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House of Commons Emblem

Standing Committee on Transport, Infrastructure and Communities


NUMBER 026 
l
2nd SESSION 
l
43rd PARLIAMENT 

EVIDENCE

Tuesday, April 20, 2021

[Recorded by Electronic Apparatus]

  (1830)  

[English]

     I would like to call this meeting to order.
     Welcome, each and every one of you, to meeting number 26 of the House of Commons Standing Committee on Transport, Infrastructure and Communities.
    As you all know, today's meeting is once again taking place in a hybrid format pursuant to the House order of January 25. The proceedings will be made available via the House of Commons website. Just so that you are all aware, the webcast will always show the person speaking rather than the entire committee.
    To ensure an orderly meeting, I would like to outline a few points to follow. Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of either the floor, English or French.
     For members participating in person, proceed as you usually would when the whole committee is meeting in person in one of the committee rooms on the Hill. Keep in mind the directives from the Board of Internal Economy regarding masking and health protocols.
    Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer.
     I remind everyone that all comments by members and witnesses should be addressed through the chair. When you are not speaking, your mike should be on mute.
    With regard to a speaking list, the committee clerk and I will do the best we can, as we always do, to maintain the order of speaking for all members, whether they are participating virtually or in person.
    Pursuant to Standing Order 108(2) and the motion adopted by the committee on October 29, 2020, the committee will now continue its study of targeted infrastructure investments
    I would like to welcome our witnesses and introduce the witnesses to all of you. First off, we have from Quebecor Media Inc., Pierre Karl Péladeau, president and chief executive officer. From Vidéotron, we have Jean-François Pruneau, president and chief executive officer. I understand they will be making a presentation together.
    From Southwestern Integrated Fibre Technology, we have Mr. Barry Field, executive director, and, finally, from Telesat, we have Stephen Hampton, manager, government affairs and public policy, as well as Michele Beck, vice-president of sales, North America.
    To all of you, welcome. I will start the presentations, of five minutes each, with Mr. Péladeau and Mr. Pruneau.
    Gentlemen, you have the floor for five minutes.

[Translation]

    Mr. Chair, ladies and gentlemen members of the committee, good evening. My name is Pierre Karl Péladeau, and I am President and Chief Executive Officer of Quebecor Media. I am joined by my colleague Jean-François Pruneau, President and Chief Executive Officer of Vidéotron.
    For more than 55 years, Vidéotron has been demonstrating its unwavering commitment to infrastructure development across Quebec and in eastern Ontario. Driven by homegrown talent, our company plays a leadership role in the country's economic ecosystem. Our company's footprint on the economic development of Quebec and its regions is undeniable, and we obviously intend to continue moving in that direction.
    The billions of dollars invested in our telecommunications network and in new technologies speak for themselves. In addition to advancing change in the country's telecommunications sector, we have been able to establish a network that is recognized internationally for its reliability and robustness. The past few months we have gone through together are a testament to the calibre of our infrastructure.
    We are here today to reiterate our willingness to participate in the country's economic recovery. Although difficult months lie ahead, they also provide an unprecedented opportunity to which Quebecor and Vidéotron are ready to contribute. Over the past few years, we have stepped up countless times to present solutions to better serve our fellow Canadians experiencing connectivity issues or suffering from a lack of competition in their area. We need only think of the investments made by Vidéotron to serve the people of Abitibi, who had been suffering for dozens of years from a highly profitable monopoly held by Bell and its regional affiliates.
    By late 2022, Vidéotron will connect, in collaboration with both levels of government, more than 37,000 Quebec households that don't currently have high-speed Internet. This commitment is the largest among all telecommunications companies in Quebec. The evidence is clear and we have shown that we want to and can compete with large national players, and we fully intend to continue moving in that direction.
    Quebeckers pay less than those in the rest of the country for their telecommunications services and have access to the best client experience because of Vidéotron, which will have forced the hand of the three national giants that would otherwise continue to provide fewer services at a higher cost, as they do elsewhere in Canada.
    To achieve those results, Vidéotron has invested, since 2008, over $1.5 billion in the building and evolution of its network, as well as more than $1.2 billion to acquire mobile frequencies. That money has gone directly into the public purse. We want to continue our investments, so that more Canadians could have access to advanced technologies at a fair price.
    However, Vidéotron will only be able to fully play its role if regulatory organizations and political decisions-makers are ensuring that the large national players cannot profit from their dominant position to threaten facilities-based competition. The Canadian Radio-television and Telecommunications Commission, the CRTC, issued two decisions favourable to this last week: one decision focused on mobile virtual network operators, or MVNOs, and the other one focused on access to Bell's support structures, the famous poles.
    Last Friday's decision on access to Bells' poles is clear: Bell has broken a number of rules and has knowingly violated the Telecommunications Act when we look at its anti-competition practices to block access to its support structures and thereby undermine Vidéotron's efforts to provide an additional choice to benefit Canadian consumers.

