Last night, in his analysis of BCE’s 2025 financial results, Maher Yaghi of Scotiabank asked a question that should be carefully considered in boardrooms of Canadian carriers, and cause serious concerns for national policy makers and regulators: “Why continue to heavily invest in infrastructure?”
Given regulatory prerogatives why continue to heavily invest in infrastructure?
In an environment where 1) the regulator forces operators to rent their infrastructure to competitors both on the wireline and wireless sides at rates set by the same regulator and not on a commercial basis as seen in the US, 2) any investment in network technology made by an operator provides the same advantage to its competitors, and 3) given the high leverage of companies like Rogers, BCE and TELUS, wouldn’t it make more sense for incumbents to materially reduce capex to levels closer to challengers like Quebecor? Obviously this was not the choice made by either BCE nor Rogers when setting their capex guidelines for 2026, but we believe it is a fair question to ask in the current Canadian regulatory context.
All Canadians should ask how the current telecom policy environment could have Scotiabank questioning carriers plans to continue to invest in infrastructure.
Contrast this with Prime Minister Carney’s Budget release: “We’re ushering in a new economic strategy to supercharge growth and give businesses the confidence to invest.”
When Prime Minister Carney launched the new Major Projects Office to fast-track nation-building projects, Energy Minister Hodgson said “At this pivotal moment, we must embrace new ways of doing business in order to build the strongest Canada. We are making good on our promise to move quickly to unlock private sector investment, provide investor certainty…”
There seems to be a serious disconnect.
A couple of weeks ago, I wrote “Communications companies are ready to invest billions of dollars of capital, and have the expertise to deploy technologies that power the digital economy.”
At that time, I also wrote that we need regulatory clarity. Not necessarily deregulation. Not necessarily lighter regulation. Just faster, smarter, more predictable regulation.
Through the years, more than 500 of my blog posts have talked about investment. Five and a half years ago, the Minister of Innovation, Science and Industry clearly stated that “Canada’s future depends on connectivity”, rejecting a CRTC wholesale rate decision because the Government was “concerned that these rates may undermine investment in high-quality networks.”
Policy makers should be very concerned that the current regulatory framework leads Scotiabank to suggest that it makes more sense for Canada’s biggest telecom carriers to materially reduce capital expenditures.
In a digital economy, isn’t investment in telecom infrastructure among the most important nation-building projects?