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Eric Smith, Canadian Telecommunications Association Senior Vice President
Opening Statement to the Standing Senate Committee on National Security, Defence and Veterans Affairs (SECD)

***Check Against Delivery***

Wednesday, May 4, 2026
4:00 p.m. ET

Good afternoon. My name is Eric Smith. I am Senior Vice-President of the Canadian Telecommunications Association.

The Canadian Telecommunications Association is dedicated to building a better future for Canadians through connectivity. Our members include service providers, manufacturers, and other organizations that invest in, build, maintain, and operate Canada’s world-class telecommunications networks.

Thank you for the opportunity to appear before you today to discuss Bill C-8, An Act respecting cyber security and amending the Telecommunications Act.

The security of Canada’s telecommunications system is of the utmost importance. Telecommunications networks are critical infrastructure that underpin Canada’s economy, national security, and public safety. They enable essential services, support government operations, and connect Canadians to health care, education, emergency services, and one another.

Our members take this responsibility seriously. They invest significant resources to safeguard their networks from cyber threats and actively collaborate through forums such as the Canadian Security Telecommunications Advisory Committee, which facilitates the exchange of information between the private and public sectors as well as strategic collaboration on current and evolving issues that may affect telecommunications systems, including cyber security threats.

We appreciate the government’s objective of strengthening Canada’s cyber security framework and recognize the importance of having the right tools in place to respond to evolving threats. We also welcome the meaningful improvements that have been made to Bill C-8 over the course of the legislative process.

At the same time, it is essential that government recognize that under Bill C-8 telecommunications service providers will be responsible for implementing government orders that may have significant operational and financial implications. Ensuring that the legislation addresses this reality will be critical to its effectiveness.

With that in mind, I would like to highlight two areas where we think targeted refinements would strengthen the bill.

First, on compensation.

Bill C-8 states that no one is entitled to compensation for financial losses resulting from compliance with government orders. It is important to recognize the practical implications of this approach.

Orders issued under this framework could require service providers to rapidly deploy new systems, reconfigure networks, replace equipment, or take other actions that involve significant and unplanned costs. These are not routine operational expenses, they can be substantial, immediate, and unbudgeted for expenses that are incurred in the broader public interest to support national security objectives.

Failure to address the impact of extraordinary costs will have real consequence, not only for the sector, but for all Canadians. Significant, unplanned costs can constrain investment in network expansion, limit innovation, and reduce the ability of providers to enhance service quality for Canadians. Uncertainty around whether these costs may be recoverable can also complicate internal decision-making and delay the timely implementation of government orders.

While this applies across the industry, the impact is particularly acute for smaller and regional providers, which operate with less scale and tighter margins. For these providers, the financial burden of compliance can be especially challenging and, in some cases, may threaten their ability to continue operating, resulting in broader knock-on effects for competition, resilience, and service availability.

For this reason, we recommend that the legislation explicitly confirm that the Governor in Council and the Minister have the discretion to provide compensation to offset all or part of the costs incurred in complying with an order, and that they make clear when issuing an order whether the affected parties will be entitled to compensation.

This is not a novel concept. Comparable approaches exist in other Canadian legislation. For example, Bill C-22 includes provisions that explicitly allow the Minister to provide discretionary compensation to electronic service providers required to implement capabilities in support of lawful access.

Internationally, similar principles are applied. In the United States, for example, the government has recognized that certain national security measures, such as the removal and replacement of high-risk network equipment, can impose significant financial burdens on telecommunications providers. To address this, funding programs have been established to compensate eligible carriers for these costs. Importantly, these programs have been supported through innovative funding mechanisms, including the use of proceeds from spectrum auctions to finance reimbursement initiatives.

These approaches reflect a practical reality: when governments require private sector actors to take extraordinary measures in the interest of national security, there should be a clear and transparent mechanism to consider compensation.

Our second issue relates to liability protection.

As currently drafted, telecommunications service providers could face civil, regulatory, or contractual liability for actions taken in good faith to comply with government orders. This could arise where compliance affects service levels, contractual obligations, or other regulatory requirements.

This creates risk at precisely the moment when decisive action may be required. We therefore recommend the inclusion of a safe harbour provision to protect providers and their personnel from liability when acting in good faith and in compliance with lawful orders. This reflects a basic legal principle that parties should not incur liability for actions taken to comply with a legal obligation.

In closing, we share the government’s commitment to strengthening Canada’s cyber security and protecting critical infrastructure. With targeted refinements, particularly with respect to compensation and liability, Bill C-8 can provide a framework that supports both national security objectives and continued investment in secure and resilient telecommunications networks.

Thank you. I would be pleased to answer your questions.