Proceedings of the Standing Senate Committee on
National Finance
Issue 16 - Evidence - July 8, 2010
OTTAWA, Thursday, July 8, 2010
The Standing Senate Committee on National Finance, to which was referred Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures, met this day at 9:02 a.m. to give consideration to the bill (topic: Part 23); and to give clause-by-clause consideration to the bill.
Senator Joseph A. Day (Chair) in the chair.
[English]
The Chair: I call to order this twenty-fourth meeting of the Standing Senate Committee on National Finance on Bill C-9, the budget implementation act.
In previous meetings, the committee has heard from ministers, departmental officials and outside stakeholders interested in or impacted by this proposed legislation. This morning, we turn our attention to Part 23, which proposes to amend the Telecommunications Act. We had hoped that the Minister of Industry would be able to appear to help us understand some of the policy implications of this amendment. In his place, we are pleased to welcome Mr. Mike Lake, Member of Parliament for Edmonton—Mill Woods—Beaumont and Parliamentary Secretary to the Minister of Industry. Accompanying him are officials from Industry Canada: Ms. Susan Bincoletto, Associate Assistant Deputy Minister, Spectrum, Information Technologies and Telecommunications; and Ms. Pamela Miller, Director General, Telecommunications Policy Branch.
[Translation]
Honourable senators, we have one hour with the parliamentary secretary.
[English]
Mr. Lake, please proceed with your introductory remarks.
Mike Lake, M.P., Parliamentary Secretary to the Minister of Industry: I am delighted to be with you today indoors instead of outdoors in the 9 a.m. heat.
I will provide the committee with some context for the government's proposal to remove the foreign investment restrictions applicable to Canadian satellite operators. Before I begin, I would like to clarify the scope of the changes being proposed.
Within Canada, telecommunications services are provided using a number of technologies. Satellites are used to provide services to remote areas, to broadcast television signals and to provide access for Canadian telecom carriers to international networks. Satellite is a specialized service: The majority of telecommunications services are provided through wireline and wireless networks. The amendment in question is in respect to the ownership or operation of satellites only.
You may be aware that the government is currently undertaking a public consultation on broader changes to the telecommunications foreign investment restrictions. This public consultation focuses on three options for broad changes, and comments are being accepted until July 30, 2010. Because of the challenges faced by Canada's satellite sector, the satellite foreign investment restrictions are being treated as a distinct issue. This is why the government is moving forward with satellite liberalization as a standalone proposal in Bill C-9.
Before discussing the challenges of the satellite sector, please allow me to clarify "foreign investment restrictions." These refer to the legislated Canadian ownership and control requirements, which take the form of restrictions on voting shares and on the "control in fact" held by foreign entities. The Telecommunications Act containing these restrictions came into force in 1993. Section 16 of that act specifies that telecommunications common carriers need to be Canadian-owned and controlled and that to meet this requirement they must satisfy three criteria: 80 per cent or more of voting shares must be held by Canadians; 80 per cent of the board of directors must be Canadian; and the corporation must "not otherwise be controlled by persons that are not Canadians," which many have come to call the "control in fact test."
A significant change affecting the satellite sector was made in 1998 as a result of the agreement on basic telecommunications as part of the World Trade Organization's General Agreement on Trade in Services. In the context of this agreement, Canada committed to liberalize the provision of international telecommunications services. To implement this commitment, the Telecommunications Act was amended in 1998 to remove the investment restrictions from satellite earth stations and international submarine cables.
As a result of this change, Canadian satellite providers face an uneven playing field. Since that time, non-Canadian entities have been allowed to own and operate satellite earth stations — otherwise known as stations on the ground that communicate with satellites — and offer service in Canada. A large number of foreign satellites have been approved to offer service in Canada in direct competition with Canadian suppliers like Telesat. Unlike Canadian satellite operators, most of these foreign operators do not face foreign investment restrictions in their home markets. This means that unlike their the competitors, Canadian satellite operators face limits to their access to capital and have a limited ability to form strategic global relationships and access new technologies. Removal of the foreign investment restrictions for Canadian satellite operators would level the playing field and put Canadian satellite operators on the same footing as their competitors.
As a consequence of these limitations, Canadian satellite operators face challenges with regard to scale. While Canada has the fourth largest satellite provider in the world, Telesat, it is approximately one quarter the size of its largest competitors: Intelsat, SES and Eutelsat. Scale matters in this industry, providing large carriers with significant cost and productivity advantages. The global satellite industry is consolidating rapidly to benefit from economies of scale. While there are over 30 fixed-satellite service providers in the world, the top 3 companies account for approximately 70 per cent of total revenue and have an average of 40 satellites in orbit, compared to Telesat's 12 satellites.
In comparison to the three largest global satellite operators, Canada's satellite operators, including Telesat and the much smaller Ciel Satellite Group, SkyTerra and TerreStar, are at subscale size. Canada's foreign investment restrictions currently restrict the growth potential of Canadian satellite operators. This keeps costs high for satellite companies, preventing them from operating as efficiently as possible and passing on lower costs to Canadian consumers and the businesses that rely on them. It also prevents Canadian firms from growing into stronger international competitors able to invest in new technologies to the benefit of Canadians.
The challenges faced by the Canadian satellite industry were recognized most recently by the House of Commons Standing Committee on Industry, Science and Technology. In its June 2010 final report on its study of Canada's telecommunications foreign investment restrictions, the committee recommended to:
Remove foreign ownership restrictions in respect of satellite ownership or operation in Canada given that Canadian satellite companies (e.g., Telesat) already face competition from foreign entities in the domestic market.
What impact will these changes have on services to Canadians? The Canadian satellite industry is well positioned to compete internationally, and greater access to capital and scale is expected to result in enhanced productivity and innovation. Competition exists in the marketplace now from both foreign and domestic satellite providers and can only benefit from a more open market.
I would emphasize that in removing the foreign investment restrictions pertaining to satellite providers, all other regulatory safeguards currently in place will continue to apply. The changes would affect only the ownership and control requirements applicable to satellite operators, leaving in place all other provisions of the Radiocommunication Act, the Telecommunications Act and the Broadcasting Act. Any company licensed to operate satellites in a Canadian orbital slot would continue to have to be incorporated under Canadian law and meet all domestic requirements. In particular, the government will retain its ability to impose licence conditions on satellite operators utilizing Canadian orbital positions, such as requiring the ability to serve all regions of Canada, including the North, and offering capacity to Canadian customers.
The Canadian Radio-television and Telecommunications Commission will retain its authority to ensure that satellite providers provide capacity to broadcasters on a non-discriminatory basis. Regarding protection for culture and broadcasting, broadcasting distribution undertakings using satellite providers will continue to be subject to all requirements of the Broadcasting Act. As well, the provisions of the Investment Canada Act, including the national security review, will remain in place.
In conclusion, the removal of foreign investment restrictions will allow Canadian satellite firms to access foreign capital and know-how, invest in new and advanced technologies, and develop strategic global relationships that will enable them to achieve economies of scale and to participate fully in foreign markets. It is time to move forward with these changes that will allow satellite companies to compete globally, providing opportunities for growth and innovation.
I look forward to your questions.
The Chair: There are four Canadian companies operating in the current regime, Telesat being by far the largest, as you have explained. We understand that this legislation is a result of urging by Telesat Canada. Could you tell us whether the other three companies have been consulted and what is their position?
