Search Results for: affordability

We frequently hear the term affordability used interchangeably with lower prices. That’s a mistake.

Certainly, there is a relationship between the terms. Lower prices make items more affordable, but stable prices with rising incomes can have the same effect. As I have previously written, mobile services prices have been coming down over the past few years, more than 25% in two years. So mobile services are certainly more affordable than before.

There is some interesting monthly household spending data on the Statistics Canada “Telecommunications: Connecting Canadians” portal. Mobile phone service is different from wireline services, like TV and home phones. Mobile phones are a personal service. We can expect a household with two adults to have two mobile phone subscriptions. It would be unusual for that same household to have more than one TV subscription. As it turns out, there is considerable variability in household size based on income.

The first three rows of data can be found on the portal itself.

The bottom row is from my calculations, based on Statistics Canada household size data, to derive average monthly spending for cell and pager per household member:

Monthly spending on cell phone services as a percent of total expenditures after tax, by income quintile, 2019

	All quintiles	Lowest quintile	Second quintile	Third quintile	Fourth quintile	Highest quintile
Monthly expenditure after tax	6,379.75	3,069.33	4,288.92	5,822.17	7,674.33	11,024.08
Monthly cell phone and pager services	$111.92	$56.08	$79.92	$109.67	$140.50	$173.42
Percentage of expenditure on cell service	1.8%	1.8%	1.9%	1.9%	1.8%	1.6%
Average size of household	2.48	1.49	2.11	2.49	2.95	3.34
Monthly cell and pager per household member	$45.12	$37.63	$37.88	$44.04	$47.63	$51.92

I thought it was interesting to see relatively little variation between the income quintiles in cell service spending as a percentage of total household after tax expenditures. As my calculations indicate, most of the variation in actual spending per household is explained by the difference in size of households; on average, with 1.49 members, lower income households are less than half the size of high income households (3.34 members).

What leads to the remaining difference? There is most likely a variability in adoption rates, and in spending per subscription. Interestingly, lower income households have typically been more likely to be “mobile only”, but we might want to take a further look at per capita mobile adoption rates by income. As the price of smartphones continues to climb above the $2000, we may need to re-examine the CRTC’s 24-month limit on device amortization as an inhibitor for low income Canadians.

In other jurisdictions, there are targeted subsidies, funded by the government, to encourage adoption of mobile and fixed broadband services. For example, in the US, the FCC’s Lifeline Support for Affordable Communications “provides up to a $9.25 monthly discount on service for eligible low-income subscribers and up to $34.25 per month for those on Tribal lands.”

In Canada, affordable broadband programs, such as the recently enhanced Connecting Families, have been completely funded by participating service providers. Last week, Connecting Families 2.0 was launched, significantly enhancing the original $10 residential broadband program with additional options and increased eligibility. These programs target residential fixed broadband service.

A number of service providers have an even wider array of options for targeted disadvantaged communities.

Mobility for Good from TELUS was first launched in 2017 as a youth focused program in BC. Mobility for Good has now grown to support youth nationally. TELUS extended the program to seniors in 2020, and to at risk Indigenous women in 2021. The program offers a free refurbished smartphone and mobile plan for youth leaving foster care, and for Indigenous women at risk or surviving violence. In addition, Mobility for Good offers low-income seniors subsidized plans and the option to buy a discounted device.

The CRTC’s Review of mobile wireless services last April established certain retail price regulations, establishing what the Commission calls “low-cost and occasional-use plans”, not tied to income qualification. As such, the plans, with specific characteristics, are not necessarily geared to meet the requirements of low-income users or help increase subscriptions among user groups with lower rates of adoption. It is not known whether these plans are actually filling a significant market void.

Lower prices are not enough.

As I wrote last year, “Unfortunately, after introducing Connected for Success, Internet for Good, Connecting Families and other targeted programs, we have learned that getting people online isn’t just a matter of price.”

There are a number of questions and issues that come to mind from all of this. There is a need to look beyond price. In addition, we know that seeking lower pricing is not the same as affordability. The consumer interest needs to balance value, affordability and investment, a corollary to the mantra of “Canada’s future depends on connectivity”.

Should the government be directly funding programs to encourage adoption of mobile and residential broadband, akin to Lifeline Support in the US?

That can be the subject of future posts. Your comments are encouraged.

I have frequently written about the regulatory policy tension in balancing quality, coverage and price for telecommunications services. These were key attributes at the foundation of the Canadian government’s policy statements over the past 5 or so years.

There has been an explicit recognition in Canadian policy that the public interest is multi-dimensional, seeking lower prices, while continuing to provide incentives for investment in new technologies and expanded coverage.

