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House of Commons Emblem

Standing Committee on Industry, Science and Technology


NUMBER 163 
l
1st SESSION 
l
42nd PARLIAMENT 

EVIDENCE

Thursday, May 16, 2019

[Recorded by Electronic Apparatus]

  (0845)  

[English]

     Welcome, everybody. Thank you for being here today.
    Pursuant to the order of reference of Wednesday, May 8, 2019, the committee is studying M-208, on rural digital infrastructure.
     Today, we have with us the Honourable Bernadette Jordan, Minister of Rural Economic Development, along with her officials, from the Office of Infrastructure of Canada, Kelly Gillis, Deputy Minister, Infrastructure and Communities; and from the Department of Industry, Lisa Setlakwe, Senior Assistant Deputy Minister, Strategy and Innovation Policy.
    Minister, you have 10 minutes.
     I would like to acknowledge that we are gathered here on the traditional unceded territory of the Algonquin peoples.
    As you said, Mr. Chair, I am joined by Kelly Gillis, my deputy minister, and Lisa...I never say it right. Sorry.
     Setlakwe.
    Thank you. Sorry.
    Lisa Setlakwe is senior ADM of strategy and innovation policy at ISED.
    I'd like to thank the distinguished members of this committee for the opportunity to update them on our government's efforts to bring high-speed Internet service and mobile wireless service to the millions of Canadians who live in rural and remote regions.
    First, I want to acknowledge the valuable work that the committee has contributed and is contributing to our understanding of this complex and vitally important issue.
    From day one, our government has been working to ensure that all Canadians have an equal opportunity to succeed no matter where they live. I know this committee shares that goal, as do all members of Parliament. The unanimous support that this House has given to Mr. Amos' motion shows government and private sector partners who are working together to address the Internet and wireless deficit across the country that there is a real commitment to get this important work done.
    Since January, when I was appointed Canada's first Minister of Rural Economic Development, I have met and spoken with Canadians from all walks of life in rural and remote communities from coast to coast to coast.
    From my own personal experience of living in rural Nova Scotia, I have seen how rural Canadians make our country a more vibrant and prosperous place to live and work.
    Though small in population, rural communities account for roughly 30% of our country's gross domestic product. They are the drivers of Canada's natural resource and agricultural sectors, and they are supported by dedicated workers who are deeply committed to their communities.
    In his mandate letter to me, the Prime Minister asked me to develop a rural economic development strategy.
    Since I started travelling across this country in January, I have listened and learned, and while each community is unique and faces different challenges, the number one on most of their lists is the need to be connected.
    Our rural economic development strategy is in its final stages of development, and I can assure you that it will fully reflect the concerns about broadband and wireless that I have heard repeatedly throughout my travels. We know that, when it comes to digital infrastructure, there is an urban-rural divide, and I'd like to take a moment to look at some of these disparities.
    Although more than nine of 10 urban households have access to high-speed Internet service, only one in three rural households have the same access. Lack of high-speed service means that these communities lack the essential services that urban Canadians take for granted. It means that Canadians cannot sell their products and services online. They must resort to accessing government services over the phone instead of online. Many farmers with multi-million dollar agribusinesses still rely on phones and fax machines to run their operations. These realities are having a real impact on people in rural Canada and, in some cases, are leaving them behind.
    It's incumbent upon us as the federal government to work with provincial, territorial and private sector partners to bridge that divide.
    The divide that we're talking about shouldn't be limited specifically to the communities in rural and remote areas of our country. It exists on our roads and highways where there is no mobile wireless coverage. This lack of connectivity is a significant challenge for those working in the transportation industry, such as truckers, for example, and it is a risk to public safety, particularly for rural Canadians, who need to be able to communicate along remote roadways, fields and natural areas.
    Wireless coverage is also essential to the national public alerting system, which relies on wireless service to deliver emergency alerts to Canadians.
    On a more basic level, rural wireless mobile services are as important to rural communities as they are to urban communities in terms of economic development, as well as personal use. That is why we announced the accelerated capital cost allowance, which is helping telecommunications companies make investments in rural Canada. As announced by Bell, Rogers, Shaw, Telus and Xplornet, this change will connect thousands of people in their homes and provide cell coverage along unserved highway corridors across the country.
    With respect to both broadband and mobile wireless access, this digital divide holds back rural Canadians from participating fully in the global and digital world. Through the connect to innovate program, we are extending high-speed Internet access to 900 rural and remote communities and an estimated 380,000 households, with more to come. That includes 190 indigenous communities across Canada. This program sets the stage for increased investments coast to coast to coast.
    Since launching the connect to innovate program in budget 2016, the government has leveraged $554 million from the private sector and other levels of government for about 180 projects. These projects will improve Internet connectivity to those 380,000 households and 900 communities, more than tripling the 300 communities initially targeted. ln total, through the connect to innovate program, 20,000 kilometres of fibre network will be installed across this country.