Mr. Lake: The first point is, if we go back to 2008 and the Competition Policy Review Panel chaired by Red Wilson, this is where the initiative for these changes came from. Of course, all of these companies would have had the opportunity to present submissions at that time. Telesat put forward a rather lengthy submission indicating the changes that they would like to see happen.
I believe you had an official from Industry Canada before the committee earlier who was asked the same question. He indicated that he had conversations with one of the other providers, but there has been substantial consultation on this issue and substantial opportunity to put forward submissions.
The Chair: Substantial opportunity but, as I understand it, only one of the other three has been consulted as to their position; is that correct?
Mr. Lake: All the companies have had an opportunity to consult.
The Chair: Did they have the opportunity?
Mr. Lake: Absolutely, yes.
The Chair: We do not know what their position is; do you know whether they support this legislation? If you tell us all four operating in Canada support this legislation, then we can go on to another issue.
Pamela Miller, Director General, Telecommunications Policy Branch, Industry Canada: There is absolutely no opposition to this. All parties have had an opportunity to comment, and this is very positive for the industry in terms of attracting capital in general.
The Chair: You have had no comment from the other three?
Mr. Lake: That is correct.
Senator Moore: Chair, can we have the names?
The Chair: For a point of clarification, do you have the names of the other three companies, besides Telesat?
Mr. Lake: They are Ciel, SkyTerra and TerreStar.
When reading the transcript of a previous meeting Ciel was noted as the letters CL; it is actually C-I-E-L.
The Chair: You indicated that Telesat Canada competes with foreign telecommunications operators on Canadian soil now. Would the fact that Telesat Canada competes with land-based satellite operators — is that how they compete in Canada now?
Mr. Lake: The challenge we have is that the three largest foreign competitors competing with Canadian companies on Canadian soil, as per the agreement in 1998, do not face the same foreign ownership restrictions in their own countries. That is why this legislation is so important for Telesat.
Telesat is in fourth place in terms of size, but the three largest competitors are significantly larger. I believe they average about 40 satellites each, whereas Telesat has 12. It is very important to Telesat that they are able to compete and access capital the same way as their competitors are able to do.
The Chair: Telesat is not into submarine cables, so the 1998 agreement, as I understand it, pertained to submarine cables and satellite earth stations. That was my question. Is Telesat competing with foreign satellite earth station operators?
Mr. Lake: Yes, that is correct.
Senator Finley: Mr. Lake, I am told that this is your first appearance before a Senate committee. I hope it will not be too tough on you. I do know that you have sat on this side of the table in a number of House of Commons committees, in particular and most recently the House of Commons Standing Committee on Industry, Science and Technology. You just finished looking at the whole subject of foreign investment rules and satellite companies. Could you take us through what happened in the committee, who you spoke with and what the views were that enable you to arrive at your conclusions?
Mr. Lake: The committee heard from several witnesses with a variety of viewpoints. We heard from carriers, broadcasters, new entrants, unions, academics, arts organizations, the Chairman of the CRTC, of course, and the minister himself was before that committee. We questioned the stakeholders and considered all of the factors involved and came up with recommendations.
We came up with a specific recommendation. It is important in the context of this meeting to note it, which I mentioned in my remarks. The specific recommendation regarding satellites is this:
Remove foreign ownership restrictions in respect of satellite ownership or operation in Canada given that Canadian satellite companies (e.g. Telesat) already face competition from foreign entities in the domestic market.
While there were different viewpoints on many things, it was definitely something we were able to come to agreement on in that committee.
Senator Finley: In the Speech from the Throne, a commitment was made to give Canadian firms access to the funds they need. In the context of this inherently international satellite market, how important is it for Canada's satellite firms to access this capital?
Mr. Lake: During the committee hearings we heard specifically from Telesat. They appeared before the committee. It is important to understand that this was something they felt was critical to their ability to compete with the largest companies in the world. The members of the Industry Committee all want our Canadian companies to be able to compete with the best. We have a well-regarded company internationally, but they face an unlevel playing field when it comes to access to capital. If they want to take that next step to be global competitors and champions, they need to have the same access to capital that their competitors have.
The Chair: A point arose earlier that requires clarification. Telesat was a Crown corporation that was then privatized; is that correct?
Ms. Miller: Yes, that is correct.
The Chair: A few years ago it was a Crown corporation, entirely owned by the Canadian people, then privatized with this restriction in terms of ownership. Now we are going the further step of deregulation by proposing to take away the Canadian ownership requirement.
Ms. Miller: That would be correct.
The Chair: Thank you. That clarifies that point that arose.
Senator Baker: Mr. Lake, you are a junior minister and I think you have performed admirably in that position in the House of Commons.
I have a couple of technical questions regarding the law that we are changing, so perhaps they will require a technical answer. Proposed subsection 16(1) of the Telecommunications Act states, "A Canadian carrier is eligible to operate as a telecommunications common carrier if . . . ." My understanding is that a Canadian carrier is actually a TCC. If memory serves, a TCC is a telecommunications common carrier who is subject to the laws of Parliament. In other words, with respect to the definition under the act and the adjudication done by the CRTC, a telecommunications common carrier is quite different from that of a Canadian carrier because the Canadian carrier is, by definition under section 2 of the Telecommunications Act, a telecommunications common carrier who comes within the legislative authority of Parliament. Am I correct up to this point?
Ms. Miller: Yes.
Senator Baker: A change made in this proposed subsection is that a Canadian carrier need not be subjected to the legislative authority of Parliament. In other words, a telecommunications common carrier is eligible to become that if — and here are the new words — "it owns or operates only a transmission facility. . . ." First, was it intended that the word "only" be placed there or should it read, "it only owns and operates"? That is different than "it owns and operates only." Why is the word "only" necessary?
Ms. Miller: It serves to specify that it is only applied in regard to the exempted facilities. If the company operated other facilities, such as fibre networks that were not captured by the exemptions, those would be scoped out.
The "only" means that it is only referring to the exemptions listed in subsection (5).
Senator Baker: Therefore, the exemptions become an obligation, do they not?
Ms. Miller: To qualify for proposed paragraph 16(1)(b), it has to fall within the exemption.
Senator Baker: In other words, you would "own or operate only" a satellite, an international submarine cable or earth stations.
If a Canadian carrier can become "only" a telecommunications common carrier, "only" if it owns a satellite and operates a satellite, then that telecommunications common carrier would no longer be subjected to tariffs. Under the act, the tariff qualification and other requirements are restricted to Canadian carriers. The point is that, under the act, telecommunications common carriers need not be Canadian carriers.
Ms. Miller: That is correct. They are still subject to all the provisions of the act. Here, we are exempting satellites from proposed subsection 16(1) while all the other provisions of the act still pertain.
Senator Baker: Yet proposed section 16 is a stand-alone section. When you go to this section under the act, it is a stand-alone part. You can go to subsections 16(5), 16(2), 16(3) and 16(4) and this is a stand-alone section to which the other provisions do not apply.
I do not know if you know where I am going with this. When looking at this subjectively, with a bit of objectivity in there, I would say that, on its face, the matter of whether or not you are a TCC or a Canadian carrier has been extensively adjudicated before the CRTC. You can correct me if I am wrong. The meaning of a Canadian carrier being able to become a telecommunications common carrier only, could result in extensive adjudication following the passage of the bill.