A recent blog post by CWTA uses a similar trilogy of terms: value; affordability; and, investment. “Canada’s wireless industry delivering greater value, affordability and investment” criticizes the level of attention “given to one-dimensional and misleading price comparison studies that paint an inaccurate picture of telecom prices and affordability in Canada” and concludes with:

Canada’s economic well-being, safety and quality of life depend on high-quality digital infrastructure. Making world-class telecommunications services available to all Canadians at affordable prices remains the focus of our industry.

No one is saying that Canada has the lowest prices in the world, but contrary to what some would have us believe, Canadian telecom prices are not the most expensive in the world and Canada is not an outlier when it comes to prices. Comparing prices to other countries without factoring in differences in average income levels, quality of service, and cost structures produces misleading results. And as I have written recently, price and affordability are not the same.

As someone who pays bills each month, I too would like lower prices, just as I do for housing, gas, water, electricity, milk, chicken, eggs and everything else. But I also want fast mobile broadband when I am in the suburbs and rural parts of the country. That takes a balance of the various factors that make up the public interest, not just looking at price.

In May, I wrote about an Opensignal report indicating “that Canada’s mobile customers put a value on quality, and will migrate between service providers based on their mobile network experience.”

I had a multi-part Twitter thread on that theme:

Prices are declining, consumers get more data included in plans and at far faster speeds. Aided by regulatory certainty, investments are being accelerated by carriers, expanding the reach and coverage of wireline and wireless networks, both fixed and mobile. Advanced technologies, such as 5G and fibre to the home are not just for Canadians in urban centres, but also in rural and remote regions. More Canadians are signing up for mobile and fixed services every month, evidence of people are finding plans that suit their budgets.

As I wrote last week, we need to do more work to understand and develop solutions for the factors that are inhibiting adoption by those Canadians who have access but have not yet subscribed. That is a different challenge from the industry focus on delivering greater value, affordability and investment.

Contradicting the popular narrative, a recent set of reports from PwC Canada puts Canadian unlimited mobile wireless plans atop affordability rankings among the G7 countries.

In December, PwC released “Understanding wireless affordability in Canada” [pdf, 4MB] and last week, it released an addendum, “Impact of unlimited data plans on affordability” [pdf, 1.6MB]. According to the reports, “unlimited plans represent a significant increase in value for the average Canadian consumer. By 2020, the price paid per GB of data is estimated to decline by 50% compared to 2018 levels, and by 38% compared to 2019 levels.”

PwC says that Canadian consumers are getting access to the top ranked unlimited data plans among the G7 countries, based on four key dimensions measuring user experience: speed; latency; price per GB; and, access. According to PwC, “Canada performs consistently well across these key dimensions, and performs particularly well on speed.”

PwC’s December affordability study was motivated by consideration of the 7.7% annual growth in Canadian household expenditures on wireless devices and services (between 2010 and 2017) versus much lower increases in disposable income.

To provide a holistic view of wireless affordability in Canada, this report examined a number of aspects related to the overall affordability of consumer wireless in Canada, including:

1. The changing pattern of household expenditures, as wireless data use is enabling a different delivery of products and services – including the substitution of select historic spend categories by wireless.
2. The assessment of wireless affordability in Canada, as measured by recognized affordability metrics.
3. The affordability of wireless services for Canadians in proportion to their income relative to other jurisdictions.

Among the results, PwC found that wireless expenditures have reduced spending on such items as landline phone, postal, and photo products and services, as well as audio, video and printed reading materials. In addition, citing ride sharing and alternative accommodation services, PwC says wireless services have “been instrumental in the growth of a number of new businesses that have directly or indirectly improved access, reduced search costs and enhanced choices for the Canadian consumer.”

PwC found that, as mobile video and social media usage increased, the average spend per gigabyte of data consumed dropped at a compound annual rate of nearly 26% between 2014 and 2017. “These trends indicate that value for money from the wireless expenditure increased.” PwC forecasts that the unlimited data plans will reduce the price per GB by a further 50%, between 2018 and 2020.

As evidence that wireless expenditures did not impose an unreasonable burden, PwC observed that across every income quintile, recreational expenditures increased faster than the total expenditures (non-discretionary, wireless, and discretionary expenditures). “It is evident that wireless expenditure did not impose an unreasonable burden on the average Canadian household’s non-discretionary expenditure across income quintiles”. Further, PwC measured affordability against the target threshold from the Alliance for Affordable Internet (A4AI) and found the threshold was met across all income quintiles in 2018.

Quoted in an opinion piece by Rita Trichur in the Globe and Mail, Innovation, Science and Economic Development Canada says “Cellphone and wireless bills are putting too much pressure on Canadian household budgets.” Statistics Canada data simply does not support that assertion. If household budgets were under “too much pressure,” how could recreational spending be increasing across every income quintile?

