The Parliamentary Industry and Technology Committee (INDU) released a report last week entitled Improving Productivity in Canada [pdf, 3.3MB].

The report contains a number of recommendations of interest to the telecom sector. Many will focus on Recommendation 34: That the Government of Canada review measures related to competition policy in the telecommunications, transportation and financial services sectors to strengthen competition in Canada.

In my view, there are two important prerequisite recommendations to such a review:

• Recommendation 19: That the Government of Canada work with provinces and territories to reduce the regulatory burden by addressing irritants systemically rather than individually to improve the overall impact of regulatory decisions, support innovation, encourage investment in Canada bring down prices for consumers. This may include but is not limited to:
  • streamline regulations surrounding domestic food processing and manufacturing, to encourage investment in Canada;
  • adopting legislation requiring all federal regulatory agencies to explicitly consider competitiveness and business growth in the performance of their duties by rigorously assessing the potential impacts of regulatory decisions on economic growth beforehand, rather than as an afterthought;
  • expanding the scope of the Red Tape Reduction Act by reducing or eliminating the exemptions it currently provides; and
  • establishing an independent body, modeled on the United Kingdom’s Regulatory Policy Committee, responsible for publicly assessing the quality of regulatory impact assessments.

and,

• Recommendation 20: That the Government of Canada undertake a comprehensive review of federal regulatory and permitting systems in order to identify and remove unnecessary regulatory and reporting burdens – particularly where they disproportionately affect small and medium-sized enterprises – with the objective of reducing duplication, accelerating timelines, improving predictability for investors and aligning regulation with trusted jurisdictions where appropriate in order to free up capital and management time for growth and technology adoption.

If you search for “incentives to invest” on my blog, more than 130 references come up. Just 2 weeks ago, in “Regulatory impacts on investment”, I referenced evidence of capital investment reductions triggered by CRTC regulations – evidence that is found in the CRTC’s own industry monitoring report.

I wrote, “The next few years will test whether Canada can maintain its infrastructure leadership while pursuing competition policy based on government intervention.”

The INDU study references a witness who “proposed undertaking systemic reform to improve the impact of all regulatory decisions. He criticized that previous government efforts had focused primarily on isolated irritants, comparing this approach to ‘pumping air into a leaky tire: It might help you in the short term, but the underlying problem goes unsolved.'”

While the INDU Committee would like the Government to improve productivity with a review of telecom competition policy, such a review needs to consider the impact of regulation on investment and competition in the sector.

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.

In late January, TELUS released its third annual AI Report, the 2026 AI Trust Atlas: Public perspectives on bridging the AI trust gap.

The report [pdf, 7.7MB] indicates the gap in AI trust is growing and we need to consider whether our policy framework is prepared.

Artificial intelligence has become so deeply woven into daily life that many people no longer notice or appreciate when they’re using it. AI shapes how we search, shop, navigate, communicate, and essential information. Increasingly AI is involved in how we access healthcare, and other government services.

According to the AI Trust Atlas, AI adoption in Canada and the United States is now nearly universal, but trust in AI is not rising alongside its use. The public is embracing AI tools at unprecedented rates, yet confidence in the institutions deploying them remains low. While nearly 9 in 10 Canadians (89%) actively used an AI-enabled tool, only a third of Canadians (34%) trust the companies using it. Only a quarter (27%) of Canadians believe the current laws are adequate to address their concerns. In both Canada and the US, 90% believe it is important for AI to be regulated.

The result is a widening trust gap — a kind of trust recession — in which AI becomes more pervasive but not more legitimate.

This recession is not defined by a collapse in trust, but by something subtler and more corrosive: stagnation. The Atlas shows that only a minority of Canadians and Americans trust companies that use AI, and those numbers have barely budged even as adoption has surged. People are using AI more than ever, but they are not feeling more secure, more informed, or more protected. They are living with AI, but not living comfortably with it. That is the hallmark of a trust recession — a moment when public confidence fails to keep pace with technological integration, leaving society in a state of unease.

The roots of this unease are not technological. They are political and structural. For more than a decade, AI has been deployed faster than governments could regulate it, faster than institutions could explain it, and faster than communities could evaluate its impacts. The result is a public that is surrounded by AI but not empowered by it. People feel AI is happening to them, not with them or for them. They see systems making decisions that affect their lives, but they do not see the guardrails that should accompany those decisions. They see benefits, but they also see risks — and they do not see a governance framework capable of managing either.

What makes the Atlas so revealing is that the public’s expectations are not vague or contradictory. They are remarkably consistent. People want to know when AI is being used and how it affects them. They want systems that undergo meaningful risk assessment before deployment, not after something goes wrong. They want human oversight across all applications, not just the ones deemed “high‑risk” by technical experts. They want independent governance rather than industry self‑policing. And they want mechanisms for public input — not symbolic consultations, but real opportunities to shape how AI is designed, evaluated, and monitored.