Ms. Miller: Department of Justice Canada officials have looked at this closely and it has been drafted by the appropriate Justice officials. They have assured us that these provisions pertain only to the ownership, and all other provisions of the Telecommunications Act remain in force.
Senator Baker: Are they convinced that the word "only" in proposed paragraph 16(1)(b) is clear enough?
(b) it owns or operates only a transmission facility that is referred to in subsection (5).
Ms. Miller: Yes, that is correct.
Senator Baker: You have checked it against the French translation, have you? The French, in this particular case, would be the same, would it not? There is a "n'est que," which means "only."
Both of them are confusing, Mr. Chair, and I find no relief in the French at this point. It is a rather strange way of making an exemption an obligation and accomplishing what is intended by the legislation.
The Chair: Are there any further comments?
Susan Bincoletto, Associate Assistant Deputy Minister, Spectrum, Information Technologies and Telecommunications, Industry Canada: I want to add to what Ms. Miller was referring to. If it is an odd way of writing it, you can thank the drafters for that. However, the policy intent was very clear. If you are a satellite operator, you would not, under this provision, be subject to foreign ownership restrictions. If you happen to be a satellite operator and also something else, like a telecommunications operator, then that exemption applies only to your satellite business but not to any other businesses of yours.
The "only" means that you cannot, through the back door —
Senator Baker: Or your international cable. It is not only just the satellite.
Ms. Bincoletto: This adds satellites. The "only" applies only to satellites. Clearly, the intent is not to alleviate any of the other obligations under the act to the satellite operators. In other words, the only thing that is excluded here is the obligation to have Canadian control.
Senator Baker: One second, now. You said the "only" applies to only the satellites. That is not correct, is it?
Ms. Bincoletto: Only to your satellite operations.
Senator Baker: No, it also includes international submarine cables.
Ms. Bincoletto: That is already there.
Senator Baker: I know it is already there, but the point is that proposed paragraph 16(1)(b) say, ". . . all facilities referred to in subsection (5)." Subsection (5) includes not just satellites but earth stations and international submarine cables. You are saying that the newness of this will extend it to satellites, but it does not only apply to satellites.
Ms. Bincoletto: Yes. You are absolutely correct.
Senator Baker: That is why there is a need for this type of questioning. The CRTC will take this afterwards and ask what it means, and that is the importance of explaining it.
Mr. Lake: When we are talking about wording, the word "only" is an important word in the context of the discussion we had at the Industry Committee. There was significant debate about potential changes to the Telecommunications Act and the impact that they might have on Canadian culture. The one area where there was no debate was on the area of satellites.
In taking this measure, it is important that we restrict it to satellites. That is why the word "only" is so important in this context.
Senator Baker: Yes, but you have restricted it to the ownership and operation of the satellite; you have not extended it to the use, in any way, of what comes from the satellite.
Mr. Lake: That is right.
Senator Baker: In other words, it is only for the people who have the money and who own and operate the facility. It is not for any extraction, any communication or anything else; it is just the pure ownership, is that correct?
Mr. Lake: Right.
The Chair: It "owns or operates only."
Senator Baker: Yes, "only." That is the importance of the word "only" because it is restricted to the corporate end of the office. There is a huge amount of litigation regarding everything other than ownership. Ownership is off in a small corner, so it raises a whole new area.
Senator Marshall: Mr. Lake, in your opening remarks you made reference to legislation. You did not call it such, but I always think of it as being like a regulatory regime. I want you to go over that again for me. I do not know if I picked up all the legislation. I picked up the Radiocommunication Act, which you mentioned, and the Broadcasting Act. Later, I think you mentioned the Investment Canada Act. Could you briefly go over that legislation? My understanding is that the requirements of that legislation will not change; the regulatory regime will not change. Perhaps you can give us a little overview and confirm that.
Mr. Lake: That is true. I think the Telecommunications Act, the Radiocommunication Act, the Broadcasting Act and the Investment Canada Act are the four pieces of legislation you are talking about. It is very important to understand that this only touches on the Telecommunications Act as it relates specifically to satellites. Again, the ongoing conversation we have had regarding telecommunications is a different conversation; the study we did in committee was a broader study. This part of Bill C-9 intends to address the issue regarding satellites specifically.
The Investment Canada Act portion of that is a little different. It refers to the national security study that can be done in the case of any foreign investment. That still applies in any of these cases. Any foreign purchase of a Canadian satellite company or a part of a Canadian satellite company or partnership that would result from that would be subject to the national security test under the Investment Canada Act.
If it would be helpful in terms of a more technical explanation of the differentiation between the three acts — the Radiocommunication Act, the Telecommunications Act and the Broadcasting Act — I could turn to the officials to give more detail.
Senator Murray: Excuse me. Your minister is in charge of the Investment Canada Act, right?
Mr. Lake: That is correct.
Senator Murray: These other acts you mention are not under his aegis, are they — the Broadcasting Act and so on? They are not under the Department of Canadian Heritage anymore.
Ms. Bincoletto: Broadcasting is.
Senator Murray: Yes; the others are under your minister.
Ms. Bincoletto: Yes.
As was mentioned, the Radiocommunication Act allows Industry Canada to establish conditions of licence on satellite operators. All of the conditions will continue to apply regardless of ownership. For example, one condition is that providers must serve all regions of Canada, including the North, and that will continue to apply regardless of whether Telesat becomes foreign owned or not. It is important to recognize that Canada will still be served by satellite operators if there is a market that is of interest to satellite operators.
The Telecommunications Act provides, as Mr. Lake said in his remarks, a non-discrimination provision for broadcasters. They cannot be discriminated against by satellite operators — again, regardless of ownership. If there is a dispute, the CRTC has an ability to hear the case and intervene. That is the other big economic lever.
The Broadcasting Act, under the jurisdiction of the Department of Canadian Heritage, will continue to regulate the broadcasters — the broadcasting distribution undertakings. All the issues about Canadian content and the rules and regulations of the content side stay and are completely separate from what is being done here.
If there are issues about investment acquisitions, there is the added lever of the Investment Canada Act, which will have to look at the acquisition — if it is above a certain threshold — as to whether there is a net benefit to Canada. All these rules and regulations will continue to apply irrespective of the fact that a satellite provider is Canadian-owned and controlled or not.
Mr. Lake: An important distinction in terms of the Investment Canada Act is that there is no threshold for a national security test. There is a threshold for net benefit on an economic basis, but there is no threshold for a national security test. That applies in all cases.
Senator Marshall: The reason I was asking is that the issue of regulatory regimes came up yesterday when we had a hearing on atomic energy. It seemed that people are quite interested in whether a by-product of any changes to legislation would be a change in the regulatory regime, but no; that is good. Thank you very much.
The Chair: You are quite right. I was trying to draw that parallel with the deregulation and "de-ownership" away from a Crown corporation to a private, Canadian-owned entity, and then the next step being deregulation in terms of ownership. It is a continuum. When we were also dealing with Atomic Energy of Canada Limited, we were getting into those issues — where is this taking us?
Senator Ringuette: You have touched on the first issue I wish to highlight. We have gone from a Crown corporation, Telesat, to privatizing it with conditions — and justifiable conditions — such that 80 per cent of the shares be in Canadian hands, 80 per cent of the board of directors be Canadians and so forth. You are removing the foreign ownership restriction. What percentage of this former Crown corporation will remain in Canadian hands?
