internal trade barriers could add as much as $130 billion to the Canadian economy each year.

Key Quotes from Maxime Bernier

“The problem of interprovincial trade barriers would not exist if we respected our Constitution.”

“Freeing our economy from internal trade barriers will help Canadian families and businesses. It will create jobs. It will increase government revenues. And it will make our country more united.”

“If I am elected Leader of the Conservative Party of Canada, and then Prime Minister of Canada, I will take the necessary steps to force provinces to respect our Constitution, and to give back to Canadians the economic freedom that is their birthright.”

Published on August 22, 2016

Let’s respect our Constitution and have free trade within Canada

Maxime Bernier, MP for Beauce and candidate for the leadership of the CPC

Ottawa, August 22, 2016

Last April, New Brunswick provincial court Judge Ronald LeBlanc finally dismissed a charge against Gerard Comeau. Mr. Comeau had been fined four years ago for bringing back 14 cases of beer and three bottles of alcohol from Quebec, which was a violation of New Brunswick’s Liquor Control Act.

How can this happen? This single event is proof that there is something utterly wrong in how our federation works. It negates the very notion of living in one united country.

As you know, the four themes of my campaign for the leadership of the Conservative Party of Canada are freedom, responsibility, fairness and respect. Interprovincial trade barriers are contradicting all four of these fundamental principles.

Fairness

It is totally unfair for Mr. Comeau, and for millions of Canadian consumers, to be forced to buy more expensive goods and services in order to allow provincial governments to maintain their monopoly control over sectors like the sale of alcohol.

It is unfair for nurses, dentists or accountants to have problems finding work in another province because their skills are not being automatically recognized.

It is unfair to have strict provincial quotas in the dairy, poultry and egg sectors that make farms smaller and less efficient, and discourage investment in new food processing capacity.

It is unfair to prevent the growth of businesses because they are not allowed to gain access to other provincial markets unless they submit to unnecessary and costly regulation.

These are only some among hundreds of examples of how provinces have erected barriers to the free movement of goods, services, and workers within our country.

Freedom

Apart from lobbies that want to be protected at the expense of everyone else, freedom of exchange benefits everyone. Free trade increases choice for consumers. It forces businesses to compete to attract customers with better and cheaper products.

This is why we have trade agreements concluded with 51 countries today. In some cases, it is easier for a Canadian company to sell its product in another country than in another province.

The recent Report of the Standing Senate Committee on Banking, Trade and Commerce, Chaired by Senator David Tkachuk, estimates that interprovincial barriers cost Canada’s economy as much as $50 billion to $130 billion each year.

Freeing our economy from these barriers would help Canadian families and businesses, it would create jobs. It would increase government revenues. And it would make our country more united.

Respect

A hundred and fifty years ago, the Fathers of Confederation knew about these advantages. That is why they inserted into our Constitution Article 121, which states that: « All articles of the growth, produce or manufacture of any of the provinces shall, from and after the Union, be admitted free into each of the other provinces. »

The problem of interprovincial trade barriers would not exist if we respected our Constitution. Unfortunately, this article was mostly ignored throughout our history. And the federal government, which has exclusive jurisdiction over the regulation of trade and commerce, did nothing to enforce it.

Instead we’ve relied on provinces trying to agree to lower barriers. In 1994, they signed an Accord on Internal Trade. It was never efficient at bringing down barriers. I was responsible for the internal trade file as Industry minister ten years ago and I could see that it was going nowhere.

The premiers were committed to sign an agreement on a new and improved internal trade regime by March 2016. The deadline passed without anything happening.

An agreement in principle was reached by the 13 premiers in July, but with very little details. We don’t know what sectors will be exempted. We don’t know what procedure will be used to solve disputes. There are already disputes about opening procurement contracts.

I do not believe that anything concrete will come out of this. It’s illogical to expect that governments responsible for the problem, will solve the problem. It’s no surprise that the government of New Brunswick is appealing the Comeau ruling.

The solution is not to hold more federal-provincial conferences of ministers and bureaucrats to negotiate tiny advances. What we need is a long-term solution, based on respecting our Constitution, to eliminate existing barriers and stop new barriers from being erected. 

Responsibility

In theory, everyone is in favour of getting rid of interprovincial trade barriers. The current Liberal government is in favour. My colleagues in the leadership race are in favour. But in practice, nobody is willing to do what it takes to solve the problem.

