Expensive Toll-Free Numbers Bother Canadian Companies
HALIFAX, NOVA SCOTIA
CANADIAN telephone costs are so high that Canadian phones are being answered in the United States.Skip to next paragraph
Subscribe Today to the Monitor
An example: Check-Inns Ltd. is a tourist information and reservation center operating in Halifax, Nova Scotia. It receives 100,000 calls a year from people who want information on booking hotels, salmon fishing trips, and other attractions. The calls come in on toll-free 1-800 numbers at its Halifax office.
But Check-Inns gets another 50,000 calls a year at an office in Portland, Maine, 350 miles away. Because the 1-800 service is expensive in Canada, the jobs go to the US.
The majority of calls from the US terminate in the Portland office, says Susan Tilley-Russell, general manager of Check-Inns. The people who work in that office are shipped down from Nova Scotia, but she says "What we want is Nova Scotians working in Nova Scotia." Telephone charges are the biggest single expense for the reservation system. Here is an example of the difference (in Canadian dollars) between the Maritime Telegraph and Telephone in Halifax and American Telephone & Telegraph Company in the US
for a toll free 1-800 number. The basic rate for 1-800 service from the US with the line ending in Halifax is C$198 a month. The same line to the Portland, Maine office costs C$20.
There are other differences. Charges per minute are higher. In Halifax, there are no discounts for calls made late at night or on weekends. However, the US line has such discounts. Check-Inns estimates it saves as much as $10,000 (Canadian; US $8,550) a month by operating phone lines in Portland. Many Canadian industries affected
The Official Travelers Guide to Canada is published and distributed by a Canadian firm. Americans can request it by dialing a 1-900 number, for which there is a small charge billed to the person calling. But because of high telephone costs that line isn't answered in Canada, but in Columbus, Ohio.
"We are a Canadian company [that] could easily have handled that contract," Mrs. Tilley-Russell says. "However, we couldn't compete on present telephone costs."
At Lee Valley Tools in Ottawa, there are 26 lines coming into the catalog operation, half of them toll-free 1-800 numbers. Owner Leonard Lee says the high cost of the lines is one reason he finds it hard to compete with his US competitors.
"Some of them [US-based catalogs] sell goods I manufacture at lower prices than I can," says Mr. Lee showing one of his patented woodworking tools on the cover of a competing US catalog. "There are many reasons Canada is uncompetitive, but high telephone costs are partly to blame."
At Lee Valley Tools, export sales - mainly to the US - are up 50 percent while domestic sales are flat. Lee says he could do even better if phone rates - especially toll-free lines - came down. He also complains about complicated rules that make costs even higher. You can't have a Canada-wide toll-free number; every region requires a separate number, and a separate charge. Canadian phone companies seek lower rates
The phone companies say they're trying but the government won't let them. "Our object is to bring Canadian rates in line with American rates by 1996," says Peter Brownhill, vice president of small and medium business marketing at Telecom Canada. Mr. Brownhill says that Bell Canada - the largest phone company in the country - applied for a whole package of lower 1-800 and WATS (Wide Area Telephone Service) charges last April. But the application has been sitting at the offices of the Canadian Radio-televi sion and Telecommunications Commission (CRTC) in Ottawa, the federal agency charged with regulating telephone rates. "The commission wants lower rates. But we can't estimate when the rate request will be approved," says William Allen, a spokesman for the CRTC.
The delay, by Bell Canada's estimates, has already cost Canadian business at least C$100 million in extra phone charges.