Mr. Lake: Under these restrictions, there is no percentage that I can guarantee. We do not know what will happen after the change is made. However, we do know that this company — specifically referring to Telesat — has indicated that the current rules present a significant challenge for them to move forward and compete globally.
I cannot predict exactly what will happen once a change is made, but I think it is important to point out, as it relates to foreign ownership in general, that Canadian companies invest more globally than global companies invest in Canada. That is always an interesting topic of conversation when it comes to what people refer to as the "hollowing out" of Canada. As Canadians, we have to recognize that our Canadian champions are doing very well globally. We want to put in place rules that will allow them to continue to do that and to even go further and become stronger than they are. This one particular change as it relates to the satellite industry will create an environment where a very good Canadian company will have an opportunity to become that much stronger. I think that is what is important.
I will also comment on the timing issue. In your question — and maybe I misunderstood it — it seemed to be articulated that somehow the rules that were in place regarding the ownership of Canadian satellite companies were applied to Telesat as part of the decision to take it from a Crown corporation to a private company. That is not the case. Those ownership restrictions, the 80 per cent you referred to, were a result of decisions made in the late-1980s by the government as it related to the entire telecommunications industry. At the time, the way those rules were written, they also applied to satellite companies. We are talking about two different time frames here.
In 1998 when the international trade agreement was signed, it put in place a situation that created this unlevel playing field in regard to Telesat's ability to raise foreign capital to the same extent as their global competitors. I want to make sure we clarify that the 80 per cent ownership rules that apply to Telesat were not put in place specifically as it related to Telesat moving from a Crown corporation to a private entity. Those were broader changes to the Telecommunications Act.
Senator Ringuette: They were indirect conditions that applied to everyone, but they still remained conditions. This implies that Canadians are not investing enough in Telesat and so you have to open their portfolio to foreign investors. Is that the situation?
Mr. Lake: The situation is that Telesat's competitors, competing with them here in Canada, have access to more capital than Telesat does under our current rules, creating an unlevel playing field for them. Therefore, our own Canadian rules are hindering a Canadian company from competing against its largest competitors. That is the challenge here.
Senator Ringuette: Are they currently competing outside of Canada?
Mr. Lake: Yes, they are.
Senator Ringuette: Mr. Lake, with respect to the Telecommunications Act, you indicated in your statement that there are broad public consultations that will end this month.
Mr. Lake: In regard to the Telecommunications Act in general, yes, I believe the consultation process began on June 11. The minister launched public consultations on foreign investment restrictions in the telecommunications sector broadly. The consultation paper outlines the current restrictions and presents three options for consideration as follows: option one, to increase the limit for direct foreign investment in broadcasting and telecommunications common carriers to 49 per cent; option two, to lift restrictions on telecommunications common carriers with a 10 per cent market share or less by revenue; and option three, to remove telecommunications restrictions completely.
At this point, the consultation process is ongoing. Canadians are free to submit their views, and the consultations will run until July 30, 2010.
Senator Ringuette: By September, the minister will have from his broad consultations a better understanding of where the general public and probably the stakeholders want changes in the act.
Mr. Lake: Keep in mind that we are talking about two different things. The changes as they relate to Bill C-9 are specifically related to satellites only. The consultation that I talked about and that you referred to in your question referred to the telecommunications sector as a whole and the Speech from the Throne commitments.
Senator Ringuette: That includes satellite.
Mr. Lake: That is correct.
Senator Ringuette: Why is this amendment in the budget bill? What was the urgency for it not to be part of the consultation process? Why is it not going to be in a comprehensive review that would have followed the public consultation that ends at the end of July?
Mr. Lake: Going back to our Industry Committee hearings, it is important to understand that this area was not contentious. The experts that have looked at this area have understood that we do want to continue this situation where a Canadian company is held back by Canadian law from competing with its global competitors. This is a unique situation, very different from the broader telecommunications environment.
Senator Ringuette: When did you become aware of this particular situation for Telesat?
Mr. Lake: It has been several years now. As I mentioned earlier, it first came up in the 2008 consultation, the Competition Policy Review Panel, and Telesat submitted an in-depth brief at that point.
Of course, on the broader issue of telecommunications, there has been significant consultation. There have been multiple studies at the committee level in the House of Commons. Other organizations, in addition to the Competition Policy Review Panel, have looked at it. Obviously, the consultation is ongoing, but this particular satellite issue is contained within Bill C-9 because it is a stand-alone issue that is not seen as contentious by experts.
Senator Ringuette: Exactly. It should be a stand-alone issue. You have known about this situation in the House of Commons and in the department since 2008, and suddenly it appears in a 900-page budget bill.
Thank you very much. You have given good answers, and I appreciate that.
Mr. Lake: Thank you.
Senator Callbeck: We are getting rid of the foreign ownership as it is right now, which is that 80 per cent of the shares must be owned by Canadians and 80 per cent of the board of directors must be Canadian. We are eliminating that, which means we will have a level playing field. You say there is no opposition from the four satellite companies we have in Canada. Are you aware of any opposition from anyone else to what we are doing here?
Mr. Lake: In terms of "any opposition," there are 33 million Canadians; I am sure we could find one who might disagree with it. However, in terms of the experts that have looked at this situation and the stakeholders that have had the opportunity to consult, I would say it is very much without contention.
Ms. Bincoletto: The balancing act here is providing the number four world operator, Telesat — a distant four because the other three are much bigger and own up to 70 per cent of the world fleets — an ability to compete internationally by lifting those restrictions. That outweighs any potential concerns because those concerns are met by the regulatory regime that continues to apply regardless of ownership and control. In other words, if there were concerns about culture, the Broadcasting Act would still apply. If there were concerns about serving Canadians, that requirement would still apply. If there were concerns about access from broadcasters to satellite providers, that would still apply. Given that Canada is a small market, the driver here is the ability for Telesat to grow in outside markets and compete with the top three.
Senator Callbeck: As Senator Ringuette pointed out, it seems strange that we have a comprehensive consultation going on that ends at the end of July and we are not waiting for that. We get this section stuck into Bill C-9, which, as she says, should be a stand-alone piece of legislation.
You referred to the experts. Well, what about the general public? What will this do for the general public? In your view, will it reduce prices?
Mr. Lake: In terms of prices, there should be a benefit to consumers in general. The most important message is the one to Canadian companies that we will not have rules in place that are to the detriment of our Canadian companies. That is an important message.
I want to ensure we are clear on the separation between the situation that exists for satellites and the rest of the telecommunications industry as it relates to what we heard at the Industry Committee and the consultation that is ongoing. There is no question that there is significant debate around foreign ownership as it relates to the broader telecommunications industry. That debate is ongoing, and I am sure that all those stakeholders will make submissions as part of that consultation process.
However, the satellite component is a very different issue. It has no bearing on Canadian culture, Canadian content or any of those things. It is simply talking about pipes and wires, if you want to think about it that way. It relates to levelling the playing field for a Canadian company that has an opportunity to be a champion, but our Canadian rules, laws and regulations are creating an unlevel playing field for them. That is simply what this is about.
It is in this budget bill because it is an important issue as it relates to a Canadian company being able to compete globally. Obviously, there has been a lot of commentary worldwide about Canadian leadership in the global economy right now, and I would look at this as a part of that leadership.