Among all the studies that have been written on the topic, I have found only one that I believe offers a workable and realistic solution. It was set out in a paper titled “Citizen of One, Citizen of the Whole” published by the Macdonald-Laurier Institute six years ago. The title comes from a declaration by one of Canada’s founders, George Brown, when he said that the goal of Confederation was to “throw down all barriers between the provinces – to make a citizen of one, citizen of the whole.”

One of the paper’s coauthors was the late Robert Knox, who was executive director of the Internal Trade secretariat when the Accord on Internal Trade was negotiated in 1993-94. Mr. Knox changed his mind after seeing how pointless the Accord’s dispute resolution mechanism was.

Their proposal is simple: It is Ottawa’s responsibility to ensure that Article 121 of our Constitution is respected. The federal government cannot of course change provincial laws and regulations directly. But it can help challenge them in court.

That’s what Mr. Comeau did in New Brunswick. But very few people are willing to get into this kind of costly and stressful court fight. And what we need is not just one challenge of one regulation. But a systematic challenge of hundreds of laws and regulations.

If I am elected Leader of the Conservative Party of Canada and ultimately Prime Minister of Canada, I will first bring forward legislation to adopt a Charter of Economic Rights. This will establish the case for Ottawa’s intervention to give back Canadians their freedom to trade and to work everywhere in the country.

Second, I will establish an Economic Freedom Commission with the power to investigate breaches of the act by the provinces, to recommend arbitration, to help citizens and businesses prosecute their case or to initiate legal action on its own.

This Commission should have the appropriate staff and budget to do its job in an efficient and swift manner, given the billions of dollars of benefit to the Canadian economy that we can expect. A jurisprudence would quickly be established, and it can be expected that cases would be solved more quickly as time goes by.

I am usually not in favour of establishing new government bureaucracies. But in this case, when the goal is to fight bureaucratic excesses, to apply the wisdom of our Constitution, and to unleash the free market for the benefit of Canadians, I think it is totally justified.

It’s time to stop pretending that we are concerned with this issue, and to take the appropriate means to solve it. If I am elected leader of the Conservative Party of Canada, and then Prime Minister of Canada, I will take the necessary means to force provinces to respect our Constitution, and to give back to Canadians the economic freedom that is their birthright.

Published on August 06, 2016

This is a reply to a column by Stephen Gordon that appeared in the National Post:

In a recent column (“Conservatives are dismantling their credibility in economics by campaigning against carbon pricing,” August 1), Stephen Gordon accuses Conservatives of “frittering away the remnants of their intellectual capital in economics” by opposing a federal carbon tax or cap-and-trade system. A market-friendly party should, in his view, instead promote these “market-based policies.” I beg to differ.

First of all, there is a huge confusion about the meaning of words here. It is true that putting a price on something and then letting market participants adapt to the change in the way they see fit is a more flexible and less intrusive way of intervening in markets than intrusive regulation that tells them exactly what to do and how to do it. But that doesn’t make it a “market-based policy.” No more than imposing a minimum wage is a market-based policy simply because the government lets businesses decide how many people to fire or hire at the new wage level instead of imposing quotas.

A cap-and-trade system is a hugely complicated artificial market whose basic features are all determined by government intervention. When the quantity of something is arbitrarily determined by bureaucrats, or when you can lobby the government to get an exception or a better deal for your industry, we’re very far from a market.

In the same way, when the “pricing” mechanism is a tax, it should be more than obvious that we’re not talking about a real pricing mechanism based on private property and free markets, but about a government measure. Almost everything about a carbon tax is determined by the government, from its arbitrary level which can change in ways unrelated to supply and demand, to what it applies to and what to do with the revenues it generates.

So, proponents of carbon pricing should stop pretending that these policies are necessarily congenial to a free-market conservative approach and call a spade a spade. Instead of market-based policies, let’s talk about various government-imposed measures to deal with carbon emissions, some of which may be more intrusive and others more flexible.

Now, there is no way of establishing property rights on the world’s atmosphere, and a real market-based way of pricing the externalities that constitute carbon emissions will thus never arise. A government-imposed measure is probably the only way to deal with carbon emissions, just as we dealt for example with acid rain and ozone depletion. But that doesn’t mean that adopting such a measure at the federal level is the best way to go.

Let me give Mr. Gordon a few reasons why a market-friendly Conservative would not want that to happen.

