The CRTC released a decision today: “Prohibition of fees that are a barrier to switching cellphone and Internet plans” Telecom Regulatory Policy CRTC 2026-43. The decision follows changes to the Telecom Act that were introduced in the omnibus 2024 Budget Implementation Act [pdf, 1.0MB]. That legislation gave rise to a “trilogy” of CRTC Notices of Consultation: 2024-294 (that resulted in today’s decision); 2024-293 (Enhancing customer notification); and, 2024-295 (Enhancing self-service mechanisms).
To be fair to the Commission, it had no choice but to respond to the legislative change. Today’s Decision was based on this new section of the Telecom Act:
Prohibition
27.04 (1) A telecommunications service provider must not charge a fee to a subscriber that is related to the activation or modification of a telecommunications service plan, or any other fee whose main purpose is, in the opinion of the Commission, to discourage subscribers from modifying their service plan or cancelling their contract for telecommunications services.
Types of fees
(2) The Commission must specify the types of fees for the purposes of subsection (1).
There are two parts to the CRTC’s determination: elimination of early termination, and elimination of activation or modification fees.
The legislatively prohibited “activation or modification fees” are defined by the CRTC as those that aren’t “related to the physical installation of a telecommunications service at a customer’s premises or fees related to additional products or services the customer has explicitly chosen to purchase”. I found it interesting that the various consumer codes are modified to include the new definition by today’s policy decision, but there is no accompanying paragraph that explicitly tells consumers that such fees are prohibited under the Act. Since the Codes are consumer-facing, one might have thought that the newly defined term should be found in the Codes.
The Wireless Code already dealt with early termination fees. If a consumer terminates service within the first 2 years after receiving a device subsidy, the service provider is able to recover the remaining balance. If no device subsidy was provided, the service provider could charge up to $50. That fee can no longer be charged. As a result, it is hard to imagine how service providers will be able to offer discounts in exchange for longer-term commitments.
The CRTC launched its consultation in November 2024, 16 months ago, initially giving the public an extremely tight schedule to provide input. It extended the deadline for submissions until March 12, 2025, exactly 1 year ago today. At the time, I asked, “Will the CRTC be able to find effective ways to work around the government’s naively constructed amendments to the legislation, using a short 6-week process?” Unfortunately, I don’t think it did.
The accompanying press release for today’s Policy says “Based on the public record, the CRTC is eliminating extra fees to activate, change, or cancel a plan. This will give consumers more flexibility to manage their plans and take advantage of better offers without worrying about unexpected costs.”
I don’t understand how regulating service provider pricing mechanisms results in more flexibility for consumers. I see at least one area where the new rules could result in less flexibility. With no ability to charge an early termination fee, service providers may tie discounts for long-term contracts to only those customers getting a device. This could eliminate discounts for one or two-year commitments for consumers bringing their own devices.
Regulations that reduce choice end up reducing consumer flexibility.