These expectations align closely with emerging global norms, from the EU AI Act to the OECD AI Principles to Canada’s own evolving regulatory frameworks. Yet in North America, policy development remains slow, fragmented, and reactive. The public sees this. And they are losing patience. The trust recession is not a failure of public understanding. It is a failure of public policy.

Healthcare offers the clearest illustration of what is at stake. It is the sector where optimism and anxiety collide most intensely. People believe AI can improve diagnosis, accuracy, and access. They see the potential for faster triage, earlier detection, and more personalized care. But they also fear privacy breaches, algorithmic bias, accountability gaps, and the erosion of human judgment. These concerns are not hypothetical. They reflect real experiences with opaque systems, inconsistent safeguards, and unclear lines of responsibility. The tension in healthcare is not unique to healthcare. It is simply more visible there. The lesson is that AI’s benefits are real, but so are its risks, and governance determines which one prevails.

One of the most important contributions of the Atlas is its focus on Indigenous perspectives. Indigenous respondents emphasize data sovereignty, distinctions‑based design, and community‑driven governance. These principles are not peripheral. They are central to building trustworthy AI systems. Indigenous data governance frameworks — including OCAP® and the CARE Principles — offer a model for how AI can be developed in ways that respect autonomy, protect communities, and embed accountability. In a trust recession, these approaches are not optional. They are essential.

The broader message of the Atlas is that the trust recession is a policy gap, not a technological one. The public is not afraid of AI. They are afraid of unregulated AI. They are afraid of systems that make decisions without transparency. They are afraid of algorithms that affect their lives without oversight. They are afraid of institutions that deploy AI without accountability.

These fears are rational. They reflect a decade in which AI innovation outpaced public policy by orders of magnitude. We built the systems and deployed them, but we did not build the guardrails.

If AI is now part of our societal infrastructure, then trust must be treated as part of that infrastructure too. Like other infrastructure, trust requires investment, maintenance, and stewardship. The report suggests that a policy response to the trust recession must establish transparency standards to make it clear when and how AI is being used. Will we create independent oversight bodies with real authority, or advisory committees with symbolic mandates? Will we require pre‑deployment risk assessments to evaluate social, ethical, and community impacts? Will we embed public participation into the governance process, not only as a courtesy but as a democratic necessity? Will we establish rights‑based frameworks to protect individuals from algorithmic discrimination, wrongful automation, and opaque decision‑making?

These would be some of the practical foundations of a trustworthy AI ecosystem. In their absence, we risk a deepening of the trust recession, and the perceived legitimacy of AI‑enabled systems will continue to erode.

The snapshot of public opinion in the AI Trust Atlas is a warning that the social contract around AI may be fraying. The trust recession will not reverse itself or be solved by better marketing, more optimistic narratives, or promises of future benefits. It will only be solved by policy — thoughtful, enforceable, transparent, and inclusive policy. While AI is reshaping society, society has not yet reshaped the governance structures needed to manage it.

A few weeks ago, I wrote about Canada’s AI advantage, referencing a three pillar framework: Sustainable-by-design; Sovereign-by-design; and, Responsible-by-design. Do we need to inject a fourth element: Trust-by-design?

Last October, the Government of Canada launched a public consultation to assist in the development of a national AI strategy. Last month, a report was issued [pdf, 305KB] summarizing the 64,600 submissions. Michael Geist has an excellent post talking about what didn’t make it into the report. On the subject of “trust”, Dr. Geist observed

Just about everyone agrees that trust is essential for AI adoption, but the implementation of regulation draws different views. Some want to move quickly, while others warn that overly broad regulation will slow deployment, disadvantage domestic firms, and regulate technologies Canada does not control. Those disagreements largely disappear in the government’s summary, where trust is presented as a settled consensus objective, rather than a contested policy domain with real trade-offs.

Everyone agrees that AI trust is essential. Can we develop a policy framework that bridges the AI trust gap, avoiding the risks identified in the submissions?

In his address at this week’s Scotiabank TMT conference, CRTC Vice-Chair (Telecom) Adam Scott spoke about the Commission working to promote dynamism in the telecommunications marketplace, “where companies make big bets in new technology… to differentiate their offers and bring new value to consumers”. His address offered a detailed explanation of how the CRTC is thinking about the telecommunications industry and some its recent telecom policy decisions.

The CRTC says telecom needs more “dynamism.” There are many ways the industry has been taking big risks for decades — but as I wrote earlier this week, there are signs suggesting CRTC regulation is cooling investment.

One phrase stood out: the Vice-Chair described the Commission’s decisions as ‘regulatory hypotheses’ that will ultimately be tested by evidence.