The first and most important is that to really have a substantial impact on people’s behaviour and ultimately on Canadian carbon emissions—which would still have barely any effect at the planetary level, given that Canada is responsible for only 1.6% of global emissions—a carbon tax should be a lot higher than 20$ or $30 a tonne. And if it is significantly higher, it will very negatively impact Canada’s economy and Canadians’ standard of living.

That alternative between inefficiency and disastrous economic consequences is something proponents of carbon pricing never openly recognize when they give us this rosy picture of a market-friendly measure. It’s just supposed to help us reach emission reduction targets without being too costly and while necessitating only a modest adaptation to our way of life. I frankly find this stance hypocritical.

Our prosperity is, and will remain for decades to come, dependent on fossil fuels to a large extent. Apart from extremist green activists, very few Canadians want to see their standard of living significantly reduced to contribute in a negligible way to the global fight against climate change. And it’s perfectly logical to want to grow our economy as much as possible to better deal with the consequences of climate change rather than hurt our economy now and jeopardize our ability to adapt in the future.

A second reason is that provinces are already experimenting with various ways to reduce emissions. Some have a carbon tax, others have a cap-and-trade regime, still, others are focusing on carbon capture or direct regulation. Several also have programs to subsidize electric cars or renewable energy that only seem to waste money and drive up costs to businesses and consumers.

We’ll see over time what model is most effective in reducing emissions and least detrimental to the economy. But there is no reason for Ottawa to impose another layer of government intervention on an already complex and costly series of measures whose effectiveness has yet to be demonstrated.

A third reason is that the transition to other sources of energy is already taking place, as companies respond to consumer demand for more environment-friendly products. The federal government should help it along by reducing taxes, barriers to innovation and competition, and ineffective and costly regulation. This is a real market-based policy that Conservatives should support.

– Maxime Bernier

• Become a Member
• Vounteer
• DONATE

Published on August 03, 2016

MAXIME BERNIER ANNOUNCES PLAN FOR FAIRNESS IN AIR TRAVEL SERVICE AND PRICES

August 3, 2016

For Immediate Release

OTTAWA – Maxime Bernier, Leadership Candidate for the Conservative Party of Canada, today announced his plan for fairness in air travel prices.

As Prime Minister, Bernier would take a four-step approach to increase service and reduce needless and hidden costs that are passed along to consumers.

First, airports would be privatized and treated like any other business. One quarter of the price differential between Canadian and American airports is accounted for by excessive airport fees.

Second, foreign ownership limits will be abolished for airlines that operate domestic services. Foreign investors will be welcomed to compete in the Canadian air travel market, in particular to connect regional airports that are currently underserved.

Third, the unjustified Liberal decision to ban jets from flying out of Toronto’s Billy Bishop airport will be overturned.

Fourth, more bilateral agreements will be negotiated to allow for more flights between Canadian cities and foreign destinations. Instead of focusing on protecting Canadian airlines from competition, consumers’ interests would drive Canada’s policy.

Mr. Bernier’s proposals are in line with the resolution to “introduce and actively promote a new framework for increased domestic & foreign airline competition in Canada” proposed by the Vancouver Centre Conservative Association and adopted at the party’s convention last May.

Key Quotes from Maxime Bernier

“Many Canadians do not fly, or rarely do, because they find it too expensive. Many others cross the border and fly from an American airport because it’s cheaper there. To tolerate such a situation is to show disrespect to Canadian consumers.”

“If I am elected Leader of the Conservative Party of Canada and ultimately Prime Minister of Canada, I will remove the burden of excess taxes and regulation, open the sector to more competition, and encourage more investment.”

“These reforms are straightforward ways to free the Canadian air transport industry; to be fair to Canadian travellers who live in currently underserved areas; and to show respect for Canadian consumers forced by bad policies to pay much higher prices than necessary.” 

Let’s Make Air Transport More Competitive and Cheaper for Canadian Travellers

Maxime Bernier, Leadership Candidate for the Conservative Party of Canada
Ottawa, August 3, 2016

Canada is the world’s second largest country. Its cities and communities are dispersed far and wide. Some of them, in the North, can only be reached by plane. Air transport plays a crucial role in bringing us together and bringing the world to us.

As Minister of State for Tourism for four years, I was very much aware of the importance of air travel for our tourism industry. I also know how important it is for Canadian families to get the best deals possible when they visit their family in another province, or when they vacation in another country. 

In 2014, the air transport industry served 125 million passengers. It directly employs more than 140,000 Canadians.

