Thank you very much.
Thank you, Madam Chair.
It is a pleasure to be here this morning to take the opportunity to join the discussion on the Canadian media landscape. I'm joined this morning by Kurt Eby. Kurt is our director of regulatory affairs and government relations at the CWTA.
The Canadian Wireless Telecommunications Association represents wireless service providers across Canada as well as companies that develop and produce products and services for the industry, including handsets and equipment manufacturers, content and application creators, and business-to-business providers. Our goal at the CWTA is to enable more Canadians to use more wireless to do more, and that is happening.
Consumer preferences have created our mobile-first world, where smart phones and tablets are the preferred choice to communicate, navigate, inform and be informed, shop, bank, work, collaborate, entertain, and be entertained.
The wireless world is growing. Canadians are using wireless services more than ever.
Consumers want wireless services to be even more accessible, convenient, and easy to use. They count on ubiquitous advanced network connectivity to help keep them safe and secure while they stay connected with family and friends and do more and more business. They need to trust that the personal and private information on their mobile devices is also safe and secure. They depend on the wireless industry to continue investing and innovating so they can maximize the value of their wireless experience.
One thing we know is that Canadians benefit from some of the best and fastest networks in the world.
A recent international study determined that, of all the networks around the world, Canadian networks are second in terms of speed. In addition, Canadians are heavy users.
Canadian consumers are among the heaviest users in the world. We currently rank fourth in terms of data consumption on wireless networks per user in the world. Indeed, Canadians' preference for wireless is clear. In only seven countries around the world does the average mobile connection use more than one gigabyte of data per month. Canada is one of those countries, and Canadians currently rank, as I mentioned, fourth highest as consumers of wireless data in the world, at more than one and a half gigabytes per month.
The cumulative effect of more Canadians using smart phones and connected devices to do more is massive growth in overall data usage. The latest projections indicate that Canadian mobile traffic in the next five years will grow by 600%, six times more in the next five years.
No other sector of the economy must consistently and constantly meet a level of demand growth similar to what is experienced in the wireless sector.
So we anticipate that the demand for wireless data in Canada will skyrocket.
This demand is driven by consumers, consumers who prefer to consume all forms of media, including entertainment and news content, any time and anywhere. Ubiquitous connectivity is changing the way Canadians are informed about what is going on in their country and what is going on around the world. Wireless service providers are facilitating this change, but they must also respond to the demand that it's putting on wireless infrastructure, because we cannot support all this without more investment.
That is why the Canadian wireless industry has invested more than $2.5 billion in capital expenditure each year since 2009. The doubling of total data usage every two years keeps the industry in a perpetual capital investment cycle. The industry has invested an additional $8 billion since 2014 to acquire the spectrum needed to expand and enhance wireless networks to meet current and projected traffic volumes.
I want to highlight this. This is $8 billion just to have access to the radio frequencies. This does not add one tower or one antenna site or connect one phone. That is just paying the government to have access to the radio frequencies. It is $8 billion since 2014.
These investments obviously create jobs directly related to network expansion and enhancement in the ongoing delivery of advanced wireless services from Canada's service providers. In 2014, Canada's wireless industry generated over 134,000 full-time-equivalent jobs and an overall economic benefit of $23.5 billion.
Canada's wireless service providers will continue to make record investments to meet the demand of exploding data usage and ensure consistent levels of services for all Canadians. Strategic government policies can facilitate additional investment in wireless network infrastructure and support innovation and economic development here at home.
Specifically, the CWTA has consistently identified four priorities necessary to ensure that the wireless industry can most effectively meet the demands of Canadians. Those four priorities are more spectrum, more towers and antenna sites, lower fees paid to government, and smart regulations.
I want to highlight what we mean by smart regulation. By smart regulation we mean that the federal government must maintain and defend its position as the sole regulator of telecommunications in Canada. Consumers, service providers, regulators, and elected officials are all better served by a proportionate and symmetrical set of federal regulations than by an asymmetrical and inefficient patchwork of different provincial frameworks.
Businesses are also better served when they compete on a level playing field rather than facing disadvantage due to regional regulation.
There is one existing fiscal policy—and this is the main reason we're here this morning—that provides foreign companies with an advantage of up to 15% over Canadian firms, and indeed creates a barrier to doing business in Canada.
There is a tax policy that provides foreign companies with an advantage of up to 15% over Canadian companies.
This policy creates a barrier to doing business in Canada. Currently foreign suppliers of digital products and services such as online news and entertainment services, music, movies, and software are not required to collect or remit HST and provincial sales tax as similar Canadian firms are obliged to do. The competitive advantage given to foreign suppliers by this policy undermines Canadian investment and innovation by encouraging Canadians to spend more money outside of the Canadian economy, to the detriment of Canadian suppliers and workers as well as content creators, programmers, publishers, actors, directors, musicians, and all others in the creative community who benefit from a strong Canadian digital economy.
Specific to this proceeding, this policy puts Canadian news and media outlets at a direct disadvantage relative to their foreign competitors. For instance, while a Canadian subscriber would pay HST on online subscriptions to The Globe and Mail, the Toronto Star, or the National Post, they would not pay the HST on subscriptions to some international press, such as The Wall Street Journal. The policy has been held over from when sales of such products and services were relatively minuscule and effective taxation was more trouble than it was worth. Those days are gone. Canadians' insatiable appetite for digital media, movies, TV shows, apps, books, magazines, video games, and software make closing this tax loophole more important than ever.