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Affordability of Communications Services for Low-Income Canadians Risks Increasing Digital Divide

New PIAC report: “No Consumer Left Behind, Part II: Is There a Communications Affordability Problem in Canada?

OTTAWA, September 15, 2016 – There is evidence many low income Canadians struggle to afford their communications services, concludes a report released today by the Public Interest Advocacy Centre (PIAC). The report, entitled, No Consumer Left Behind Part II: Is There A Communications Affordability Problem in Canada? suggests that as the cost of communications services continues to rise, a growing number of Canadian households struggle to retain their communications services. According to Statistics Canada, 13.5% or about 4.64 million Canadians were considered low-income in 2013.

“Our study confirms an affordability problem exists for many Canadians who need to be connected to broadband and other communications services,” said John Lawford, Executive Director & General Counsel to PIAC.

Low-income survey respondents viewed communications services to be as important as other household goods and services traditionally viewed as essential. Home internet service, in particular, was perceived to be just as important as health care, coming second only to food and housing, and considered more important than transportation or clothing.

According to PIAC’s 2015 report No Consumer Left Behind Part I, Canadians should spend no more than 4% to 6% of their household income on communications services. However, a survey of 752 low-income Canadians who use the Internet found they spend an estimated 8% of their income on communications expenditures, with some families spending closer to 10%. In addition, the survey found:

  • About one-half of low-income respondents had to trade off other household goods or services in order to pay their communications bills—almost 1 in 5 (17%) indicated they went without other essential goods, such as food, medicine or clothing in order to pay a communications bill; 1 in 10 respondents (11%) ultimately cancelled a communications service.
  • Despite this, about 20% of low-income subscribers still struggled to pay their communications bills in the past year, having to make partial payments, suspend or disconnect the service, commit to a payment plan, or be referred to debt collectors.
  • Of low-income respondents who wanted another communications service, 84% cited affordability as a main reason for not being able to subscribe to that service.

To address this affordability challenge, PIAC recommends the establishment of a National Affordability Plan to ensure broadband Internet service is both available and affordable for low-income households in Canada. Addressing affordability requires a multi-pronged approach which includes both public and private funding. The report also recommends the Canadian Radio-television and Telecommunications Commission (CRTC) spearhead affordability initiatives, with federal and provincial political support and coordination. Specifically, PIAC proposes a flexible end-user subsidy would most effectively address the affordability of communications services by allowing low-income Canadians to make telecommunications choices that best suit their needs.

“Canadian policy makers must ensure low-income families will not be left behind as Canada moves forward in a digital reality,” noted Alysia Lau, Legal Counsel at PIAC and co-author of the report. “Otherwise a growing number of Canadian families may be forced to make difficult choices, such as retaining home internet service by sacrificing the quality of food they provide for their families,” concluded Ms. Lau.

To see the full report, please consult the following link:

No Consumer Left Behind Part II: Is There A Communications Affordability Problem in Canada?

To view the report in French, please consult the following link:

Aucun consommateur laissé pour compte, partie II: Le caractère abordable des communications pose-t-il un problème au Canada?

PIAC received funding from Innovation, Science and Economic Development’s (ISED) Contributions Program for Non-Profit Consumer and Voluntary Organizations to prepare the report. The views expressed in the report are not necessarily those of ISED or the Government of Canada.

 

For more information please contact:

John Lawford
Executive Director & General Counsel
Public Interest Advocacy Centre (PIAC)
(613) 562-4002 ext.25
lawford@piac.ca
www.piac.ca

Alysia Lau
Legal Counsel
Public Interest Advocacy Centre (PIAC)
(613) 562-4002 ext. 38
alau@piac.ca
www.piac.ca

 

 

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