  (0850)  

     We are connecting households and business, schools and hospitals, as well as supporting mobile wireless networks. We are establishing fibre optic connections in the farthest point north in all of Canada.
    These investments show that our government recognizes that access to high-speed Internet and mobile wireless service is not a luxury; it is a necessity. We're not finished making these investments.
    ln budget 2019, our government has made an ambitious new commitment to ensure that, over time, every single household and business in Canada has high-speed connectivity. As you know, we anticipate having 95% of the country connected by 2026, and 100% of the country connected by 2030.
    We are investing in tomorrow's technologies, such as 5G and low earth orbit satellite capacity, today. The budget announced $1.7 billion in new broadband investments, including a new universal broadband fund and a top-up for the connect to innovate program that will focus on extending backbone infrastructure to underserved communities. For the most difficult to reach communities, funding may also support last-mile connections to individual homes and businesses.
    The Canada Infrastructure Bank will seek to invest up to $1 billion over the next 10 years and leverage at least $2 billion in private capital to increase broadband access for Canadians. The CRTC's $750-million broadband fund, launched last fall, will help to improve connectivity services across the country, including wireless mobile services. Broadband infrastructure projects are also eligible for funding under the $2-billion rural and northern communities stream of the investing in Canada infrastructure program.
    We understand that our success depends not only on our government's commitment to invest, but also that of our provincial, territorial and private sector partners. That's the reason we created the Canada Infrastructure Bank, which is currently exploring opportunities to attract private sector investments in high-speed Internet infrastructure for unserved and underserved communities.
    Overall, budget 2019 is proposing a new, co-ordinated plan that would deliver $5 billion to $6 billion in investments in rural broadband over the next 10 years to help build a fully connected Canada.
    To ensure maximum efficiency and coordination and to bring maximum benefit to underserved Canadians, officials are currently drafting a national connectivity strategy that promotes collaboration and effective investments of public dollars. This strategy will outline clear objectives and targets against which progress can be measured; provide a tool to guide efforts and improve outcomes for all Canadian homes, businesses, public institutions and indigenous peoples; and create accountability and responsibility for all levels of government to contribute towards eliminating the digital divide.
    I'm proud to be part of a government that recognizes that building our nation's high-speed Internet is as important as building our nation's roads. That's how we will ensure that all Canadians have equal opportunities to succeed, regardless of where they live.
    Thank you for the opportunity to address the committee. I'm happy to take your questions.

  (0855)  

    Thank you very much, Minister.
    We're going to get right into questions, starting with Mr. Longfield, for seven minutes.
    Thanks, Mr. Chair.
    Minister Jordan, it's great to have you here representing rural Canada.
     I'm picturing Nova Scotia's challenges. Rural Canada also extends beyond the land onto the sea, when people are trying to communicate from ship to shore.
    I'm thinking of rural Ontario. I was managing a business in Welland. I was trying to get high-speed Internet into that business and it was going to cost me $75,000 to get the last part of the line done. I was connecting to our office in Germany and our offices across the States, upgrading our technology and hiring people, and then I had this limit to growth. So we know that it's there.
    Could you could speak to what working with other orders of government might provide? We have the SWIFT project that we studied here at the committee, where Ontario, the Government of Canada and private industry are trying to reach out to rural Canada. How important is it that we have willing partners at the table from other orders of government?
     Thank you, Mr. Longfield.
    You've made some very valid points with regard to how important it is for businesses to have good connectivity in order to grow. I come from a fishing community, and we know that access to international markets is extremely important, the same as it is for agriculture. We know that in rural Canada access to broadband is extremely critical in order for businesses to continue to grow and be able to compete on the world stage.
     With regard to how we achieve that, we need to have all partners at the table. This would include the federal government and our provincial and territorial partners, as well as stakeholder groups. In some cases, municipalities are stepping up because they realize how important it is for them to have that connectivity. It's not going to be a one-size-fits-all solution. I think every area has to be looked at independently, but also in recognizing that this has to be done with a whole-of-government and a whole-of-country approach.
    We have been very fortunate. As I've travelled across the country since being appointed in January, meeting with communities from coast to coast to coast, no matter where I've gone, no matter where I am in the country, this is the number one priority that we're hearing about. I will also say that in engagement with my provincial and territorial partners, it's their number one priority. Everyone recognizes that this is something that needs to be done, and I'm happy to say that in most cases all of our partners are on board with this and want to see us make sure that we connect 100% of Canadians.
    You mentioned the municipal partners. I'm thinking of my driving route from Welland back to Guelph: 131 kilometres to work every day. I had time in the car for hands-free calls, and I knew that as soon as I hit a certain bridge on Highway 20 that it was going to cut out, so I would have to interrupt my conversation and say, “I'm going to call you back when I get to the barn on the other side of the creek.”
     I've now visited some of the farms in that area. We have egg farms that are doing amazing work with data in measuring thickness and composition of shell that relates to the feed the chickens are using, and for animal welfare in terms of watering and keeping the hens happy as they're laying eggs, but really connecting to the outside world.
     The municipal partners often don't have funds. It's a small community. Just to pick a name, Grimsby, Ontario, is going to be different from Toronto, Ontario, so again, there's support back to us and our provincial partners. Could you speak to capacity-building within these small communities?
    You're right. There are some small communities that just don't have the capacity to build it on their own, but there are other small communities that have definitely made this a priority and are budgeting accordingly. I will say that we've been very fortunate, in that the rural and northern communities fund, which is a fund under Infrastructure Canada, has allowed connectivity to be one of the areas where they can apply for funding. We've also made it easier for smaller communities to access those funds by lowering the cost of their contribution.
     These are all things that I think are really important when we listen to rural communities, because it's an expensive venture to connect people, and they know how important it is for them to stay sustainable. We also need to make sure that our provincial counterparts are at the table with us. In a lot of cases, they already are. There have been budget allocations in different provinces to make sure that broadband is one of the things that they see developing. The other thing, of course, is our stakeholder telco companies. They are also stepping up, as is the CRTC. There are a lot of different funds.
     I think this is one of those things where right across the country and right across the spectrum everybody is on board in making sure that we do connect rural Canada.