Senator Callbeck: You say it is an important issue and I agree. That is exactly why it should be in stand-alone legislation.
I want to go on to something else. I heard one of you say that all satellite operators must service all markets. Then I thought I heard that they must service the market if it interests them. Do they have to service all markets or not?
Ms. Bincoletto: I think I referred to that. If a satellite wants to serve Canada and wants to serve it from a Canadian orbital slot, there are rules and requirements in order to have access to that orbital slot. There is a web of rules internationally to know where satellites are so they do not bump into each other. If there is an interest in serving the market, they need the ability to show that the satellite can serve the whole of Canada.
If they are not interested because they are interested in a South American market or an Asian market, those requirements will not apply; but if they want to play in Canada, they have to abide by certain rules.
Senator Callbeck: Do you think that all of this will lower the price for the consumer?
Mr. Lake: "All of this" is the conversation now about Bill C-9 specifically and the measures taken here? Yes, I think any time we introduce more competitiveness that creates an environment with a better ability for a Canadian company to compete, there will be benefits for the Canadian consumer, absolutely.
Senator Gerstein: Mr. Lake, am I simplifying this too much by suggesting that there are basically two paths we can take? We can let the industry remain small and protected, or we can take the opportunity for growth and build this great company that plays in a market of giants. Is it as simple as that? Is that what we are really talking about?
Mr. Lake: I think it is.
Senator Gerstein: As I understand it, Telesat has really reached the limit of its growth under the circumstances it is operating within today.
Mr. Lake: Absolutely.
Senator Gerstein: This is lifting the veil.
Mr. Lake: You might find it helpful, before going to the next step, to go back to the evidence from our committee hearings where Telesat appeared and review the comments they made, because they clearly articulated that is a challenge for them. All committee members might find it helpful to review the comments they made.
Senator Murray: Mr. Chairman, the parliamentary secretary has said that these amendments send a message to Canadian companies that they will not be inhibited by foreign investment restrictions from carrying on their businesses. The amendment itself is focused on telecommunications carriers, and it occurred to me to ask you whether there are other areas of economic activity where it is your view that those businesses or industries are inhibited by foreign investment rules, and, therefore, are you planning further amendments to the Investment Canada Act?
Mr. Lake: That is a good question. This amendment relates to the Telecommunications Act, and that is what the ongoing consultation is all about, taking a look at what options there are in the broader telecommunications industry. In the Speech from the Throne and on many occasions, we have identified that we think Canadians are paying too much for wireless services and we do not have the innovation we need happening in the industry. We do not have the environment to create innovation to ensure that Canadian consumers have the best products at the lowest prices possible.
However, as I mentioned, there is a significant debate about how to proceed on that issue, and that is what the ongoing consultation that ends on July 30 is all about — telecommunications. That area is being looked at. We encourage any stakeholder, any Canadian who wants to be a part of that consultation, to make their views known to the minister by the end of July. Obviously, steps will be taken after that.
Senator Murray: You are responsible for the Investment Canada Act and for investment in Canada. My question was whether, outside of the telecommunications sector, other economic or industrial sectors come to mind where you believe that foreign investment restrictions inhibit them from reaching their full potential.
Mr. Lake: We have already taken measures to increase the thresholds under which companies can invest in Canada, and introduced the national security test to ensure that any investment in Canada is not only to the net benefit of Canada from an economic standpoint but also at the national security level.
More broadly, we want to create an environment where Canadian companies, Canadian champions can access the capital they need to be successful. In a global environment, Canada is a trading nation. We need rules in place that allow Canadian companies to trade and be successful.
Senator Murray: I seem to hear you saying that there are sectors where foreign investment restrictions are an inhibiting factor, so may we expect further amendments to the Investment Canada Act in the near future?
Mr. Lake: I will not speculate on what decisions the minister will take in the future.
Senator Murray: Is it under review? It always under review; "yes" is the answer.
Mr. Lake: Thanks for answering.
The Chair: Mr. Lake, to clarify the record, the foreign investment tests under the Investment Canada Act do not apply to the sale of Crown corporations; is that correct?
Mr. Lake: We have to check. We can get back to you.
The Chair: If you could confirm that, please. That is my understanding from the evidence we have heard thus far. If it is otherwise, it would be very important for us to know that.
Mr. Lake: Right.
The Chair: My concern is that this is the end of our planned hearings and we have one senator who is confused in both official languages in relation to your presentation. Maybe, with these questions that have been posed and the answers given, he is less confused, but I would like to give the last word to Senator Baker.
Senator Baker: I have come to the conclusion, Mr. Chairman, as you sometimes do, that the French is clearer than the English in this case.
The French says on either side of owner or operator, "n'est que," which says "only" an owner or operator. That is pretty clear.
In the English it says if the person "owns or operates only a transmission facility." The "only" in the English really should have been "only owns or operates a transmission facility." That is my interpretation.
I had an opportunity while you were testifying to look up what "Canadian carrier" means and what "telecommunications common carrier" means pursuant to the Telecommunications Act under section 2.
A "telecommunications common carrier," which a Canadian carrier can now become, is as follows under section 2:
. . . a person who owns or operates a transmission facility used by that person or another person to provide telecommunications services to the public for compensation;
In other words, "owns or operates a transmission facility used by that person . . . to provide telecommunications . . . ." However, your amendment then restricts that person. A "Canadian carrier" is now defined under the act as: "means a telecommunications common carrier that is subject to the legislative authority of Parliament." You no longer are subjected to the legislative authority of Parliament. However, your restriction in the French text — and I take that to be what you intend under the legislation — is that that person only owns or operates the transmission facilities and not the person who is providing the telecommunications services to the public for compensation. Do you get my point? You are restricting the meaning of "telecommunications common carrier." Your intent is that this change only applies to those who own and operate, but they cannot be a part of the transmission from those satellites, international cables or earth stations.
Mr. Lake: Senator Baker, you are making a fairly technical argument before you get into clause-by-clause consideration of the bill.
Senator Baker: Yes, but it is key.
Mr. Lake: Perhaps it would be prudent for the officials to take what you have said and review the wording. It sounds like we are talking about one word and where it should or should not be within the context. We can get back to you before you get to the clause-by-clause consideration of this particular section. Is that a reasonable approach?
Senator Baker: My point is that you are restricting it to the ownership. This clause says that you cannot be part of the transmission from that ownership, if you get what I mean. The proposed subparagraph says "owns or operates only," which is different from the definition of "telecommunications common carrier" because that person can provide as well.
I notice you had a note passed to you by a lawyer.
The Chair: Only a lawyer?
Senator Baker: Yes, one who understands the French and the English, I think.
In any event, this is the key point between the definition of "telecommunications common carrier" and what the Canadian carrier will become under this legislation.
Mr. Lake: Right.
Perhaps Ms. Miller would like to add to that.
Ms. Miller: The definition of "telecommunications common carrier" under the Telecommunications Act is: "means a person who owns or operates a transmission facility used by that person or another person to provide telecommunications services to the public for compensation." The purpose of our clause is to distinguish that those satellite carriers providing carriage facilities for satellite transmission purposes are exempted.
We have had discussions with our legal experts, and that is the drafting they arrived at to convey this meaning.
Senator Baker: What meaning?
Ms. Miller: That we are exempting the transmission of the satellite provider.
