PKP accused gov’t of ‘flagrantly’ favouring Bell over G7 contracts

Quebecor Inc. CEO Pierre Karl Péladeau wrote a letter taking the Liberal government to task over the contract to upgrade wireless services for 2018 G7 summit, accusing it of favouritism toward Quebecor rival BCE Inc. and demanding the government make the new Bell infrastructure available to other providers for free. In a sector as heavily regulated as wireless, “all arbitrary intervention from the government to favour one enterprise at the expense of another constitutes an unacceptable interference” that is likely to cause long-term harm, Péladeau said in a Jan. 31, 2018 letter obtained by The Wire Report through access to information. Quebecor’s Videotron has taken the government to court over Shared Services Canada (SSC) granting Bell, without a tendering process, the $24-million contracts to improve local telecommunication infrastructure ahead of the 2018 G7 Summit held in La Malbaie, Que. The Federal Court of Appeal is scheduled to hear arguments in the case in Montreal on Monday. “This intervention might seem harmless to you, but it constitutes a flagrant violation of the rules of fairness in a competitive market,” Péladeau wrote in the French-language letter to Minister of Public Services Carla Qualtrough. “I am therefore requesting today that you make this infrastructure available for free to other phone providers, since it was paid for with public money,” he said. He said Videotron would have not only been able to deploy that network, but that a competitive process would have allowed the work to be done at a lower cost. Péladeau pointed to the government’s efforts over the past 10 years to increase competition in the wireless market, including by encouraging a fourth player, and said that Videotron has spent billions on spectrum and building its network. “You understand that a gesture which advantages an established player so flagrantly will undermine the efforts the Canadian government has so carefully deployed,” he said. “The intervention of Shared Services Canada in an unfamiliar market could greatly harm the competitive balance” in the areas in question, Péladeau argued. Several months after that letter was sent, Videotron filed a complaint with the Canadian International Trade Tribunal, arguing that the work was not covered under Bell’s initial government contracts and should have triggered a new tendering process it could have participated in. In October 2018, the tribunal ruled in favour of the government and Bell, saying that the matter doesn’t fall within its jurisdiction, and that the work stemmed from reasonable additions to two older government contracts that didn’t require a new procurement process. The work included upgrading phone switching stations and broadband networks, including installing fibre, and the building of “at least at least thirteen cellular telephone towers along highways 138, 170 and 362, connecting the cities of Québec, La Malbaie and Bagotville,” according to the tribunal ruling. Videotron then filed an appeal in the Federal Court, asking for the case to be sent back to the tribunal. Among other arguments, it said that the tribunal’s conclusion that “it lacked jurisdiction to inquire into Vidéotron’s complaint because it pertained to a matter of ‘contract administration’ has no basis in law and is unreasonable.” Videotron argued that “the negotiation of new contracts, valued at more than $25 million does not amount to a matter of ‘contract administration’ that is outside the Tribunal’s inquiry jurisdiction.” In separate French-language replies, SSC and Bell defended the tribunal’s decision. SCC said that the original contracts in question provided for the possibility that the government could require additional services arising from short-term events -- including specifically mentioning the G7 summit as an example -- and that the tribunal had found such clauses to be reasonable. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

PKP accused gov’t of ‘flagrantly’ favouring Bell over G7 contracts

News | November 1, 2019

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PKP accused gov’t of ‘flagrantly’ favouring Bell over G7 contracts

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