A Statistics Canada building and signs are pictured in Ottawa on Wednesday, July 3, 2019. THE CANADIAN PRESS/Sean Kilpatrick

As MPs study the affordability of telecommunication services, Statistics Canada says cellphone and internet costs continue to decline, helping to drive the national inflation rate lower last month.

Consumers who signed on to a cellphone plan in February paid 26.5 per cent less than they did during the same month a year ago, according to the consumer price index report released Tuesday. That follows a year-over-year drop of 16.4 per cent in January.

It said the latest year-over-year decrease was driven by lower prices for new plans and increases in data allowances for some cellular service plans.

StatCan also said prices for internet access in February fell 13.2 per cent on a year-over-year basis and 9.4 per cent month-over-month, noting some special offers that were available from providers last month.

The agency's telecom price calculations reflect two main factors — raw prices for services and "quality difference," said telecommunications consultant Mark Goldberg.

Price declines in the national inflation report could indicate that consumers are getting more bang for their buck through new offers, such as bigger data packages, international roaming perks, or voice-to-text voicemail services.

"They're either getting more for the same price or they're paying less for the same thing," said Goldberg, who likened it to "the opposite of shrinkflation."

"If you go into a grocery store and the box of cereal on the shelf is $3.99, but last month it was a 500-gram box and this month it's a 400-gram box ... you'd say prices went up 25 per cent. In this case, it's the opposite."

StatCan's report showed Canada’s overall annual inflation rate was 2.8 per cent last month, down from 2.9 per cent in January, with the agency citing the indexes for cellular and internet services as among the drivers of that decrease.

The February data is in line with national trends frequently touted by the telecom industry. From January 2019 to January 2024, the cost of cellular services in Canada declined 47 per cent, according to StatCan data highlighted by the Canadian Telecommunications Association.

"While most goods and services have become more expensive, fierce competition in the telecom sector has resulted in significant price declines for both cellular and internet services," said association spokesman Nick Kyonka in an email.

Telecom prices have been a hot topic lately and the issue is currently being studied by the House of Commons industry committee.

MPs on the committee sounded the alarm in January when Rogers Communications Inc. confirmed it was raising prices by an average of $5 for some wireless customers not on contract and some Bell Canada customers were also told their wireless bills were set to increase.

On Monday, the committee heard testimony from the chief executives of Rogers, Bell and Telus Corp., who stressed that phone and internet prices are coming down. But they acknowledged some customers don't feel they are paying less while noting that Canadians' data usage has been on the rise in recent years.

"I'm just not seeing plans that are tailored to more low-usage customers," said Mohammed Halabi, director and founder of MyBillsAreHigh.com, a company that helps customers negotiate with cellphone providers to save money.

While the big companies are offering plans that allow customers to pay less per gigabyte of data, he said they typically include a "huge amount of data that customers may not necessarily need."

"Where are the plans that are more tailored to people who are only using five gigabytes?" said Halabi.

He added customers increasingly have opportunities to save on their cellular bills when bundling with other services such as TV or home internet.

"But then that's pushing you into another service that you may not need and then you're having to deal with sizable discounts that expire, in some cases, after two years."

Goldberg said it's important to recognize that someone who has been on the same plan for years wouldn't notice the effects measured by StatCan. Its report only captures changes to customers' bills, including those who switched carriers or renegotiated their existing plan with their provider.

"You should not be on a two- or three- or five-year-old price plan," he said.

"If you still have the same plan that you had two years ago, you're not getting enough data for the same amount of money."

This report by The Canadian Press was first published March 19, 2024.

News from © The Canadian Press, 2024