  (0900)  

    Thank you.
    In terms of your strategy development and working with other ministers, you have a new ministry, and we also have Minister Ng in a new position, a new ministry, with small business and export promotion. Minister Bains, of course, is in this area, as is Minister Bibeau, with agriculture. How do the ministers work together on developing strategies?
    That's a very good question.
    Since I was first appointed, we have been very active in going across the country and talking to our provincial and municipal counterparts, but we also recognize that this is a whole-of-government approach. Twenty-one different departments have been involved in developing our strategy and in working on national connectivity. We recognize that it's not just one area that's affected—all areas are. It doesn't matter if it's natural resources, agriculture, fishing, business development, exports or tourism. We definitely have a number of departments that have to be involved in making sure that as we build this plan for national connectivity, we build it in the right way and we make sure that we hit all of the targets we're striving for.
     As well, we have limited time. Right now we have limited time, but we also have a very limited schedule ahead of us. Hopefully we can get to a break point where that can be picked up in the future Parliament.
    We've always been committed to connectivity, first of all with the connect to innovate program, which was announced in budget 2016. This is going to be able to connect to 900 communities, which is three times the number that we had originally anticipated. It's going to be 380,000 households.
     We also have a top-up on the connect to innovate budget in 2019. Of course, the universal broadband fund that we're developing now will be used as we go forward.
    Thank you.
    Thank you very much.
    We're going to Mr. Chong.
    You have seven minutes.
    Thank you, Minister, for appearing in front of us today to talk about this important issue. I think our ridings of South Shore—St. Margarets and rural Wellington County and the rural Halton region are very similar.
    I would encourage the government to focus not only on accessible Internet for rural areas, but also affordable Internet. When we say that only a third of Canadians in rural areas have access to high-speed Internet, I think that's better and more accurately termed as a third of Canadians in rural areas have access to affordable high-speed Internet. Many more than that have access to Internet, but they choose not to put it in place because it is far too expensive.
    I mentioned this in the last committee meeting and I'll emphasize it again. If you're living in the city of Guelph, you can get 100 gigabytes of high-speed Internet a month for $49.99. You can get unlimited high-speed Internet in the city of Guelph for $69.99. If you live a mile outside the city of Guelph in rural Wellington County, if you want 100 gigabytes of high-speed data, it will cost you about $300 per month. If you want 200 gigabytes of high-speed data, which is not unreasonable for a family of four with kids in high school who need to access online resources to do their homework, you're paying $500, $600 or $700 a month for that. Obviously, that's too expensive and out of reach for most rural families so they choose not to put it in place, because who's going to pay $600 a month for 200 gigabytes of data? That's $7,200 a year plus tax. It's far too expensive.
    I think that is the bigger issue than actual accessibility to Internet in rural areas. It's the number one complaint that I've heard in the north Halton region and in southern Wellington County. They say that yes, they can get Internet, but how are they supposed to pay a monthly bill of $500. Especially, as you know, in the Maritimes you don't have access to natural gas, and neither do we, and you're paying $1,000 a month for oil heat. The marketplace isn't working for those rural customers.
    Unfortunately, we didn't do what western Canadians did and roll out natural gas across all the Prairies to every single rural residence, and we didn't do what Bell telephone did and roll out Internet access, high-speed Internet, to every single rural household when we were rolling it out in cities. Now we have this problem where most rural families don't have access to affordable high-speed Internet. As I said, who's going to pay $600 a month, plus tax, for 200 gigabytes' worth of high-speed Internet access?
    I think that is just as big an issue as making sure high speed is available. I bring that to your attention because I really think that's just as important, if not more important, than actually having access to high-speed Internet.

  (0905)  

    Mr. Chong, you're absolutely right. We've heard that across the country. It's not only a matter of accessing high-speed Internet; it's being able to afford it, and rural Canada is disadvantaged when it comes to costs in terms of how payments are initiated.
    Before I turn to Lisa to comment on this, I will say that Minister Bains has actually directed the CRTC to look at the competitiveness of telcos, and with that we would hope with better competition there would be better pricing.
    I'm going to ask Lisa if she would make some comments on where that process is right now.
    Specifically on the policy direction, as you know, the minister is looking to issue a direction to the CRTC. It is in large part in response to what you've just talked about, which is affordability and competition. What we're asking them to do, as they are going to be making decisions on a variety of policy areas, is that they consider it through a consumer lens first. That's looking at affordability, consumer rights, encouraging competition and also encouraging innovation. That is in process now. We are welcoming comments on that.
     Sure, and I'll add to that.
    People say that there is more affordable Internet for 200 gigabytes a month than paying $600. The problem is that it's not low-latency, high-speed Internet access. The problem with satellite technology is that there's a great deal of latency in the service. The problem with direct line-of-sight radio frequency Internet access is that it's not as reliable.
    Really, if you want reliable high-speed Internet access, the technology that's best suited for a lot of these rural areas is cellular high-speed mobile Internet access, which is often marketed under branded products like Turbo Hub for Bell or Rocket Hub for Rogers. That is actually reliable high-speed Internet access with low latency. The problem is, as I mentioned before, that those plans are prohibitively expensive.
    Most rural customers I know, if they can't get Internet access right now through those services, are more than willing to pay $500 to $1,000 for a one-time installation fee to put up a big aerial antenna with a Yagi antenna at the top to boost the signal through a coax cable down to the Turbo Hub or Rocket Hub provided by Bell or Rogers. They're more than willing to pay that one-time fee. The challenge is that nobody's willing to pay an ongoing fee of $600-plus a month just to get some basic 200 gigabytes of data.
    The affordability is the issue, then. The vast majority of households are within range of a cell tower, and if the signal isn't strong enough, they would be more than willing to pay the one-time $500 charge to get somebody to install a booster antenna on their roof. The issue is that paying an ongoing cost of $600 or $700 a month for 200 gigabytes of data is out of reach for the vast majority of families.
    We can roll out more cell towers and do all that kind of stuff, but if the pricing of these plans is at that level, nobody's going to be able to afford it.
    Please give a very brief answer.
    I have a couple of comments with regard to that.
    First of all, we know that there's no one-size-fits-all solution in connectivity, but making sure things are affordable and reliable is extremely important.
     We are looking at things like the low earth orbit, LEO, satellites. We're looking at fibre. We're looking at the towers. How you get connected is going to depend on where you are.
     Also, in co-operation with the CRTC and what they've been directed to do, we're hoping we can bring together better affordability and better access to all Canadians.

