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ASL – Early cancellation fees (7 of 12)

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Video Transcript

In 2024, the government enacted a number of amendments to the Telecommunications Act by adding a number of provisions relating to the prohibition of fees related to activation, modification, and cancellation of service plans. These provisions are intended to ensure that consumers can promptly, affordably, and easily cancel, downgrade, transfer, or otherwise change their services

In response, the Commission amended the Wireless Code and Internet Code in Telecom Regulatory Policy 2026-43 as follows:

  • These codes include a new definition for activation and modification fees, which are prohibited under the Telecommunications Act.
  • Service providers cannot charge an early cancellation fee when a subsidized device is not provided as part of the contract.

The Wireless Code also includes rules related to early cancellation fees for subsidized devices.

In recent years, the industry has begun offering device rental plans.  Device rental plans are different from device financing plans because they allow customers the option of returning their rented device to the service provider at the end of their contract terms. They also have the option of paying the remaining balance at the end of their contract term. Approximately 27% of Canadians now report renting their mobile device. While these devices are not necessarily subsidized, customers may not always be fully aware that they opted into a device rental plan, and that they may have to pay a balance to keep their device after their contract ends.

Q8. Please comment on whether the existing rules on early cancellation fees, as modified by the noted regulatory policies, are sufficient to protect consumers from fees intended to discourage subscribers from modifying their service plan or cancelling their contract for telecommunications services, in line with the amendments to the Telecommunications Act.  Please provide supporting rationale.

Q9. What modifications are needed, if any, to ensure that these provisions meet their intended objective, in line with the amendments to the Telecommunications Act, while taking into consideration the government’s commitment to reducing administrative burden? Please provide supporting rationale.

With respect to wireless services:

Q10. Are updates to the rules on existing early cancellation fees for wireless services needed to account for service contracts involving device rental plans to ensure they align with the amendments to the Telecommunications Act? Please provide an explanation, alternative wording (if possible), and supporting rationale.

Q11. Should the Consumer Protection Code Working Document include a definition for device rental plans? If so, how should device rental plans be defined?

Q12. Are any other updates to the rules for early cancellation fees for wireless services needed to account for other evolving industry trends? Please provide supporting rationale.

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The Commission is looking to make the consumer protections for communications services clearer and more consistent by combining them into a unified Code.

This video in sign language shows the questions related to early cancellation fees from the Broadcasting and Telecom Notice of Consultation.

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