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Rogers-Shaw deal: Decision will be made ‘in due course,’ says minister amid committee probe

Click to play video: 'Rogers-Shaw deal future uncertain as feds deny spectrum transfer'
Rogers-Shaw deal future uncertain as feds deny spectrum transfer
The federal government says it will not approve the wholesale transfer of wireless spectrum licenses from Shaw to Rogers, threatening the proposed merger of the two telecommunications giants unless new conditions are met – Oct 25, 2022

The federal government’s decision whether or not to approve a $26-billion merger of Rogers Communications Inc. and Shaw Communications Inc. will focus on making sure the deal will provide more competition and affordability for Canadians, Industry Minister Francois-Philippe Champagne said.

His comments on Wednesday came as the House of Commons Standing Committee on Industry and Technology examined the proposed deal.

Speaking to reporters in Hamilton, Ont., where the Liberal cabinet is gathered for a three-day retreat, Champagne said he wants to understand why the Federal Court of Appeal dismissed on Tuesday the Competition Bureau’s bid to overturn the deal and will make a decision in “due course” on the matter.

“I’ve always been working on behalf of Canadians to make sure that we have more competition, more affordability and innovation in the sector,” Champagne, who has final say on whether the deal goes through, said.

“And this is what’s going to be guiding my decision,” he added.

Champagne last year set new conditions for his approval concerning the sale and holding of wireless spectrum owned by Shaw for Freedom Mobile that would be transferred to Videotron under the terms of the deal. He said on Wednesday that he will be weighing whether those conditions have been met in order to make a decision, but was also asked whether he was waiting on additional information from the companies.

“It’s not really about hearing from the company but I want to understand the reasoning of the Federal Court of Appeal,” Champagne responded.

“I’m a lawyer. I want to look at these things and understand their reasoning why they came to that conclusion with respect to competition. And I’ll have a separate decision.”

Shaw Communications and Corus Entertainment, the parent company of Global News, are owned by the Shaw family based in Calgary.

Read more: Rogers-Shaw merger: Federal court rejects Competition Bureau bid to overturn deal

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The Competition Tribunal ruled in favour of the Rogers-deal in December, saying the merger of the two telecommunications companies would not result in materially higher prices.

The Competition Bureau appealed that approval but the Federal Court of Appeal rejected its bid to block the deal on Tuesday.

At the House of Commons meeting on Wednesday, officials from the Competition Bureau expressed their disappointment at the appeals court decision and said the bureau would not be taking its case to the Supreme Court.

“We stand by the findings of our investigation and our decision to challenge the merger,” said Jeanne Pratt, senior deputy commissioner of mergers and monopolistic practices branch.

“After conducting an exhaustive investigation, we continue to disagree with the tribunal’s findings and are very disappointed.”

The Competition Bureau has argued the planned merger would lessen competition in the telecom market, trigger higher prices and lead to poor service.

Click to play video: 'Telecommunications ‘need more competition,’ Poilievre says after Rogers-Shaw deal clears hurdle'
Telecommunications ‘need more competition,’ Poilievre says after Rogers-Shaw deal clears hurdle

Pratt of the Competition Bureau said that while they were concerned about the impact of the merger on all consumers, their investigation indicated that there would be a “disproportionate impact on lower-income Canadians”.

“We saw not only that there was going to be an impact on consumers, but the wealth transfer would be disproportionate on lower income Canadians,” she told MPs.

However, Rogers and Shaw argue that the deal would enhance competition and be better for consumers.

Paul McAleese, president of Shaw Communications, stressed before the industry committee on Wednesday the deal would result in a “more aggressive and effective competitor” for the Canadian market.

Rogers has also pushed back against claims the deal would have a disproportionate impact on lower income Canadians, pointing to the CRTC’s decision to approve the deal and noting that the regulator examined how the merger would impact consumer interests, including low-income households, seniors and people with disabilities, before doing so.

The deal was originally scheduled to close by the end of 2022, but the deadline was extended to Jan. 31, 2023.

— With files from The Canadian Press

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