  (0910)  

    Thank you very much.
    Now we're going to move to Mr. Masse.
    You have seven minutes.
    Thank you, Mr. Chair, and thank you, Minister, for being here.
    The 700 megahertz band mobile spectrum option was probably one of the most successful spectrum options in Canadian history. Brand names like Telus paid over $1 billion. SaskTel paid nearly $1 billion and Rogers paid over $3 billion. In total there was $5 billion, with $300 million allocated to the government. How much of that money, that $5 billion-plus the government received, has been directed to expanding broadband?
    Mr. Masse, the money that is brought in from auction goes into general revenues, which actually pays for a lot of different programs. Of course, we're investing significantly in broadband and in high-speed Internet coverage.
     We have $1.7 billion allocated in this budget that will be going to high-speed broadband.
    That's for this budget, but I'm asking about the previous money your government received, the $5 billion. That $1.7 billion is actually over 13 years and it's actually legacy for another government, be it yours or someone else's.
    What did your government do with the 2015 spectrum auction, which netted a sum of $2.1 billion? Where did that $2.1 billion go? Did any of that go to rural broadband?
    Money that comes from spectrum auctions goes into general revenues. General revenues would, of course, take into account broadband as well as other services and programs that the government provides. The money would go into the general revenues.
    That also, then, includes the other 2015 auction, the 2,500 megahertz band, which is another $1 billion. There was the residential spectrum licences for the remaining 700 megahertz as well.
    In total, Canadians have received from their government over $14 billion with regard to spectrum auctions in recent history, so it's hard to believe we've ended up with a revenue stream of $14 billion and some of the highest prices and some of the least coverage in rural areas. Why do you think that's the case? We've received record amounts of unaccounted-for money in terms of it being required for anything.
    With the spectrum auction, for those who aren't aware, you're selling off land rights and air rights. That's like water. It's something that there is no cost to do for the Canadian government, so it's pure revenue for the government.
     Why do you think there's been no allocation of these resources to rural broadband, especially given the high prices we have?
     We've invested in rural broadband significantly since we've been elected. The money that comes from the spectrum auction goes into general revenues, which pays for a lot of different programs. Rural broadband would probably be one of them.
    We're making significant investments as well as commitments to making sure that we connect this country. We've already committed to connecting over 900 communities through the connect to innovate fund. We're looking at topping up that fund, as well as the universal broadband fund that's going to be rolling out shortly. We know that the money is necessary in order to connect communities across this country. It is something we are extremely committed to doing.
    When you talk about the spectrum auction specifically, there's been a carve-out spectrum for rural communities. We know it's critical for rural areas to get that connectivity. We're making sure we're going to do it.
    Given that, right now, you have two spectrum auctions under way, are you able to commit the revenues from those spectrum auctions, which will be in the billions, to broadband services?
    Revenues from spectrum auctions go to the general revenues that pay for a number of different government programs, one of which may be broadband. We have committed to making sure that this country is connected. We've made sure that we're putting that money in the budget.
    I'll take that as a no.
    Those are future budgets. Future revenues will come in. There are future spectrum auctions on top of that. There's an excessive amount of money being generated here. I know that you're seeking partners for the Canada Infrastructure Bank to the tune of $2 billion. At the same time, you're expecting Bell Mobility, Telus, Vidéotron, SaskTel and Rogers to spend billions of dollars on a spectrum auction.
    I want to move towards consumer protection. The recent CRTC decision acknowledges that consumers in this country have been abused by predatory pricing practices and the telcos' behaviour toward customers. The decision is going to take a full year to put penalties on those companies for such behaviour.
    Is that acceptable to you and the minister?

  (0915)  

