Municipality sells Bruce Telecom to Eastlink

Section: 
News

By Barb McKay

 

After 102 years as a municipally-owned utility, Bruce Telecom has been sold.

 

Kincardine mayor Larry Kraemer announced during last Wednesday’s council meeting that Eastlink, owned by Bragg Communications Ltd., has purchased the company for approximately $26.5 million. The agreement was approved by council, with only councillor Randy Roppel voting against the sale. Councillor Mike Leggett was absent from the meeting. The signed agreement for the sale of Bruce Telecom is expected to be finalized within 90 days, pending approval from Industry Canada.

 

Kraemer revealed that discussions to sell Bruce Telecom have been taking place since July. A budget plan was put forward to try and keep the company going, but it would have cost millions of dollars to keep it viable, he said.

 

“Council did a lot of homework and hired consultants to look at opportunities and threats, and at the end of the day, given the laws governing the municipality and the evolving nature of telecom businesses, (we determined) that a specialized business could do a better job.”

 

The municipality hired consultants to assess the value of Bruce Telecom and search out potential buyers. Kraemer said Eastlink was the preferred choice to purchase the company because it pledged to honour existing employee contracts. Bruce Telecom employs approximately 80 people. Eastlink, based on the east coast, employs more than 1,700 people and provides service to a number of neighbouring communities, including Port Elgin and Southampton.

 

“They came forward and put a superior offer on the table,” said Kraemer, who wouldn’t say what other companies made offers. “They had the most sound and appealing plan.”

 

“We are proud to deliver industry-leading video entertainment and communications services across eight provinces, including this area with successful operations in Saugeen Shores, including Port Elgin, Paisley and other communities,” Eastlink CEO Lee Bragg said in a media release. “We have a proven history of successfully integrating telecommunications acquisitions like Bruce Telecom. We look forward to serving residential and business customers of all sizes by leveraging our world-class fibre network and our industry experience. We will work very hard to ensure a smooth transition for both employees and customers.”

 

Kraemer said the decision to sell Bruce Telecom was a very difficult one for council.

 

“Nobody wanted to do this, but it was about what serves taxpayers best. Council struggled with it for quite some time.”

 

During a meeting last Thursday with Tiverton ratepayers, Bruce Telecom board member Tom Scott said the news that the utility was sold was “shocking.” He said five of the six board members had voice their opposition over plans to unload the company.

 

Roppel said he believes the municipality is making the wrong decision.

 

“We are willing to spend millions of taxpayers dollars on something that doesn’t have a promise of making a profit,” he said, referring to the natural gas project, “and here we have a corporation that will make a profit for years to come. I think it’s a sad day for the Municipality of Kincardine and the people of Bruce Township.”

 

Kraemer said the natural gas project will not be impacted by the sale of Bruce Telecom because it was already out of the running as a potential distribution option. He said it has yet to be decided how the funds from the sale will be used.