MEI: Expanding mandatory sharing policies could jeopardize Canada’s digital future

• Adjusted for inflation, investment in telecommunications infrastructure fell by $600 million in 2023, compared with pre-pandemic levels.

Montreal, June 10, 2025 – Forcing companies to sell access to their networks, sometimes below cost, will discourage investment in vital internet infrastructure, warns a new MEI economic note released this morning.

“By making infrastructure ownership less and less profitable, Canada’s telecommunications regulator has shifted investment away from network build-up and maintenance,” says Gabriel Giguère, Senior Policy Analyst at the MEI and author of the publication. “Under the guise of being consumer-friendly, by reducing reliability, these policies risk harming the very consumers they intend to protect.”

Mandatory sharing was introduced in the 1990s by the Canadian Radio-television and Telecommunications Commission (CRTC) with the goal of increasing competition. The policy required large telecommunications companies to provide smaller service providers with access to their networks at regulated rates.

In 2023, the CRTC extended this policy to include mandatory wholesale access to fibre optic networks in Ontario and Quebec. In 2024, the policy was expanded to apply nationwide.

These rules make no distinction based on the size of the reseller, allowing even Canada’s largest telecom companies to resell access to a competitor’s network.

“This policy has resulted in a textbook example of what is known in economics as the free-rider problem,” says Giguère. “After all, why would a company sink billions into its own network if it can simply piggyback on its competitors’ network at a discount rate set by the government?”

Free-riding is an economic phenomenon in which individuals or entities benefit from a resource without having to pay for it, something that frequently leads to overuse and underinvestment.

Adjusted for inflation, investment in Canadian telecom infrastructure was $600 million lower in 2023 than in 2019, prior to the pandemic.

Following the CRTC’s 2024 expansion of mandatory access rules, one of Canada’s largest telecom companies announced it would cut its planned network investment by over $1 billion, including a $700 million reduction as of 2024-25.

In formal consultations, the government of Quebec raised concerns that this policy will reduce future investment, compromise the quality of service and imperil the future of mid-size infrastructure providers now present in the province.

The MEI researcher recommends that the network sharing policy be scrapped or, at the very least, that restrictions be added with regard to the size of the reseller in order to re-incentivize investment in telecommunications infrastructure.

“With this policy in place, there is nothing to prevent large telecommunications companies from benefitting from discounted access to their competitors’ networks,” explains Mr. Giguère. “This could prove detrimental to some of the smaller infrastructure providers, who will be forced to sell access to their networks to their much larger competitors.”

The MEI Economic Note is available here.

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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