Rogers, Telus and Bell Back Ottawa’s Plan for a New Canadian Internet Network

The feds want to help build a new nationwide internet network designed to keep more Canadian data and internet traffic under Canadian control, according to The Globe and Mail.

Prime Minister Mark Carney announced the plan Tuesday at the Canada Investment Summit in Toronto. The federal government says it will help finance a new high-capacity broadband network connecting Canada from coast to coast, with more direct and secure links to Europe and Asia. Carney later said the network would also reach the Arctic.

In simple terms, the project would strengthen the major fibre routes that carry large amounts of internet traffic between cities, regions and countries. Ottawa says the goal is to rely less on foreign infrastructure (well, mainly U.S. it seems) and keep more Canadian connectivity under Canadian control.

Rogers, Bell and Telus have all expressed support for the idea. Rogers CEO Tony Staffieri told The Globe there is a “clear economic opportunity” in building a Canadian-controlled fibre route, while Bell said a sovereign network would help protect connectivity within Canada and across international links.

Telus CEO Victor Dodig also said the company plans to work with the federal government, the Major Projects Office and other industry partners on the project. Quebecor CEO Pierre Karl Péladeau welcomed the plan as well, pointing to growing competition from U.S.-owned satellite internet companies (seemingly hinting at SpaceX’s Starlink).

According to The Globe, two sources familiar with the discussions say Canadian telecom companies and the federal Major Projects Office are already talking about how the network could be financed and who would own it. The sources were not authorized to discuss the talks publicly. Seems like these might be government sources talking to tease this idea to Canadians?

The federal government has not yet said how much the project would cost, where new fibre would be built or when construction could begin. One can only imagine how much this mega project would cost taxpayers.

Ottawa is also introducing tax changes aimed at encouraging companies to spend more on infrastructure. The new Productivity Mega Deduction will allow businesses to immediately deduct a wider range of investments, including fibre-optic cable, computer equipment, software and other assets. The government says the changes will lower Canada’s marginal effective tax rate on new business investment from roughly 13 per cent to 6.4 per cent. So with Big 3 telecoms backing this idea, they can apply the new lower tax rates on these investments.

For now, the sovereign internet project remains in the planning stage, but Ottawa has committed to helping finance it and discussions with our big telecom companies are already underway.