    As we talked about earlier, the Minister of Innovation, Science and Economic Development has already given a directive to the CRTC to look at the pricing of the telcos.
    This is about their behaviour. There was an inquiry with regard to their behaviour and predatory practices with consumers, be it marketing, soliciting of business or moving customers to different elements. There is a ruling specifically identifying that they're guilty.
    The CRTC has said they will take a year to bring consequences for that. Is that acceptable to you and the minister, that it would take a year to rebate or compensate Canadian consumers for behaviour the CRTC has ruled was inappropriate?
    I'm going to ask Lisa to comment on that, since she is the person who deals mostly with ISED. She can maybe bring a little more to that.
    I'm really asking you. It's going to take a year. I want to know whether you find that acceptable for the CRTC, after they have issued a guilty decision. The penalty is not going to take a matter of days, weeks or months. It's going to take a year. There's been dead silence related to that. I want to know whether you find it acceptable that for abusive practices identified and acknowledged by the CRTC, the penalties and consequences will take a full year to benefit consumers.
    Do you think that's appropriate for the CRTC to take that length of time?
    Mr. Masse, as you are aware, the CRTC is an arm's-length organization of government. We have had a directive from the Minister of Innovation, Science and Economic Development to ask the CRTC to look at the practices of the telcos and how they are doing.
    You have had a directive letter, exactly.
    You can have public comment with regard to whether or not it's acceptable for them to take that long—
    Thank you.
    —if the minister issued an actual directive to them—
    Thank you.
    —as you have acknowledged and expressed here.
    Your time's up.
    I would just remind everyone that ministers bring their deputy ministers and agents with them in order that they may help ministers answer questions. If ministers want to refer to them, that's well within their right.
    We're going to move to Mr. Graham.
    You have seven minutes.
    Thank you, Ms. Jordan, for being here for this. This is a very important issue we're discussing. I know we've talked about the Internet an awful lot, but I think cellphones are really what we're trying to get to here.
    I'll continue with Brian's point for a bit. How do we get small companies, such as the ones in my riding, to get involved in cellphones, when it costs them $1 billion to get into the market?
    Are we going to look at moving to a post-auction world for wireless spectrum?
    Mr. Graham, thank you so much for all of your advocacy for cellphone and Internet coverage in rural communities. I know it's something that you've been extremely dedicated to since you were first elected here.
    With regard to smaller companies being able to access spectrum, there was actually a carve-out in the spectrum auction for rural and smaller communities. I think that's one of the ways we are able to help address the smaller companies that want to get into the marketplace.
    It's something that we've heard about across the country, in terms of making sure that those companies have the ability to compete. We know that sometimes in rural communities, they are the people who have the vested interest in making sure that they are able to be part of the planning and the go-forward and making sure we provide good cellphone coverage and connectivity.
    As we've said many times, this is not going to be a one-size-fits-all solution, but we do know that small companies have a huge role to play.
    I appreciate that.
    I can add one thing to that. What we do hear from smaller companies when we are selling off spectrum is that we sell it in blocks that sometimes are not affordable for them. We are actually in the process of consulting on a smaller block size, so that these kinds of service providers can participate in spectrum acquisition.

  (0920)  

    By smaller blocks, do you mean narrower band or a narrow geographic area?
    Narrow geographic area.
    That's helpful. We have an Internet service co-operative in my riding and it would be wonderful if they could bid on cellphones to provide it to that county, as opposed to having to do the province or the country. That's what I'd like to get to.
    You mentioned in your opening comments, Minister, about the stakeholder telcos stepping up. With respect to that, it has not been my experience with the stakeholder telcos. They have been remarkably reluctant to invest in rural areas if it is not profitable.
    If you as a community or an individual wanted them to install infrastructure in your area—for example, one of my communities that has no cellphone service, and I'll get back to that in a second—and went to one of the larger telco companies, they might say sure they'll install a tower for you if you pay 100% of it. There isn't even a cost-sharing option. When they start making money off that tower, because there are 1,000 residents around it, there is no revenue sharing back to the community that brought it in.
    It's the same thing with Internet service. If I want to bring in a fibre optic line three kilometres down the road from where I am to the nearest connection of any sort, it would cost me about $75,000. If the 20 or so houses between us start connecting, then all the revenues go back to the original company. There's no revenue sharing once you force the private to invest.
    I don't agree that stakeholders are stepping up. I think they're actually quite frustrating and slowing us down, not accelerating us.
    I'd like to comment on that if I could.
    As I've said, there is no one-size-fits-all solution. I would like to comment that in the fall economic statement, we allowed for the accelerated capital cost allowance, which has given the telcos the ability to invest money that they're basically saving because of that. We have actually seen a number of them stepping up and making sure that they are connecting rural communities because of that accelerated capital cost allowance.
     I believe that one company has said it is going from 800,000 to 1.2 million connections because of it. Another one has already announced that it will be providing cellphone coverage on highways in British Columbia, as well as Nova Scotia, and that it has more rolling out.
    So, we do see that the telcos are actually investing in rural communities because of that provision that we put in the fall economic statement. But, to your point earlier, I think the smaller companies have a large role to play as well. We see that as part of our go-forward plan for sure.
    I appreciate that.
    One of the things about your appointment as minister is that you are under infrastructure. I think it's really important to put Internet and cellphone service as infrastructure instead of as service and I wanted to thank you for that.
     The first Internet as an infrastructure project last year was in my riding, so I'm very proud of that fact.
    I want to come back to Michael Chong's point from earlier. He talked about having access and affordability. Everyone has access to a Porsche, but not everybody can afford a Porsche. We have to be careful in what words we use. When we say everyone has access, it's really quite not true for huge communities that have nominal access to Internet. When you actually look at it, as I said, it's not realistic.
    When we are telling the CRTC that competition is the be-all and end-all, I don't agree that it's necessarily the case. When we're telling them competition will solve all the problems, it won't. If you don't have any service at all, competition doesn't fix it.
    What we need to get to—and again, this is more of a comment, but you're welcome to comment on it—is a paradigm where Internet costs the same in downtown Montreal or downtown Toronto as it does at the end of dirt roads, just like electricity does. We did this generations ago. There's no argument that it is 3.9¢ a kilowatt hour, or whatever it is where you are, here and in the country. As long as you have a hydro pole, you pay the same.
    Can we get there for Internet and cellphone service? Can we get to where the service, the infrastructure, is what you're paying for, regardless of where you are?
     It's imperative that we make sure that high-speed Internet is affordable as well as available.
    Right now, we're building the national strategy on connectivity. We will take all those things into consideration as we go forward with that, recognizing that rural Canadians should have the same access to the same services as people who live in urban Canada. You shouldn't be disadvantaged for living in a rural community. I believe that's one of the reasons I was appointed, because we recognize that there is a divide between rural and urban, and not just in connectivity but a lot of different things.
    We need to make sure that people who want to live, work, grow businesses and raise families in rural Canada are able to do so just as easily as people who want to live in urban areas. I'm quite passionate about rural specifically, because I am from rural Canada myself and I can't imagine living anywhere else. I know we have to make sure that we can keep our young people there and that people who want to live in the area are able to do so.

