TELUS recently released its second annual AI report [pdf, 15.3MB] and among its key findings, the research shows that AI trust is “fundamental to the social license required to unlock AI’s full potential to do good”.

Pam Snively (Chief Data & Trust Officer, TELUS) said, “While Canadians are actively embracing AI in their daily lives, they’re telling us that trust must be earned through meaningful human oversight, robust safeguards, and transparent practices. It is trust that will determine how far and how fast we can go.”

The TELUS study canvassed views from 5667 members of Leger’s online panel between mid-December, 2024 and mid-January 2025. It reports Canadians recognize the potential for AI to drive social impact and productivity, but are concerned about the consequences of AI, if left unchecked, especially absent human intervention. The report says confidence in AI decision making doubles when human supervision is present, especially in “high stakes” areas such as healthcare.

The report speaks about “Responsible AI”, while noting that despite widespread use of AI is, 91% of respondents expressed concern about its impact on Canadian society, implying a recognition of AI’s potential as a powerful tool, but also as a risk:

AI has the potential to drive meaningful positive impact and productivity, transforming the way we work, live, and learn in the world. But this potential comes with risk. Issues like misinformation, bias, societal disruption, and data security make it clear: the responsible development of AI is crucial to the technology’s evolution as a tool to drive amazing outcomes.

I’ll note that TELUS has been involved in projects such as Trust by Design for at least 5 years, dating back to when the company described three core principles for its use of customer data: accountability; ethical use; and, transparency.

Last year, Harvard Business Review had an article by Bhaskar Chakravorti, Dean of Global Business at The Fletcher School (Tufts University), about persistent risks associated with AI trust. “For instance, radiologists hesitate to embrace AI when the black box nature of the technology prevents a clear understanding of how the algorithm makes decisions”.

The HBR article suggests that the AI trust gap will be permanent, “even as we get better in reducing the risks.”

This has three major implications. First, no matter how far we get in improving AI’s performance, AI’s adopters — users at home and in businesses, decision-makers in organizations, policymakers — must traverse a persistent trust gap. Second, companies need to invest in understanding the risks most responsible for the trust gap affecting their applications’ adoption and work to mitigate those risks. And third, pairing humans with AI will be the most essential risk-management tool, which means we shall always have a need for humans to steer us through the gap — and the humans need to be trained appropriately.

At last month’s meeting of the G7, the leaders issued a statement on “AI for Prosperity”. The statement calls for “[driving] innovation and adoption of secure, responsible, and trustworthy AI that benefits people, mitigates negative externalities, and promotes our national security.” The term “trust” shows up 13 times in the brief document, with the final section entitled “Unlock AI opportunity through trust-building”.

Writing about “AI Slop,” Josh Gans, from the Rotman School at University of Toronto warns “disinformation drives out information in the sense that people do not trust anything to be informative at all. That is, you can’t inform any people any of the time.”

Trust in AI systems will have to be earned. We need to ensure there is an appropriate level of AI literacy among lay people, to help build sufficient understanding of AI’s challenges and opportunities. Consumers and businesses alike need to be aware of the risks that come alongside powerful capabilities.

It has been a little over three years since I last looked at mobile affordability in detail. We frequently hear the term “affordability” used interchangeably with “lower spending”. That isn’t necessarily so, as we will see from a detailed examination of data from the latest release of Statistics Canada’s Survey of Household Spending (SHS).

Lower prices make items more affordable, but stable prices with rising incomes can have the same effect. Lower prices can also serve as an incentive for people to consume more of a service, or substitute one service for another. Statistics Canada’s Consumer Price Index (CPI) reveals mobile services prices are less than half what they were 5 years ago. Contrast that with the overall price index (reflecting goods and services across the economy), which is now 20% higher over that same time frame. So, mobile services are certainly more affordable than before.

At the same time, mobile penetration has risen substantially. According to the CRTC, there were 33.0M mobile subscribers in the first quarter of 2019. There were 35.2M by the first quarter of 2023, an increase of 10%. In addition, people are subscribing to enhanced services packages, using faster mobile data with larger data buckets.

More people choosing to connect, and more people choosing more data, serve as additional indicators of affordability.

That helps to explain why monthly household spending on mobile services has increased from $111.92 in 2019 to $125.33 in 2023. Still, as a percentage of after tax household spending, mobile services have remained constant at 1.8%.

