With a trade war launched against Canada by U.S. President Donald Trump’s administration causing worry for this country’s telecommunications and broadcasting sectors, how exactly to respond is not clear.

Steven Globerman is a senior fellow at the Fraser Institute, a B.C.-based think tank. He believes the impact of the trade war on both sectors will be indirect rather than direct.

“The main indirect effect is the slowdown in growth, economic growth, in Canada. Of course, telecom services are income elastic so if there’s a slowdown in economic growth one would expect the revenues of telcos will not grow as much as they would otherwise,” he predicted in an interview with The Wire Report. “They might even decline for a period of time.”

Saskatchewan Telecommunications Holding Corp. (SaskTel) does not expect any direct impact from the levies, but it does worry about the broader effect on the Canadian economy.

“From a procurement perspective, in terms of U.S. goods purchased, SaskTel’s exposure is quite limited,” the prairie telecom said in a statement. “Our larger concern related to trade action is the overall negative effect on the economy, how it impacts people, and their purchasing decisions. That will take more time to determine, of course.”

Globerman agrees with SaskTel.

“I don’t see countervailing duties imposed by Canada significantly impacting input costs for communications companies in Canada,” he stated. “They are buying, obviously, a lot of computer- and related electrical equipment. So far those haven’t been threatened by countervailing tariffs.”

The Canadian Telecommunications Association, which represents major players in the industry such as Rogers Communications Inc. and BCE Inc., told The Wire Report in a statement that it will “continue to do our part to ensure the resilience of our economy, while also continuing to advocate for public policies that promote investment in our country.”

“The Canadian telecommunications industry stands united in support of Canada. As the situation unfolds, we are closely monitoring developments and assessing potential impacts on our industry and Canadian consumers,” the association said. 

A Bell spokesperson said in an email to The Wire Report that the company believes public policy should be used in this moment to incentivize “Canadian companies that invest in critical infrastructure and support highly skilled, good-paying jobs in Canada to help future-proof Canada’s economy.

“That means building more telecommunications infrastructure to help Canadians connect their business to local and world markets,” the company statement read. “We will monitor the impact of these tariffs now that they are in place, but we have the scale and flexibility to manage through supply chain impacts and continue delivering for our customers.”

Bell previously announced, unrelated to the trade war, that it would scale down its infrastructure build plans in response to a CRTC decision on competitor access to its fibre-to-the-premises networks, including a $1 billion reduction in fibre investments it announced following the CRTC’s November 2023 interim decision.

Sweden-based equipment manufacturer Ericsson AB, meanwhile, is uncertain what the tariffs will mean for its business and that of its customers. The company has had operations in Canada for 70 years.

“Ericsson continuously assesses our supply chain strategy and works closely with our customers,” the firm told The Wire Report. “Our main focus is to serve our customers’ specific needs in the best way. We are still assessing and determining whether and how the tariffs will impact our business.”

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While not seeing any direct threat from the tariffs, the Canadian Association of Broadcasters (CAB) worries about ancillary side effects.

“We haven’t yet seen ways in which the tariffs would directly affect Canadian broadcasters,” CAB president Kevin Desjardins emailed The Wire Report. “However, we know that a negative impact on the broader economy will likely result in further downturns and challenges to Canadian broadcasters’ advertising revenues.”

The Organisation for Economic Cooperation and Development (OECD) has lowered its projections for growth in several countries. Canada’s real gross domestic product (GDP) growth is expected to slow to a minuscule 0.7 per cent in both 2025 and 2026, compared to 1.5 per cent in 2024.

The Fraser Institute’s Globerman wonders if Canadian rules on telecom ownership could be the focus of renegotiation of the Canada-U.S.-Mexico trade agreement (CUSMA), which captures what items may be sent across the borders duty-free. Telecom shouldn’t be an issue, but it could turn out to be, he added

“In principle, it’s not supposed to but everything’s on the table,” the senior fellow said. “That’s clear, given Trump’s position on the whole trade issue.”

Conversely, the Americans could try to impose their own ownership restrictions which could affect Bell Canada. Bell recently purchased an American fibre carrier in the western United States.

“I don’t see that as a high probability but it is a possibility,” Globerman surmised.

He also speculated that lower immigration levels into Canada could depress the market for telecom and broadcasting services.

In its report on the fourth quarter of fiscal year 2024 released in late January, Rogers Communications Inc. noted it saw fewer postpaid mobile phone customers added to its base year-over-year due, in part, to slowing population growth and “changes to government immigration policies.” The company referred The Wire Report to the CTA and the CAB to speak for it when asked for comment on tariffs. 

The same day the American government implemented the new tariff regime, the government of Ontario retaliated by ripping up a $100-million contract with Space Exploration Technologies Inc. (SpaceX) subsidiary Starlink to provide internet connectivity to remote sections of the province. SpaceX owner Elon Musk has become a prominent advisor to the Trump administration.

ppark@thewirereport.ca