New Minister of Innovation should prioritize investment in digital infrastructure to ensure economic recovery
Op-ed by Robert Ghiz
Originally published in The Hill Times on January 27th, 2021
Congratulations to the Hon. François-Philippe Champagne on his new role as Minister of Innovation, Science and Economic Development, one of Government’s most important portfolios, at a crucial time for the Canadian economy.
The past year has not been without challenges for all Canadians and all levels of government. The challenges before Minister Champagne and the rest of the Federal Government are many.
Among the many priorities set out in the Minister’s mandate letter from the Prime Minister, Minister Champagne is tasked with helping grow Canada’s economy, creating jobs, ensuring Canada’s long-term competitiveness on the world stage, and promoting a cleaner environment.
These priorities are not the Minister’s alone. To be successful, government and the business community must work together with common purpose to ensure that Canada emerges from this turbulent period in better shape than it was prior to the COVID-19 outbreak. This can only be accomplished if we prioritize investment in critical infrastructure.
When thinking of infrastructure, many immediately think of roads, bridges, and other bricks and mortar projects. However, the pandemic has highlighted the importance of a critical infrastructure that many had previously taken for granted. Over the past year, our wireline and wireless telecommunications networks have been a lifeline for Canadians and businesses, many of whose only way to maintain social and economic activity has been through digital communications.
While strong digital networks have been important during the health crisis, they are equally important to Canada’s long-term future. By some estimates, the pandemic has accelerated the digitization of society and business by between five and seven years. Without ongoing investment in advanced digital infrastructure, Canada’s economic recovery will be delayed and may not reach its full potential.
Fortunately, we are starting from a strong position. As a result of years of private sector investment (e.g. averaging more than $13-billion per year from 2015 to 2019), Canada’s digital networks are regarded as amongst the best in the world. In fact, last year independent network analyst Opensignal ranked Canada’s wireless networks as having the fastest average download speeds in the world, and amongst the best performing and most widely available in rural areas.
But there is more work to be done. While most Canadians have access to connectivity, further investment is needed to ensure that all Canadians can participate in the digital economy. In the hardest to reach and least-populated communities, this will often require a combination of public and private funding.
Wireless network operators are also starting to invest in the rollout of 5G which will enable a new era of innovation across all sectors of the Canadian economy, including health care, manufacturing, transportation, retail, entertainment, and natural resources. In economic terms, Accenture estimates that 5G will add $40-billion to Canada’s gross domestic product (GDP) and generate 250,000 permanent full-time jobs by 2026.
5G will also be a key contributor to Canada’s fight against climate change. Accenture estimates that mobile technologies have the potential to address 23 per cent of Canada’s total 2030 emission reduction target by 2025.
The initial rollout of 5G is estimated to cost $26-billion by 2026, not including what is likely to be billions more needed for spectrum acquisition.
This level of private sector investment can only happen if Minister Champagne and his colleagues maintain a balanced and stable regulatory environment that recognizes the importance of encouraging private investment in digital infrastructure.
There are policies being explored that could negatively impact network operators’ capacity to invest in digital infrastructure at a time when the digitization of our economy is so important. Policies such as mandated mobile virtual network operators (MVNOs) will do nothing to help connect more Canadians and ensure high-quality services and wide network coverage.
The regulatory uncertainty surrounding these policies makes for a very challenging environment for network operators to commit to making long-term investments.
These are not the kind of outcomes that will help Canadians successfully emerge from the COVID-19 crisis. Government and industry must come together and prioritize investment in Canada’s digital infrastructure. We cannot leave communities behind and we must set the stage for the next wave of digital innovations.
We wish Minister Champagne well in his new role and look forward to working with him to ensure that Canada continues to benefit from having world-leading digital infrastructure.
Robert Ghiz is the president and CEO of the Canadian Wireless and Telecommunications Association, and former premier of Prince Edward Island.
[Op-Ed originally published in the Hill Times on January 27th, 2021].