Good morning, everyone.
This is meeting number 128 of the Standing Committee on Public Accounts for Thursday, February 21, 2019.
We are once again here in consideration of “Report 1—Connectivity in Rural and Remote Areas” of the 2018 fall reports of the Auditor General of Canada.
We're honoured to have with us this morning, from the Office of the Auditor General, Mr. Jerome Berthelette, the Assistant Auditor General, and Philippe Le Goff, Principal.
From the Department of Industry we have the Deputy Minister, Mr. John Knubley. We also have Lisa Setlakwe, Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector. We also have Michelle Gravelle, Director General, Audit and Evaluation Branch.
From the Canadian Radio-television and Telecommunications Commission we have Mr. Ian Scott, Chairperson and Chief Executive Officer; Mr. Christopher Seidl, Executive Director of Telecommunications; and Mr. Ian Baggley, Director General, Telecommunications.
For those who may be interested, we are televised today. We had these folks with us before, but we were interrupted by votes in the House. Typically, all they did at that time was their opening statements. We didn't get into very much questioning.
They have complied with our request and are willing to again give us an opening statement. We thank them for that.
We will now turn our time over to Mr. Berthelette.
Thank you, Mr. Chair, for this opportunity to discuss our fall 2018 report on connectivity in rural and remote areas. Joining me at the table is Philippe Le Goff, the principal responsible for the audit.
This audit focused on whether Innovation, Science, and Economic Development Canada and the Canadian Radio-television and Telecommunications Commission, according to their respective roles and responsibilities, monitored the state of connectivity and developed and implemented a plan to meet the connectivity needs of Canadians in remote and rural areas.
Over the past 12 years, detailed examinations of the state of broadband access in Canada have included recommendations that the federal government lead the creation of a national broadband strategy. However, at the time we finished our audit, the government had still not agreed to take that step.
Innovation, Science and Economic Development Canada indicated that it was reluctant to establish a strategy with an objective that could not be reached with the available funding. The department had continued to follow an approach that expanded broadband coverage to underserved parts of the country according to when funds were available.
This approach left people in rural and remote parts of the country with less access to important online services, such as education, banking, and health care, and without information about when they could expect to have better access.
On October 26, 2018, the announced that the federal, provincial, and territorial ministers for innovation and economic development agreed to make broadband a priority and to develop a long-term strategy to improve access to high-speed Internet services for all Canadians.
Ministers committed to a goal of establishing universal access to Internet speeds of 50 megabits per second download and 10 megabits per second upload.
Mr. Chair, with respect to the current state of connectivity in Canada, we found that the department relied on complete and accurate data to inform policy-making aimed at addressing the connectivity gap in rural and remote areas.
In 2016, the government launched its connect to innovate funding program to bring high-speed Internet to 300 rural and remote communities in Canada. We examined whether the department designed and managed this program to maximize the value for taxpayers. We found that the department did not implement the program in a way that ensured the maximum broadband expansion for the public money spent. The program did not include a way to mitigate the risk that government funds might displace private sector funds.
We also found that the department did not provide key information to potential applicants for funding under the program. As a result, some applicants had to invest more effort in preparing their proposals, and all applicants lacked full knowledge of the basis for selecting funding proposals. For example, there were a number of considerations for selecting projects, but the application guide did not specify the relative weight of each criterion used in the project selection process. Also, projects were less likely to be funded if they did not align with provincial and territorial priorities. However, these priorities were not made public. In our view, the department should have made the weights and priorities public.
Many Canadians in rural and remote areas had to rely on fixed wireless broadband solutions. We found that small Internet service providers did not have sufficient access to high-quality spectrum to support broadband deployment in rural and remote areas. For example, the department auctioned spectrum licences for geographic areas that were too large for smaller service providers to bid on. The secondary market for unused spectrum did not function well, partly because licensees had little business incentive to make unused spectrum available for subordinate licensing. In addition, the information on unused spectrum was not readily available to interested Internet providers.
