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

Input wanted on cannabis grow near Gardom Lake

A temporary use permit is being considered for a Capri Road property

Shuswap potter’s empty bowls help fill food bank

Mud, Sweat and Tears’ Bruce Nyeste expects project to raise $12,000 for Salmon Arm’s Second Harvest

Survey, hotline launched amid probe into racist blood-alcohol guessing game at B.C. hospital

Mary Ellen Turpel-Lafond has been appointed to lead an investigation by Health Minister Adrian Dix

Morning Start: Naps could save your life

Your morning start for Wednesday, July 9, 2020

Columbia Shuswap Regional District warns ‘dock hogs’ to follow time limits

Boats have been moored for days in some cases at public boat launch docks

Canadian policing organization calls for decriminalization of simple illicit drug possession

Canadian Association of Chiefs of Police want policing focus of opioid crisis to be replaced with a health one

Pure magic: live performances revived in Revelstoke

Revelstoke Arts Council hosting Guerrilla Gigs on Wednesdays all summer long

Penticton photographer publishes book showcasing resilience of Okanagan people

Okanagan Strong showcases the bravery of many during crisis; from COVID-19, to floods, and fires

Summerland steam train to begin operations

Reduced schedule, physical distancing planned for Kettle Valley Steam Railway beginning July 18

B.C. appeals judge’s decision to leave three clubhouses in Hells Angels hands

The province has filed two notices of appeal related to the B.C. Supreme Court decision

Kelowna woman shares story of alleged dog attack

Resident Yuli Lavigne alleges the incident happened on Monday, July 6

Conservation officers relocate Spirit bear known to roam northwestern B.C.

Bear roamed valley north of Terrace for many years

Successful first week for Okanagan ride-sharing, service expansion underway

The service is expanding to Peachland, Lake Country, Penticton and Vernon by the end of July

B.C. premier applauds call to decriminalize drug possession

Police shouldn’t struggle with health issues, Horgan says

Most Read