Minister Flaherty gives thumbs up to Teachers takeover of Bell Canada

Jim FlahertyApparently, the $52-billion pension fund led buyout of Bell Canada is good for the Canadian economy if the company continues to invest in infrastructure as well as research and development.

That’s the scenario laid out by Jim Flaherty, Canada’s finance minister the other day in an exclusive story by the National Post’s Paul Vieira.

http://www.canada.com/nationalpost/financialpost/story.html?id=fe5e12d3-783f
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Mr. Flaherty’s statement is based on the hope the organized chaos to ensue if and when the Teachers-led consortium takes over Bell settles down sooner rather than later.

The Finance Minister should be more concerned. Any hopes Bell will quickly ramp up cap ex programs represents nothing more than wishful thinking as everything will be on hold until the new owners have a chance to review operations.

There are already well-founded fears the federal government will lose up to $1-billion of tax revenue assuming Bell is privatized. The proposed transaction will be funded by debt - the interest is tax deductible which means potential lost revenue for the government.

There will be no sacred cows - Teachers is known for generating quick ROI on investments. A widespread fiber to the home program, though long overdue and necessary, like other proposed investments is by no means guaranteed under any new Bell Canada ownership regime.

July 5, 2007 | Filed Under News Items and Commentary 

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