Our industry minister flunks basic accounting.

Stephen Harper appointed Christian Paradis Minister of Industry after the federal election in May.  This has turned out to be a very bad idea.  While Mr. Paradis is a lawyer and Minister of Industry, he obviously knows nothing about corporate balance sheets. Mr. Harper might not have a wealth of talent available to him among his Quebec members but Mr. Paradis is an embarrassment.

Paradis authorized a news release this week that actually said that a $4.5 billion purchase of Nortel patents did not reach the value necessary for a review to be required.  He said the deal was really only worth $312 million because that was the value for the patents showing on Nortel’s balance sheet.  One wonders if Mr. Paradis is kidding.  Does he really think that the figure companies carry on their books represents anything like the true value of the company’s patents?

Accountants use arbitrary figures for this area to show a balance on the books.  They have no idea what patents are worth unless they hold some sort of sales event.  That is hardly practical to do on a regular basis.

What Nortel is selling is Canada’s heritage in telephone technology.  Those patents represent more than 100 years of leading edge technology in the inner workings of the telephone networks and cellular telephones.  The consortium that includes Apple, Microsoft, Ericsson, Sony and RIM are not buying a pig in a poke, they are ensuring their companies’ futures.  For $4.5 billion, they are buying Canada’s telephony heritage.

Since Alexander Graham Bell spent his early years in Brantford, Ontario developing his ideas for the telephone, Canada has been very lucky in how previous governments protected our Canadian rights.  From its beginnings as Northern Electric Company and then with the leadership of Bell Northern Research (BNR), Nortel assured Canadians of a leading position in world telephone markets.

But now Mr. Harper and Mr. Paradis have sold us out.  Canada’s telephone heritage is lost.  Canada’s leadership in telecommunications is just another export to them.  They can care less about our past while they forsake our future.

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Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

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