For the purpose of international benchmarking, PwC compared Canada to the US, Australia and the UK. It found that an average Canadian household spent 1.6% of its disposable income on wireless, less that what was spent by an average US household or Australian household. PwC said that UK households spent 1.3% of disposable income. Looking at the data by income quintile, wireless service was more affordable in the UK across all income quintiles; compared to Australia, wireless was more affordable in Canada across every income quintile except the lowest.

In my year-end wrap-up, I wrote that there are indeed some Canadians unable to find an affordable device or service plan that they may need to participate in today’s economy. We know these technologies can help find a job, maintain health, be in touch with families and friends. In late October, we learned that nearly 1 in 5 Canadians in the lowest income quartile still doesn’t have broadband connection at home.

But, we also know that in many cases, it isn’t just an issue of affordability; the experience learned from targeted programs that deliver low-cost connected computers have helped us to understand that there are a number of factors – not just lower prices – that inhibit adoption of communications technologies among certain demographics.

As I have written in the past, most government programs continue to target increasing “supply”, extending the geographic reach of services.

We need to focus on strategies to drive “demand”: increasing adoption rates among groups that could subscribe, but have not. That is a problem across all geographies, and perhaps more pronounced in urban markets. That should start with developing a greater understanding of those individuals and households on the wrong side of the digital divide.

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An earlier version of this article appeared last week on National Newswatch.

Last week, The Hill Times published a Policy Briefing supplement looking at Rural & Remote Broadband.

I was asked to prepare an Op-Ed for that supplement.

Regular readers will notice that it was largely based on a piece I published last month.

Canada’s national broadband objective is defined as having high-speed (50 Mbps down / 10 Mbps up) connectivity available to all Canadians by the year 2030. I wonder if it may be time for us to declare victory and move on to setting a new objective: increasing adoption among those who still aren’t connected.

Various broadband funding programs (such as the Universal Broadband Fund – UBF, Connect to Innovate, provincial initiatives, the CRTC’s Broadband Fund, etc.) have collectively pushed high‑speed connectivity deeper into rural and remote regions than ever before. Fibre builds now reach thousands of communities once considered uneconomic, and latest generation wireless services have filled many mid‑density gaps. Yet despite billions of dollars of investment, a stubborn last 1–2% of households remain unserved, particularly in the North and in the most sparsely populated rural pockets.

This is where Low Earth Orbit (LEO) satellite networks should be added to the broadband connectivity toolkit. Indeed, we might consider whether direct satellite-to-device is a satisfactory mobile solution for those remote communities currently lacking terrestrial-based coverage.

LEO systems operate a few hundred kilometres above Earth, far closer than traditional geostationary satellites. This enables low‑latency, high‑throughput broadband rivalling terrestrial options. Starlink, the most mature LEO provider, already offers:

• High‑speed service with typical download speeds ranging from 45–280 Mbps.
• Low latency (25–60 ms), suitable for video calls, cloud apps, and real‑time services.
• Global availability, including remote and northern regions.

Other LEO constellations are literally on the horizon. Why isn’t LEO considered to be an obvious tool to fulfil Canada’s broadband ambition? For households beyond the economic reach of fibre or microwave backhaul, LEO solutions eliminate the need for towers, rights‑of‑way, or construction seasons. A dish, a clear view of the sky, and power are enough to provide connectivity.

Based on publicly available coverage maps and service availability data, existing LEO broadband constellations cover all populated regions of Canada.

Where availability issues arise, they are typically due to temporary local capacity constraints, obstructions due to trees, terrain, or building orientation, or weather‑related installation challenges. These are all easily solvable problems, at a cost far less than the $10-20,000 (and more) per household being spent for terrestrial solutions in some communities. Four years ago, the government contributed more than $46.6 million to connect 182 households in northern Ontario, more than $250,000 per household for broadband in an area where houses sell for less than that.

LEO solutions provide full national orbital coverage and can close the final connectivity gap quickly, affordably, and sustainably. One might say that we have walked the last mile of last mile connectivity.

Using LEO, we could (but shouldn’t) provide a permanent subsidy to equalize the prices paid by rural subscribers to those being paid in urban centres. We need to think carefully about subsidies for rural broadband broadband expansion. Subsidies should be based on financial need, not based on geography. There are people in urban centres who need lower cost everything, just as there are people in rural and remote communities who do not need financial aid. For example, a little over a year ago, I observed “Median household incomes in the north are considerably higher than in the rest of Canada.”

