Source: The Montreal Gazette

The reaction has been mostly positive to last week's federal cabinet decision to overturn a regulatory ruling and allow Globalive Communications Corp. to get into the lucrative cell-phone-service market.

That was the right decision. But this case raises a broader issue: On what basis do we decide which enterprises in this country should be reserved for Canadian ownership and control?

The cabinet claimed to be convinced that foreigners do not have control of Globalive. But an Egyptian firm, Orascom Telecom, owns substantial equity and debt related to Globalive. That was enough to lead the Canadian Radio-television and Telecommunications Commission to refuse Globalive access to the cell-service business.

Further, the government says, this is a special case and nobody should cite it as a precedent for other relaxations of Canadian-ownership requirements. "The government is not removing, reducing, bending or creating an exception" to foreign-ownership rules, Industry Minister Tony Clement said.

But maybe it should. Ever since the last spike was driven in Canada's first railway, our government has often had cozy relationships with select companies at the expense of competition and consumer choice.

In telecommunications, two government-appointed panels have recommended that the telecommunications industry be opened to foreign ownership. Last year, the Competition Policy Review Panel urged Ottawa to take that step, and in 2006, a Liberal-appointed Telecommunications Policy Review Panel did the same, noting that Canada has "one of the most restrictive and inflexible set of rules limiting foreign investment" in the telecom industry.

Michael Geist, a University of Ottawa expert on telecom issues, argues that "the real culprit" in Canada's high telecom prices is not the CRTC, nor the incumbent companies, but rather "outdated legislation that prioritizes Canadian ownership over a competitive Canadian marketplace."

This is what Ottawa should now review, and in the process let's take a closer look, too, at ownership restrictions on other sectors: from banking to airlines to broadcasting.

In any industry you choose, there's a trade-off between agility, responsiveness, and consumer benefit, which comes from competition, and what we might call a national security blanket, the warm cozy feeling that no foreigners can shut down our airlines, for example.

But this security is ever more illusory in a globalized world. An airline or bank operating in this country is subject to the same regulations and laws no matter who owns it.

It's time for a new national debate on such ownership restrictions, and what really constitutes the national interest.

© The Montreal Gazette