How is the CRTC ensuring that continued investment is occurring and how are carriers responding?

The Chair of the CRTC spoke at the annual meeting of the Canadian chapter of the International Institute of Communications in Ottawa on October 20, 2025. I was particularly interested because the title of the speech was, “The future is now. Let’s keep building it. Together.” As readers of this blog will know, I have expressed concerns about the CRTC’s regulatory approach to building Canadian telecommunications networks, and whether that approach will harm future investment. With that in mind, I listened intently to what Chair Eatrides had to say.

Chair Eatrides began on firm ground, explaining that since 2019 the CRTC Broadband Fund, a fund endowed annually by large telecommunications providers for the purpose of improving high-speed internet and cellular telephone services in rural, remote and Indigenous communities, had allocated $750 million dollars to projects delivering Internet or cellphone services to nearly 50,000 homes in more than 290 communities. Of the many assignments given the CRTC this, in my opinion, is an important and useful one and one that directs capital toward infrastructure projects that otherwise would not be built. Chair Eatrides indicated that a new call for proposals would be announced in the Spring of 2027. For companies and entities interested in the nation-building exercise of deploying and operating networks in rural, remote and Indigenous communities, another round of funding will be welcome news, particularly after ISED had to wind down its separate and very successful Universal Broadband Fund due to a realignment of spending priorities in the last Budget.

Following her description of the status of the CRTC Broadband Fund, Chair Eatrides attempted to explain how that effort works hand-in-hand with the CRTC’s efforts to strengthen competition and make internet and cellphone services more affordable for Canadians. I found this to be, at best, a tenuous claim and at worst, wildly inaccurate. What the Chair attempted to argue was that by lowering wholesale rates for resellers, granting access to incumbent fibre to resellers and by granting incumbents’ access to each others’ fibre out-of-territory that, somehow these would operate seamlessly in fulfilling the objective of improving high-speed internet and cellular telephone services to Canadians. These two competing objectives cannot happily co-exist since the areas requiring the investment of capital (i.e., rural, remote, and Indigenous communities as well as transportation corridors unserved by cellular telephony,) simply cannot be served by undermining existing and unamortized investments in hypercompetitive urban markets, which like it or not are the only markets that fund capital investments in rural and remote communities without significant subsidy.

The CRTC claims that it put in place a number of safeguards to "ensure" continued investment which it says was a main objective that it focused on in arriving at its determinations in Telecom Decision CRTC 2025-154.

What were those safeguards? According to the CRTC, the safeguards are:

1. setting cost-based interim rates that it claims ensure that large telephone companies are compensated for the expense of building out existing fibre networks;

2. incumbents are prohibited from using wholesale access in parts of the country that they have traditionally served with their own networks (the in-territory rule). This, the CRTC curiously contends, means that incumbent carriers must use their own networks in those areas as they always have and not use wholesale access; and

3. competitors cannot access newly built fibre until 2029, which the CRTC incorrectly, in my opinion, believes will allow carriers to substantially recoup their capital investment.

In its Decision, the CRTC indicated numerous times (7 times to be exact), that the CRTC would be monitoring its framework and adjust it as necessary should, among other things, continued investment not occur for the benefit of Canadians. Since that time we have had the benefit of seeing the Quarterly and full year financial disclosures from many of the companies.

Bell Canada reported a 4th Quarter increase in capital expenditures year over year from $963 million to $1.317 billion. Bell noted that the increase reflected $260 million in capital investment in its U.S. Ziply Fiber operation, in jurisdictions without the prescriptive regulatory regime favoured by the CRTC. Bell Canada also noted increased expenditures in its Bell Communications and Technology Canada division which were largely due to the timing of the spend. Pointedly, Bell Canada noted that the reduction was in part due to regulatory decisions that discourage network investments and offset by increased expenditure in the United States.

Rogers Communications reported capital expenditures in Q4 of $900 million, reflecting a capital intensity of 15%, its lowest level since Q2 of 2017 and forecast greater capital efficiency going forward. For the uninitiated, this portends even lower capital spend going forward.

Telus published guidance of $2.3 billion in capital expenditures a reduction of $230 million for 2026.

The reason it is important to highlight these capital expenditure trends is to establish that a significant reduction in capital expenditure is occurring, with at least one major network builder, Bell Canada, suggesting that, for its part ,its reduction is at least partially due to regulatory decisions that discourage investment. Collectively, these reductions are significant. They amount to hundreds of millions of dollars per year in Capex that is not being invested in extending wireline and wireless coverage to rural, remote and Indigenous communities, and those are just the direct impacts.

The issue becomes more pronounced when you examine the capital expenditures of Videotron and Cogeco - the beneficiaries of the CRTC and Government's policy of promoting resale over network expansion. On examination, the increased Capex of the competitors who reported slightly elevated or flat Capex is not nearly enough to make up for the reductions in expenditures disclosed by the incumbents. The result is that there is a net reduction in total industry Capex which is a trend that Canadians hoping for better service, or any service at all, should find deeply disturbing.

A valid question to ask, is how does the CRTC with its monitoring view these disclosures that capital expenditures are falling across the whole of the industry? It turns out somewhat tentatively. In an interview with the Globe and Mail in December of last year the Chair of the CRTC, Vicky Eatrides, seemed to favour the carrot and stick approach, suggesting despite observers' skepticism that the CRTC will, in fact, enforce the 7-year sunset period for its mobile virtual network sharing framework which expires in 4 years. Ms. Eatrides indicated she had seen evidence of "some network building", which is likely indicative of the lacklustre capital expenditures indicated above for Cogeco and Videotron. Is it enough for the CRTC to proclaim victory? It shouldn't be, but many believe that Videotron and Cogeco believe it will be.

In the Communications Monitoring report we learn that the CRTC is using capital intensity increases, which is expressed as a percentage spent on capital investments to total revenue, apparently to demonstrate that increases in Capex from Videotron and other facilities-based provider is significantly offsetting the pull backs by the established network builders, Bell. Rogers and Telus. The data demonstrates otherwise, but that is what it appears the CRTC is readying itself to declare. I for one, continue to doubt that the bright line sunset clause will be invoked as designed in May of 2030.

At the end of the day, the current trends show lower revenues, lower absolute investment and lower employment in one of Canada's core productivity inducing industries. While the CRTC and the Government writ large has forced small incremental pricing reductions, the longer term impact of this policy and regulatory malpractice can hardly be said to have delivered the "dynamism" that the CRTC seems to believe, among other things that it is seeing with companies shedding assets.