OTTAWA — Canada’s industry minister is under fire from telecommunications companies after her recent decision to uphold the Canadian Radio-television and Telecommunications Commission's (CRTC) rules on wholesale internet access. This decision allows the country’s three major telecom companies to resell fiber optic services to internet service providers, including smaller players, on their networks.

The backlash is particularly strong in Montreal, home to several major telecom firms. Frédéric Perron, CEO of Cogeco, expressed his dismay, stating, “I am in shock. In shock. I am profoundly disappointed.” He described the minister’s decision as “damaging” and “dangerous,” indicating that he never expected such a ruling. Perron added, “We had high hopes that this new government would make better decisions for business and the Canadian economy.” He criticized the decision as reminiscent of outdated policies from the Trudeau era.

Mélanie Joly, the industry minister, was anticipated to challenge the CRTC's controversial ruling, which permits companies like Telus to utilize other providers' networks to gain customers in regions like Ontario and Quebec without investing in their own infrastructure. The CRTC argued that this measure would lower costs for consumers. However, industry stakeholders, including Perron, argue that there is no solid evidence to support this claim. Robert Ghiz, president and CEO of the Canadian Telecommunications Association, stated, “It discourages investment, weakens competition, and ultimately harms Canadian consumers.”

Last year, Joly’s predecessor, François-Philippe Champagne, had responded to industry concerns by urging the CRTC to reconsider its decision, citing worries about the viability of investments in less populated areas. At that time, Joly was serving as the minister of foreign affairs. Despite the industry's pushback, Joly confirmed her support for the CRTC's ruling via a post on social media, stating, “By immediately increasing competition and consumer choice, the CRTC’s decision aims to reduce the cost of high-speed Internet for Canadians.”

The timing of Joly's decision coincided with Bell Canada’s quarterly earnings announcement, which saw a drop in its stock price. Bell’s CEO Mirko Bibic expressed disappointment, urging the government and the CRTC to ensure that network builders receive adequate compensation for their investments.

Perron criticized the decision further, saying it allows the major telecom companies to grow even larger at the expense of regional providers. “With this decision, the minister is essentially saying it’s okay if the Big Three get even bigger,” he said. “We don’t think it’s okay. Consumers won’t think it’s okay, and we’ll fight to make sure it doesn’t happen.”

Cogeco and Eastlink have announced they are suspending planned upgrades in smaller communities and have filed an appeal to the Federal Court to challenge the CRTC's decision. In Ottawa, some view the decision to uphold the CRTC as a bold move that could disrupt the current political landscape, especially so soon after a new election.

Champagne, now the finance minister, did not comment on the matter but confirmed his attendance at the cabinet meeting where the decision was made. He stated that the government has a strong mandate to reduce costs and strengthen the Canadian economy. Perron expressed disappointment in the lack of courage shown by the government, suggesting that maintaining the status quo was an easy choice but not the right one.

Industry sources echoed Perron’s sentiments, with Rogers Communications stating that the government’s decision contradicts its stated goal of building a strong Canada. A recent study by PwC highlighted the telecommunications sector's significant contribution to Canada’s economy, projecting a potential increase in GDP contribution by 2035. However, industry leaders worry that the recent decision could jeopardize these growth expectations. “The decision from last week is not sending the right signal, and it’s concerning to me,” Perron concluded.