With technology now offering a reasonable option for broadband connectivity Canada’s broadband strategy needs to focus on getting the remaining unserved households to get online. This is no longer an engineering challenge that can be solved with money, but one of understanding the factors that inhibit increased adoption in both rural and urban settings.

Programs such as Internet for Good from TELUS, and Connected for Success from Rogers, and the national Connecting Families initiative have made broadband even more affordable for many disadvantaged households, fully funded by Canada’s telecommunications industry. But, we have also learned that there are issues beyond affordability inhibiting some people from connecting.

Integrating LEO into regulatory and policy frameworks, while preserving private sector investment incentives, will allow us to declare victory in meeting Canada’s national broadband objective. It is time to engage partnerships between service providers, government social service agencies, and training facilities to drive adoption, ensuring no Canadian household is left offline.

Canadian telecom investment is slipping, as I have been writing over the past few months. After years of sustained capital spending, operators are now pulling back. At the same time, expectations placed on networks — economic, social, and security‑related — are rising sharply.

A new report from PwC [pdf, 2.6 MB] lands at this important moment for Canada’s telecommunications sector. The report warns that Canada’s digital ambitions are resting on infrastructure that is increasingly taken for granted, and the conditions required to sustain investment are eroding.

The data-filled report tells a compelling story. Since 2021, Canadian operators have invested roughly $59 billion in networks, enabling faster speeds, broader coverage, and meaningful affordability gains for consumers. Wireless CPI has fallen 45.5% since 2020, and wireline CPI is down slightly over the same period. It is an extraordinary contrast to rising costs in shelter, food, and transportation. Canadians are paying less while getting more, making telecommunications services a rare bright spot in an otherwise inflationary environment.

These outcomes didn’t happen by accident. They were funded by some of the highest capital intensities in the world. Between 2021 and 2024, Canadian telecoms invested an average of 18% of revenue back into their networks — higher than peers in the US, UK, and Australia. The report shows that investment delivered near‑universal access to 50/10 Mbps broadband, gigabit availability to 90% of households, and a 410% increase in average mobile data usage since 2017.

But, despite the sector’s performance, the investment trend is now moving in the wrong direction. The PwC report confirms capital expenditure trends I discussed a couple of weeks ago. Annual capex has fallen from $12.5 billion in 2022 to $10.9 billion in 2025, a decline driven by moderating telecom revenue growth, rising regulatory costs, and a policy environment that increasingly prioritizes short‑term affordability optics over long‑term infrastructure resilience.

The report highlights a striking figure: in 2024, operators paid $2.5 billion in government and regulatory costs — an amount equal to 58% of their combined net income. Layer on top of that more than $30 billion spent on spectrum over the past decade (including some of the highest mid‑band 5G prices in the world), and the investment squeeze becomes even more obvious. Every dollar directed to taxes, fees, and spectrum is a dollar not available for rural builds, network hardening, or next‑generation upgrades.

This matters because telecommunications is no longer just a consumer service. It is the enabling layer for Canada’s economy, public safety, and digital sovereignty. The report catalogues the sector’s expanding role: supporting emergency services, powering digital supply chains, enabling remote work, and underpinning AI adoption across industries. In 2025, telecom contributed $86 billion to GDP and supported 611,000 jobs across the economy. These spillovers depend directly on sustained capital investment.

The disconnect is growing. Writing about the PwC report, TD Securities said, “The regulatory environment has already caused a reduction in privately funded infrastructure investments, which could have helped Canada’s economy and competitiveness in the future.”

Policymakers continue to treat telecom as a utility to be cost‑controlled, while simultaneously expecting the sector to function as critical infrastructure — resilient to extreme weather, secure against cyber threats, and capable of supporting data‑intensive national priorities. The Senate’s recent warning on copper theft, the rollout of NG9‑1‑1, and the federal focus on supply chain resilience, underscore how essential networks have become. But, essential infrastructure cannot be maintained on shrinking investment.

The PwC report also highlights the implications for rural and Indigenous connectivity. While progress to date has been meaningful — 50/10 access on First Nations reserves has risen from 39% to 66% since 2020 — gaps remain substantial. Closing them requires capital, and capital requires a stable, predictable investment environment. Without it, the pace of progress will slow.

If investment continues to decline, Canada risks compounding its already weak productivity performance.

Canada’s digital future depends on reversing an investment decline already underway. That will require a regulatory and fiscal framework that recognizes telecommunications as critical infrastructure, not merely a consumer product. Policy makers must ensure the networks upon which Canadians rely remain robust, resilient, and ready for the demands of the next decade.

The PwC report is a reminder that strong outcomes we enjoy today do not guarantee strong outcomes tomorrow. Sustaining Canada’s digital advantage will require policy choices that support and encourage — not undermine — the investment engine driving a 21st century economy.