Innovation, Science and Economic Development Canada and the Canadian Radio-television and Telecommunications Commission have agreed with our six recommendations, and we understand that the department has prepared a detailed action plan.
Mr. Chair, this concludes my opening remarks.
We would be pleased to answer any questions the committee may have.
I want to start by thanking the Auditor General and his office for their report. This is an extremely important set of issues. We accept the recommendations and are moving forward to improve rural and remote connectivity.
I have just a few words, then, on the three specific areas of comment in the Auditor General's chapter: first, on strategy; second, on programs; and third, on spectrum.
On strategy, we agree on the need for a connectivity strategy, particularly in light of the CRTC decision in December 2016 declaring broadband a basic service and setting that 50/10 target. I personally believe that this declaration has created a significant inflection point for the delivery of broadband, which has required us to move from an evolutionary, step-by-step approach, addressing gaps, to a more collaborative, integrative approach to broadband.
As a basic service, the department's broadband programs predate this announcement from CRTC. As I said, they were designed to be step by step and to focus on specific gaps in services, coverages and speed. We focused on closing the gaps in speed between urban and rural areas in a way that carefully balances the public interest and private investment. We do want to avoid crowding out private investment in whatever we do.
I would also want to stress to members and to the chair that connectivity is very much a moving target. Technology is constantly changing and improving, and in this context, strategy is important, particularly as we set specific goals. However, it's constantly evolving. Only a few years ago our target was five and one, as opposed to 50 and 10.
As indicated earlier, work was already under way on a strategy this past spring. We established a federal-provincial-territorial connectivity committee. Federal-provincial groups have existed before, but we formalized it.
In June, the department launched a national digital and data strategy consultation, in which connectivity was the foundational component.
On September 25, released the economic strategy tables report, which focused on six sectors. This included the importance of broadband and digital infrastructure for economic growth, innovation and social inclusion.
Finally, on October 26 of last year, the federal-provincial-territorial ministers met. They agreed as a group to make broadband a priority, and to work together to that end. They agreed to a set of connectivity principles and to develop a long-term strategy to improve access for Canadians to high-speed Internet and mobile services. In other words, they accepted the 50/10 goal and the objective of serving Canadians with broadband as a basic service.
They did announce three specific principles: access to ensure reliable, high-quality service; collaboration to leverage all partners, and end fragmentation; and effective instruments, especially targeting market failures, so that government supports this where it is most needed in a real world context and does not crowd out private investment.
I would like to end my comments on the strategy by reminding members that the department has been very active in the digital and connectivity space for many years. It goes back to Minister Manley. There was a national broadband task force in 2001, led by David Johnston. If you look at their principles—I suspect I'll point them out to you later—you will see that they are remarkably similar to ones that are at the heart of our new strategy. The department has been committed for many years to providing programming around education related to digital and broadband activity. I can talk to you about some of those programs.
The second area of focus for the Auditor General was our two programs: Connecting Canadians, a $240-million, five-year program launched in 2014 to install last-mile connection for households; and our more recent program, connect to innovate, a $500-million, five-year program launched in 2016 primarily to support new backbone infrastructure to connect institutions such as schools and hospitals, and to ensure that communities have access to broadband.
I do want to stress that the findings of the audit focus solely on the design phase of the connect to innovate program. That's where we were at the time of the work of the Auditor General. I am pleased to report, and I have been asked to do so by , that the program will connect 900 communities across Canada. That's three times the program's original target of 300 communities.
Of the 900 communities, 190 are indigenous communities, some of them in the direst need of better high-speed Internet. I want to stress that above all what was targeted in this program were the areas of highest need for rural broadband, typically where the private sector is not inclined to go and that, overall, our $500 million program leveraged another $500 million, so that $1 billion is dedicated towards improved connectivity.
