Commentary

Critical role of Canada’s digital infrastructure in a post-pandemic world

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Digital infrastructure is at the heart of knowledge-based economies such as Canada. It enables businesses to adopt more productive ways of staying competitive, individuals to consume services more efficiently and, more generally, leads to a better quality of life. Maintaining these benefits, particularly in a post-pandemic world, will require new investments in digital infrastructure and related technologies. What is more, the services need to be provided in an affordable and equitable way, which may require new funding models.

So far, Canada has struck the right balance of private and public investments in digital infrastructure, putting us in an enviable position. For example, our Internet speeds are among the fastest in the world, over 90 per cent of the population has access to 4G mobile services, and Canadians have a high adoption rate for digital services. This result has been achieved through strong investments in the primary components of digital infrastructure. These include fibre connectivity, hardware and software to operate the infrastructure, and service providers that leverage the infrastructure to provide connectivity and related services to end users.

While Canadian digital infrastructure has handled the 40 per cent increase in traffic due to COVID-19 and related remote-work requirements, Canada is currently lagging when it comes to next-generation data networks.

Looking forward, we face strategic choices that will influence our competitiveness when it comes to digital infrastructure. The emergence of next-generation technologies, such as the Internet of Things, artificial intelligence, and robotics, requires a paradigm shift in connectivity. For example, to enable a connected environment where autonomous vehicles can safely coexist with traditional transportation services, we need data networks that are not only several magnitudes faster than today’s networks, but must also be of significantly higher quality to handle unprecedented data demands from next-generation connected environments.

And that’s where 5G networks come in—offering speeds up to 20 times faster than current 4G technologies while providing network agility to meet the projected data demands of tomorrow’s digital solutions.

In a post-COVID-19 world, global competition for advanced digital environments will only grow stronger. While Canadian digital infrastructure has handled the 40 per cent increase in traffic due to COVID-19 and related remote-work requirements, Canada is currently lagging when it comes to next-generation data networks. Countries such as the U.S., Korea, and Japan have already deployed 5G services for businesses; Canadian service providers are still in the early deployment phase. This delay in rolling out 5G services leaves our businesses that rely on advanced digital infrastructure at risk of losing out to their competition or relocating outside of Canada—both options, of course, are undesirable.

To mitigate the negative impact on our business competitiveness, we must consider the affordability of digital services and the quality of those services in a new era of increased digitization. These two aspects of digital services are interconnected. Continuous improvements in data infrastructure require ongoing investments that must be paid for in some way. If private sector businesses are the primary source of upgrade investments, then consumers will pay higher prices for services as companies try to recoup their upfront investments.

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Funding for digital infrastructure should be viewed as an investment in Canada’s future. We should avoid boiling the conversation down to “consumer bills” versus improved digital infrastructure. This oversimplification of the issue does not take into account the broader economic impact that digital infrastructure brings to a region or country. Some studies have estimated that an effective digital infrastructure can add as much as $200 billion annually to Canada’s GDP.

Canada must deploy innovative fiscal and direct investment models to establish an ongoing support system for digital infrastructure upgrades and evolution. The new models should be based on a respectful partnership with the private sector players, including network providers, service providers, and content providers.

At the same time, we must ensure that our digital infrastructure evolution is more equitable than it has been in the past. All regions of Canada must be able to benefit from the next digital revolution. In the 20th century, we ensured physical connectivity to all Canadians. In this century, looking at a post-COVID-19 world, we must ensure that digitization and digital infrastructure are national priorities, and that all Canadians can effectively participate.

Harry Sharma

Harry Sharma

Director, Innovation and Technology

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