Shortly before New Year’s, UK Prime Minister Keir Starmer reportedly wrote key regulators telling them he expects them to be regulating for growth, to ensure regulations are not holding back investment and jobs.
Sir Keir’s letter is understood to have referred to a need for every government department and regulator to support growth, and called on each recipient to submit five ideas for delivering that mandate by 16 January.
The letter also urged regulators to identify how the government could remove barriers to economic growth and where regulatory objectives were either conflicting or confused.
Keep in mind that a month ago, the UK’s Competition and Markets Authority (CMA) approved the merger of Vodafone with Three, reducing the number of mobile carriers from 4 to 3. The CMA stated “the Merger is likely to boost competition in the long term in both markets and result in significant increases in mobile network quality in the UK.” Economic growth and investment were clearly important considerations for the Authority.
Canada might want to consider how our own government agencies could remove barriers to economic growth and where regulatory objectives are conflicting or confused. In June of 2023, I wrote how Canada’s climate for investment looked cloudy. A survey of CEOs found nearly 40% identified poor policy and regulation as the biggest threat to conducting business. It was the number one threat identified, by a nine point margin.
In its year-end review, the Globe and Mail noted that 2024 was “a very bad year” for the telecom industry. That isn’t good for investors. And it isn’t good for consumers either.
Telecommunications is a business requiring massive levels of ongoing investment. I have frequently written about the need for policy and regulation to create the appropriate climate for businesses to deploy capital. More than 600 of my blog posts show up in a search for “investment”. Operating in a business environment so sensitive to regulatory decisions, a clear message of “regulating for growth” would be an improvement over the ambiguities contained in the current Policy Direction.
I noticed a media release from the CRTC last month describing its plan to improve the Broadband Fund “to help connect Canadians faster.” The Broadband Fund isn’t government money. The source of cash for the fund comes from the communications industry. Contrast this with other broadband stimulus programs from various levels of government, where funding is sourced from the overall treasury. Has the regulator considered the impact of its Broadband Fund on investment in the sector? A little over 4 years ago, I asked if the CRTC’s fund is fundamentally flawed. Keep in mind that there are other federal funding programs for rural broadband, and other federal agencies responsible for indigenous communities. Does Canada really need the CRTC to be duplicating their efforts? Would it be more effective for the CRTC to refocus the Broadband Fund to address ongoing expense shortfalls in high cost serving areas, rather than duplicate the awarding of project-based capital funding?
When the current Policy Direction was released for comments, I wrote about the importance of policy consistency to promote growth and investment. There is an important balance to be made between the need to promote investment in networks, and the need to promote competition and affordability.
Canada will soon be heading to the polls to elect a new government. I would endorse a platform promoting regulating for growth, to ensure regulations don’t hold back investment and jobs.