For years, the high cost of mobile phone and internet services has been a persistent “kitchen table” issue for Canadians. To understand the complex web of factors driving these costs, it is first necessary to establish a clear, data-driven baseline. An examination of international and domestic data reveals that Canada is a consistent global outlier, with prices for both mobile and broadband services ranking among the highest in the industrialized world.

A Global Outlier: Benchmarking Canada’s Telecom Prices

International comparative studies consistently place Canadian telecommunications services at the expensive end of the spectrum. The most comprehensive annual analysis comes from Canada’s own department of Innovation, Science and Economic Development (ISED), which compares prices in Canada against those in other G7 countries and Australia. The findings from its 2023 report are unambiguous.

For mobile wireless services, Canada, the United States, and Japan tend to have the highest prices internationally, while European countries consistently offer the lowest prices—often less than half of what Canadians pay. The situation is even more pronounced for fixed broadband internet, where Canada has either the highest or second-highest prices across most service levels. This is not a new development; as academic Michael Geist has noted for over a decade, Canada’s relative international price ranking has remained stubbornly high.

This reality persists despite a counter-narrative focused on domestic price trends. While it’s true that the price-per-gigabyte has been falling, as shown by Statistics Canada, the total amount leaving Canadian wallets continues to climb due to market dynamics that encourage consumers to upgrade to more expensive plans.

The Architecture of the Market: An Oligopoly by Design

The primary driver of Canada’s persistently high prices is its market structure. The Canadian landscape is a textbook example of a highly concentrated oligopoly, where a small number of firms dominate.

The “Big Three” and Their Dominion

In the mobile wireless sector, Bell, Rogers, and Telus (the “Big Three”) collectively account for approximately 89% of total retail revenue. The Canadian Radio-television and Telecommunications Commission (CRTC) confirms this overwhelming market power is the central feature of the industry. This dominance is maintained through a sophisticated use of “flanker” brands (like Virgin, Fido, and Koodo) and “deep-discount” brands (like Lucky, Chatr, and Public Mobile) that create an illusion of choice while containing price pressure within their own corporate ecosystems.

A History of Consolidation

The current market structure is the culmination of a long history of corporate consolidation. A critical turning point was the wave of acquisitions in the early 2000s, where Telus acquired Clearnet and Rogers acquired Microcell (Fido), cementing the “Big Three” structure. This trend reached its modern apex with the 2023 approval of the $26-billion merger between Rogers and Shaw Communications, a move the Competition Bureau fought to block, warning it would reduce competition and lead to higher prices.

The Canadian Challenge: Geography, Demographics, and Investment

The most prominent justification offered by providers for high prices is the unique challenge of Canada’s geography. The industry argues that building and maintaining networks across the world’s second-largest country, characterized by difficult terrain and low population density, is exceptionally capital-intensive. This argument has merit, particularly for serving rural, remote, and Northern communities, where a significant digital divide persists.

However, critics argue this is used to justify a national pricing model that generates substantial profits from the urban majority who live in densely populated corridors. While Canadian telecoms are heavy investors, a crucial component of this “investment” is the world-leading prices paid for government-auctioned wireless spectrum, a cost that is inevitably passed on to consumers.

The Regulator’s Dilemma: A Delicate Balancing Act

The CRTC and the ministry of Innovation, Science and Economic Development (ISED) are tasked with a delicate balancing act: fostering competition for affordable prices while encouraging the massive investment required to build networks. This fundamental conflict is at the heart of the regulatory dilemma.

The Wholesale Access Battleground

Nowhere is this dilemma more apparent than in the battle over wholesale network access. To inject competition, the CRTC mandates that incumbents sell access to their networks to smaller competitors. This has been a constant source of conflict. Incumbents argue that mandated access is forced “free-riding” that disincentivizes investment, while smaller competitors argue the wholesale rates are set too high for them to compete effectively. In the mobile sector, Canada’s framework for Mobile Virtual Network Operators (MVNOs) is uniquely restrictive compared to the liberalized markets in the UK and Australia, preventing the emergence of nimble, low-cost competitors.

The Fortress: Foreign Ownership Restrictions

The most formidable regulatory barrier is the restriction on foreign ownership. The Telecommunications Act effectively shields the Big Three from direct foreign competition. Proponents argue this is essential for national security and cultural sovereignty (as the Big Three are also major media companies). Critics, including think tanks like the Fraser Institute, see it as the single greatest impediment to a truly competitive market.

Conclusion: The Path Forward

The high cost of telecommunications in Canada is the product of a deeply entrenched, self-reinforcing system where a concentrated market, geography, and a complex regulatory framework lock together to create a stable, high-price equilibrium. Breaking this cycle requires a holistic approach. Recommendations from consumer advocates and policy experts often focus on two key areas: embracing true competition by opening up the MVNO market, and liberalizing foreign ownership rules to break the regulatory gridlock and introduce powerful new incentives for lower prices and greater innovation for all Canadians.