The whole intent is not to capture other activities. For example, if they have fibre facilities or a cable facility, our intent is to capture only the satellite facilities and to carve out the remaining facilities. That is the purpose of this clause the way it is drafted.
As suggested by the parliamentary secretary, we can review this for further clarification with our legal staff as well.
Mr. Lake: I know time is of the essence. I know how these things work in committee and that you want to move on to clause-by-clause consideration of the bill. Therefore, we will ensure that you have it by the time you get to this clause.
Senator Baker: I notice a man of great standing in the legal community for international law, Senator Dickson, is nodding his head with approval.
Senator Dickson: That is great way to end this committee.
The Chair: Mr. Lake, this presents itself in a strong fashion to our committee because one of the parts of the bill dealt with that very problem in relation to Canada Post and remailers. The French and the English were different, and court cases flowed from that. We recognize that this kind of thing can result in a lot of litigation if we are not careful in making sure that the words achieve the intended purpose.
Mr. Lake: Absolutely. That is the importance of the committee process.
The Chair: Thank you very much. We hope you will exchange numbers so that you are able to get that information to us as quickly as possible.
Will you undertake to let us know, the deputy chair and I, if you are still confused after receiving further information?
Senator Baker: I will consult with Senator Dickson as well.
The Chair: Honourable senators, on your behalf, I would like to thank Parliamentary Secretary Mike Lake, for being here, representing very well the Minister of Industry on this technical but important part of the bill. Ms. Miller and Ms. Bincoletto, thank you very much for being here.
Honourable senators, as agreed earlier, this concludes our review of Bill C-9, subject to proceeding to clause-by- clause consideration of the bill.
(The committee suspended.)
(The committee resumed.)
The Chair: Honourable senators, I have a number of formal points that I would like to make before we proceed with the business at hand. These points have been worked out with the clerk so that we all understand what we are doing as we proceed to clause-by-clause consideration of Bill C-9.
In considering the 2,208 clauses of this bill, 45 individual senators have participated in 24 different meetings, spanning more than 61 hours, where we heard from 122 witnesses.
I will propose a way to handle the 2,208 clauses rather than dealing with them one by one. Before we do so, I would like to remind senators of a number of points.
[Translation]
I know that senators on both sides certainly want to make sure that our committee will do everything in its power to have the bill properly referred back to the Senate at third reading.
[English]
If at any point a senator is not clear where we are in the process, please interrupt me and ask for clarification. We must do our utmost to ensure that we at all times have the same understanding as to where we are in the process.
Honourable senators, before we take up any amendment in a clause, I am required to verify whether any other senator had intended to move an amendment earlier in that particular clause. We have to first deal with the first amendment that would come in that clause. If senators do intend to move an earlier amendment, they will be given the chance to do so first.
If a senator is opposed to an entire clause, I would remind you that the proper process in committee is not to move a motion to delete the entire clause, but rather to vote against the clause standing as part of the bill. On this matter, I can refer you to Beauchesne and O'Brien and Bosc.
[Translation]
As chair, I will do my utmost to make sure that all senators wishing to speak may do so. However, I will be counting on your cooperation. I will ask all senators to think of their colleagues and to focus on the facts when asking a question.
[English]
Honourable senators, when we take a vote on any question, I will be listening first for "yeas." If I hear nothing but "yeas," then the question is affirmative and everything that we vote on at that time will pass and I will so declare.
If I hear "yeas" and "on division," then I will declare the clauses passed, on division. If I hear "yeas" and "nays," then I will ask for a show of hands for those who are entitled to vote, and we will determine who that is shortly.
If there is ever any uncertainty as to the result of the show of hands, the cleanest route is to request a roll call. Any senator who wishes to request a roll call can do so, and we will take one. If you are content with my ruling as to the show of hands, then we will let it go on the show of hands.
Honourable senators, before we begin, I want to thank the Library of Parliament personnel who have been with us, in particular, Lydia Scratch, who has been with us throughout and who, in fact, is overdue in another part of her life. We very much appreciate her assistance.
I also want to thank Sylvain Fleury.
[Translation]
Sylvain, thank you very much for having assisted us in our deliberations.
[English]
John Bulmer will be taking over from Ms. Scratch in the unusual possibility that this hearing continues beyond this time.
On your behalf, senators, I also want to thank the interpreters, stenographers, technicians and pages who have served us so well over the past several days and weeks. Those personnel are behind me here. They have done a wonderful job and we thank them very much.
When we have 125 witnesses, it takes a lot of coordination. We very much appreciate all the work done by our clerk, Adam Thompson, and his staff, Allison Button and Natalie Lemay-Paquette, in putting this together, work that allows us to do our job.
Gérald Lafrenière has been in and out on a number of occasions.
[Translation]
Gérald, thank you for your assistance and for having supported Adam Thompson in his work.
[English]
Thank you all, honourable senators. This has been one of the highlights of your career. You will come to realize and appreciate that as time goes on. It has been said many times that the work the Senate does at committee is some of the finest work that is being done on Parliament Hill, and you have demonstrated it with our review of Bill C-9. Thank you all.
The clerk will now read out who is officially a member of this committee. Others are welcome to attend and participate, but when we vote, only those whose names are called out now will be entitled to vote.
Adam Thompson, Clerk of the Committee: The current members are the Honourable Senators Andreychuk, Callbeck, Day, Dickson, Finley, Gerstein, Marshall, Mitchell, Moore, Murray, Ringuette and Runciman. In accordance with rule 87, each of the leaders — or, in either of their absence, their deputy leaders — are ex officio members of the committee.
The Chair: There are 24 parts to this bill, as I have mentioned on a number of occasions. I propose that we go part by part. If anyone wishes to discuss any clause in a particular part, then we will have that discussion. I trust that is an acceptable manner of proceeding.
Senator Andreychuk: Senator Day and I have worked on many committees together. Will we receive written amendments, should amendments come forward? I realize that senators are not precluded from other aspects, but are we aware of any written and translated amendments?
Senator Murray: Speaking for myself, I do have an amendment, one that I will propose at Part 18, assuming we get there. I have a dozen copies of the amendment, in both of our official languages.
The Chair: Does any other senator wish to intervene at this point? I have been given notice of nothing else.
Is it agreed that the committee proceed to clause-by-clause consideration of Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures?
Hon. Senators: Agreed.
The Chair: With leave, is it agreed that the committee be allowed to group clauses by the 24 parts identified in the bill, when appropriate?
Hon. Senators: Agreed.
The Chair: Shall the title stand postponed?
Hon. Senators: Agreed.
The Chair: We will come back to the title at the end of our clause-by-clause consideration of the bill.
Shall clause 1, which contains the short title, stand postponed?
Hon. Senators: Agreed.
The Chair: Shall Part 1, entitled "Amendments to the Income Tax Act and Related Acts and Regulations," containing clauses 2 to 36, carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Agreed, on division.
Shall Part 2, entitled "Amendments in respect of Excise Duties and Sales and Excise Taxes," containing clauses 37 to 95, carry? Does anyone wish to discuss any of those sections?
Senator Moore: Do you wish me to go ahead now?
The Chair: Do you wish to discuss all the clauses or particular clauses?
Senator Moore: I want to speak with regard to clause 55(6).
The Chair: Honourable senators, can we agree, then, that clauses 37 to 54 shall pass?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Clause 55, Senator Moore.
