For years, I have talked about policy and regulatory impacts on capital spending by telecom carriers. As we have come to learn in the Twitter/X era, government action can enhance or destroy incentives for investment with the simplicity of a late-night Ministerial tweet, or the potential global economic impact of late-night Presidential social media musings.
Last week’s release of the CRTC’s “Canadian Telecommunications Market Report 2026” (CTMR) provides quantitative evidence of a pull-back in telecom investment – reductions that are attributable to regulatory policy. It is notable that the CRTC also released its 2026-27 Strategic Plan last week.
While the facts are laid out clearly in the CTMR, there is only a subtle acknowledgement in the text that regulatory decisions could be influencing capital spending. The report notes reduced investment in landline networks due to “a large pullback by one of Canada’s major operators” — an allusion clearly referring to Bell, which has not been shy in attributing its CAPEX reductions to 2023 and 2025 CRTC decisions.
The CTMR demonstrates how Canada’s largest operators are weighing returns on incremental network investment, resulting in 10% lower capital investment in wireline networks in 2024 compared to 2022. A $500M decline in total 2023 capital investment first noted in last year’s CTMR continued, and it accelerated to a $600M reduction in 2024 versus 2023.
The Monitoring Report says, “Already, operators have signalled that they are moderating their investments in telecommunications networks. This is partly a response to pressure on their revenues and partly because wired and wireless networks now reach virtually the entire population.”
I think a little more introspection by the CRTC is warranted. For years, the regulatory framework — particularly a hands‑off approach to fibre and wireless — created strong incentives to build. Policy favoured the primacy of facilities-based competition.
But that environment is changing. The CRTC’s new wholesale fibre access regime, combined with a more interventionist stance on pricing and competition, introduced uncertainty into the investment calculus. Scotiabank’s Maher Yaghi recently wrote a report asking, “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.
Capital flows toward environments where returns are predictable and policy signals are stable. When those signals become ambiguous, investment pauses, recalibrates, or shifts to lower‑risk categories. Bell framed its CAPEX reduction as a direct response to regulatory headwinds, arguing that mandated access and pricing constraints erode the business case for continued fibre expansion. Whether or not one agrees with that interpretation, the CTMR’s acknowledgement that investment levels are dropping – and the regulator’s potential role – is significant. It states “As the CRTC continues to monitor the market, it will be mindful of the balance between increased competition in Internet services, and ongoing investment in high-quality networks.”
The Commission’s Strategic Plan says it will “Promote competition for Internet and cellphone services while supporting continued investment in reliable, high-quality networks by allowing competitors to access telecommunications infrastructure at fair rates and on fair terms.”
The CTMR stopped short of drawing explicit conclusions, but we need to be concerned about the tangible impact on investment behaviour from regulatory decisions. The market is indicating that what the CRTC considers “fair rates” is unable to support the same levels of “continued investment in reliable, high-quality networks”.
The next few years will test whether Canada can maintain its infrastructure leadership while pursuing competition policy based on government intervention. The Monitoring Report states up front:
Telecommunications – especially high-speed Internet and cellphone services – have never been as central to Canadians’ daily lives and livelihoods as they are now. Canadian telecommunications networks have never been as extensive or advanced as they are today. These are undeniable successes, attesting to Canadians’ embrace of digital technology, to innovation and investment by the telecommunications industry, and to policy frameworks that support better network quality, coverage, and service. As we look ahead, however, the market is shifting, and the Canadian industry is facing significant challenges.
Through the years, government policy has promoted a focus on Quality, Coverage, and Affordable Prices. The CTMR acknowledges that “Canadians believe telecommunications services have become more affordable, or that they have the opportunity to switch to more affordable or suitable options.” With the drive toward affordability in hand, more attention is needed on the regulatory impacts on investment – investment that drives quality and coverage.
The CTMR shows that 96.4% of Canadian households had access to the national objective broadband service (50/10 Mbps unlimited) by year-end 2024. But there is work to be done to provide coverage for one in six rural households, a third of households on First Nations reserves, and 30% of residences in the Territories. The report shows wireless networks covered 99.5% of Canadians by the end of 2024, but that needle hasn’t moved much since the capital investment peak in 2022, leaving 10% of those on First Nations Reserves.
Speaking at the 2011 Canadian Telecom Summit, former TELUS CFO Robert McFarlane warned attendees that nothing changes the profitability of a carrier faster than the stroke of a regulator’s pen. Going forward, will the regulatory framework provide enough certainty to keep investment flowing into Canada’s networks?