Canada to relax foreign ownership rules

To allow foreign companies to acquire media groups

TORONTO -- Canada's Conservative government is to put the country's entertainment industry in play by loosening foreign ownership rules.

The feds signaled in Wednesday's Throne Speech, which triggers a new sitting of the House of Commons in Ottawa, that it will open the floodgates to more foreign ownership of Canada's communications industry.

"Our government will open Canada's doors further to venture capital and to foreign investment in key sectors, including the satellite and telecommunications industries, giving Canadian firms access to the funds and expertise they need," the speech, read by Governor General Michaelle Jean, said.

Legislative changes to Canada's Telecommunications Act to allow foreign companies to purchase controlling stakes in media groups like Rogers Communications, Bell Canada and Telus Corp. is expected to unleash a slew of eventual acquisitions of local broadcasters.

"If Rogers, Telus and Bell are bought by foreign interests, we lose control not only of our telecom/satellite industries, but we're one small step away from foreigners owning our broadcasting/media industry," ACTRA national executive director Stephen Waddell warned after the Throne Speech was delivered.

Current legislation calls for 80% Canadian voting control of domestic media assets.

Cultural nationalists contend stringent foreign ownership rules protect Canadian broadcasters and other homegrown media from domination by Hollywood and other foreign interests.

Canadian cable operators and broadcasters, many family controlled, have long complained to Ottawa that existing foreign ownership rules impede their efforts to raise growth capital.

Ottawa telegraphed its commitment to relax and possibly scrap foreign ownership rules in November by overturning a CRTC regulatory ruling and allowing upstart mobile phone operator Globalive to enter the Canadian market, even though it is Egyptian-owned and controlled.

Ian Morrison, a spokesman for Friends of Canadian Broadcasting, which represents TV viewers, said the sale of telecom and satellite companies to foreigners will inevitably lead to local cable operators and broadcasters similarly selling out to the highest bidders as they demand equal treatment in national legislation.

"Broadcasters will follow suit and several generations of hard work to maintain our cultural sovereignty through Canadian ownership and control of broadcasting will be lost," Morrison argued.
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