Rogers-Shaw Deal Will Disproportionately Impact Lower-Income Canadians, MPs Hear

A woman holds two cellphones in this photo illustration, March 29, 2021 in Chelsea, Que. (The Canadian Press/Adrian Wyld)

Rogers’ planned buyout of Shaw Communications Inc. for $26 billion will have a disproportionate impact on low-income Canadians by harming competitiveness in the telecom industry, says a lawyer from the federal Competition Bureau.

“We saw the impact on all consumers generally. We were concerned about all of those consumers,” said Jeanne Pratt, senior deputy commissioner of the Bureau’s Mergers and Monopolistic Practices Branch, while testifying before the House of Commons industry committee on Jan. 25.

“We did look at the impact that was going to be on the bottom decile of taxpayers as a result of this merger,” she said, adding, “It indicated that there would be a disproportionate impact on lower-income Canadians.”

Pratt said the bureau conducted an “exhaustive investigation” on the planned buyout and that it will “likely harm millions of Canadians in Alberta and British Columbia through higher prices, lower quality services, and lost innovation.”

The bureau recently appealed the Competition Tribunal’s dismissal of its case against Rogers’ planned buyout of Shaw, arguing that the deal would significantly impact Canadian telecom competition and drive up prices for consumers.

However, the bureau’s challenge of the ruling was rejected on Jan. 24. by the Federal Court of Appeal, which said the bureau’s arguments did not meet the threshold to overturn the tribunal’s original ruling.

“We stand by the findings of our investigation and our decision to challenge the merger,” Pratt told the committee.

Buyout

Cabinet still must approve Rogers’ planned buyout of rival telecom company Shaw before the deal can go through.

Industry Minister François-Philippe Champagne told reporters on Jan. 25 that he will be examining the Court of Appeal’s rejection of the bureau’s case challenge to “understand their reasoning.”

“I'll make a decision in due course,” Champagne said, adding, “I’ve always been working on behalf of Canadians to make sure that we have more competition, more affordability and innovation in the sector and this is what’s going to be guiding my decision.”

Rogers has said it hopes to complete its acquisition of Shaw by Jan. 31.

Conservative MP Rick Perkins said during another industry committee meeting on Jan. 25 that Rogers insiders told him the merge with Shaw will eliminate “4,000 to 5,000 jobs in the combined entity.”

“Are you going to cut thousands of jobs in this merger?” he asked Rogers’ President and CEO Tony Staffieri.

Staffieri said the planned buyout will result in “more jobs” and that Rogers will look to “redeploy resources in areas that are growing.”

The Canadian Press contributed to this report.