Telecommunications Sector Directly Contributes Nearly $75 Billion to Canada’s Economy and Supports Over 650,000 Jobs, According to New Report
Study also shows Canada’s telecom network operators outpaced international peers in capital investments in 2021, investing $21.2 billion in infrastructure and new spectrum licences to further expand and enhance Canada’s world class telecommunications networks.
OTTAWA, ON – October 25, 2022 – As the COVID-19 pandemic continued to disrupt the lives of Canadians in 2021, Canada’s telecom network operators played a vital role in maintaining economic and social activity in Canada, including investing more in expanding and enhancing critical network infrastructure than their international peers, a new report shows.
In a report commissioned by the Canadian Wireless Telecommunications Association (CWTA), PricewaterhouseCoopers (PwC) estimates Canada’s telecommunications sector contributed $74.9 billion to the national GDP in 2021 and supported over 650,000 Canadian jobs, helping spur growth in other economic sectors as Canadians adjusted to new social and economic norms amidst the ongoing global pandemic.
Canada’s telecom sector also invested more than $21 billion in capital investment and spectrum licenses in 2021, the report says, including $12.3 billion to expand and enhance network infrastructure and $8.9 billion to acquire new spectrum licences needed to support the country’s 5G networks. Canadian operators’ continued investments in network technologies have played a key role in the expansion of the country’s digital economy, the report adds, and have the potential to contribute an incremental $97 billion to Canada’s GDP by 2035 while supporting the delivery of a wide range of social and environmental benefits.
“Canada’s telecommunications sector has played a crucial role in maintaining economic and social activity since the beginning of the pandemic, and by investing in critical network infrastructure at levels that exceed that of international peers, the telecom sector will be a key contributor to Canada’s post-COVID economic recovery,” said Robert Ghiz, President and CEO of CWTA. “These investments are vital to maintaining Canada’s status as a world leader in telecommunications and meeting Canada’s innovation and economic growth objectives.”
Key Findings of the Report:
- Direct GDP contribution and jobs supported by the telecommunications sector in 2021 is estimated to be $74.9 billion and over 650,000 jobs (versus $70.7 billion (+6%) and 596,000 jobs in 2020 (+9%)*);
- The telecommunication sector invested $12.3 billion in capital expenditures in 2021, representing 19% of annual sector revenue (capital intensity), which was significantly higher than peers in other G7 countries and Australia, where the average capital intensity was 14%;
- On a per subscriber basis, in 2021 Canada’s telecom sector invested $168 in capital expenditure per subscriber compared to a G7 and Australia average of $87 per subscriber;
- Canada’s telecom sector’s large investments are delivering positive outcomes for Canadians, including:
- As of the end of 2020, 99.7% mobile wireless network coverage where Canadians live and conduct business and along major transportation roads, and sector is on track to deliver 100% coverage by 2026;
- Based on a quality index that considers speed, availability and video experience, Canada ranks above G7 peers and Australia;
- Canada’s national operators ranked as Global High Performers for 5G Reach by Opensignal, with only South Korea, Taiwan and Saudi Arabia having as many network operators with as high a ranking;
- Wireline internet access to 100 Mbps and 1 Gbps are available to 87% and 76% of homes in Canada compared to 76% and 51% of homes in EU countries;
- The number of rural households with access to 50/10 Mbps internet speeds with unlimited data has risen by 46% between 2017-2020 (54.4% vs 37.2%), while rural access to 50 Mbps+ download speed increased by 90% over the same period (74.6% vs 39.2%);
- Continued sector investment in 2021, directly and through partnerships with government, are further closing the rural/urban divide.
- Consumer prices have declined, particularly in the case of mobile wireless plans, where prices have decreased at a rate of 11% per annum from 2017 to 2021 while other product groups such as shelter and transportation prices increased 3% and 4% per annum respectively. Canadian internet access plan prices are also trending below inflation, decreasing 1.7% year-over-year from June 2021 to June 2022; and
- Looking to the future, expansion of the digital economy through the deployment of 5G networks and other enhanced connectivity has the potential to contribute an incremental $97 billion to Canada’s GDP by 2035 while supporting the delivery of a wide range of environmental and social benefits.
“The telecom sector plays a significant role in Canada’s economy and the connectivity provided by the sector is the foundation of Canada’s digital economy,” said John Simcoe, National Media & Telecom Lead at PwC Canada. “Ongoing investment by network operators in network infrastructure, including 5G and spectrum, is critical to Canada’s future prosperity, the advancement of Canada’s innovation ecosystem, and the deployment of technology that is required to meet Canada’s climate action and sustainability objectives.”
A copy of the report, entitled, “Canada’s post COVID-19 recovery: The impact of the telecom sector in 2021 and beyond,” can be found here.
*2020 figures based on previous CWTA commissioned report
CWTA is the authority on wireless issues, developments and trends in Canada. It represents companies that provide services and products across the wireless sector. CWTA also administers initiatives on behalf of its members, including corporate social responsibility programs and the national common short codes program.