Source : Globe & Mail

OTTAWA -- Two government departments at odds over foreign ownership restrictions on telecommunications companies are now working toward resolving their differences by the spring, Industry Minister Lucienne Robillard says.

Ms. Robillard said yesterday that officials from Industry Canada and Heritage Canada have been working together in recent weeks in an attempt to "break down the silos."

"This is a big challenge," Ms. Robillard said during an interview. "I think it's important to come to a common view on that."

Hélène Scherrer, the new Heritage minister, has also said she is open to all possibilities.

Analysts say the attempt to find common ground reduces the chances that the government will raise or eliminate foreign ownership restrictions.

Iain Grant, a telecommunications analyst at consultancy SeaBoard Group, said Heritage Canada's constituents, including arts and cultural groups, are a largely united voice in their opposition to lifting the restrictions.

The telephone companies that work with Industry Canada, however, have a mixed view. Smaller phone companies want the restrictions lifted because they need access to capital. Larger players are less interested in the proposed change.

The attempt at conciliation follows a battle between the two departments, their parliamentary committees and their most recent former ministers. Two Liberal-dominated committees separately studied the issue last year, coming to opposite conclusions.

The matter was also made more contentious because former heritage minister Sheila Copps and former industry minister Allan Rock -- were pursuing Liberal leadership campaigns. Ms. Copps opposed lifting the ownership rules, while Mr. Rock said Canada pays a price for being out of step with other countries on foreign ownership restrictions in telecommunications.

For both sectors, telecom and cable, foreigners can own a maximum of 20 per cent of an operating company and one-third of a holding company, producing an effective cap of 46.7 per cent.

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