Telecoms don't expect major hit from tariffs but other pressures persist: report

Canada's telecommunications companies don't expect to be hit hard by the ongoing trade war with the U.S. but face other economic challenges that could limit their ability to attract new customers in the near future. A person uses a cellphone in Ottawa on Monday, July 18, 2022. THE CANADIAN PRESS/Sean Kilpatrick

Canada’s telecommunications companies don’t expect to be hit hard by the ongoing trade war with the U.S. but face other economic challenges that could limit their ability to attract new customers in the near future.

A Desjardins report Monday said major providers that presented at its Montreal conference last week “were clear that they have limited exposure to tariffs,” while acknowledging the sector is not immune to negative macroeconomic pressures.

“Management comments supported our view that the sector is relatively shielded from the increased macro risks we are currently seeing,” said analyst Jerome Dubreuil in a note to clients.

“That said, we have seen few signs that many of the fundamental headwinds affecting the space are about to subside.”

The Desjardins conference was held March 17 and 18, and included presentations from Bell Canada’s parent company BCE Inc., along with Telus Corp., Quebecor Inc. and Cogeco Communications Inc.

Telus chief financial officer Doug French said the company has an internal “playbook” to ensure it is ready for either short or long-term effects of tariffs. He said those effects could include volatility in the U.S. dollar and the need for Telus’s subsidiaries to operate more efficiently.

He said Telus is also continually examining its supply chain to ensure it is diversified enough to overcome higher cost structures or limited supply in general.

“I think the only thing that’s a little bit harder to predict would be: What is the impact on the economy and will there be a slowdown on the consumer and (business) side that would be abnormal?” French said in his presentation, a recording of which was posted on Telus’s website.

“I think so far we’re seeing that our services are still in very high demand and we haven’t seen the impact in the early stages of that.”

Dubreuil said in his note that he wouldn’t be surprised to see one of the Big Three carriers report no net additions of new customers in its latest quarter, or even a decline.

He highlighted a recent uptick in promotional offers that may represent a push to obtain more subscriptions before the quarter ends. But Dubreuil said companies would be better off focusing on long-term wireless revenue growth versus “quarter-end promotional skirmishes.”

“Management teams generally sounded cautious about (their first-quarter subscriber additions) given the significant slowdown in immigration,” he said.

Last fall, the federal government announced it was slashing immigration targets. It now expects to bring in 395,000 permanent residents this year and 380,000 in 2026, both down from a previous forecast of 500,000.

Ottawa also previously capped international student visas for both 2024 and 2025.

During a separate conference hosted earlier this month by Scotiabank, Bell chief executive Mirko Bibic said he expects the industry will see lower subscriber growth in 2025 compared with the previous two years.

“That’s a largely a function of federal government policies around newcomers to Canada,” Bibic told analyst Maher Yaghi, adding Bell started to feel the effects in the second half of 2024.

“Newcomer growth is slowing down. There are still newcomers coming to Canada and we are really focused on gaining our fair share there.”

Dubreuil’s note said companies may also be aiming to divest assets this year to reduce debt amid slow industry growth, high dividend payouts and expensive spectrum payments.

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Sammy Hudes, The Canadian Press

This report by The Canadian Press was first published March 24, 2025.

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U.S. President Donald Trump’s reciprocal tariffs on trading partners are set to take effect on April 2, a day he has proclaimed as “Liberation Day” for American trade. CTV News will have extensive coverage across all platforms:

• CTVNews.ca will have in-depth coverage, real-time updates, and expert analysis on what the tariffs will mean for Canadians.
• CP24.com will report on any developments out of Queen’s Park and what the tariffs means for the people of the GTHA.
• BNNBloomberg.ca will explain what this means for the business community, investors, and the market.