Thank you very much, Mr. Chair.
Good morning to all of you. I'm pleased to be here this morning.
I have a good news story to tell this morning. It's about the wireless sector in Canada. It's a fast-growing sector. It creates thousands of jobs. It enables our communities and our families to be better connected, and it makes our communities safer as well.
The industry is enjoying tremendous growth. We are not here to ask you for money, but to tell you that things are going well and that certain steps can be taken to ensure that things keep going even better.
The wireless sector in Canada is a major driver of economic activity across all sectors of the economy, and it’s one of the few true enablers of success and growth in all other sectors of the economy.
Just to give you an example, traffic on Canada’s networks is growing exponentially. Some of our networks are growing at 5% per week. Now, most other sectors of the economy would be thrilled to have 5% growth in a year. But 5% growth a week means that the traffic on our networks will more than double; it will be 26 times more by 2015. This means there's an ongoing requirement to make massive investments in networks to make sure Canadians continue to enjoy the service they want.
We provided a submission to the committee. We also shared with you a slide deck. On one of those slides, slide 3, you can see the contribution of the wireless sector in Canada. You can see it's $41 billion a year.
This is a contribution of $41 billion to the Canadian economy, $17 billion of which is a direct contribution to the gross domestic product, $15 billion is in indirect flow-through and $9 billion is in consumer supplies.
And you can see how this compares to other sectors of the economy. But what we see and what's happening in the wireless world is something truly remarkable, and that is the combination of wireless telephony with broadband Internet to create the mobile broadband Internet. That's truly what Canadians want from coast to coast to coast, and that's what the wireless sector wants to deliver.
If you look at slide 4, and this is a very interesting slide, you will see it gives an indication of what's happening in the wireless sector. A smartphone will consume 24 times the bandwidth of a traditional feature phone. A laptop will consume over 500 times the bandwidth of a traditional feature phone. This is exponential growth. If you compare it to highways, for instance, it's as if we had a four-lane highway this year, and next year we'd have to have an eight-lane highway and a sixteen-lane highway the year after just to satisfy the traffic. The increase will be 26 times between now and 2015.
One of the roadblocks we face in Canada is high government spectrum licence fees. I refer you to slide 5. This compares the spectrum licence fees that are paid by the wireless sector to governments in all G-7 countries. You can see that Canada has the highest spectrum licence fees in the G-7. In fact, Canadian wireless carriers hold licences for less than 2% of all the licensed spectrum in Canada, yet they pay for over 50% of all spectrum licence fees in Canada.
If we had a regime comparable to that of the U.S., the wireless sector would pay $4 million in fees. In 2009, the wireless sector paid $130 million in fees. This is simply an obstacle to investment and an obstacle to growth in one of the fastest growing sectors of our economy.
If you look at slide 6, you will see the investments that have been made by this sector in recent years. While other sectors were struggling from 2007 to 2010, this sector of the economy made record investments in our networks around the country.
All this is to say, Mr. Chair, that we have three recommendations to make. The first is to introduce in 2012 a temporary accelerated capital cost allowance for broadband network-related assets and move it from 50% to 100%. The second is that the government set a timetable for bringing the administrative licence fees paid by Canadian wireless carriers in line with comparable fees paid by wireless carriers in other G-7 countries. The third is that Industry Canada eliminate outdated regulation and red tape on conditions of licence that impose an unnecessary regulatory overhead on both licences and the government.
Thank you, Mr. Chair.