Let me just turn to the issue of spectrum and the issues raised there by the Auditor General. We certainly agree that the impact on rural and remote areas is a very important consideration when developing spectrum activities or licensing frameworks. We continue to develop policies that encourage service into rural areas to ensure that all Canadians will benefit from high-quality services, coverage and affordable prices. For example, we've just published a consultation on the development of similar geographic service areas for spectrum licence, known as the tier 5 consultation, which was referenced in the Auditor General's report.
What we have been doing is trying to drill down to a smaller geographical service areas so that we have a better understanding and mapping of what can be available to Canadians.
Also the 600 megahertz spectrum auction is scheduled to take place shortly. This spectrum can provide expanded rural coverage, specifically because we set aside 40% of the spectrum for regional service providers.
Let me conclude by just reaffirming that we recognize how important affordable high-speed connectivity and broadband is for rural communities and Canadians and that we all work very hard to ensure that we service and meet the objectives related to that.
Thank you, Mr. Chair.
Good morning, Mr. Chair.
Members, I'll forgo introducing myself and my colleagues, as the chairman has already done so.
We appreciate the opportunity to appear before this committee to discuss the findings of the Office of the Auditor General and to explain the CRTC's role in increasing connectivity for Canadians living in rural and remote areas of our country.
As the Auditor General's report noted, the commission has a limited but important role to play. Our job as an independent regulator is to ensure that Canadians have access to a world-class communication system that promotes innovation and enriches their lives. We believe that all Canadians, no matter where they live, should have access to broadband Internet services on both fixed and mobile networks. As the Auditor General's report underlines, connectivity is vital in today's world. Broadband is the critical tool we use to communicate with each other, educate and entertain ourselves, find information, apply for jobs and do routine activities from banking to accessing health care and other government services.
So Canadians need access to an unfettered Internet experience.
While we don't hold all the levers, there are areas where the CRTC can—and is—helping to advance this goal. A perfect example is the CRTC's December 2016 announcement that broadband Internet is now considered a basic telecommunications service.
At the same time, we established a new universal service objective, as just mentioned by the deputy minister. We call for all Canadians to have access to fixed broadband services at download speeds of at least 50 megabits per second and upload speeds of 10 megabits per second, as well as access to an unlimited data option. The latest wireless technology, currently known as LTE—long-term evolution—should be available not only in Canadian homes and businesses but also on major roads in Canada. By the end of 2021, we expect that 90% of Canadian households will have access to speeds matching the universal service objective. By our current estimates, it will take another decade or so after that for the remaining 10% to join them.
Mr. Chairman, 84% of Canadians have access to the Internet at the new speed targets today. However, many people, particularly those living in rural and remote areas, can only dream of this level of service. While 97% of households in urban areas have access to service that meets the universal service objective, only 37% in rural areas have similar access.
As a result, 16% of Canadian households or nearly two million Canadians still don't have access to the universal service objective speeds or unlimited data option. Fast, reliable, high-quality Internet is simply out of reach, whether physically or financially, in many parts of the country.
That message came through loud and clear during the CRTC's public hearing on basic telecommunications services. We heard from more than 50,000 people—individual Canadians, business owners and leaders of indigenous communities. Many of them told us they're being left behind in the digital age.
Coverage gaps, of course, vary by region. Smaller maritime and prairie communities often do not enjoy the high speeds of major urban centres. The worst off and most in need are almost always found in the Canadian north.
Efforts to close these gaps need to be coordinated, as they are a shared responsibility among numerous players. Beyond the CRTC, this of course includes Innovation, Science and Economic Development, as well as the provinces and territories, indigenous governments, the telecommunications industry itself and non-governmental organizations.
For its part, the CRTC has announced a new broadband fund. It will provide up to $750 million over the next five years to help pay for infrastructure to extend Internet and mobile wireless services to underserved areas. Our objective is to ensure that rural residents have comparable service to those in urban areas.
Of that $750 million to be made available, up to 10% of the annual total will be provided to improve services in satellite-dependent communities. These are communities that rely exclusively on satellite transport to receive one or more telecommunication services, such as telephone, fixed and mobile wireless, and Internet services.
