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OTTAWA -- Canadian jobs would be lost if foreigners are allowed to buy majority control of domestic phone companies, a parliamentary committee heard yesterday.

The House of Commons industry committee is reviewing rules that restrict foreigners to a maximum stake of 46.7 per cent in Canadian phone companies. The committee is trying to decide whether easing the restrictions would increase investment in Canada's telecommunications infrastructure and encourage greater competition in the sector.

"Jobs would probably move south," said Jean Sébastien, a telecom policy analyst at the Consumers Union in Quebec.

If restrictions are eased, Mr. Sébastien suggested it's likely that large phone companies in the United States would buy Bell Canada or Telus Corp., Canada's two biggest phone companies. Jobs such as those in network management would move to the United States, Mr. Sébastien said, as the larger American company tried to make the combined entity more efficient.

Mr. Sébastien also said opening the market to foreigners could threaten "affordable services" for Canadians who live in isolated areas.

The regulatory system in Canada ensures that rural Canadians generally have access to telephone service that is equal to that of people in large cities. But Mr. Sébastien said this could change if the restrictions are loosened.

"We don't think consumers have a lot to win," he said.

Before making a decision on the issue, Mr. Sébastien said the committee should conduct an in-depth study on what such changes could mean to Canadian consumers.

François Ménard, a project manager at engineering firm XIT Telecom, said easing ownership restrictions "could well enhance" the dominant market positions of Bell Canada and Telus.

Mr. Ménard and Mr. Sébastien were the first witnesses the committee has heard from who haven't enthusiastically endorsed dropping foreign ownership restrictions. The business community -- from Rogers Wireless Communications Inc. to AT&T Canada Inc. -- has argued that opening the market is key to attracting more money to Canada and to speeding the development of competition.

Telus is scheduled to speak to the committee today, the first former monopoly to appear. The company has said it is in favour of easing the restrictions. BCE Inc., owner of Bell Canada, is scheduled to appear Feb. 18 and hasn't stated its position publicly.

Beyond the business community, Canadians do not favour opening the market, a recent poll suggested.

Only 36 per cent of those surveyed said it's acceptable to drop the ownership restrictions, a Decima Research Inc. poll found.

"Canadians by and large are generally happy with their telephone companies," said Keith Neuman of Ottawa-based Decima.

The poll, conducted last December, surveyed 2,017 Canadians and is deemed accurate within 2.2 percentage points, 19 times out of 20.

Mr. Neuman said the results -- which were mostly unchanged from a poll in 2001 -- reflect a variety of feelings, including a fear of Americans charging in and taking over, and the sense that opening the market won't benefit ordinary Canadians.

Older Canadians are especially opposed to opening the telephone market, Mr. Neuman said. Only 27 per cent of those 55 years and older are in favour, compared with 48 per cent of those 18 to 24.

Men are more likely to favour a change, Mr. Neuman said, with 44 per cent in favour of dropping ownership restrictions compared with 28 per cent of women.