Law Times

Oct 21, 2013

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Page 6 OcTOber 21, 2013 • Law Times COMMENT u Editorial obitEr By Glenn Kauth Help for consumers must be effective A s the federal government touted its consumer-friendly agenda in its speech from the throne last week, it's worth looking at how well one of its last major efforts on that front worked out. As has become clear in recent months, many of the wireless upstarts that emerged from the government's 2008 spectrum auction haven't done so well. While consumers have seen prices decline as competition in the telecommunications sector increased, some of the new companies are in financial trouble. In Re Mobilicity Group this month, Superior Court Justice Frank Newbould noted the extent of one company's problems. The company, he pointed out in his reasons for granting protection under the Companies' Creditors Arrangement Act, had lost almost $72 million during the first seven months of the year on revenues of nearly $47 million. So far, it has accumulated a net deficit of more than $430 million after raising more than $400 million in debt financing to fund its operations and capital expenditures since 2008. It has about 194,000 subscribers but, according to the ruling, has run out of so-called financial runway before achieving profitability. It's obvious, then, that while the government did a good job of encouraging competition by reserving wireless spectrum for the new entrants during the last auction in 2008, it didn't do enough to ensure their long-term viability. Mobilicity may yet survive, but it's clear it and its fellow entrants have a difficult path ahead of them. Starting a wireless company takes a lot of upfront capital and an ability to withstand large initial losses. Also, the new entrants have struggled to attract T enough customers, despite their very competitive prices, in part due to the limitation of their wireless networks. Mobilicity, according to Newbould, provides cellphone service in five urban markets (Ottawa, Toronto, Calgary, Edmonton, and Vancouver) with roaming agreements covering other areas. So as the government looks to attract votes by appealing to consumer interests around things like cable TV, it's worth viewing its efforts with a dose of skepticism. It may craft rules and regulations that look great on paper, but that doesn't mean they're sustainable or won't have negative unintended consequences. That's not to say the government shouldn't do what it's proposing, but it should consider all of the issues, including the full range of policies needed to ensure success, when appealing to consumer interests. — Glenn Kauth EllisDon bill a simple fix to an ancient wrong o hear the NDP tell it, bill 74 will strike a stake through the heart of collective agreements across the province and deny tradespeople the right to a living wage. On the other hand, hard-right maverick Conservative MPP Randy Hillier clashed with his leader, Tim Hudak, and found himself relegated to the backbenches when someone leaked an e-mail saying bill 74 smacked of large corporations seeking favourable legislation by offering generous party donations. Obviously, bill 74 must be some kind of nefarious plot to subvert democracy and destroy the middle class if both sides of the political spectrum have issues. But that's not really the case. Bill 74 seeks to free one company from having to work only with union labour across Ontario. The company is EllisDon Corp., which describes itself as an "employee-owned company that completes in excess of $3.1 billion in new construction annually and delivers construction expertise to clients throughout the world." The background of why bill 74 is necessary — and both the Conservatives and the Liberals had been backing it as part of their deal to get legislation moving again this fall — is both complex and convoluted. Law Times decision, he was declaring an It's critical legislation trapped in a paralyzed legislature. It goes Queen's estoppel for two years to give EllisDon time to seek a legislato the standing committee on Park tive amendment. finance and economic affairs It was, in effect, a legal loopon Oct. 24. hole, he said, that has bound Unfortunately, Premier EllisDon uniquely to specific Kathleen Wynne, under presunions across Ontario. sure from the NDP and the In a subsequent appeal of the powerful Provincial Buildboard's decision, the Divisional ing and Construction Trades Court ruled in September in Council of Ontario (which favour of an estoppel without a Ian Harvey also runs the Working Famitime limit. The grieving parties lies Ontario coalition, the lobby group that supported the Liberals are now appealing the decision. Despite the ruling, the issue is still in the last election), has withdrawn her party's support claiming a Divisional not over, says Tom Howell, EllisDon's vice president of labour relations. The Court decision makes it moot. EllisDon disagrees. And here's the company fears it won't be competitive quick nub of the legal wrangle. The in the Ontario construction