Of course, when we launch our first call for applications this year, it will be important for potential applicants to know where the greatest needs are located. We agree with the Auditor General's report on this issue.
Last month—it has actually been a few months now—we published maps indicating the areas of the country that do not have access to broadband speeds of 50 megabits for download and 10 megabits for upload. The maps also identify communities without high-capacity transport infrastructure and where homes or major roads do not have access to LTE mobile wireless service. In short, the areas of the country that do not currently meet our universal service objective. We have asked Internet and wireless service providers to verify the accuracy of our maps.
This is consistent with our overall approach regarding broadband data. We make information available to the public in as much detail as possible, while respecting the confidentiality provisions of the Telecommunications Act.
In fact, we will soon publish an update to our annual communications monitoring report that will provide fresh data on broadband availability and other related information.
Moreover, a memorandum of understanding was established a number of years ago between the CRTC and Innovation, Science and Economic Development Canada. This agreement governs our collaboration and the data that is shared between our organizations. We're committed to sharing information on broadband infrastructure to support evidence-based decision-making. We're also committed to working with all levels of government as part of a collaborative effort to provide broadband Internet service to underserved Canadians.
Since announcing the details of our fund late last year, we've met with representatives from provincial and territorial governments, as well as all the relevant federal departments, to explain how the fund will work and to understand their broadband funding plans.
Mr. Chairman and members, extending broadband and mobile coverage to underserved households, businesses and along major roads will require billions of dollars in investment and infrastructure. There is no doubt that this objective is an ambitious one, in part because of our vast geography and shorter construction season in many parts of the country.
The CRTC's broadband fund is obviously just one part of the equation. It is meant to be complementary to but not a replacement for existing and future public funding and private investment.
Having detailed, accurate and up-to-date information at the disposal of the public and policy-makers will ensure that the funds are being directed to the most appropriate projects and communities. There's also no doubt that much work remains to be done. I'm confident, however, that this objective will be met in the same manner that railways and electrical grids were built in the past, by connecting one community at a time.
Thank you very much.
We will be happy to answer any questions you may have.
Thank you, all, for being here again.
I want to start, as I often do, with the focus right at the beginning.
On page 6, it says:
This audit focused on whether Innovation, Science and Economic Development Canada and the Canadian Radio-television and Telecommunications Commission, according to their respective roles and responsibilities, monitored the state of connectivity, and developed and implemented a strategy to meet the connectivity needs of Canadians in rural and remote areas.
The conclusion on page 26 says:
We concluded that Innovation, Science and Economic Development Canada and the Canadian Radio-television and Telecommunications Commission, according to their respective roles and responsibilities, monitored the state of connectivity
but did not share enough detailed information publicly. We also concluded that Innovation, Science and Economic Development Canada did not develop and implement a national strategy to improve broadband Internet connectivity to a specific service level in rural and remote areas.
That's going to be the focus of my comment.
However, I do want to start on a positive note and, where I can and where it's deserved, give some credit. Mr. Berthelette, in paragraph 5 of his opening remarks, advised:
Mr. Chair, with respect to the state of connectivity in Canada, we found that the Department relied on complete and accurate data to inform policy-making aimed at addressing the connectivity gap in rural and remote areas.
So, by the looks of it, you did a good job on data. Data has been a major priority for us in this term of Parliament, so congratulations on that. That's well done.
Now I want to get to this business of a national strategy because there is a piece missing and I'm not getting it. There are 12 years of studies that say that we need a national broadband strategy. Yet, Mr. Berthelette, you say in the third paragraph of your opening remarks.... To be specific, it states that for 12 years we have needed a national strategy.
However, at the time we finished our audit, the government had still not agreed to take that step.
I know that they have, subsequently, but at the time, no.
Innovation, Science and Economic Development Canada indicated it was reluctant to establish a strategy with an objective that could not be reached with the available funding.
Mr. Berthelette, would you just expand on that, please? It sounds backwards to me, but again, if you would just reiterate your findings....