I thought it was interesting to see that household spending on income taxes have increased 38% over the period 2019-2023, nearly double the increase measured by the overall CPI.

This isn’t to say there are no households for whom communications services are unaffordable. There are households that have trouble putting food on the table and staying warm in the winter. At virtually any price point, these households might find communications services unaffordable. As I wrote last November, targeted solutions (including measures to improve digital literacy) are the best approach to address mobile affordability concerns.

I may take a deeper dive into the Survey of Household Spending data through the summer. There is a lot of data embedded in the SHS tables for those who choose to poke around.

In the meantime, be wary of those looking for overall communications prices to come down in the name of “affordability”. Targeted programs remain the best way to address such cases.

A recent paper discusses the use of spectrum set-asides to achieve policy objectives. Its conclusion merits careful review.

In Telecommunications Policy, Bronwyn Howell wrote “Using spectrum set-asides to address distributional objectives: Lessons from Canada, New Zealand, South Africa and the United States”, concluding that Canada’s use of set-asides has raised costs and has failed to foster competition effectively.

The last time I looked at set-asides (in December 2023), I wrote that “ISED got it right” by using spectrum caps (instead of set-asides) as a means to ensure smaller service providers had equitable access to the 3800 MHz band. The average cost per Mhz-pop was $0.29, as contrasted with the 3500 MHz auction held two years earlier with an average cost of $3.28 per MHz-pop. At the time, I noted that the lower spectrum cost meant carriers would be in a better financial position to invest in physical infrastructure.

The Telecom Policy article notes that set-asides “are not economically neutral.” Set-asides distort spectrum auctions by reducing the total spectrum available, creating an artificial scarcity. This has been shown to result in higher auction prices.

In Canada, set-asides have generally been used to help “new-entrant” wireless service providers with market entry. The article also looks at setting aside spectrum rights for “economically disadvantaged communities” in specific geographies to redress economic, social and digital divides.

The rationale is that the spectrum can be used to attract service provision, confer profits from network ownership and upskill individuals in network engineering skills within disadvantaged communities. However, telecommunications network operation requires substantial additional capital as well as spectrum holdings. It is not clear where already financially-disadvantaged communities will raise this additional capital to deploy networks with any spectrum they may own.

Looking at data from examples in the US and New Zealand, the author found “it is not axiomatic that spectrum ownership is necessary for these communities to participate in the digital economy or that spectrum ownership alone will close digital or skills divides.”

Looking at Canada, we read that, despite what might be the best of intentions, Canada’s spectrum set-asides “failed dismally at inducing new competition”.

A 2023 paper by Kent Fellows and Jeffrey Church at University of Calgary looked at Canada’s AWS-1 auction concluding “there was a substantial opportunity cost associated with the set aside of spectrum.” They estimated that the increase in consumer surplus from the auction would have been 6 to 8 times greater, rising from $932M to a range of $5.9B to $8.2B. Further, they believe mobile penetration would have up to a million subscribers higher. Finally, the economists found that “the set-aside policy had a modest impact in reducing quality-adjusted prices, from one to two percent, whereas if the spectrum was allocated to the three incumbents, quality-adjusted prices would have fallen by four to six percent.”

The Telecom Policy article concludes appropriately:

While set-asides can address certain short-term equity concerns or sovereignty goals, realising sustainable gains in connectivity and economic development requires complementary resources — most critically, network capital, skills, and appropriate governance structures. By illuminating these trade-offs and complexities, we aim to inform more nuanced policy-making that balances equity and efficiency in future spectrum policy.

I couldn’t say it better.

In late May, we saw the release of the 2025 OECD Economic Survey of Canada.

Canada tends to perform very well in basic research, as illustrated by its strong research impact, which plays a key role in driving breakthrough innovations with broad industrial potential.

Low business R&D activity points to challenges in translating basic research into large scale commercial applications. This might reflect difficulties to bridge university research with business needs and to ramp up commercialisation. Canada’s promising start-ups are often acquired and developed abroad and the same goes for intellectual property products.

The report notes that production of patents in Canada has grown considerably over the past 30 years, but this growth has only had a weak impact on total factor productivity because of inventors leaving Canada, and foreign acquisition of the patents and intellectual property. The OECD Economic Survey observed “a propensity to assign Canadian-invented intellectual property to foreign firms rather than retain it for further development.”

