Industry Canada

Industry Canada

November 14, 2005 15:30 ET

Government of Canada Announces Amendments to the Telecommunications Act

OTTAWA, ONTARIO--(CCNMatthews - Nov. 14, 2005) - The Honourable David L. Emerson, Minister of Industry, today announced that the Government of Canada has introduced legislation to amend the Telecommunications Act to provide the Canadian Radio-television and Telecommunications Commission (CRTC) with direct fining authority, which would give it the power to levy substantial penalties against telecommunications carriers that violate its decisions or provisions of the Telecommunications Act.

Direct fining authority would be granted through the implementation of an administrative monetary penalty (AMP) scheme. Under the scheme, the CRTC would have the ability to impose AMPs in the following ranges: for companies, maximums of $10 million for a first offence and $15 million for a subsequent offence; for individuals, maximums of $25 000 for a first offence and $50 000 for a subsequent offence.

"The CRTC's new ability to act quickly to impose fines will enable it to better regulate the industry by responding quickly and effectively to violations of the Act and its decisions," said Minister Emerson. "This will lead to smarter regulation, stronger competition and more choice for consumers."

Currently, the only recourse against companies or individuals who have violated the Act or CRTC decisions is through a criminal proceeding in the courts. AMPs will give the CRTC the necessary tools to act quickly to address violations directly, without going to court. AMPs are also meant to serve as a deterrent for any company or individual that would consider operating in a manner that contradicts telecommunications rules and regulations.

Access to the courts will continue to be an important tool and will remain available as a final recourse to the CRTC to use at its discretion. With this in mind, the proposed amendments also call for streamlining the existing summary conviction provisions in the Telecommunications Act and increasing the associated fines.

Finally, the amendments propose giving the Commissioner of Competition improved access to commercially confidential information filed with the CRTC in respect of telecommunications proceedings. The Competition Bureau has a mandate to intervene in CRTC telecommunications proceedings, and the amendments would allow the Bureau to provide more informed advice to the CRTC as it works to foster competition in the telecommunications marketplace.

"These amendments will strengthen the CRTC's ability to carry out its mandate by ensuring it can regulate in a timely, effective and flexible way that fosters competition in the telecommunications industry," said Minister Emerson. "Facilitating reliable, affordable telecommunications services contributes economic and social benefits to all Canadians across the country."

This initiative was first outlined in Budget 2005 as part of a number of initiatives designed to address shorter-term telecommunications policy issues. Other initiatives address unwanted telemarketing and spam. Taking immediate action on existing issues is consistent with the government's Smart Regulation commitments.


Backgrounder

Legislation to Amend the Telecommunications Act

The telecommunications sector is a powerful enabler in the economy and in society as a whole, and the government's objective is to ensure that Canada has a strong internationally competitive telecommunications industry that delivers world-class, affordable services and products for the economic and social benefit of all Canadians in all regions of Canada.

Consistent with these objectives, the 2005 federal Budget stated the following:



The Government recognizes the critical importance of the
telecommunications sector to Canada's future well-being and the
need for a modern policy framework. To ensure the
telecommunications industry continues to support Canada's
long-term competitiveness, the Government intends to appoint a
panel of eminent Canadians to review Canada's telecommunications
policy and regulatory framework. Reporting to the Minister of
Industry, the panel will be asked to make recommendations before
the end of the year on how to move Canada to a modern
telecommunications framework in a manner that benefits Canadian
industry and consumers.

In the meantime, the Government will continue to pursue a
number of improvements to Canada's telecommunications regulatory
framework. The Government will table amendments to the
Telecommunications Act to provide the Canadian Radio-television
and Telecommunications Commission (CRTC) with direct fining
authority. This measure should provide the CRTC with the
flexibility to regulate in a more strategic manner that focuses
on results.

- Budget 2005


In keeping with the Budget commitment, these proposed amendments to the Telecommunications Act are designed to provide the CRTC with direct fining authority for violations of its decisions or of the Act. Direct fining authority would be granted by introducing amendments to the Act that would implement an administrative monetary penalty (AMP) scheme. Given that the CRTC has moved from regulating monopolies to fostering competition, its ability to respond in a timely and effective manner to behaviour that undermines competition needs strengthening.

AMPs are appropriate tools for enforcing compliance where regulatory breaches are not criminal in nature. AMPs are meant to deter behaviour that undermines competition in the telecommunications market. They will also allow for more flexible, timely and smarter regulation. An avenue of appeal will be provided through the Federal Court of Appeal.

The amendments propose AMPs in the following ranges: for companies, maximums of $10 million for a first offence and $15 million for a subsequent offence; for individuals, maximums of $25 000 for a first offence and $50 000 for a subsequent offence. These fines are appropriate given the size of the communications services industry, which earned $40 billion in revenues in 2004.

Concurrent with introducing an AMP scheme, the proposed amendments will streamline the current summary conviction provisions in the Telecommunications Act and to increase the fines associated with those provisions. They also propose two categories of offences under a streamlined section 73.



- Section 73(1) would cover the most serious contraventions of the
Act and CRTC decisions. This category would cover activities such
as failure to file tariffs for CRTC approval or failure to comply
with conditions of service imposed by the CRTC. For these offences,
maximum fines for individuals would range from $75 000 for a first
offence to $150 000 for a subsequent offence; for corporations,
maximum fines would range from $20 million for a first offence
to $30 million for a subsequent offence.

- The second category, section 73(2), would serve as a general
offence group, carrying a lower range of penalties. Maximum fines
for individuals would range from $50 000 for a first offence to
$75 000 for a subsequent offence; maximum fines for corporations
would range from $15 million for a first offence to $20 million
for a subsequent offence.


The CRTC can impose AMPs through a relatively quick administrative process, while summary conviction provisions entail a criminal proceeding in a court of law. These provisions are still a necessary tool and should continue to be available as a final recourse to the CRTC to use at its discretion for very serious offences.

The proposed amendments to the Act will also allow the Competition Bureau to access confidential cost and revenue information filed in CRTC proceedings where competitive issues are an important factor, and where the CRTC determines that sharing this information with the Bureau is in the public interest. Improving the interface between these two agencies is particularly important given that the CRTC is now moving beyond the initial opening of markets to competition. This approach will enable the Competition Bureau to provide more informed expertise to the CRTC as it seeks to foster competition in the telecommunications marketplace. Such an amendment will also ensure that the information remains confidential.

Contact Information

  • Office of the Honourable David L. Emerson
    Minister of Industry
    Christiane Fox
    (613) 995-9001
    or
    Industry Canada
    Media Relations
    (613) 943-2502