Canada has a relatively strong air transportation industry and good infrastructure. But like many other sectors of our economy, such as telecommunications and supply management in agriculture, it suffers from a lack of competition and from prices that are too high.

In terms of cost competitiveness, Canada is at the bottom of the World Economic Forum ranking, 124^th out of 141 countries. Toronto’s Pearson airport is the fourth most expensive airport in the world to land in.

Many Canadians do not fly, or rarely do, because they find it too expensive. Many others cross the border and fly from an American airport because it’s cheaper there. To tolerate such a situation is to show disrespect to Canadian consumers.

My campaign is based on the four themes of freedom, responsibility, fairness and respect. If I am elected Leader of the Conservative Party of Canada and ultimately Prime Minister of Canada, I will remove the burden of excess taxes and regulation, open the sector to more competition, and encourage more investment.

In other words, I will let entrepreneurs and free markets play their role fully in order to bring more options, better services and lower prices for consumers.

There are several areas of reform that need to be acted on to bring about these changes.

First, the major reason why tickets prices are so high in Canada is that the federal government continues to treat airports as cash cows that should be milked as much as possible.

In the 1990s, Ottawa transferred the management of 26 airports to non-profit airport authorities. But it retained ownership of land and assets, and has been charging excessive airport rent since then.

According to the Canada Transportation Act Review Report, submitted last February by the honourable David Emerson, Ottawa has collected about $5 billion in airport rent since 1992. This is well in excess of the value of the assets transferred, even though Ottawa is not investing any money in those airports. These rents can represent up to 30 percent of airport operating budgets, costs that are of course passed on to travelers.

Moreover, security charges of up to $25 per passenger have exceeded the cost of security screening by an average of 18 percent every year for several years. Again, instead of paying for a service, travelers are penalized by an unjustified tax.

This is why I would abolish the rents, privatize the airports, and treat them instead like other businesses, which would reduce costs and encourage investments.

Privatization of airports is the model that predominates elsewhere in the world. This is just a common sense solution to stop penalizing air travel and put money back into one of our most important industries and into consumers’ wallets.

A second reform that would considerably help the industry and travelers is to raise the foreign ownership limit in airlines. With its current 25% limit, Canada is among the developed countries least friendly to foreign investors. And we are also the only major market in the world not served by ultra-low-cost airlines, because they cannot get the necessary funding in Canada.

Two new ultra-low-cost carriers backed by European and American investors, Enerjet and Jetlines, have asked the Transport Minister to raise the foreign ownership limit to 49%. They want to connect smaller airports such as Hamilton, Quebec City, Halifax, or Edmonton, that are underserved and where there is very little competition. The Minister has yet to respond. This situation is unfair to Canadians who live in these cities and regions.  

This is why I would eliminate the 25% foreign ownership limit. But why stop at 49%? Australia and New Zealand allow 100% foreign ownership for airlines that operate domestic services. If foreign investors have enough confidence in our economy to establish a new airline service, we should fully welcome them and the competition they bring.

A third way to help consumers is to allow Porter Airlines to fly jets from Billy Bishop Airport in Toronto. The Liberal Transport Minister announced last November that he would not allow it. This was a reckless and unjustified decision.

Porter had planned to offer new destinations such as Vancouver, California and the Caribbean using CSeries jets, which have a longer range than the turboprops in its existing fleet. I would allow Porter to go ahead with its plan because it would increase competition and lower prices for everyone flying to and from Toronto.

A fourth important initiative would be for Canada to pursue more open skies bilateral agreements with other countries so as to increase the number of flights between Canadian cities and foreign destinations.

As the Emerson report notes, Canada’s policy until now has been focused on protecting Air Canada and WestJet from too much competition on international routes. Because of this, Canadians have fewer options when traveling abroad. This contrasts with the policies of most other developed countries, where consumer interests have been given a more prominent role. I would advance a real open skies agenda. It’s time to put consumers’ interest first.

These reforms are straightforward ways to free the Canadian air transport industry; to be fair to Canadian travellers who live in currently underserved areas; and to show respect for Canadian consumers forced by bad policies to pay much higher prices than necessary. 

If I become leader of the Conservative Party and prime minister, I will implement these reforms. They are in line with the resolution to “introduce and actively promote a new framework for increased domestic & foreign airline competition in Canada” proposed by the Vancouver Centre Conservative Association and adopted at the party’s convention last May.

Thank you.

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.