Industry Canada’s rejection of a planned investment in MTS-Allstream for unspecified national security reasons is another sign the federal government’s entire telecommunications policy is inconsistent and failing, said the leader of Unifor, Canada’s largest telecommunications union.
“The federal government has completely mismanaged the policy framework for this industry,” said Jerry Dias, National President of Unifor. “The bizarre rules for the coming spectrum auction, and the inconsistent and arbitrary approach to foreign ownership, have created nothing but confusion and uncertainty across the industry.”
Unifor represents some 30,000 workers across Canada’s telecommunications sector – including workers at MTS-Allstream. MTS-Allstream had reached an acquisition agreement with Accelero, an international firm that would facilitate new capital spending and Allstream’s expansion. Industry Canada suddenly notified the company of the rejection of the deal late on October 7, just before the timeline for federal review expired.
For decades, Canada’s telecommunications sector was off-limits to foreign corporations, but the Harper government began opening loopholes for foreign investments in its 2012 omnibus budget bill. The government claims its policy will facilitate the emergence of an elusive “fourth national carrier,” which would supposedly create benefits for consumers. This was also the rationale behind other policies, like rules in the coming spectrum auction which clearly favour foreign entrants, and restrictions on purchases of smaller companies by the three existing Canadian-owned major suppliers.
“Industry Canada says our operations are of vital national interest, and that’s why they rejected the Accelero deal,” said Dylan Gadwa, President of Unifor Local 2000-A which represents workers at the company. “The government owes it to Canadians to ensure the future stability of these vital jobs, under an alternative ownership structure.”
Unifor restated its position in favour of consistent and clear limitations on foreign ownership, a National Wireless Code to protect consumers (including with regulations on roaming charges, contract length, and other practices), and Canadian-content thresholds to prevent the offshoring of Canadian telecom work to foreign jurisdictions.