We go through proceedings to crystallize issues and identify the strategically important outcomes that our decisions need to promote. And then we take the evidence on the record and use it to form a regulatory hypothesis—that by taking a certain course, we will see a certain type of outcome.

That framing is welcome. Regulatory policy should absolutely be judged by its real-world outcomes.

But the speech also contained a premise that deserves closer scrutiny: the suggestion that telecom companies need encouragement to take bold commercial risks to inject dynamism into the market.

If anything, the opposite is true.

Canada’s telecom sector has always been about big bets. Canada’s telecom networks exist today because companies repeatedly took enormous risks on new technologies.

In the 1980s, operators invested heavily in cellular networks long before there was certainty that Canadians would adopt mobile services. At the time, many observers believed mobile phones would remain a niche product for executives and emergency services.

Fast forward a few decades to see tens of billions of dollars poured into nationwide LTE networks, fibre-to-the-home deployments, and now 5G. The shift from copper to fibre alone represents one of the largest infrastructure upgrades ever undertaken in Canada’s communications sector.

These investments weren’t made because regulators encouraged companies to ‘take risks.’ They were made because companies believed that, if they made the right bets, the regulatory and policy environment would allow them to recover the enormous capital required to build those networks.

That distinction is important.

Telecommunications is one of the most capital-intensive industries in the economy. Networks require billions of dollars in upfront investment with payback periods measured in decades as confirmed by one of the CFOs at the Scotiabank event. Companies only deploy that kind of capital when there is a reasonable expectation of regulatory stability and an opportunity to earn a return on investment.

The issue isn’t willingness to invest — it’s the risk environment associated with those investments.

The Vice-Chair’s speech repeatedly emphasized affordability and competition as policy goals. Few would disagree with those objectives. But, the real balancing act in telecom policy is ensuring that regulator’s competition frameworks don’t undermine the incentives driving facilities-based investment.

Investors pay close attention to regulatory risk. When policy signals suggest that long-term returns could be constrained, capital allocation decisions adjust accordingly. Those signals don’t take years to show up. In fact, as I wrote earlier this week, the CRTC’s own Canadian Telecommunications Market Report (CTMR) demonstrates we are seeing early evidence. Several Canadian carriers have pulled back on capital spending plans.

At the same time, financial analysts have begun openly questioning whether further reductions in capital expenditures (capex) are warranted. For example, analysts at Scotiabank recently wrote “wouldn’t it make more sense for incumbents to materially reduce capex” given the evolving regulatory environment. Those comments didn’t come from industry lobbyists. They came from the investment community that finances telecom infrastructure.

Another theme in Mr. Scott’s remarks was the suggestion that large network operators might prefer a world without wholesale competition. That framing misses the real debate.

Canada’s telecom providers compete intensely every day. They spend billions expanding networks, upgrading technology, and fighting for customers in one of the most capital-intensive sectors of the economy.

The question has never been whether competition should exist.

The question is how to structure competition policy and regulation in a manner that preserve strong incentives to build and upgrade infrastructure.

Facilities-based competition — companies building and operating their own networks — has been the foundation of Canada’s telecom success. Fibre networks, nationwide wireless coverage, and now 5G infrastructure exist because companies – competing companies – invested billions of dollars to build them.

Resale-based competition can play a role in the market. But if it significantly weakens the economics of building networks, the long-term consequences are felt in slower investment and delayed upgrades.

Let’s return to the description of Commission policies as regulatory hypotheses that will ultimately be tested by evidence. As we heard in his address,

We have advanced regulatory hypotheses that now serve as blueprints for the future. The architect’s job is done, and the plans have been handed over to the builder. Might we need to adjust as we go? Sure, that’s normal, prudent, and expected. A good regulator, like a good builder, will adjust to conditions on the ground. We will need to, and are in fact required to, actively gather the evidence that will inform us as we go.

The hypotheses are already being tested and evidence (in the form of the CTMR) is already in the hands of the Commission. Price movements are one piece of evidence, but they are far from the only one. The more important indicators are the signals coming from capital markets and the investment decisions being made inside telecom companies.

When analysts begin advising operators to reduce network investment, that should get policymakers’ attention. Those policymakers might want to explore whether their hypothesis needs to be adjusted, recognizing the “conditions on the ground.”

I’m not convinced the regulator’s job as architect is done and that it is now up to the industry to build.

Ultimately, whether the industry continues building at the pace Canadians expect depends upon the blueprint regulators have drawn.

Telecom operators have never lacked the willingness “to make big bets,” to take risks “to differentiate their offers and bring new value to consumers”.

But, even the most ambitious builders need a regulatory framework that supports long-term investment, not one that makes such investments harder to justify.

How should the CRTC promote dynamism in telecommunications? By architecting a policy framework that supports long-term investment by carriers to build facilities and infrastructure.

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?