Senator Moore: Honourable senators, this clause does nothing more than provide a continuation of the confusion that exists with regard to the interpretation of the "financial service" definition. It is interesting that the Canadian Bar Association made the point that, contrary to historic practice, they did not have an opportunity to have input into the preparation of these tax measures. Even the minister himself, in a March press release, said that the wording is poorly drafted.
With regard to payment or collection, it was raised by other senators here that the discrimination and the treatment of one taxpayer differently from another is not the usual or appropriate way for law, let alone tax law, to be administered in Canada.
I am not, never have been and never shall be a fan of retroactivity. I think it is repugnant. We heard evidence from one witness that it could result in as much as a $1 billion collection of revenues from taxpayers who would otherwise not suspect being approached. I just do not think you can change the goalposts after the game has begun. For all these reasons, I am completely against the passage of this clause.
The Chair: Your objection is to the entirety of clause 55; is that correct?
Senator Moore: Correct.
The Chair: Does anyone else wish to speak on that particular matter? Then I will call a vote on clause 55. Shall clause 55 carry?
Some Hon. Senators: No.
Some Hon. Senators: Yes.
The Chair: I have heard "nays" and "yeas," so we will go to a hand vote.
All those in favour of clause 55 carrying, please raise your hand.
All those who wish to vote against clause 55 carrying, please raise your hand.
Mr. Thompson: Six in favour, six opposed.
The Chair: According to our rules, when there is a tie vote, the clause shall not carry. I declare that that clause does not carry.
I will now proceed with clauses 56 to 95, the remaining clauses in Part 2. Does anyone wish to discuss any of those clauses? Shall those clauses carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
We now come to Part 3, entitled "Amendments with respect to the Air Travellers Security Charge," containing clauses 96 and 97. Does anyone wish to discuss clauses 96 or 97? Shall those clauses carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
I am now at Part 4, entitled "Softwood Lumber Products Export Charge Act, 2006," containing clauses 98 to 103. Does anyone wish to discuss any of those clauses? Seeing no hands, shall clauses 98 to 103 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 5 is entitled "Customs Tariff," containing clauses 104 to 1645. That is not a typographical error. Does anyone wish to discuss any of those 1,500-plus clauses? Seeing none, shall clauses 104 to 1645 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 6 is entitled "Federal-Provincial Fiscal Arrangements Act," containing clauses 1646 to 1648. Does anyone wish to discuss any of those clauses? Shall clauses 1646 to 1648 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
I am now at Part 7, entitled "Expenditure Restraint Act," containing one clause, 1649. Does anyone wish to discuss that further? Shall clause 1649 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 8 is entitled "Amendments Relating to Certain Government Bodies," containing clauses 1650 to 1785. Does anyone wish to discuss any of those clauses further? Shall clauses 1650 to 1785 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 9 is entitled "Pension Benefits Standards Act, 1985," and it contains clauses 1786 to 1827. Does anyone wish to discuss any of those clauses? Shall clauses 1786 to 1827 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 10, honourable senators, is entitled "Agreement on Social Security between Canada and the Republic Of Poland — Retroactive Coming Into Force," containing clauses 1828 to 1830. Does anyone wish to discuss that further?
Senator Andreychuk: I enthusiastically agree.
The Chair: You are happy to see it passed.
Shall clauses 1828 to 1830 pass?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 11 is entitled "Export Development Act," containing clauses 1831 to 1833. Does anyone wish to discuss these clauses further? Shall clauses 1831 to 1833 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 12 is entitled "Payment Card Networks," containing clauses 1834 to 1850. Is there anyone who wishes to discuss those clauses further? Shall clauses 1834 to 1850 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 13 is entitled "Financial Consumer Agency of Canada Act," containing clauses 1851 to 1861. Does anyone wish to discuss those clauses further? Shall clauses 1851 to 1861 pass?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 14, "Proceeds of Crime (Money Laundering) and Terrorist Financing Act," containing clauses 1862 to 1884. Does anyone wish to intervene? Shall clauses 1862 to 1884 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 15 is entitled "Canada Post Corporation," containing one clause, 1885, and I think I heard there are 20 words in that clause. Does anyone wish to intervene at this time?
Senator Ringuette: I do. I will try to limit my wording.
Canada Post — and its former department status — has been serving Canadians since Confederation, even before that. It has served Canadians well from coast to coast to coast, including in foreign diplomacy. It has provided jobs for over 71,000 Canadians at 15 million points of delivery.
Removing the exclusive privilege of Canada Post with regard to outbound mail will create a dent into this century- long company that provides services to Canadians. I cannot at all agree with clause 1885.
The Chair: Does anyone else wish to comment?
Senator Murray: I will just say, Mr. Chair, for the record, as I have indicated previously, I do not share the apprehensions that Senator Ringuette and others have expressed as to what can flow from the proposed amendment. Still, I accept that it does not belong in a budget implementation bill. I will therefore, on that basis, join Senator Ringuette in voting against the clause.
The Chair: Does any other honourable senator wish to intervene? Shall clause 1885 it carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: No.
The Chair: I hear "yeas" and "nays"; therefore, a hand vote is in order.
All those in favour of clause 1885 carrying, please raise your hand.
All those opposed to clause 1885 carrying, please raise your hand.
Mr. Thompson: Yeas, 6; nays, 6.
The Chair: A tie vote is a negative. Clause 1885 shall not pass.
I will now proceed to Part 16, entitled "Canada Deposit Insurance Corporation Act," containing clauses 1886 to 1893. Is there any senator who would like to intervene or make further comments in relation to those clauses? Shall clauses 1886 to 1893 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 17 is entitled "Federal Credit Unions," containing clauses 1894 to 2136. Does any senator wish to intervene in relation to any of these? Shall clauses 1894 to 2136 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
I am now at Part 18, entitled "Atomic Energy of Canada Limited." Does anyone wish to intervene.
Senator Murray: Mr. Chair, as indicated earlier, I have an amendment to propose and will speak to it briefly.
The Chair: Could we circulate the amendment? Do you have it in writing?
Senator Murray: Yes. I have it in writing and in both official languages.
The Chair: While you are speaking, it would be helpful for us to have it for review.
Senator Murray: Briefly, by way of background and in fairness, the policy objectives that have been set out by the government in respect of this amendment are not only unobjectionable but I think would be supported by most of us if not all of us. First, they are safe, reliable and economic options to address Canada's energy and environmental needs. Second, they control costs to the government while maximizing return on investment. Third, they position Canada's nuclear industry to seize domestic and global opportunities.
However, the fatal flaw in Part 18 from the point of view of our parliamentary democracy and, indeed, of the national interest is that Part 18 proposes to give to the cabinet the unfettered right to dispose of AECL in any way it wishes: by merger, by partner, by selling 100 per cent of it or simply by shutting the door and closing the company down.
This relates to a nuclear industry of which, as the government itself has stated, AECL is the driving force. It is an industry, according to the government, that generates $6.6 billion per year in economic activity, over 30,000 jobs and $1.2 billion in exports.
It seems to me that it is a pretty cavalier way to go about the future of this Crown corporation, which has helped make Canada a world leader in nuclear science, to simply turn it over to the cabinet to do whatever it wishes with it without recourse to Parliament or to the public.
