Telecoms only offer locked phones from manufacturers that are programmed to work only with their service. Then they charge a fee — typically $50 — to unlock the phone when you have completed your contract agreement and paid the phone in full.

Phone locking is is to prevent a user from switching provides in the middle of a contract, protecting the Telecom from unscrupulous clients running away to a competitor with a phone that is not fully paid.
Or to discourage you from switching later

This petition is to pressure the CRTC to change this practice and make it illegal for Telecom to charge a service fee to unlock a phone once the contract is completed.

If you have completed your engagement, the phone is yours , and therefore illegal for the Telecom to keep a legal link on your purchase.