OTTAWA—Forget “pocketbook issues.” Federal political parties are now targeting something people actually carry in their pockets: their cellphones.
Liberal Leader Justin Trudeau promised a re-elected Liberal government would considerably reduce the average Canadian cellphone bill by a combination of increased competition and working with incumbent telecommunications companies.
The Liberals announcement follows on a New Democrat promise from June. Jagmeet Singh’s party says they would put a price cap on cellphone bills that would result in every Canadian saving $10 a month. The NDP would also bring in a “Telecom Consumer’s Bill of Rights” that would lay out acceptable sales and billing behaviour from companies.
With roughly 32 million mobile subscribers in Canada, the populist pledge to lower cellphone bills is bound to strike a cord with many Canadians. But how realistic are the proposals?
“The fact that multiple political parties are talking about the need to address cellphone affordability is a really huge step,” said Laura Tribe, the executive director of Open Media.
“(But) I think part of the problem is the way these issues are being framed is in a way that will try to make it really easy for the average voter, whoever that is, to try and understand without necessarily matching the policy steps that would be needed to achieve it.”
First off, what’s Canada’s mobile market like?
Canadians pay some of the highest rates in the world for mobile telephone services, according to a federal government-commissioned study in 2018.
The wireless market is dominated by the big three telecoms — Bell, Rogers and Telus — who have been historically resistant to increased competition. An August report from the Communications Radio-television and Telecommunications Commission (CRTC) found that prices dropped an average of 28 per cent from 2016 to 2018 over the four mobile packages analyzed by the regulator.
But experts say other countries are seeing a much more rapid decrease in costs — meaning Canada still lags.
“We are coming down at a much slower speed than other countries, and they already started at lower rates,” Tribe said.
“When you start with rates that were as high as we were paying, pretty much everything looks like an improvement. But that doesn’t mean we’re where we need to be.”
What has the federal government done so far?
In March, the CRTC launched a long-awaited review into Canada’s mobile wireless market. And the regulator has already signalled that it believes more competition — in the form of mobile virtual network operators (MVNOs) or resellers of wireless services — would be a good thing.
So the wheels were already in motion before Trudeau made his announcement Sunday. A report from Scotiabank researcher Jeff Fan suggested “regulatory heat” on telecoms would be “elevated prior to the election,” but the bank expects it to “simmer down post elections.”
“The submissions and the hearing will occur (thankfully) after the elections and we expect an evidenced based process to determine the outcome,” the report read.
What are the Liberals promising?
Trudeau promised on Sunday that a re-elected Liberal government would reduce Canadians’ cellphone bills by 25 per cent over four years. Based on the party’s claims, that would work out to about $1,000 in savings per year for the average Canadian family.
How they’ll go about doing that, however, is not quite so clear. The Liberals say they will work with Canada’s telecommunications providers to “offer plans at globally comparable prices.”
“I don’t think that talking, cajoling, trying to convince telecom companies to do something that they have long opposed is likely to yield much success,” said Michael Geist, a University of Ottawa law professor who researches telecommunications policy.
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The Liberals also say they’d “encourage” competition in Canada’s telecommunication market, and allow regulators to “step in” if competition isn’t leading to lower prices.
They’d also prioritize competition and affordability when awarding new wireless expansions.
So can they actually do any of that?
Yes, Geist said.
“We’ve seen markets or countries, (where) one of the things that they’ve done is open up the market to foreign competition or try to develop competitive policies, and the effect is that prices come down,” Geist said.
“In Canada, we’ve had these big three players that have been pretty dominant for a very long time, and they’ve done whatever they can in recent years to either stall or block new entrants … into the marketplace. So the role of government is to essentially reject those big telecom responses by trying to foster greater marketplace competition.”
What’s the New Democrats plan?
The New Democrats would put price caps on cellphone plans that they say would save every Canadian $10 a month on their bill. The New Democrats would also introduce a “Telecom Consumers’ Bill of Rights” that would “put an end to the outrageous sales and services practices of big cell and internet companies,” according to their platform.
How likely is any of this to actually happen?
Tribe said the NDP’s suggestion to legislate might be more effective than the Liberals’ plan to chat with telecoms to voluntarily lower their prices.
“The idea that the Liberals will work with the companies seems less realistic than the NDP’s (plan) to legislate the change,” Tribe said.
“(But) when you look at where the CRTC is heading now — we’re already trending towards the MVNOs that the Liberals have promised, and so that looks very realistic.”
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