  (0925)  

    Thank you, and good luck.
    Thank you.
    Thank you.
    We're going to move to Mr. Lloyd, for five minutes.
    Thank you, Minister and your department, for being here.
    There's a saying that all politics is local, so I'll start out with a bit of local advocacy here.
    Parkland County, which I represent a large swath of, was recently a finalist in the smart cities challenge by Infrastructure Canada. Also, in 2018, they were listed as an ICF Smart21 community in relation to its advances towards increasing rural connectivity and broadband.
    In anticipation of this meeting, I messaged my local mayor, Rod Shaigec of Parkland County, and asked whether the federal government has been supportive through the connect to innovate program. His answer was that, so far, the federal government has not been supportive through the program. To quote him exactly, “It has been limited.”
    They have made huge investments in building cellular towers throughout the community in trying to advance rural broadband for their area. I know this is an issue for places that are adjacent to cities across the country. You don't have to be somewhere north of 60 or far outside an urban area to have digital broadband access problems. As my colleague Michael Chong said, you could be right next to a thriving metropolis with adequate and affordable high-speed Internet, yet still have a dead zone equivalent to being near the North Pole. That's my local advocacy piece.
    My next piece is that we had spoken to this motion in the previous committee. I brought up a similar motion last fall in the wake of the Ottawa tornadoes. There are a lot of things we can laud in the wake of this natural disaster in the Ottawa area, such as the effectiveness of our emergency alert management system. That's hugely important for all Canadians, but particularly rural Canadians who don't always get their local newspaper or don't have access to cable TV all the time. How do they get these essential warnings or alerts?
    Perhaps you, in your capacity as minister, or your department can answer. Is there any movement on this and do you believe the government should set a minimum standard to ensure that cellular infrastructure can be powered independently in case of a natural disaster for a minimum standard period of time?
    Actually, I met some of the people from your community at the smart cities challenge reception the other night. We had a good conversation and I look forward to continuing that with them.
    With regard to their connectivity specifically, the program was a $500-million commitment that we leveraged dollar for dollar with stakeholders. Unfortunately, it was an oversubscribed program. We do have the top-up that was announced in budget 2019. We know there is no one-size-fits-all solution for everybody, but we are working very hard to make sure that we do connect all Canadians. Hopefully we can continue to work with Parkland County to make sure that this is something we can go forward with.
    With regard to the cellphone and emergency signal specifically, it's funny, because somebody was saying that when they drive, they hit an area and then they have to stop. It's so much more than being able to talk hands-free. We know that it's critical infrastructure during emergencies such as fires and floods. We saw it with the tornado here in Ottawa. Making sure that it is available to people is critical.
    We're building the infrastructure now to help mitigate that, to make sure that we have that ability to connect people. We know that ISED works closely with national security whenever there is a crisis, so that they can get things up and running as soon as possible, working with the military and working with public safety so that—
     If I could briefly interrupt, in the case of the Ottawa tornadoes, we had areas that do have adequate cellular access, but when an electrical station is hit—and there are independent generators at these stations—they only run for a short time. People were in areas that previously had cellphone access but because the electrical stations weren't up and running quickly, these cellphones weren't up to snuff.
    Is the government looking at having a minimum standard to ensure that these cellular stations can run for a reasonable amount of time to ensure that our electricity system can get back up and running?

  (0930)  

    Reply very briefly, please.
    I'm not aware of minimum standards at this point. It is up to telcos to make sure their infrastructure is up and running. However, as we go forward with the national connectivity strategy, that could be part of it. Thank you for the suggestion. We've written it down.
    Thank you.
    We're going to move to Mr. Amos.
    You have five minutes, please.
    Thank you, Chair.
    Thank you to committee members for allowing me to join these proceedings.
    Thank you, Minister, and the hard-working public servants who support you.
    I know that the good people of Pontiac, hundreds of whom are evacuated right now, many of whom are supporting family members, community members who are in the direst of straits, are thinking about the immediate term, about cleaning up and getting their house back to normal.
    The conversations have already started around what we can do to make sure that next year or the year after if it happens again we won't be in a situation where we can't pick up our phone and call our mayor or our neighbour and get a sandbag or get some clean water or...you can imagine the scenario. This conversation has been repeated several times, and I appreciate that we can't change the lack of action, lack of investment from previous governments and the private sector overnight. It takes time.
    What confidence can we give rural Canada that when it comes to ensuring that critical infrastructure is available, particularly cellphone infrastructure in those places where there isn't access, the investments we're making are going to help us to build that up?
    Thank you, Mr. Amos, and thank you for your emotion as well.
    Thank you to all members for supporting it.
    It's extremely important to all of us across the country that we make sure that adequate cellphone coverage is available in situations like we've had recently with the flooding, the tornadoes, the fires. We've seen right across the country what's happening in the extreme weather events we're having. It's important that Canadians are able to feel they have access to being able to make those calls that you said are so important, even about how to get sandbags.
    We're making sure as we build this infrastructure that connects Canadians that we're building it for the future, that the investments we're making are going to be for critical infrastructure. People in urban areas don't understand the difference between having coverage and not having coverage until you put it down to something as critical as making sure you're able to make that 911 call if you have to.
    Some of the investments we've already made in the telcos will be making a difference to cellphone coverage, investing in different highway systems, making sure they're connected. The infrastructure we're building for connect to innovate will help with our wireless component to make sure that cellphones are covered. We need to make sure we're aware of this as we go forward when we build the national connectivity strategy.
    We're committed to making sure that Canadians have access to the services they need. It's very tough when you're in a situation like that and you're not able to get out that 911 call or the help you need. We know we have to continue to work to provide the service that most Canadians need and we've said right from the start that we're committed to making sure we get 100% coverage.
     I really appreciate your saying that. I know that many rural communities across Canada right now are just wondering how this is going to help. In a similar vein, small communities, for example, like my small community of Waltham or the municipality of Pontiac have far fewer than 5,000 residents. They don't have the expertise necessarily to figure out how they can advance their local needs. If the big private telecom companies aren't willing to go there, they need the help to drive their own process forward. Thankfully, the Government of Canada has, through the Federation of Canadian Municipalities, flowed funding so that municipalities can apply to have environmental assessments done, technical assessments so that they have the support necessary to inform infrastructure decisions.
    Could it be contemplated that there would be flow-through funding to small municipalities that don't have that capacity or the technical expertise so that they can help advance their own cellular infrastructure and Internet infrastructure building agenda?

