For Immediate Release July 31, 2009

Newmarket, OntarioThe Nortel continuing saga may turn out to be the worst abandonment of Canadian technology in history.  Worse even than the canceling of the Avro Arrow project.

The Minister in Ottawa in charge of the Investment Canada Act, Tony Clement, seems to have been confused as to what action he should take when it was announced Nortel would seek bankruptcy protection with the view of selling off assets to liquidate debts.

That was strange.

Since when is the Government of Canada subject to a Bankruptcy Court proceeding, be it in Canada or a foreign country such as the U.S.A., when it comes to protecting Canada’s technology and national security.

The purpose of the Investment Canada Act is clear.  Clause 2 of the Act reads:

“Recognizing that increased capital and technology benefits Canada and  recognizing the importance of protecting national security, the purposes of this Act are to provide for the review of significant investments in Canada by non-Canadians in a manner that encourages investment, economic growth and employment opportunities in Canada …”

I was the sponsoring Minister in July 1985 when the Act became law.

It is strange that the Minister and the Prime Minister have chosen to take no action to date with respect to Nortel yet the Harper government went along with Ontario to shore up General  Motors then in U.S. bankruptcy when it was rescued by the U.S. government.

Why is it right to contribute over $10 Billion in a bail out of GM  -  giving Canada a minority share interest in a new GM company controlled by the U.S. government  but in Canada Mr. Clement has dithered with respect to Nortel which is Canada’s number one technology company.

Founded in 1895 Nortel, part of Alexander Graham Bell’s original break through in the communication field, has been Canada’s leading technology player especially in the communication and internet fields. 

Nortel now holds more patents than any other Canadian company.  They have approximately 3,650 U.S. patents  and  approximately 1,650 patents in other countries.

Nortel has taken Canada’s name in Research and Development from its base in Ottawa to branch locations in  Beijing China,  Boston and Silicon Valley U.S.,  Galway Ireland,  Manchester England,  Istanbul Turkey,  Bangalore  India,   Chateaufort  France  and  Korea.  In Canada they have branch sites in Montreal, Belleville and Calgary.

It is time for Ottawa to be pro active.  Surely if P.M. Harper can justify spending billions to shore up yesterday’s technology in General Motors he can justify taking a leading role in ensuring that Nortel not only survives but can be facilitated to regain its stature in the exciting technology world especially in communications and related areas.

At its height Nortel had a market capitalization of  $250 Billion  with over 90,000 employees.  It was a world star.  A decade ago Fortune Magazine showed Nortel as one of the 10 most exciting companies in the world and a place to invest.

Section 16 of the Investment Canada Act gives the government an easy course to follow.  It states:

“A non-Canadian shall not implement an investment reviewable under this Part (which it is) unless the investment has been reviewed under this Part and the Minister is satisfied or is deemed to be satisfied that the investment is likely to be of net benefit to Canada”.

Selling to a foreign concern in the case of Nortel or any significant part thereof will not be  “a net benefit to Canada”.

The lack of understanding of Canadian law was demonstrated in Bankruptcy Courts Tuesday in both Canada and the U.S.A., when for example one of the three dozen lawyers in attendance, Kevin Collins,  asked about the impact on Canada, said  “Most of us wouldn’t have a clue about that.  Around here it is all about the money  -  and in the case of Nortel, everyone is impressed with how much money was raised…  It might be sad for Canada,  but for anyone who has a claim on Nortel, this is great news.”

Interesting but in that scenario who spoke for the Canadian Government which has invested multi millions in Nortel over the years.

It is shocking that there has been no Parliamentary Committee Hearing to review Nortel’s situation.  Congress in the U.S. has been and still is active in reviewing troubled corporations in the financial, auto and technology fields in that country.

Surely a Parliamentary Committee could be convened to hold hearings with respect to research and development in Canada with a particular focus on Nortel.

Witnesses could be heard including representatives from Nortel and any bidders could be asked to appear.  Recommendations could be made including the role government should play.

It is unfortunate with the world facing the worst economic conditions since the great depression our federal government has shown so little concern about the loss of a significant research and development pillar in Canada.

Today’s networked world was  unimaginable  when Nortel began yet much of that world is due to Canadian know how produced by Nortel.

Today it is financially a shell of its former self but still has 25,000 employees.

Relatively if Nortel got the same governmental and private support given to GM, it could shine again.

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For more information call Hon. Sinclair Stevens at 1-888-666-3821 or e-Mail him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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