I’m tired of Harper and his Conservatives. I wonder about his politics. I wonder about his agenda and his decidedly US Republican attitude towards Canadian politics.
My political exhaustion has been growing since the Senate scandals, a Senate he once promised to reform. Now there is this growing fracas within Canada’s telecom industry. In June of 2013, then Minister of Industry, Christian Paradis, prevented Telus from acquiring the smaller and failing Mobilicity on the grounds that the takeover would hinder competition in the telecom industry. The Conservatives want more telcom companies to increase competition in Canada, not less.
A noble cause, enough to draw sympathy from the average Canadian believing we are charged fees higher than almost any other country in the world. Not exactly true, but close enough to bear merit.
The problem is, while the plan looks good on paper, the reality is far from accurate. A new telecom company requires more than outlets selling phones and service. They need infrastructure to create the network necessary for cell phone coverage, not to mention the service people required to keep it all running. All this costs money, so much so that by the time a small company gets up and running, they’ve acquired so much debt any signs of profit is decades away.
So, what’s a government to do? The answer is typical Harper, change the rules. Allow foreign companies to purchase smaller Canadian telecoms and set up shop. The thought was that some small telecom from the States would take interest. The problem is US giant Verizon has looked into the venture.
The average cell phone customer might salivate at potential lower cell phone bills and rightly so, although at what cost? What is the overall impact of Verizon’s entry into the market?
– First, pure size and power. Verizon has more capital than BCE, Rogers, and Telus combined. To put this into perspective, imagine Amazon becoming a player in Canada’s telecom industry.
– Second, other than purchasing Mobilicity, Verizon doesn’t have to spend a dime on infrastructure because one of the loopholes Harper created in his rule change allows them to use existing infrastructure already built by the existing Canadian telecoms. That means Verizon can provide service by piggybacking their cell signal on BCE, Rogers, or Telus.
– Third, because of yet another loophole, Verizon through its Mobilicity acquisition, is free to buy other small Canadian telecoms without government interference while the big three Canadian telecoms simply aren’t allowed. Essentially, that means Verizon will not be creating a single new job in Canada, but merely recycling what’s already provided.
Harper is punishing Canadian telecoms for being successful, and he is punishing stockholders for daring to invest in these companies. Thanks to Harper and his interference people have lost money. Don’t be confused by the term stockholders. We’re not talking about fat cats who buy and sell companies while playing the back nine at Glen Abbey. We’re talking about average people investing their hard earned money in what should have been relatively safe companies, hoping for a better return than what the banks will give.
Collectively, Harper has cost them millions. Yeah, that sounds great for the economy.
Now, let’s delve a bit deeper into this wonky decision.
– Early June, Minister of Industry Paradis blocks Telus’s takeover bid. Paradis has been embroiled in one corruption allegation after another as far back as 2010. Despite this, in 2011 Harper made him Minister of Industry in an undoubtedly politically motivated move. Paradis is one of the few Conservatives from Quebec.
– Middle to late June rumours that Verizon is interested in Wind or Mobilicity begin circulating.
– Early July Mobilicity confirms they are in talks with a foreign company for a take-over, later to be revealed as Verizon sending telecom stocks plunging.
– July 15, Paradis is replaced as Minister of Industry by BC politician James Moore. Whether this was political maneuvering or damage control, only Harper knows.
I have nothing against competition. The true impact of Verizon’s entry into the Canadian market ranges from game-changer to negligible, at least for the first few years. Indeed, at this time Verizon has yet to make an offer for Mobilicity. But an offer is coming, if not Verizon then someone else. The Big Three can see which way the wind is blowing. All they want is a level playing field. They, along with other organizations, have petitioned the government to close the loopholes they feel give Verizon unfair advantages.
For their part, Harper’s government believes Verizon or any potential outside companies wouldn’t take advantage of these loopholes. Huh? Companies live for loopholes. They have reams of corporate lawyers whose sole purpose is to find these kinds of loopholes and exploit them. To presume Verizon wouldn’t take advantage of the situation is beyond naïve, it’s plain stupid.
In the end, business is business. Verizon will either come in or it won’t. They will change the face of Canadian telecommunication services or they won’t. What matters here is this government’s treatment of three of Canada’s major industries and its blatant manipulation of the rules of industry simply to allow a US carrier into the market. And make no mistake, the target has been an American carrier. Since first elected Harper has pursued a policy of cozying up to the United States, particularly during the Bush years. His stratagems have been more in line with the American Republican Party than anything traditionally Conservative.
Of course, Harper’s Conservatives are not the Traditional Conservatives of old. Originally the Alliance party, they merged with the remnants of the old Progressive Conservatives to form a new party and in their drunken euphoria infamously renamed themselves the Canadian Conservative Reform Alliance Party. The acronym CRAPP sobered everyone up and they quickly changed their name to the Conservative Party of Canada.
These new Conservatives are related to the old Tories in name only. These guys are right-wing in a Fox News kind of way. After two elections only the failure of the other two major parties to front a leader worth voting for has kept Harper in charge. Jack Layton of the NDP come close and who knows what might have been had he not lost his fight with cancer.
Justin Trudeau has entered the stage as the Liberal Party’s Great White Hope. But the son of whom many consider Canada’s best Prime Minister, Pierre Trudeau, is himself very young. He still needs to grow, both in maturity and political experience.
Other than a good showing during a televised Question Period with Harper, the NDP’s new leader, Thomas Mulcair has been virtually invisible.
I suspect they are biding their time, waiting for the right time to strike and make a name for themselves. Perhaps this is the opportunity they’ve been looking for.