More Canadians have a smartphone than have a driver’s licence, and it’s not because we like scrolling through Instagram in our down time.
Today, mobile access to the internet is at least as important to being a productive part of the economy and moving through the world as having a car. For lots of people, it is far more important.
And yet, owning a smartphone in Canada is an expensive pain by global standards. A recent study lays out in stark terms what many Canadians already know: We are paying through the nose for mobile data. The analytics firm tefficient reports that Canadian wireless providers make more revenue per gigabyte than providers in any of the other 38 countries they looked at.
A 2017 study commissioned by the federal government found much the same thing: Canadians pay more for data-heavy phone plans than our peer countries. The price differences are shocking. The average Canadian phone plan featuring unlimited calls, texts and two gigabytes of data costs 50 per cent more than the equivalent plan in Australia, 138 per cent more than in the United Kingdom and 156 per cent more than in France.
And yet, our remarkably high phone and data bills are barely on the political radar. It would be as if Canada had the world’s most expensive gasoline and hardly anyone was talking about it.
Tackling runaway phone bills has vote-getting potential for all the major parties, with their various points of emphasis: The NDP could point out that pricey data hits the poor and precarious hardest; the Conservatives that it makes life more expensive for ordinary working families; and the Liberals that it hurts competitiveness and the middle class. Each has a constituency and all have a point.
It’s easy to imagine each party offering its own distinct policy tools for fixing the problem, too. An NDP government might be tempted to sic the regulators on Canada’s big telecom companies and nudge them on high rates; the Conservatives could revive their previous attempt to increase competition by introducing a fourth national wireless carrier.
The Liberals have, characteristically, opted for something up the middle, persuading the telcos to offer cheap home internet to some low-income families while auctioning off cellular airwaves with a carve-out for regional competitors in the hopes of driving down overall prices.
There’s some merit in each approach. Regulators like the Canadian Radio-Television and Telecommunications Commission are right to keep an eye out for insufficiently robust competition in a sector dominated by the big three of Rogers, Telus and Bell – especially in an industry where there have been instances such as one discovered by the Competition Bureau in 2017, when Bell offered the same phone plan for $105 in Toronto and $60 in Winnipeg.
There’s evidence the additional competition from a fourth major player in the Canadian market could help drive prices down. A 2014 report by the OECD found that countries with four or more carriers see a “higher likelihood of more competitive and innovative services being introduced and maintained.” In a country where regulators have recently ordered the Big Three to offer cheap, data-only cell packages to consumers, an increase in “competitive and innovative services” sounds pretty tempting.
Short of a fourth national player, levelling the field for Canada’s existing regional telecom providers is a good start. The Competition Bureau has found that, no surprise, provinces with a strong local alternative to the Big Three, such as Quebec’s Vidéotron or Saskatchewan’s SaskTel, have among the country’s lowest rates.
The standard response to carping about prices is to say expensive cell service goes with doing business in a big, sprawling country. At first blush, that sounds reasonable. But the vast majority of Canadians live in cities and suburbs, not in the bush – and those who do live in remote areas often have weak, slow internet, anyway. Meanwhile, the vast Outback doesn’t keep Australian phone bills from being far cheaper.
Canada’s high smartphone charges are a problem. Compared to consumers in other developed countries, the average Canadian is paying a lot more. So what do each of the federal political parties propose to do about it? In run-up to an election this fall, that’s a question Canadians should be asking, and one politicians should be prepared to answer.