Industry Minister Champagne will make no decision on Rogers-Shaw deal until legal case is resolved

Industry Minister François-Philippe Champagne says he will allow the legal process to continue before he makes his own decision on whether to approve Rogers Communications Inc.’s RCI-B-T proposed takeover of Shaw Communications Inc. SJR-B-T

The minister’s comments Saturday came after the Competition Tribunal said the deal should proceed, a decision that the Competition Bureau – which challenged the sale – later said it will appeal.

The deal between Canada’s first- and fourth-largest telecommunications providers has sparked vigorous public debate on competition and pricing in the telecom market since it was first announced in March, 2021. The companies are hoping to close the deal by Jan. 31. Rogers will be paying $20-billion in cash for Shaw, and assuming $6-billion of Shaw’s existing debt.

The agreement must clear two more regulatory hurdles this year after the Canadian Radio-television and Telecommunications Commission approved the deal in March, 2022, as being beneficial for the development of Canadian programming.

The first is the tribunal and the Competition Bureau’s planned appeal of its decision in Federal Court. The bureau, led by Commissioner Matthew Boswell, has strongly opposed the sale on the grounds that it would worsen affordability and choice for consumers because of reduced competition. The bureau took the companies to the tribunal in an attempt to stop the deal.

The final hurdle rests with Mr. Champagne and the Department of Innovation, Science and Economic Development.

Rogers and Shaw sought to allay competition concerns by working out a separate deal with Quebecor Inc.’s Vidéotron that would see the Quebec-based telecom company acquire Shaw’s Freedom Mobile to create another national competitor. The tribunal indicated in the summary of its decision that it believed the arrangement with Vidéotron would maintain competition in Alberta and B.C., which were the geographies most at issue.

The minister has already rejected the transfer of spectrum between Rogers and Shaw. He has said that an approval for the deal with Quebecor’s Vidéotron would only go through on the condition that the licences are held for at least 10 years, and that prices in Ontario and Western Canada are lowered to be in line with the company’s prices in Quebec.

“Promoting competition and affordability in the telecom sector is one of my top priorities,” Mr. Champagne said in a Saturday statement. “That position has not changed.”

The tribunal has not yet released its full reasons for its ruling. Mr. Champagne said he will review that decision when it is fully released.

“I will review that decision in detail and will render my separate decision only after there is clarity on the ongoing legal process,” he said in the statement.

Mr. Champagne’s office did not respond to questions about whether the minister was waiting for the full legal process, including appeals, to play out.

Jennifer Quaid, a law professor at the University of Ottawa who studies competition, said the minister appeared to be giving himself some breathing space to make his decision.

The tribunal made its decision much faster than normal at the request of Rogers, which said it would have to pay roughly $260-million to bondholders if the deal deadline was not met.

Prof. Quaid said that for political reasons, Mr. Champagne may not want to appear to be in the same rush, though he may find it difficult to reject the deal if all other regulators approve it.

“If the tribunal comes down and says this isn’t a problem, I don’t think anything is going to get in the way of a licence transfer,” Prof. Quaid said.