  (0935)  

    A very brief answer, please.
    One thing we've done to help the small municipalities has been with the top-up of the gas tax fund. This year we doubled it so that they are able to access more money and they can use that for infrastructure in their communities no matter what that infrastructure is. There is also the $60 million that was given to FCM for asset management help so that people in rural communities, or all communities, can make sure that they know what needs to be done in terms of maintaining their infrastructure; that they have good-quality infrastructure not only for what they are building but also for what is existing. These are all things that we've been doing. By recognizing also that small municipalities have oftentimes a more difficult challenge with accessing funds because of the application process, we're trying to help them in different ways with that as well.
    Thank you.
    Thank you very much.
    We will move to Mr. Albas.
    You have five minutes.
    Thank you, Minister and officials, for the work you do.
    We know through the Auditor General's report last fall that the connect to innovate program has been a disaster. He found specifically that there was not good value for the money spent. Now we see that of the 892 applicants applying for the money under this program, 532 have not even heard back.
    Minister, the application process closed two years ago. How is it possible that 532 applicants have still not been contacted to let them know their status?
    First of all, thank you, Mr. Albas.
    We accepted the Auditor General's report as well as the recommendations and thanked them for that. The program itself, connect to innovate, is going to be connecting 900 communities, which is three times the number that we had originally anticipated. We were able to also double the investment in the connect to innovate program, dollar for dollar, so we were actually able to do a lot more than we had planned.
    With regard to the program itself, we learn from things that we do. It's always a learning process. We also saw that in budget 2019 there was a top-up of that fund—
    But, Minister, none of that is new money—
    Excuse me, if I can—
    The question I specifically asked is regarding 532 people who have not been told. Minister, yes, the people who were successful I'm sure are very happy with that, but by the same token, 532 people, two years out, have not been told.
    Are you going to be able to apologize on behalf of the government because many of them may have gone on their own and are still waiting to hear from you as to whether or not they can go forward?
    The connect to innovate program was extremely popular with people. It was oversubscribed. That's one of the reasons we put new money in the budget, to make sure that we could top up that fund. We know there are people who need to be connected. That's one of the reasons we've committed to ambitious targets: 90% by 2021, 95% by 2026 and 100% by 2030. We know that Canadians need to be connected. There is no one-size-fits-all or one program that's going to do that. That's the reason we're making sure that we're looking at a lot of different options to connect Canadians. It will be our vision as we go forward.
    My colleague asked earlier about what the status of the program was, and I have to say, Mr. Chair, the results were incredible. The information from your government shows that under 10%—10% of the funding for approved projects—has actually been paid. Now, Minister, many of these projects had start dates in 2017 and yet no money has been paid. Again, how is that even possible?
     On the program itself, once the approval process is completed, there is a lot of engineering work and planning that needs to be done. You don't build infrastructure quickly, as I'm sure you're aware. We know that 85% of the projects will have shovels in the ground this summer. We know that it has sometimes been a little bit longer than people would like to see, but it also takes time to make the designs for these communities.
    We're making sure that we're not just building band-aid solutions. We're building this for the future. We want to make sure that the programs and the infrastructure that we build are scalable and able to meet the needs as we go forward.
    Quite frankly, far too often, there have been band-aid solutions to things, and we don't want to see that anymore. We want to make sure when we're building this infrastructure that it's something we can use well into the future and meets the target of 50/10.

  (0940)  

