Leaders in Canada’s telecommunications sector are urging policymakers to make it more attractive for companies to invest in improved infrastructure, as a new report says sustained spending by carriers is key to boosting economic growth.
The study by PricewaterhouseCoopers, which was commissioned by the Canadian Telecommunications Association, said the sector contributed $87.3 billion in direct GDP last year while supporting 661,000 jobs across various industries.
Its report was released Tuesday as industry representatives, academics and regulatory officials gathered for the 23rd annual Canadian Telecom Summit in downtown Toronto.
The theme of the two-day conference, which continues Wednesday, is unlocking value in the telecom sector amid global economic challenges.
“If we fail to act, the consequences of underinvestment will be severe,” said Robert Ghiz, president and CEO of the Canadian Telecommunications Association, in a speech to attendees.
“Without robust and enhanced telecom infrastructure, our trade corridors and our economy would grind to a halt.”
Speeches and panel discussions touched on a range of topics including the role of telecom networks in shaping urban transportation, public safety and accessible communication technology.
As demand continues to grow for advanced connectivity, the report said Canadian telecom companies spent about $282 per capita on network development in 2024.
That’s higher than peer countries such as the U.S., where telecoms devoted approximately $193 per capita in capital spending last year, and the U.K., where that measure stood at $225 per capita.
The report said Canadian telecom companies invested 18 per cent of their revenue on capital expenditures in 2024, which was also a higher rate than both other countries.
But it outlined challenges providers face, including higher costs, declining revenue growth, heightened competition and a complex regulatory environment.
“Relative to our peers globally, Canada does have a restrictive and very difficult business environment at the moment,” said Sam O’Halloran, strategy and consulting director for PwC Canada.
That’s on top of “natural” challenges Canadian providers face, such as the country’s geography that makes it more expensive to reach remote communities when building networks, O’Halloran said.
He added that with natural disasters becoming increasingly common, Canadian providers face resiliency obstacles, along with “tight windows to build” due to long winter seasons.
“This makes it more costly for Canadian telcos to deploy capital and deploy networks,” O’Halloran said.
The company’s research shows Canadian telecoms are pulling back on network investments for the first time in years. Major Canadian providers spent an average of $12 billion in capital expenditures last year, down from $13 billion in 2022 and 2023.
“The real risk here is what degree to which this will begin to mirror what’s happening in European markets, where we’re seeing heavy regulation result in pressure on their ability to invest in networks,” said PwC Canada partner Bali Minhas.
Ghiz said Canada currently “stands at a crossroads” as Prime Minister Mark Carney sets out to make Canada more self-reliant through “nation-building” projects.
He said the government must view telecom as a “critical enabler of growth and increased productivity” as it looks to find ways to strengthen the national economy.
“We need a regulatory framework that encourages long-term investment,” he said.
“That means creating stable, predictable policies that reduce regulatory uncertainty, reward infrastructure buildout, and support innovation over the long term.”
CRTC vice-chair Adam Scott said priorities for the regulator include quality, coverage and price when it comes to setting telecom policy.
He said the commission acknowledges the “importance of continued investment.”
“As we work to ensure all Canadians have access to telecom services and that Canadian networks are among the highest quality in the world, we also want to make sure everyone has access to affordable choices,” he said.
“We’re addressing a common complaint: Too often, Canadians feel like they pay more than they can afford for telecommunication services.”
While Statistics Canada’s Consumer Price Index reports show telecom prices are on the decline — the price of cellular service was down 50 per cent between 2020 and 2024 — Scott said there’s more work for the CRTC to do.
“Despite what the numbers say, many Canadians are telling us that they aren’t seeing those savings,” said Scott.
“We’re exploring a range of options to determine how we can ensure Canadians are benefiting from greater competition.”
Ghiz encouraged the regulator to incentivize continued network investment by supporting public-private partnerships, offering tax incentives that encourage building, and eliminating or significantly reducing annual spectrum license fees.
“Without continuing to build and enhance telecom infrastructure, Canadian businesses will find it more difficult to adopt digital tools, automate operations and compete globally,” Ghiz said.
“Foreign investors and companies will look elsewhere … and once that capital leaves, it’s hard to get it back.” BIV