The amendment that I am proposing will, as you will see, reserve to Parliament the right to say no before a decision is consummated by the Governor-in-Council. The amendment does not impose conditions on the government. It does not tie the hands or constrain the negotiators in any way. It will not enable Parliament to nickel-and-dime or even to amend any decision that the government proposes to make. It will protect commercial confidentiality. It will simply oblige the government to put any order-in-council or directive on this matter on the table of both Houses of Parliament and if, after 30 days, Parliament has not voted it down, it will go ahead.
The amendment is simple. I hope it commends itself to senators. It is, in my view, the minimum that we can do to discharge our responsibilities to Parliament and to the country.
Therefore, I move:
That Bill C-9 be amended, on page 702, by adding after line 13 the following:
"2142.1(1) Before the Governor in Council gives an approval under section 2139 or 2140 or subsection 2141(1) or issues a directive under subsection 2141(2), the Minister shall cause a report on the proposed measure to which the approval or directive relates to be laid before each House of Parliament.
(2) The report need not include any information the publication of which would, in the opinion of the Minister, be detrimental to Canada's interests or to the commercial interests of AECL or the corporation or other entity who is proposing to take the measure or to whom the directive is to be issued, as the case may be.
(3) The Governor in Council may give an approval under section 2139 or 2140 or subsection 2141(1) or issue a directive under subsection 2141(2) only if
(a) each House of Parliament approves, by resolution, the proposed measure to which the approval or directive relates; or
(b) 30 sitting days have elapsed after the tabling of the report in both Houses and neither House has, by resolution, disapproved of the proposed measure to which the approval or directive relates.
(4) In this section, "sitting day" means a day on which either House of Parliament sits.".
The Chair: Is there anyone else who wishes to engage in debate on this particular motion? We do not need a seconder in committee. It has been duly moved. With leave, we will vote on this motion at this time.
The motion by Senator Murray is to amend this particular part by adding clause 2142.1 —
Hon. Senators: Dispense.
The Chair: All those in favour of the motion to amend by adding this particular clause, please raise your hands.
All those opposed to this amendment, please raise your hands.
Mr. Thompson: Yeas, 6; nays, 6.
The Chair: It is a tie vote. A tie vote is in the negative.
I regret to inform you, Senator Murray, that your motion has not passed.
We will now proceed to clauses 2137 to 2148. Do I have the right clause numbers?
Mr. Thompson: That is correct.
The Chair: Is there no further discussion?
Senator Murray: We are talking here about Part 18. My reasonable attempt to preserve some bit of authority for Parliament on this matter having failed, I will be voting against this part, more in sorrow than in anger.
The Chair: Shall clauses 2137 to 2148 carry?
Some Hon. Senators: Yes.
Some Hon. Senators: No.
The Chair: I hear "yeas" and "nays." Could I have a show of hands?
All those in favour of the clauses 2137 to 2148 carrying, please raise your hands.
All those against clauses 2137 to 2148 carrying, please raise your hands.
Mr. Thompson: Yeas, 6; nays, 6.
The Chair: It is a tie vote, honourable senators. According to our rules, those clauses do not carry.
We will now proceed to Part 19, entitled "Participant Funding Programs," containing clauses 2149 to 2151. Does anyone wish to discuss any of those clauses? Shall clauses 2149 to 2151 carry?
Some Hon. Senators: Agreed.
Senator Ringuette: On division.
The Chair: Carried, on division.
Next is Part 20, entitled "Environmental Assessment," containing clauses 2152 to 2171.
Senator Mitchell: I wish to address something.
The Chair: Did you wish to speak about any particular clause or the clauses in general?
Senator Mitchell: All the clauses.
Part 20 and the clauses contained in it significantly weaken Canada's environmental assessment process. They do this because they give the Minister of the Environment the power to diminish the scope of any particular environmental process at his discretion, without any recourse to the public or any interested parties at all to review or appeal his decision in that regard.
These provisions of the bill could have the effect — and likely will, given the concerned testimony we have heard — of an environmental review process of a major industrial energy project being restricted to the project's impact on a small creek next to the facility. That would forego a proper impact assessment of all other potential emissions, et cetera. In particular, it could be used to exclude any kind of review of emissions related to climate change, such as greenhouse gases, which are becoming an increasing concern to Canadians.
The argument used by the government in defence of their minister's ability to diminish environmental assessments is that environmental assessments have caused delays in the development of major projects. However, testimony we received was to the contrary. We also received a lot of testimony demonstrating that there are all kinds of reasons why projects are delayed. One of the reasons heard least frequently is the difficulties with environmental assessments.
For these reasons, and at a time when we should be far more sensitive to environmental concerns, this takes us in exactly the wrong direction and I will be voting against this part of the bill.
The Chair: Does anyone else wish to engage in the debate? Shall clauses 2152 to 2171 carry?
Some Hon. Senators: Yes.
Some Hon. Senators: No.
The Chair: I hear "yeas" and "nays."
All those in favour of the clauses carrying, please raise your hands.
All those against the clauses carrying, please raise your hands.
Mr. Thompson: Yeas, 6; nays, 6.
The Chair: It is a tie vote and a tie vote means those clauses are negatived, by our rules; those clauses do not carry.
I will now proceed to Part 21, entitled "Canada Labour Code," which contains clauses 2172 to 2179. Does anyone wish to engage in any debate on these clauses? Shall clauses 2172 to 2179 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 22 is entitled "Payments to Certain Entities" contains clauses 2180 to 2183. Does anyone wish to engage in debate on these clauses? Seeing no one, I will call for the vote. Shall clauses 2180 to 2183 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 23 is entitled "Telecommunications Act" and contains clause 2184. Does anyone wish to engage in debate on this particular clause? Seeing no one, I will call for a vote. Shall clause 2184 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Part 24 is entitled "Employment Insurance Financing," containing clauses 2185 to 2208. Does anyone wish to engage in debate on these particular clauses? Seeing none, shall clauses 2185 to 2208 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Honourable senators, there are a number of schedules that we have to adopt. Shall Schedule 1 carry?
Some Hon. Senators: Agreed.
Senator Ringuette: On division.
The Chair: Carried, on division.
Shall Schedule 2 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Shall Schedule 3 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: Carried, on division.
Thank you, honourable senators.
We now go back to clause 1. Shall clause 1, which contains the short title to this bill, carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall the title carry?
Hon. Senators: Agreed.
The Chair: Carried.
We have another special amendment here. May I have a motion to renumber the clauses, given certain deletions?
Senator Mitchell: I so move.
The Chair: It is moved by Senator Mitchell.
All those in favour of allowing the clerk to renumber the clauses as a result of certain deletions, please signify by saying "yea."
Some Hon. Senators: Yea.
The Chair: Contrary minded?
Some Hon. Senators: Nay.
The Chair: On division, or do senators want a show of hands?
Some Hon. Senators: On division.
The Chair: On division, thank you.
Shall the bill, as amended, carry?
Hon. Senators: Agreed.
The Chair: Carried. Thank you.
I do not believe this to be the case, but I will ask: Are there any observations that should be attached to this particular bill? There was some attempt at that, but I do not think it has worked out.
Seeing nothing, we will not append observations, but I do hope that everyone who wishes to do so will participate and make his or her own observations during debate at report stage and third reading of the bill.
Shall I report the bill to the Senate, as amended, without observations?
Hon. Senators: Agreed.
The Chair: There is nothing left in my book.
Honourable senators, this has been a wonderful exercise for the Senate. It has been great working with you.
(The committee adjourned.)