Booking a flight in Canada, or looking at a new cellular phone agreement, or watching the prices of items pop up on the screen at the grocery store creates a mix of anxiety and anger for millions of us every day.
One large Canadian service provider wants people to stop getting angry and start getting motivated—to act instead of begrudgingly accepting the high prices we are saddled with.
When we look at what others around the world pay for the same products and services, Canadians need to ask our governments, why?
Why does a cellular phone plan in the U.S. or Europe cost a fraction of what we pay?
Why are groceries so much cheaper elsewhere?
Why has the cost of air travel gone up far faster in Canada?
The companies behind the high prices have a range of answers: Canada is much larger and therefore infrastructure costs to do business are way higher; we don’t have a dense population; the supply chain and material costs are driving higher prices; our weather and other unique conditions here make the cost of delivering goods and services more expensive.
But one reality they seldom address is the lack of competition compared to the same industries in other markets around the world.
And one corporate giant says governments are the main cause of this cripplingly expensive lack of competition.
“What we’ve been told when we asked is that the policy is not actually about choice, affordability and competition, it’s about protecting specific players in the market,” Zainul Mawji, president of TELUS Consumer Solutions, told The Pointer, describing the actions of the federal government in a recent decision that shut down more competition in the home internet space. “So this has been highly politicized, instead of being hosted by an independent, adjudicated body.”
A comparative scan of prices in Canada compared to other markets shows what consumers here, with a lack of competition, are forced to contend with, as the cost of living becomes increasingly unsustainable.
Using Expedia, a return flight from Toronto to Vancouver leaving March 8 in the morning and returning March 15 in the evening costs between $1,100 and $1,400 (CDN) on Air Canada or WestJet. Using the same dates and times, prices to fly from New York City to San Francisco ranged from $550 to $650 (CDN) on Delta, United, JetBlue and other airlines.
Looking at groceries, the cost of red seedless grapes on Loblaws’ online store is $3.99 (CDN) a pound, compared to Wegmans in the U.S. which charges $2.49 (US) a pound.
According to a 2023 study by HelloSafe, which compares prices in various market categories, cellular phone packages in Canada cost $7.36 (CDN) per 1 Gb of mobile data on average, among the ten most expensive countries in the world. This was far higher than the 28 cents (CDN) per 1 Gb in France on average, 86 cents in the UK, 22 cents in India, 51 cents in China and 60 cents in Australia (which has slightly fewer residents per square kilometre than Canada).
Telus, which is one of Canada’s major players in the cellular data market, is now questioning the role of Ottawa and other governments across the country in placing untenable financial pressure on the shoulders of Canadian consumers.
Instead of improving the different options for telecommunications that could drive down the costs of data plans and home internet/cable that a vast majority of Canadians have, the federal government led by Liberal Prime Minister Justin Trudeau (who recently announced his upcoming resignation and suspended government ahead of a looming federal election) has sought to overturn a recent Canadian Radio-television and Telecommunications Commission (CRTC) decision that would allow that to happen. The move will reduce competition across the market, ultimately limiting choice and increasing prices for consumers who are already struggling with the cost of living crisis.
Mawji says the federal government’s decision will limit opportunities for competition, impacting the ability for more affordable options. It will also take away TELUS’ ability to compete in the market.
“We were very surprised by this decision. We were surprised primarily because our entry into the market fulfilled the original policy mandate of choice, competition and affordability,” she told The Pointer. “We’ve entered the market. We’ve seen prices drop. We’ve provided very affordable rates. We’ve provided incredibly innovative bundles from adding streaming options helping you save energy in your home when you buy internet from us and we’ve been asked to potentially exit the market.”
According to her, federal government officials have justified their actions by saying they want to protect select internet providers from the competition that a company like TELUS would bring to the home internet markets in Quebec and Ontario, overlooking the fact that the CRTC’s decision was intended to increase competition and consumer choice.
The company is taking matters into its own hands, recently launching a public petition to oppose the move by the federal government.
As the cost of living continues to rise and more people find themselves pushed into poverty, Trudeau’s recent decision to give Canadians a GST holiday and what has been described as a laughable $250 rebate have been widely criticized. His own finance minister Chrystia Freeland, resigned from the role in December citing Trudeau’s political gimmicks in a scathing resignation letter she posted online.
Trudeau and his Liberal government were heavily criticized during the SNC-Lavalin scandal (the company is now called AtkinsRéalis) when Jody Wilson-Raybould, the attorney general at the time, also resigned and left the Liberal caucus over the PM’s interference. He attempted to influence Wilson-Raybould when she sought to criminally prosecute the company for corruption in a bribery case. The Liberals had long ties to the engineering and infrastructure development company, which had a controversial past and a long history of securing large government contracts. Competitors issued scathing rebukes of the Trudeau-led government, pointing out that Canadian taxpayers would suffer because other engineering firms were effectively kept from competing equally while a favoured corporation was protected from fair open-market and regulatory consequences by politicians on Parliament Hill.
