Industry Minister François-Philippe Champagne announced the federal government will allow Rogers Communications Inc. to acquire Shaw Communications Inc., but some experts say this raises questions about the strength of Canada’s competition laws.

In an interview with BNN Bloomberg on Friday, Keldon Bester, co-founder of think tank Canadian Anti-Monopoly Project, said while it’s good that Rogers will now face fines of as much as $1 billion if they break the conditions of the deal, this is a negative sign for competition in Canada.

“I think that the conditions and the financial penalties associated with them [breaking the deal conditions] is a positive step but unfortunately, that reflects the reality of the transaction that I think a lot of Canadians are familiar with, is that competition is actually going down and we've traded away existing players for the hope that that competition can be replaced,” Bester said.

“So as a result we need these conditions, to even have a chance for things to either stay the same or potentially improve. So while I welcome the Minister [Champagne], beefing up the commitments from his October statement last year, I think it really is a product of the weak laws that shouldn't be stopping these mergers in the first place.”

This announcement ends a two-year saga of Rogers trying to acquire one of its largest rivals.

Rogers first struck the agreement to buy Shaw back in March 2021 for $20 billion. Companies involved said they expect the sale will be finished by April 7.

Bester said Canada needs to take a step back and “really reform and revitalize our laws related to mergers and competition in general.”

“Our laws still allow that merger to proceed so first things first, I think we need a stronger set of laws to deter these mergers in the first place and after that, we need a competition law that really takes that power seriously to ensure that consumers and other businesses aren't under the thumb of these dominant incumbents,” he said.

Robert McFarlane, corporate governance director and former chief financial officer of Telus Corp., said he thinks this deal won’t impact competition in Canada’s telecom sector, and it will maintain the status quo with the country’s four main players still in the spotlight.

“I think competition is being enhanced, it isn’t being reduced. There is not a reduction in the number of wireless providers,” McFarlane said in an interview with BNN Bloomberg on Friday.

“Second point is while governments love to focus on pricing, wireless pricing has actually gone down the past two years, that’s down, not up, despite inflation.”

McFarlane said he thinks what matters most in the Canadian telecommunications environment “is innovation, its efficiency, its competitiveness. Not to say that pricing isn’t important, it is.”

INCREASED COMPETITION IN WESTERN CANADA

Mark Goldberg, telecom industry consultant, Mark H. Goldberg & Associates Inc., said it was “about time” that this deal went through after first being announced in 2021.

“I think most of the things that the Minister [Champagne], was able to reduce into contractual arrangement are things that the Competition Bureau should have done a year ago if they had more imagination and less obstinance,” Goldberg said in an interview with BNN Bloomberg on Friday.

“They simply were not willing to consider any alternatives and I think that's one of the reasons they got slapped down by both the Competition Tribunal and the Federal Court and left it to the Minister [Champagne], to negotiate this arrangement.”

In the announcement on Friday, Minister Champagne also approved Quebecor Inc.’s proposal to buy most of Shaw’s wireless business.

The Montreal-based telecom company will be acquiring Freedom Mobile for about $3 billion, which has the majority of Shaw’s wireless accounts.

Goldberg added the sale of Freedom Mobile could increase competition in Western Canada.

 “What we're going to see though, from this deal, is certainly increased competitiveness from let's call it the Freedom Mobile assets in Western Canada because now you've got an owner [Quebecor] that's willing to invest and in fact is committed by contract to invest in that Freedom network,” Goldberg said.

“Something that a lot of people simply haven't talked about is the impact on competition in Manitoba and Saskatchewan, that Rogers is a small wireless player there, Shaw was the cable company in those provinces and now those provinces will be able to benefit from potential bundling by the new Rogers.”

'THIS DEAL WILL TAKE ADVANTAGE OF CANADIANS' WALLETS'

Experts are also warning that this deal might weigh on Canadians’ pocketbooks, at a time when many residents are already struggling to keep up with higher prices.

“This deal will take advantage of Canadians' wallets, there's no sugarcoating it. More market power in fewer hands will always lead to higher prices and, in this case, a slower pace of wireless industry innovation,” Anthony Lacavera, founder and chairman of telecommunications investment company Globalive, over email.

“Despite the Competition Bureau's warnings, the overwhelming majority of Canadians, and countless industry experts sounding the alarm, Minister Champagne gave the green light, forcing Canadians to suffer with less affordable wireless prices.”

Bester flagged that the Competition Tribunal has already acknowledged that “at least hundreds of thousands of Canadians are likely to see prices increase.”