To me, this points to an aversion to risk among companies developing promising innovations. The OECD Economic Survey notes that support for R&D by the Canadian government tends to favour small firms over larger ones. The largest government program to support R&D activities is the Scientific Research and Experimental Development (SR&ED) tax incentive.

SR&ED provides an enhanced and refundable tax credit of 35% of current expenditures to small and medium Canadian-controlled private corporations, compared to a non-refundable tax credit of 15% for larger businesses. The OECD report recommends harmonizing the programs to improve the overall effectiveness and reduce distortions, such as subsidizing investments that would have been made regardless of public support. We have all seen examples of ceremonial government cheques being handed over to companies doing things that they would (or should) be doing on their own.

For a long time, I have expressed concern that government attempts at picking winners can inevitably create more losers.

The OECD Economic Survey says there is room to improve Canada’s regulatory environment. It says Canada’s natural disadvantage – having dispersed and relatively
small markets – should be countered by ensuring regulatory barriers are as low as possible. The OECD calls for “ensuring telecommunications markets are competitive and thus providing the quality digital access that is essential to smooth business operations.”

Looking well beyond telecommunications and broadcasting, “regulation” and “regulatory” appear more than 100 times in the 136-page report [pdf, 5.5MB]. The OECD complains that Canada’s regulatory environment “poses a burden on productivity growth”.

Internal trade barriers remain significant and should be reduced more quickly. Barriers on foreign investment should be revisited. Additionally, improving mutual recognition, including on foreign credentials, of qualifications across provinces would lower internal barriers to labour market mobility.

The OECD Economic Survey suggests increasing the digital intensity of the economy, another theme you have frequently seen on these pages.

According to the OECD, “Boosting productivity requires a combination of policies, including rebalancing R&D support, reducing regulatory barriers in internal markets, enhancing competition and digitalisation of the economy, and fully utilising women’s skills.”

Along those lines, a recent post by Eric Fruits in Truth on the Market talks about the need to consider regulatory reform as a means to increase competitive intensity. “When many think about monopolies and unfair business practices, they typically picture large corporations squashing smaller rivals. But there’s another significant culprit restricting competition that gets far less attention: government regulations themselves.” His article refers to a number of areas, with headings like: The Permission-Slip Economy; The Licensing Trap; Legal Immunity for Anticompetitive Behavior; When Government Competes Unfairly; Inflating Public-Project Costs; Energy-Market Distortions; and, Agency Overreach.

As Dr. Fruits writes, “True competition policy requires treating government-created barriers with the same skepticism we apply to private anticompetitive conduct.”

In his keynote address a couple weeks ago at The 2025 Canadian Telecom Summit, CTA CEO Robert Ghiz said “it is market competition — not regulation — that drives companies to outdo one another in delivering exceptional customer service and innovative solutions.”

Should the CRTC mandate consumer broadband labels to help make comparisons between service providers?

That is the subject of an oral hearing beginning this week in the nation’s capital region. Telecom Notice of Consultation 2024-318 (“Making it easier for consumers to shop for Internet services”) was triggered by the passage of amendments to the Telecom Act that were made last year by the unanimous approval of a Private Members Bill (C-288), introduced by Manitoba Conservative Dan Mazier.

Section 24.2 of the Telecom Act now reads:

1. In this section, fixed broadband service means any high-speed data transmission service provided to a fixed location using cable, fibre optics, wireless access, satellite or any similar transmission system.
2. A Canadian carrier that offers fixed broadband services shall make the following information available to the public, in the form and manner specified by the Commission:
   1. service quality metrics during peak periods;
   2. typical download and upload speeds during peak periods; and
   3. any other information required by the Commission that is in the public’s interest.
3. For the purposes of subsection (2), the Commission shall hold public hearings to determine the following:
   1. the service quality metrics that are to be measured and the manner in which they will be measured, as well as the methodology that is to be used to ensure that those metrics are representative of the different fixed broadband services packages offered in different regions across Canada;
   2. the methodology that is to be used to determine what constitutes typical download and upload speeds for different fixed broadband services packages offered in different regions across Canada;
   3. the periods that are to be considered peak periods;
   4. the types of Canadian carriers, if any, that should be excluded, in whole or in part, from the application of subsection (2);
   5. the types of transmission systems in respect of which the information referred to in subsection (2) is to be provided;
   6. the form and manner in which the information referred to in subsection (2) is to be provided to the public to ensure that it is easily available, accessible and simple to understand; and
   7. the measures that are to be taken, including in respect of compliance monitoring and enforcement, to ensure that the fixed broadband services provided by Canadian carriers reflect the information made available under subsection (2).

