Canada to ‘Liberalize’ Telecom Sector Under EU Trade Pact

Canada said it will further open its telecommunications industry under an agreement in principle with the European Union.

The deal “locks in future liberalization” in Canada’s telecom industry, according to a summary of the agreement released by the government today. The document doesn’t elaborate on how industry rules will be relaxed.

The government has tried to boost competition in the Canadian mobile-phone industry for years by taking measures such as making it more difficult for the country’s three biggest companies, Rogers Communications Inc. (RCI/B), BCE Inc. (BCE) and Telus Corp. (T), to make acquisitions and buy wireless spectrum.

Last year, Canada lifted restrictions on foreign investment in the sector for companies with less than 10 percent of market share by revenue.

Rudy Husny, a spokesman for Canadian Trade Minister Ed Fast, didn’t immediately respond to an e-mail seeking details about the telecom changes.

Prime Minister Stephen Harper and European Commission President Jose Barroso announced on Oct. 18 the two sides had agreed on a treaty that would eliminate about 98 percent of tariffs when it takes effect.

The trade-deal summary says Canada will raise the threshold for reviewing takeovers of European companies to C$1.5 billion ($1.4 billion). The government currently reviews foreign takeovers with assets of at least C$344 million, and has said it will raise the floor to C$1 billion, while keeping it at the existing level for state-owned enterprises.

The summary says other countries with which Canada has free-trade agreements will benefit from the raising of the EU threshold, because of existing “most-favored nation” commitments.

It also says European investment in Canada’s uranium resources will become less restrictive by exempting companies from the requirement of “first finding a Canadian partner.”

To contact the reporter on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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