Canadians pay more than most for cellphone plans. Some angry MPs are demanding to know why

“We’re in a cost-of-living crisis and people are having to find ways to pay the grocery bills, pay heat, pay the rent and mortgage and probably the one thing that most Canadians have is a cellphone,” Tory MP Rick Perkins told the Star.

“Any time the prices go up on the most expensive cellphone providers in the world, that’s a concern.”

As MPs consider the scope and urgency of a study on cellphone plan prices, industry groups maintain prices have been decreasing rapidly in recent years — and Statistics Canada data suggests they’re not wrong. 

So what’s behind the most recent political push to address the prices of wireless mobile plans? And what can the government actually do about it? Here’s what you need to know.

Why are cellphone bills so high in Canada?

Time and time again, independent reports have confirmed that Canadians pay some of the highest prices for cellphone plans in the world.

Many experts and politicians of all stripes agree a lack of competition is the biggest issue in Canada — but that’s a claim the largest operators in the industry dispute.

While regional players in some provinces have led to lower prices, just three companies — Rogers, Bell and Telus — still control much of the Canadian market. That means “consumers can’t really go and seek alternatives,” University of Ottawa law Prof. Jennifer Quaid said.

Robin Shaban, co-founder of the Canadian Anti-Monopoly project, acknowledged that geography and the cost of infrastructure also play a role.

But critics have asked why Australia — a country like Canada, with a small population spread over a large area — has lower cellphone prices. According to one study, the average price (in US dollars) per gigabyte for a cellphone plan is about 44 cents in Australia; in Canada, it’s $5.37. 

For Shaban, the biggest contributor to high prices has been inadequate regulation by Ottawa. Despite the fears of consumers, experts and even Canada’s competition bureau that mergers in the cellphone sector lead to higher prices, the recent acquisition of Shaw by Rogers was approved, which Shaban said is proof of Canada’s inadequate competition laws.

“Deficiencies in Canada’s competition law makes it weak and makes it so that these sorts of deals are more easily pushed through,” Shaban said.

Industry Minister François-Philippe Champagne and the companies involved suggested the merger could lead to more competition and lower prices. As part of the deal, the vast majority of Shaw’s wireless business, Freedom Mobile, was sold to Quebec-based Videotron, which they argued could lead to a fourth national player. But there are no guarantees in the deal that that will happen, Quaid noted.

But haven’t prices gone down?

In the 2019 election campaign, the Liberals promised to lower wireless prices by 25 per cent; the party faced criticism for leaving the issue out of its platform in 2021. Statistics Canada data shows consumers paid nearly 23 per cent less on average in 2024 than in 2023, with a large chunk of the reductions starting after April last year.

But aside from directing the federal regulator, the Canadian Radio-television and Telecommunications Commission, to promote competition in its decisions and urging companies to reduce prices, experts told the Star that Ottawa has done little to spur competition.

Shaban noted that in the past, the Harper government allowed an additional carrier, Wind, to enter the market, but that the company was eventually sold to a larger competitor.

Meanwhile, providers say the overall price decreases have demonstrated how a competitive industry has spurred innovation, and have contrasted the prices with rising inflation across the board.

“For example, in 2020, for $37.50 a month, one could purchase a plan with two gigabytes of 4G data,” said Nick Kyonka, the director of communications at the Canadian Telecommunications Association. “Today, for the same price or lower, one can get a plan with as much as 50 gigabytes of 5G data.” 

Can the government actually do anything to reduce prices?

Solutions have been proposed. The Tories have called for the loosening of rules on foreign investment to allow international players into the Canadian market. The NDP called for caps on the prices of cellphone plans in the 2021 election campaign.

“Do we open it up to foreign competition? Do we interfere more with prices? Do we create categories of telephone service, and some of those are (price) guaranteed?” Quaid said.

In a statement to the Star, a spokesperson said the CRTC “is aware of the price increases that have been announced and is prioritizing work to help Canadians have more choice in affordable wireless and internet plans” through promoting regional competitors. 

MPs on the industry committee are now debating a study on the issue. The NDP’s Brian Masse said he’d like to see a comprehensive review with all telecom companies. Perkins said he wants to start with Champagne and Rogers CEO Tony Staffieri, and ask them why prices have gone up after the Rogers-Shaw deal was approved. (A Rogers spokesperson said cellphone plan prices are going up an average of $5 per month for those without an existing plan.)

The governing Liberals, meanwhile, have tried to strike a delicate balance between celebrating progress on the overall reduction of prices and signalling they won’t tolerate price increases.

“I strongly urge companies and carriers to seriously consider customers over profits at this time,” Champagne said in a statement. “I am prepared to use any other tools at my disposal to fight for Canadians consumers.”

But experts question the value of another study on a topic they say has been “studied to death,” when they argue it’s clear competition laws are not stringent enough. 

“The combination of the way our telecom regulation and our corporate law exist and the fact that we are a market-based economy does mean that we built the institutions a certain way. Do we need to rethink that?” Quaid said, suggesting another study would be “just talk.”

“It’s like screaming in the wind.”

With files from The Canadian Press