So, we have enshrined in the Telecom Act a one-time order to the CRTC to hold this week’s hearing. As an aside, can we all agree there has to be a better way for Parliament to get the CRTC to hold a hearing on a subject?

But, here we are.

Now, the first witness at the CRTC hearing will be Dan Mazier, the MP who drafted the legislation. In his CRTC intervention, he states: “The question of whether Internet service providers should be required to display information in a standardized label is nonnegotiable. The consultation the Commission is legally required to undertake in response to Bill C-288 is not to determine if, but how Internet service providers display specific service quality metrics to consumers. This criterion is explicitly outlined in Bill C-288. I find it concerning that I must state this, but I will for clarity—the CRTC is legally obligated to enforce Bill C-288.” [emphasis his]

Funny thing. The term “standardized” doesn’t appear in the legislation. I reproduced the section above so you can see for yourself. There is nothing close to a requirement for the CRTC to define a standardized label. Yes, the CRTC is legally obligated to enforce Bill C-288. What is surprising to me is that the MP who drafted the legislation (and received unanimous approval for his legislation), doesn’t seem to understand what the legislation actually requires of the CRTC and the industry. Fortunately, his submission to the CRTC includes transcripts of his testimony before the Bill was passed. During Parliamentary Committee consideration of the Bill, Mr. Mazier stated “When the CRTC actually launches these hearing processes, that’s where there is an opportunity to be flexible as well. There’s lots of latitude in this. It is a discovery process to figure out how Internet service providers are going to display or transmit their services for Canadians.”

As Mr. Mazier said, I find it concerning that I must state this, but I will for clarity. There is an opportunity to be flexible. There’s lots of latitude.

When you read the Parliamentary transcripts, the amendment to the Telecom Act was predicated on a belief that internet service providers in Canada were misleading consumers in the way broadband speeds are advertised. However, the CRTC already studies this. In its March 2016 preliminary report, the CRTC found “performance was largely consistent across all regions, with the vast majority achieving between 104% and 110% of advertised download speed”. In November 2016, the CRTC found the majority of ISPs were delivering speeds above those advertised, including during peak periods, across all access technologies. In its 2020 review (Measuring Broadband Canada), the CRTC found “all major Canadian ISPs are delivering users with average download speeds that exceed maximum advertised rates.”

And a year ago, the CRTC released an update of Measuring Broadband Canada focusing on Fixed Wireless Services. The result? “On average, both the advertised download and upload speeds were achieved across a 24-hour period.”

So what is the problem this hearing is trying to fix? It should be said that general purpose advertising laws are already in place to protect consumers from misleading advertising.

The CRTC conducted some public opinion research [pdf, 1.1MB] that appears to be driving some of the preliminary views of the Commission. The Commission will point out that 84% of consumers said a standardized label would be helpful. But you have to look at how the question was phrased. “Would you support or oppose something like this being available to consumers when
shopping for any broadband (Internet) service in Canada?” Asked that way, I am surprised only 84% said it would be helpful.

I wonder if responses would have been different if the cost of implementation was part of the equation. More importantly, when asked “how satisfied or dissatisfied would you say you are with the information you are able to find when shopping for [consumer broadband service]?”, only 13% indicated dissatisfaction.

Question 57 of the survey asked “When shopping for home Internet services and/or trying to decide what Internet service provider to use or what Internet option to purchase, is there any particular kind of information that you find particularly hard to find or difficult to understand?” I thought it was significant that no response attracted more than 2%: Speed (upload and download); Cost / Cost including fees/charges; Service / Customer service; Network / Reliability of network; Extra fees / Hidden costs/charges (service, cancellation, transfer, connection etc.); Difficult to compare / price compare; Amount of data / Data usage; Contract / Terms and conditions.

Again, I have to wonder, what is the consumer broadband problem the CRTC is trying to solve?