Telecommunications and Satellites

As part of the “Building on a Strong Economic Foundation” part of the Budget, the Government has briefly touched on telecommunications and satellites. This is further to its statement in yesterday’s Throne Speech to open the doors to foreign investment in key economic sectors, including the telecommunications and satellite industries. In the Budget, however, the Government has stated that “[c]onsistent with the recommendations of the Competition Policy Review Panel, the Government is acting in Budget 2010 to remove the existing restrictions on foreign ownership of Canadian satellites”. This statement is somewhat puzzling as it suggests that the planned liberalization of the foreign ownership rules will be restricted to the satellite sector of telecommunications, which appears to run counter to the apparently broader initiative announced in the Throne Speech.

The emphasis on satellite technology is is also noteworthy in the Government’s plan to invest almost $500 million in developing the Canadian Space Agency’s RADARSAT Constellation Mission over the next five years.

We expect there will be clarifications forthcoming soon from the Government on how it plans to liberalize the current ownership and control rules, and which aspects of telecommunications the new rules will apply to.

Advancing the Digital Economy

Echoing what was announced in yesterday’s Throne Speech, the Government has reiterated in the Budget its intention to “develop a Digital Economy Strategy that will enable the ICT sector to create new products and services, accelerate the adoption of digital technologies, and contribute to improved cyber security practices by industry and consumers.” No further details of this Strategy were revealed in the Budget but, as indicated in the Throne Speech, it will include elements of copyright reform, something the Government has tried to do for some time now without much success. Again, we will be looking for greater clarity on the Government’s plans in this important area in the weeks ahead.