I think it is important for members to understand that since 2001 there has been a staged approach, which is a strategy, to closing gaps in broadband. The strategy has been to identify where there are areas of greatest need and to address those.
What has happened as a result of the declaration in December, 2016 that broadband is a basic service and that we agree as a country on moving towards a 50/10 goal—because in the past there have been different views on what the goal should be, and whether it should be 5/1, 30, or 50/10—is that we are now in a position, thanks to the CRTC I would say, to work together in an integrated way to really address the issues together, along with the provinces, private sector, etc.
I would make just one more point about that staged approach. I think that the underlying policy issue at play always, and it continues to be even in this new integrated world we're in, is how to ensure that we get value for money and do not crowd out what private sector input would normally occur.
So there is always a balancing act going on between what is the public interest in closing these gaps and how we work with the private sector, and indeed with provinces and communities, to ensure that there is value for money as we go forward.
Now you've moved to a national strategy. My question is, why wasn't there one in the beginning? If it were a health care issue.... It's not as though we don't know these challenges—transportation, health care, community services. It's always difficult in a large country like this, and it's expensive. That's why we have plans and phase-in and that's why there are constant protests coming from the north and far-flung regions about why they're not getting service equal to what we can get in my hometown of Hamilton.
But what I don't understand is why there wasn't a national strategy. It sounds as though there wasn't one because the money wasn't there to do one, which is just not acceptable. If this were a health challenge, we would have recognized that health challenge and we would have put a national strategy in place.
The absence of a national strategy—it looks to me like the politics of this, which is one step beyond you, are that we don't have the money and we don't want to pony up the money, so let's not have a strategy because that will give opponents something to point to in terms of what's not being done. Now it just looks as though they've run out of runway and they have no choice but to do it, and they're dragging their heels at that.
Chair, I know my time has probably run out, but I'll just finish my thought. This may be one of the very few times in the 15 years I've been on this committee that we do need to call a minister in, because it may just be that the answer to the problem has been that the bureaucracy has been told that there is not enough money to do a strategy, so don't even think of starting one. If that's the case, then there has to be a political answer to this, not a bureaucratic one.
Thank you very much, Mr. Chair.
My thanks to the witnesses for being here.
I am new to this committee and this is only my second meeting. Therefore, I don't know the full history of the witnesses who appeared or about your previous testimony. I apologize in advance if my questions may seem inappropriate to you.
I come from an extremely rural region: not the far north of Quebec, not an island lost in the Atlantic or Pacific or Sable Island, but Madawaska-Restigouche in northern New Brunswick, a place that is well within Canada.
Across my riding, the lack of broadband service is an irritant that prevents us from developing our full economic potential. I am talking about my region, but the situation is the same in many places in Atlantic Canada or elsewhere in the country, of course. The first casualty therefore is economic development, which leads to the exodus of people from our region who are educated and who could contribute to it, but who look for work elsewhere. Without economic development, there is no growth, and rural areas are being emptied to the benefit of large urban areas. I know you are already familiar with the picture I'm painting for you.
However, in addition to the economic development, there is the whole issue of safety. In my region, the vast majority of economic activity is based on forestry. There are a lot of forestry operations, where workers can get hurt. However, those areas have no access to any cellular signals. Access to ambulance services, hospitals, police and firefighters is a matter of safety.
So we are really lagging behind the Canadian average in terms of safety and economic development.
Mr. Scott, I think you said that basic telecommunications services are now essential, as was the railway to travel across Canada in another era. The construction of the railway was a national project led by the government, not the private sector. Setting up telephone service in New Brunswick was not a private sector project either, which makes me think that perhaps we should study that aspect of the issue. However, that is not what we are talking about today.
I have a question for my friends in the department, either Mr. Knubley or one of his colleagues. To pick up on what Mr. Christopherson was saying, has a study been conducted to establish the strategy and funding necessary to resolve this issue once and for all across Canada?