    Minister, people see that there's $17.7 million for projects in the County of Kings in Nova Scotia, and the project start date was supposed to be May 1, 2017, but the actual amount of funding provided to date is zero. I can refer to a whole host of different projects in Newfoundland, in Inuvik, and elsewhere.
    I think it's very clear. You said earlier that you plan to have more of these things done in the summer. Your government wanted to announce these projects initially, and then you waited to spend the money so that you could reannounce them before the upcoming election. I think, Minister, that the Canadian public will see through that ruse.
    Will the Liberals be making any announcements in the media around already announced projects?
    The contribution agreements that have been signed with these companies are when the programs start. They have to build the plans for this. They have to hire the people. They have to make sure that they have the plan in place. They have contribution agreements that they have to meet milestones with.
    The agreements that have been signed are rolling out. When you look at every application, they are different, and they do have to meet milestones along the way in order to do that.
    And after announcements, Minister, that's very politically convenient.
    Thank you very much.
    We're going to move to Mr. Sheehan.
    You have five minutes.
    Thank you very much, Minister, and congratulations on your appointment as the first Minister of Rural Economic Development for Canada. I think that underlines and highlights the commitment to the people of rural Canada. Obviously you're right in there, rolling up your sleeves. I appreciate that.
    To Will Amos, the member for Pontiac, congratulations on your motion.
    I would be remiss, Minister, not to mention the member for Nickel Belt, who was appointed as your parliamentary secretary.
    I am from Sault Ste. Marie, in northern Ontario. Northern Ontario is 90% of the land mass of Ontario, and there are a number of geographical issues and a number of remoteness issues, but I'm not going to delve into those. I am going to specifically talk about first nations.
    There was an announcement recently under the previous program. Matawa First Nations Management connects four or five remote first nations in the Ring of Fire. It was important to do that for education, health care and remoteness. You know that there are first nations that deal with high rates of suicide because of their remoteness, and one of the things we've read about is the ability to connect people. The ability for people to support one other is important.
    Bernadette, with that, I want to also talk about something you alluded to about the private-public sector partnership, because the private sector is involved up there. This is just a general statement. How important is it to you philosophically for the private sector to be involved, not only the big ones but the small and medium-sized enterprises across Canada and in northern Ontario?
     Thank you, Mr. Sheehan.
    With regard to indigenous communities, 190 of the connect to innovate program approvals were for indigenous communities. I think that's quite a significant amount and it's something I'm happy to see. Like you said, we know that in some of our more remote regions specifically, there are a lot of challenges. People there rely on the Internet for things like health care and support, so it's extremely important.
    With regard to your question about small and medium-sized companies, I've seen such great, innovative programs coming out of smaller areas from these small companies. It's because they have a vested interest in their communities and they want to make sure that their communities are connected. Sometimes it's things like co-operatives. Other times it's municipalities that have started their own ISPs. I think it's extremely important to have them at the table as part of the conversations we are having with regard to connectivity.
    I know that we have to look at...as I've said many times already today, there's no one-size-fits-all solution. Sometimes the best service will come from those smaller organizations. Sometimes it's going to come from the bigger companies. No matter how it comes about, though, it has to happen. I think that's the main thing I'd like to say: No matter who is connecting, we have to connect.
    This isn't about a luxury anymore. This isn't about people binge-watching Netflix, although if that's what they want to do, that's great. This is about health care. This is about education. This is about banking. It's about growing businesses. It's about not having to go into a store. I was recently in a place in a rural area and I went to use my debit card. They said “Let's hope the phone doesn't ring.” They were still on dial-up. I mean, how do you grow a business when you don't have access to good-quality high-speed Internet? It's about safety.
    All of the things you are saying are correct in terms of making sure we have all different partners at the table. We look at all different options when it comes to connecting people, but the ultimate goal is to connect them.

  (0945)  

    Thank you.
    I'm going to share my time with the parliamentary secretary for innovation.
    You have about a minute left.

[Translation]

    Thank you, Minister, for being here.
    I, myself, am an example of someone in a rural area who has Internet connectivity issues. I have to be in a specific spot in my home in order to get cell phone service, and thus make and receive calls. In the mornings, if I want to check La Presse for the news, and one of my four sons is online doing homework, I have to tell him, or yell out to him, to get off the Internet so that I can access La Presse. It's a problem.
    Now, there's light at the end of the tunnel. The $500 million that we've invested in the Connect to Innovate program is going to ensure all 58 municipalities in my riding have access to high-speed Internet at 50 megabytes per second. The installation work has already begun and will continue until next year. Now, we have ambitious goals.
    Given all the funding that is now available, specifically, for infrastructure and the CRTC, how is everything coming together to continue the expansion of high-speed Internet connectivity further to your vision?

[English]

    Very briefly, please.
    With regard to the national connectivity strategy, we're working right now with all our partners to make sure that we look at all of the options available for funding. We want to make sure that we don't develop programs in silos, and that we look at umbrellas and at how we can best serve all members and what program is best for each area.
    Thank you.
    Excellent. Thank you.
    For the final two minutes, we'll go to Mr. Masse.
    Thank you, Mr. Chair.
    Mr. Amos' motion was a good motion. I'm happy to support it.
    Motions can become law in regulation. My motion on microbeads did that and the previous government actually made it law.
    How much of Mr. Amos' motion are you making law, and which sections, if not all?
    Thank you, Mr. Masse.
    You're right, motions can become law. I had one myself that became the abandoned and derelict vessels law—
    Yes, and I worked with Sheila Malcolmson on that.
    —and I was very happy to see that happen.
    With regard to Mr. Amos' motion, right now, we're looking at a broad range of ways we can address concerns with cellphone coverage and specifically with broadband.
     Are you making it law? That's what I want to know.
    I personally do not have any legislation in the works at the moment.
    What about through regulation?
    That does not mean to say that it can't be. That does not mean to say that as we go forward with a national connectivity strategy and how we develop our cellphone coverage that we wouldn't look at how that would go.
    Why wouldn't the government make this law? What would be holding it up, especially section (c)?
    I'm sorry. Section (c)?
    I'm sorry. Section (c) is about equality for “rural and remote” areas. You shouldn't be expected to know exactly what.... It's rural and remote connectivity, that's what it is, and it's about equality for those two. Why not make that law?
    We've actually committed to making sure that we look at rural and remote connectivity. It's something that we've committed to financially. It's something that we've committed to with a minister to look after it. I think it's obvious that as a government we take this very seriously and that we're making sure when we roll out programs we look at them and make sure connectivity is part of that—
    Has there been analysis about making it law, though? Has the department done an analysis of that?
    At this point I would say no, but that's not to say that it can't happen.
    Okay. Thanks. I'm just trying to drill down into that.
    Hon. Bernadette Jordan: Thank you.
    Thank you, Minister, to you and to your officials for being here today with us to talk about M-208.
    We are going to suspend for a quick two minutes because we have a lot of work to come back to.
    [Proceedings continue in camera]
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