market unOntario Sheet Metal Workers' & Roof- til it settles the matter once and for all. ers' Conference and the International Further, he says that without bill 74, it's Brotherhood of Electrical Workers filed an invitation for the unions to engage a grievance at the Ontario Labour Re- it in still more litigation. The even biglations Board against EllisDon arguing ger threat, EllisDon maintains, is that a the company is bound by a provincial healthy selection of general contractors collective agreement by virtue of a 1958 is necessary to keep Ontario's construction sector vibrant in the face of a growSarnia, Ont., agreement. In February 2012, vice chairman Da- ing number of large companies based vid McKee sided with the unions but offshore competing in the same space noted that because of the legislative his- for the big projects. tory and entanglements that led to that This is where it gets even more complex. Thomson Reuters Canada Ltd. One Corporate Plaza, 2075 Kennedy Rd., Toronto, ON • M1T 3V4 • Tel: 416-298-5141 • Fax: 416-649-7870 www.lawtimesnews.com • clb.lteditor@thomsonreuters.com • @lawtimes Director/Group Publisher . . . . . . . . . . . . Karen Lorimer Editor in Chief. . . . . . . . . . . . . . . . . . . . . . Gail J. Cohen Editor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Glenn Kauth Staff Writer . . . . . . . . . . . . . . . . . . . . . . . .Yamri Taddese Staff Writer . . . . . . . . . . . . . . . . . . . . . . Charlotte Santry Copy Editor . . . . . . . . . . . . . . . . . . . . . . Mallory Hendry CaseLaw Editor . . . . . . . . . . . . . . . . . Adela Rodriguez Art Director . . . . . . . . . . . . . . . . . . . . . . Alicia Adamson Production Co-ordinator . . . . . . . . . . . . . Catherine Giles Electronic Production Specialist . . . . . . . Derek Welford Advertising Sales . . . . . . . . . . . . . . . Kimberlee Pascoe Advertising Sales . . . . . . . . . . . . . . . . Steffanie Munroe Advertising Sales . . . . . . . . . . . . . . . . . . . . . . . Grace So Advertising Sales . . . . . . . . . . . . . . . . . . . . Joseph Galea ©2013 Thomson Reuters Canada Ltd. All rights reserved. No part of this publication may be reprinted or stored in a retrieval system without written permission. The opinions expressed in articles are not necessarily those of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher assumes no responsibility for errors or omissions. Law Times disclaims any warranty as to the accuracy, completeness or currency of the contents of this publication and disclaims all liability in respect of the results of any action taken or not taken in reliance upon information in this publication. Publications Mail Agreement Number 40762529 • ISSN 0847-5083 Law Times is published 40 times a year by Thomson Reuters Canada Ltd., clb.lteditor@thomsonreuters.com CIRCULATIONS & SUBSCRIPTIONS $179.00 + HST per year in Canada for print and online (HST Reg. #R121351134), $145 + HST per year for online only. Single copies are $4.50. Circulation inquiries, postal returns and address changes should include a copy of the mailing www.lawtimesnews.com Two of the biggest trade unions in Ontario, the United Brotherhood of Carpenters and Joiners of America's district council of Ontario and the Labourers' International Union of North America, agree with EllisDon and are supporting bill 74 to the chagrin of the NDP and the building trades council. "This is not union busting," said Howell. "We're a proud union company. But it's an incredibly complex issue and that's why it's been so hard to get the story out." The 1958 working agreement aside, there's a slew of other legislative changes that helped weave the ties binding EllisDon. But while the issue is too complex to sum up in a sound bite, one thing is clear: The bill isn't the end of collective bargaining as we know it but is rather a simple fix to an ancient wrong. It is, however, another example of how three years of legislative neglect by a government so obsessed with its own survival and so beholden to select union interests have helped paralyze an important issue. LT Ian Harvey has been a journalist for 35 years writing about a diverse range of issues including legal and political affairs. His e-mail address is ianharvey@rogers.com. label(s) and should be sent to Law Times One Corporate Plaza, 2075 Kennedy Rd. Toronto ON, M1T 3V4. Return postage guaranteed. Contact Ellen Alstein at ............ 416-649-9926 or fax: 416-649-7870 ellen.alstein@thomsonreuters.com ADVERTISING Advertising inquiries and materials should be directed to Sales, Law Times, 2075 Kennedy Rd., Toronto, ON, M1T 3V4 or call: Kimberlee Pascoe ...............................416-649-8875 kimberlee.pascoe@thomsonreuters.com Grace So .............................................416-609-5838 grace.so@thomsonreuters.com Joseph Galea .......................................416-649-9919 joseph.galea@thomsonreuters.com Steffanie Munroe ................................416-298-5077 steffanie.munroe@thomsonreuters.com

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