Again at this committee we have a report from the Auditor General and departments that have said they accept the findings of the Auditor General, yet in the testimony I've heard, in particular in the answers to Mr. Christopherson's question, I sense push-back and defensiveness around the conclusion of the Auditor General.
Mr. Knubley, the Auditor General said that your department did not have a national strategy. Mr. Christopherson asked you why, and if I heard you correctly, I heard not only in response to his questions and to some of the other questions you repeatedly going back to the Johnston report of 18 years ago. It identified a strategy for which the objectives seem largely still unfulfilled 18 years later.
I'm going to repeat the question. Why was there no national strategy in particular after the CRTC declared broadband to be a public necessity? It's easy to declare something a necessity. Those are just words. Once you do that, though, there has to be a strategy and a plan to achieve objectives.
Please, do you accept the Auditor General's assessment that there was no national strategy, and if so, why?
Thank you for your answers. They are very informative, as I am no technician.
There must be territorial, provincial and federal agreements or collaboration. I think Canadians can do that. As for technological complications, the technicians are there to help and support us.
It's all about money. Two years ago, I went around the main suppliers. We know them well. I will not name them, but they are always the same. It was clear that they were reluctant to connect the remote areas.
Let me oversimplify a little. Basically, they told us that they would connect these regions if they were paid for it, but that they were not interested in investing in this connectivity because it was not financially profitable. We live in a capitalist world.
I now turn to Mr. Scott from the CRTC.
The major Internet service providers have an oligopoly; they agree among themselves. We all know how it goes, we are not naive. The licence that the CRTC grants to those providers is a privilege. Within the limits of its jurisdiction, would the CRTC have a way of making them aware that the licence it gives them to expand their services includes an obligation to serve all Canadians, from coast to coast or from forest to forest? If so, could you tell me how this could be done legally?
I've been following the bouncing ball, as well as looking at the paper trail we have, and I'm still not satisfied that we've got to the nub of this lack of a national broadband strategy, which was recommended time after time after time for 12 years.
When the Auditor General went in and asked why there wasn't one, according to what we've heard today, the department was—and I'm quoting—“reluctant to establish a strategy with an objective that could not be reached with the available funding.”
I didn't hear anything about nuance, about all the problems of trying to bring all the people together. In fact, when it's difficult and tough like this, with multiple dimensions to the complexity of it, there is all the more need for a strategy, even if the first thing you say is that we have to get all the provinces, territories, and federal government on the same page in terms of what we agree on: “This is what we need to do. Here's who's responsible. Here's the process. Here's the time frame.”
Instead, what we're hearing, in my opinion, is from governments who have refused...because they didn't want to face the bill. I get the politics of it, but that doesn't make it right in terms of governance. That strategy needed to be in place, and the response at the time that the Auditor General went in was that they hadn't yet done it. Now they're bragging about the fact that they're doing it.
Let's take a look at the time frame. The audit was done about 18 months ago, which is usually when they begin. The deputy mentioned that there was a meeting in June of last year and on October 26, and between those two meetings that's when it was decided that there needed to be a strategy—just in time to get in front of the public hearing on the auditor's report.
If nothing else, I want to claim victory for the auditing system we have in Canada. After 12 years of governments—plural—dragging their heels on doing the right thing in terms of public policy, it took the Auditor General to roll in there and hold them to account. They then come to this committee where, under the glare of public scrutiny, they now acknowledge that they're going to give us a national strategy. I would submit to you, Chair, that if we'd not had an audit, there still would be no plans for a national strategy.
I have to say that I am rejecting the answers I'm hearing from the deputy.
I understand why you're saying it, and I understand it's part of your role, but you also have a responsibility as an accounting officer now. Unlike when I first got here and the rules weren't clear, now they are clear.
The public interest would only have been served if there was a national strategy, and there wasn't one, because no government wanted to be held to account for not spending the money it would take to implement it. That's what it looks like to me.
The important thing right now for me is that the strategy is on track—at least it's there.
I also want to mention, if I can parenthetically, that again, this is one of the issues that most of us don't get too cranked up about, because we have the best service. Most Canadians live in urban centres and everything is fine.
