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

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

Summerland to hold meeting on solar project

Event on July 13 at 1 p.m. open to comments from the public

LETTER: Land for Summerland’s solar project site was designated for growth

Site represents close to 20 per cent of land marked for future growth

South Okanagan RCMP member speaks out against criticism

Police have been the subject of intense scrutiny in recent weeks

B.C. identifies 20 new COVID-19 cases, travellers specified in count

Pandemic total 3,028 cases, 51 people from outside Canada

Kelowna taxpayers could pay $90K for losses caused by cancelled Memorial Cup

$135,000 would be put aside for a potential bid for a future opportunity to host the tournament

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

Motorcycle rider seriously injured in collision with vehicle on Highway 97 west of Pritchard

Chase RCMP report that motorcycle was attempting to pass when crash occurred

Predator mutilated cats in Kelowna: BC SPCA

The BC SPCA confirmed a mutilated cat was killed by a predator

LETTER: Former Summerland mayors speak out on solar project

Five former Summerland mayors sign name to short letter

Emergency crews conduct CPR on unresponsive person in Okanagan Lake

West Kelowna emergency crews are on scene at the shores of Jubilee Mobile Home Park

Filing deadline in RCMP sexual-harassment class-action extended due to COVID-19

Plaintiffs now have until January 2021 to submit claims for up to $222,000

Jamie Bacon pleads guilty to charge in Surrey Six case

The plea brings an end to a complex legal case that has spanned more than a decade

Most Read