Critics have long pointed to the cozy relationships monopolistic companies have with Canadian political parties and the aggressive lobbying efforts they use to prevent competition. Governments repeatedly warn that competition will hurt these companies and the millions of employees who work for them, a key justification that ultimately allowed SNC-Lavalin to avoid normal prosecution in two cases, including one that involved $2.3 million in kickbacks to a corporate head whose company gave the engineering firm a $128 million contract to refurbish a Montreal bridge.
Meanwhile, actual solutions that could bring down the cost of government and prices for consumers through fair competition across industry sectors, have been papered over by policies that even politicians such as Freeland have described as nothing more than gimmicks.
For example, by not allowing competition within the telecommunications industry, contradicting a recent decision from Canada’s regulatory agency for broadcasting and telecommunications, the federal government once again denied consumers the significant benefits of competition.
The CRTC’s original ruling — made after 17 months of consultation with over 300 participants — was designed to increase competition and lower prices for home internet services, opening the door for new entrants to offer internet services in Ontario and Quebec. The purpose of the decision was to encourage more options for Canadians by ensuring that all internet service providers, regardless of size or brand recognition, would have access to the wholesale broadband market.
Through the recently developed regulatory policy, the CRTC said it would “empower consumers with additional choices while encouraging companies to invest in connecting Canadians to higher-speed Internet services.” The revised policy would require Canada’s largest cell phone companies – Rogers, Bell Canada, Saskatchewan Telecommunications (SaskTel), and TELUS Communications Inc. (TELUS) to provide competitors with workable wholesale access to their fibre networks by no later than February 13. Acknowledging that “increased competition creates more choice and lower prices,” the Commission assured the new framework would “unlock new options for Canadians when they choose a provider.”
The CRTC’s review found that consumers have fewer choices when buying internet services and that competition has been declining in recent years, suggesting that the previous regulatory approach was not bringing in “sustainable competition that delivers more choice and more affordable services to Canadians, nor has it resulted in universal access to higher-speed Internet services.” The Commission determined objectives needed to be set that would “continue to incentivize network investment and facilities-based competition while supporting increased choice and greater affordability for Canadians.” Supporting more competition through the new framework, the CRTC said, would “foster greater affordability, increased choice, and differentiated service offerings for Canadians” while also “promoting investments in high-quality networks, particularly in underserved areas.”
Despite the agency’s findings, the federal government, prior to Trudeau’s suspension of Parliament, looked to reverse the decision. The CRTC said its direction would “help bring more affordable, high-quality Internet services to Canadians by focusing on lowering barriers to entry and supporting all forms of competition and investment.”
TELUS is now launching a petition to counter the federal government order, asking the CRTC to reconsider allowing the provider to offer fibre internet services to consumers in Ontario and Quebec. The provider has also turned to the courts, filing a judicial review that alleges the federal government is trying to overturn an independent CRTC decision, improperly entertaining submissions from select internet service providers and failing to adequately consult with the provinces.
“The decision that they came out with was a balanced decision, which took into account investment, choices and decisions companies have to make as well as how to improve the competition for any affordability, particularly in specific regions where they were seeing competition decline,” Mawji said.
“So this is very much a head scratcher, but it's highly politicized, and we don't think that it's right or fair for Canadians to not have the choice. and we're not saying everyone has to take our products of course. We want to compete, we want to work hard every day and earn the right, but we do not understand why we should be excluded from the market.”
According to a 2022 report from Canadian Telecom Sentiment, 71 percent of Canadians were most concerned and angry about their cell phone, TV, and internet costs, which were ranked the third highest of 13 cost-of-living pressures examined, behind cost of food at the grocery store and gas. The analysis found 66 percent would deem their cell phone bill unaffordable if it rose just 10 percent and that “high wireless pricing has continued to remain an ongoing point of contention for Canadians, especially when compared to those of other countries.” Other studies found that Canadians pay anywhere from 20 percent to 140 percent more for their wireless plans compared to other countries.
Given what is becoming out of reach pricing for many Canadians, the 2022 report found that over half of Canadians (57 percent) have or would consider switching providers multiple times to take advantage of "new customer" deals. It revealed 42 percent would consider a prepaid phone plan with limited minutes, 41 percent would consider switching to a less expensive provider offering worse service, and 32 percent would consider using a U.S. phone plan while living in Canada.
Canada has among the highest wireless prices in the world, a 2021 Rewheel Research study found. The minimum monthly price for a smartphone plan that includes 20 gigabytes in Canada was the highest among 51 European, American, Asia Pacific, Middle East and African countries. The 2021 report also found that consumers in Canada paid seven times more every month than consumers in France for the same plan.
But these larger systems that could have a real impact on people's lives continue to be overlooked by upper levels of government.
As day-to-day life becomes increasingly unaffordable for people, it has exacerbated an already alarming food crisis as more people turn to food banks to get the support they need. Advocates have criticized the three major grocery chains, Loblaws, Sobeys and Metro, while pushing the federal government to make good on a recent pledge to attract international grocery chains to compete in Canada and force prices down.
With a lack of competition and policy intervention by upper levels of government, Food Banks Mississauga revealed that by 2027, the organization will see more than 100,000 clients in the city.
Meghan Nicholls, the organization’s CEO, previously told The Pointer that governments have to bring prices down.
“There's currently no indication that the provincial or federal government have any plans to implement any new policy that's going to lift folks out of poverty.”