However, when I listen to my colleague, , talk about what's going on in her riding, and especially when she ties it to the banks that are closing branches in her rural areas, the need for Internet is not only beyond necessity, but is right up there with housing and health and food.
My question, Mr. Berthelette, is on whether you have had a chance to see the strategy at all.
I don't have any other questions, but I typically explain to our guests that, when we meet like this, we provide a report following it and I do as a result have a couple of questions that have been given to me by the analysts.
Before we get to those questions, I would that although this is a highly technical type of meeting that is televised, many Canadians may be watching it because they watch these types of programs—though their eyes may just glaze over. As Mr. Christopherson suggested, a majority of Canadians live in urban areas and say, “Connectivity problems, what problems? I can game, I can watch a movie, and I can do so many different things.”
However, the Auditor General's report explains the reason for this study, namely, that in 2016 about 96% of urban Canadians had access to broadband Internet speeds of 50 megabytes per second for downloading data and 10 megabytes per second for uploading data, but only 39% of Canadians living in rural and remote areas had access to those speeds.
I represent a riding that is not so much remote as very rural. Within my central Alberta riding, there are what we call the “special areas”, where I know that, when I get into those areas for meetings, I will just have to watch the phone trying to connect. This gap between urban and rural areas is part of why the Auditor General's office did this study, and out of the study, although there has been some improvement over the years, there are some troubling facts.
I should also say—and some of our analysts have worked on indigenous files before—that in paragraph 1.8 of its report, the Auditor General's office noted that “The Commission called broadband a 'transformative enabling technology' and concluded that any Canadian without broadband access is profoundly disadvantaged.” You know this, but I want the viewers watching to understand why this is so significant.
Governments have stated that we want to see improved health care for our indigenous people and those in remote and rural areas. We want to see specialized health, where they have access to specialized health. Part of the universal health care act says that universality, accessibility and reasonable access to common delivery are very important. Those are three of the five principles of the Canada Health Act. Well, specializing in health care in remote areas means that we need broadband, and that it has to be a priority.
I think all of us realize that it's going to be costly. It was costly originally to get a railway out to the far remote parts, but we said we had to do it. Consequently, this is what governments have said.
Health care, education.... If we're going to see indigenous and remote areas of the north, especially the eastern Arctic, improve their lot in life and have more opportunities, it's going to be through education. How do they do it? We do it through broadband, so that's why it's important.
If anyone is going to have a business in those special areas, in rural areas—so many home businesses are now starting up—they completely rely on being able to have the opportunities with this business because of broadband and access. This is part of the reason.
We have 15 minutes left, so pardon the rant.
Then we get into page 13 of the report, and we see, “Lack of transparency in the selection process”. This, to me, is one of the big problems, and we've talked about it today, the lack of transparency in selecting the processes for delivery.
Here's the problem for most Canadians, if they're watching.
Connect to innovate had $500 million available for allocation to successful applicants. The program received 892 applications, with funding requests for $4.4 billion. In some cases, there were multiple projects covering overlapping areas.
Here's the problem: “We found that the Department used a three-step process to evaluate applications. First, it screened the applications and assessed their merit.” That was the initial screening. “Second, officials from the Department and the Minister's office assessed funding options, each including a different mix for eligible projects.” Finally, in the third step, “the Minister provided conditional support approval on selected projects.” All of these areas—not so much area number one, but the other two areas—can be politicized and could be problematic. I'm not stating that it was a roadblock in any way, but certainly it can be viewed as one.
In paragraph 1.57, the Auditor General's office “found that there were a number of considerations to select projects”. The applications came in and “there were a number of considerations to select projects, but the application guide did not specify the relative weight of each criterion used in the project selection process.” The people applying didn't really understand the weight to each part of it. “Projects were less likely to be funded if they did not align with provincial and territorial priorities. However, these priorities were not made public. In our view, the Department should have made the weights and priorities public.”
Does the department agree with that?