Manitoba’s Cell Phone Contract Laws:
Cancellation Fees

Under Manitoba’s consumer protection legislation regarding cell phone contracts, consumers can cancel their contracts at any time.  A company can charge a reasonable cancellation fee, as follows:

1. Cancellation Fee Maximum: Cell Phone Provided – Fixed Term Contract

   If you were given a phone for no cost or at a reduced rate when you signed up for a fixed term contract, the cancellation fee will be based on the value of the phone, pro-rated over the remaining term of the contract.

   For example:
   You receive a $300 phone at no cost when you signed a three-year (36 month) contract. You cancel the contract after one year (12 months). The maximum cancellation fee is $200:  $300- ($300x12/36) = $200

2. Cancellation Fee Maximum: Cell Phone Provided – No Fixed Term

   If you were given a phone for no cost or at a reduced rate when you signed an indeterminate contract (no fixed term), the maximum cancellation fee is also prorated, based on a 48 month time period.

   For example:
   You receive a $300 phone at no cost when you sign a no-term contract. You cancel the contract after 12 months. The maximum cancellation fee is $225: $300 – ($300 x 12 / 48) = $225.

3. Cancellation Fee Maximum: No Phone Subsidy

   If you were not given a phone as an incentive for signing a contract (you may have used a phone you already had or bought a phone to use), the maximum cancellation fee is $50 or 10 per cent of the remaining cost of the contract, whichever is less.