Canada’s Connectivity Future Depends on Sustaining Investment
By Eric Smith, Senior Vice-President, Canadian Telecommunications Association
On May 20, the Canadian Telecommunications Association and GSMA co-hosted Connecting Canada, a one-day conference in Ottawa bringing together policymakers, industry leaders, investors, technology experts, and global stakeholders for an important discussion about the future of connectivity in Canada.
The timing of the event could not have been more significant.
As telecommunications networks become increasingly central to Canada’s economy, productivity, public safety, resilience, and digital sovereignty, an important question is emerging: how does Canada continue to sustain the large-scale private investment required to support growing connectivity demands in an increasingly challenging investment environment?
That question was at the centre of discussions throughout the day.
The event also coincided with the release of a new report prepared by PwC for the Canadian Telecommunications Association: Telecommunications investment: Sustaining the infrastructure behind Canada’s economy. The report highlights the critical role telecommunications networks now play across virtually every part of Canadian society — underpinning commerce, emergency response, public services, supply chains, digital innovation, AI adoption, and national security and resilience.
At the same time, the report documents a stark reality: while consumer affordability outcomes have improved dramatically, the investment environment supporting those outcomes has become more fragile.
As outlined in the PwC report, between January 2020 and February 2026, Statistics Canada’s wireless price index declined by more than 45%, while wireline prices also declined. During the same period, prices for many other essential goods and services — including shelter, food, and transportation — increased substantially. Canadians today are benefiting from the most affordable connectivity services the country has ever seen, while also consuming more data, using faster networks, and relying on digital services more than ever before.
In a recent note to investors discussing the Canadian Telecommunications Association/PwC study, TD Cowen stated that the findings provide “clear evidence that telecom regulation has already achieved its stated objective (if not beyond the objective),” while also flagging recent commentary from industry players that “key aspects of the regulatory system continue to disincentivize investment.”
More recently, RBC Capital Markets raised similar concerns in its latest Canadian telecommunications sector outlook, arguing that Canadian telecom policy may now be reaching a “tipping point”:
Given the current price of wireless and Internet services in Canada versus many global benchmarks and relative to the rising prices of most other consumer discretionary and non-discretionary products and services, we believe Canadian telecom policy has reached or even crossed the tipping point whereby Canadian telecom operators are notably less incentivized to invest, and equally consequential, public market investors are notably less interested in owning Canadian telecom stocks in turn driving up the cost of capital for telecom operators, which only further raises the hurdle rates for telecom investment. …[W]e see a growing disconnect between the price of wireless and Internet services in Canada and what arguably has become one of the most (if not the most) important consumer value propositions (i.e., connectivity) across all discretionary and non-discretionary consumer spending buckets.
Uncertainty around regulatory frameworks, returns on capital, and future market conditions can have significant implications for investment levels, infrastructure deployment, and ultimately Canada’s digital competitiveness. Telecom policy can no longer be viewed solely through a narrow consumer pricing lens.
That does not mean affordability is unimportant. It remains an important public policy objective, and as the PwC report highlights, the telecom sector has delivered greater affordability gains than any other category of essential goods and services. But the discussions at Connecting Canada and in the investment community underscore that long-term consumer outcomes ultimately depend on more than lower prices alone. They also depend on maintaining a policy and regulatory environment capable of attracting the long-term private capital needed to deliver continuing innovation, network quality, resiliency, and the ability to finance the next generation of infrastructure.
The conversations at Connecting Canada reflected both the opportunities and the challenges ahead. But they also reinforced an important reality: sustaining world-class connectivity requires sustaining the investment environment that makes it possible.
