Promised 25% wireless rate drop must be on top of recent cuts, feds say

Industry minister mandated to achieve 25% cut over the next two years

Innovation Minister Navdeep Bains holds a news conference in Ottawa on Wednesday, July 24, 2019. THE CANADIAN PRESS/Sean Kilpatrick

The federal government is making clear that cuts to wireless rates it expects from mobile-phone service providers must be in addition to price reductions already seen since 2016.

But the latest comments about the Liberals’ mobile price reduction plan have only added to confusion around the starting point for the cuts, says the organization that represents Canada’s wireless carriers.

Industry Minister Navdeep Bains says the 25-per-cent rate reductions he has been mandated to achieve over the next two years will be measured starting after the Oct. 21 election.

The Liberals promised during the fall federal election campaign to cut mobile device rates by an average of 25 per cent, a pledge that was embraced by opposition parties.

But there were no specifics provided on how or when the government intended to force the rate cuts.

In the letter from Prime Minister Justin Trudeau giving him his orders as a minister, Bains was told to use “all available instruments” to make the reduction a reality within two years.

According to a 2019 report from the Canadian Radio-television and Telecommunications Commission, prices in Canada’s mobile wireless market had already dropped by an average of 28 per cent from 2016 to 2018.

In an interview with The Canadian Press, Bains said further rate reductions will be measured from around the time he received his mandate letter in December.

“It makes sense that, from our perspective, we made a commitment in the campaign and we are going to honour that,” Bains said.

“There has been some confusion regarding how the government intends to measure” its commitment on pricing, the Canadian Wireless Telecommunications Association said in response.

“We will wait to see what details the government provides in terms of how they intend to move forward.”

The CWTA noted there has already been “very positive momentum” in Canada’s telecom industry with prices declining amid intense competition.

During the election campaign, the Liberals promised to reduce the cost of wireless services by almost $1,000 per year for a family of four. They based the savings on that family having four devices: two with unlimited talk and text and five gigabytes (GB) of data, each costing a “current average price” of roughly $87 per month, and two with 2 GB each of data usage per month, each at a cost of about $75 a month.

Reducing those costs by a mandated 25 per cent would save the family $976.56 annually.

Analysts at Scotiabank and TD Bank concluded in late September that the reduction target could easily be achieved, essentially because the targets were either already within grasp, or had already been reached or surpassed.

Telus, Rogers and Bell — the Big Three telecom service providers — no longer offer plans that provide only 2 GB of data. Their unlimited plans, with speed caps at 10 GB, list at $75 per month, or less than that as part of promotional offers.

Smaller carriers such as Virgin Mobile, Fido and Koodo sell 2-GB and 4-GB plans for between $45 and $55 per month.

KEEP READING: Competition bureau has plan to lower cell phone bills across Canada

Canadian cellphone and wireless rates have long been a source of complaints from consumers who see lower prices advertised in other countries, particularly the United States.

The major Canadian carriers have warned that forcing prices for their wireless plans too low could result in reduced investments in the infrastructure needed for faster and more reliable mobile service.

Terry Pedwell, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Historical society working to preserve cabin and rename roundabouts in Summerland

Summerland branch of society has taken on duties for former Heritage Advisory Commission

Purchase of Francophone school brings with it “sense of belonging” say parents

École Entre-lacs now has a permanent home in Penticton thanks to the provincial government

Abandoned boats left to freeze on Okanagan Lake cause chaos

Over the last week weather conditions have caused three separate incidents

UPDATE: Jack-knifed semi closes Coquihalla northbound

A red liquid is reportedly spilled down the side of Highway 5

COLUMN: Pre-clearance changes at Canadian airports

Some believe these expanded powers may be contrary to the Canadian Charter of Rights and Freedoms

VIDEO: WHO says China virus not global health emergency

The decision came after Chinese authorities moved to lock down three cities on Thursday

Investigators in wildfire-torn Australia head to site of B.C. airtanker crash

The B.C. government sends condolences to Port Alberni-owned Coulson Aviation

RCMP investigating sexual allegation against Lower Mainland police officer

Delta officer suspended while the alleged off-duty incident involving a co-worker is investigated

Former Mountie, sports coach convicted of sex abuse in B.C. granted day parole

Alan Davidson was sentenced to almost six years for abusing seven boys in the late 1970s and early 1990s

VIDEO: Person in wheelchair narrowly avoids collision with car in Kelowna

There were no injuries in the scary looking near-accident last week in Rutland

Here’s what Canada is doing to stop the coronavirus from getting in

Health officials are monitoring multiple possible cases in Canada

‘Deeply sorry’: Former West Kelowna teacher offers emotional apology to student he sexually exploited

Judge will make decision on Bradley Furman’s sentencing in the coming weeks

Most Read