Telecom role in Canadian economy increasing, Industry Canada reports

Despite the doom and gloom of the last year, the telecommunications sector is still a healthy part of the Canadian economy. New figures released by Industry Canada show salaries are above the national average, while prices are below the mean. "Since 1994, telecommunications services GDP has out-performed the overall economy," states the background paper Telecommunications Service in Canada: An Industry Overview 2000-2001. "In some years it has grown five times faster than the overall economy." It adds that in 2000 telecom services topped the general economy by 8.3 per cent despite the drop in telecom GDP from 18.7 per cent in 1999 to 12.8 per cent the next year. The survey lists telecom services GDP for 2000 at $21.3 billion (set in 1992 dollars), representing 2.7 per cent of the Canadian total GDP of $786.8 billion. The percentage total has been steadily climbing for the past few years (see chart). Telecom represented two per cent of total GDP in 1995 and 1996, edging up slightly to 2.1 per cent in 1997. In 1998 it symbolized 2.2 per cent of the total and reached 2.5 per cent the following year. The industry employed 116,000 people in 2000, up marginally from the 113,000 working in the sector in 1999, but down from the high of 120,000 in 1995. The employment level represents 0.9 per cent of the Canadian workforce, consistent with the rates of the last few years. Those workers were not earning as much as they had previously. "For 2000, the average salary in the telecommunications industry was about $43,049, a decrease from 1999’s $43,590," Industry Canada reports. "This is, nevertheless, 27 per cent higher than the average salary in the overall economy ($33,985) and approximately 37 per cent higher than the services sector ($31,311) as a whole." Telecom prices have also fallen below the national average. Using a standard of 1992’s Consumer Price Index equaling 100, Industry Canada finds telephone costs below the national rate for two consecutive years after hovering above the level the three preceding years. In 2000, the telephony rate stood at 111.4 versus the national level of 113.5. In 1999, the equivalent rates were 109.3 versus 110.5. The telephone services price index is a composite of local telephone charges, installation and repair levies, equipment charges, and LD tolls. Basic local and LD constitute most of the index. Revenues have increased, but so have operating expenses, with the pursuant effect on telcos’ bottom lines. Operating revenues have jumped each year for the last five years, hitting $32.6 billion in 2000. Expenses similarly moved up, reaching $27.9 billion two years ago.

Telecom role in Canadian economy increasing, Industry Canada reports

News | February 26, 2002

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