  (1835)  

    That decision was issued following steps undertaken by Vidéotron. It was reaffirmed by many stakeholders, including municipalities and other telecommunications service providers, who have been speaking out against those unfair tactics for months.
    The CRTC's decision is clear and concludes unambiguously that the preferential treatment Bell has given itself and the disadvantage it has imposed on Vidéotron are undue and unreasonable. That decision comes with monetary penalties of up to $10 million. The impact of Bell's anti-competitive behaviour is especially serious. If Bell's opposition is not permanently eliminated, our ambitious collective project to finally connect all Canadians will remain unfeasible, and the digital divide separating our fellow Canadians in rural regions from those in urban areas will persist.
    Of course, to respond to collective pressure, Bell recently boasted of having improved its operational processes. That's very well, but one thing is certain: it is crucial for governments to maintain this pressure on Bell concerning access to its support structures. They should even consider the possibility of stiff penalties should Bell refuse to comply with the legislation, as is too often the case.
    Bell's dominance is not the only threat to facilities-based competition, as the recently proposed transaction by Rogers to acquire Shaw is another such threat. In fact, approving such a transaction will inevitably send us back to the drawing board and eliminate the fourth player essential to maintaining true competition in Canada's wireless market.
    That would also go against the recent CRTC decision on MVNOs, where the commission writes the following:
The Commission's determinations in this decision will foster continued innovation and investment in, and affordable access to, high-quality telecommunications facilities in all regions of Canada, including rural and remote areas; promote sustainable competition that provides benefits such as affordable prices and innovative services to Canadians; and reduce barriers to entry into the market.
    That is actually why we urge that the main transaction, that of consolidating wireline networks, be subject to the disposal of Freedom Mobile's assets by including the conditions necessary to the effective operation of a wireless network, including spectrum holding, roaming agreements, tower sharing and a fair agreement for the use of wireline transport, which we refer to as backhaul in our jargon.
    In closing, Canada's economic prosperity and the well-being of all Canadians largely depend on builders of telecommunications networks like Vidéotron deploying their networks and providing unimpeded services in a very competitive but fair market. As a result, it is crucial for regulatory organizations and political decision-makers to ensure that large national players cannot take advantage of their dominant position to threaten facilities-based competition. This way, all Canadians could benefit from a competitive environment, numerous choices and lower prices for telecommunications services.
    Thank you for your attention.

  (1840)  

    Thank you, Mr. Péladeau.

[English]

     Well done.
    We're now going to move to a representative from Southwestern Integrated Fibre Technology, Mr. Barry Field, executive director.
    Mr. Field, you have five minutes.
    Mr. Chair, and honourable committee members, my name is Barry Field. I’m the executive director of Southwestern Integrated Fibre Technology, commonly referred to as SWIFT. SWIFT is a non-profit regional broadband program. Our mandate is to eliminate the digital divide within southwestern Ontario.
    Thank you for this opportunity to participate in your important deliberations. SWIFT has recently completed the procurement phase of our first program called SWIFT 1.0. The program is funded equally by the governments of Canada and Ontario, each contributing $64 million. SWIFT is grateful for these contributions and works diligently to ensure that these public funds are spent in the most effective, efficient and equitable way possible.
    The primary goal of the SWIFT program is to provide broadband services to 50,000 underserved premises within the SWIFT catchment area, on or before June 2023. Secondary goals include ensuring 3,100 kilometres of new fibre construction and $65.5 million of private sector investment in the form of contributions from the Internet service providers, or ISPs.
    Upon the conclusion of the procurement phase of our program, SWIFT has exceeded all of these targets, and is currently working with the ISPs to implement these important projects. The SWIFT 1.0 program has exceeded the premises target by 27%, the fibre construction target by 37% and the private sector investment target by 98%.
    It’s important to note that the digital divide in Canada exists for one simple reason—there's a general market failure in this space. The high cost of implementing fast, reliable broadband infrastructure in rural areas with low population density is not offset by the requisite revenues that would make the investment profitable. Simply put, the ISPs have no profit motive to invest in these areas. There is a patchwork of non-profit co-operatives that do an incredible job of addressing rural broadband service gaps, but they are generally small and localized operations, not in a position to address such issues on a national scale. This is where the government must step in.
    Subsidy programs targeted to reduce the cost of implementing and, in some cases, maintaining broadband infrastructure are necessary. The federal, provincial and municipal levels of government across the country get this.
     Prior to the COVID-19 pandemic, I spent a lot of time talking to policymakers about why broadband is important. Since the pandemic, this conversation has shifted away from why it is needed to how much it’s going to cost and what's the most efficient and effective means of solving it.
    Recently, the Province of Ontario announced an additional $2.8 billion worth of broadband funding. This brings their total current broadband commitment to $3.8 billion. Yesterday, in the federal budget, we learned that the federal government has committed an additional $1 billion to the universal broadband fund. This is above and beyond the $1.75 billion already committed in the UBF, and is in addition to other federal programs.
    Municipal governments across the county have also answered the call with their own local commitments. Here in southwestern Ontario, the member municipalities of SWIFT have contributed $24 million to date and are committed to future funding currently under consideration. Again, all levels of government understand the need and the financial commitment required to resolve this issue, but what's missing is a co-ordinated approach, at the local level, to address this problem.
    I recently argued in front of the industry committee that one size does not fit all when it comes to broadband programs. What I meant by that was that there are regional differences in requirements, current state, and implementation realities that all come into play with respect to broadband. Effective programs need to take into account local requirements and differences.
    Also, the current patchwork of broadband programs, all trying to solve a small piece of the problem, is not the most effective or efficient means to address the digital divide. Within southwestern Ontario today, there are no less than five active government programs, all trying to solve the same problem in the same geography.

  (1845)  

    You have one minute left, Barry.
    If we were to go back to the drawing board with the goal of designing a national broadband program, the result would not look like this. It's far more effective and efficient to consolidate funds into a single program, to address the entire problem as a whole, rather than to have four or five disparate programs running in parallel.
    I urge all three levels of government to co-ordinate their efforts and to consolidate programs with the goal of ensuring that every Canadian, regardless of geography, has access to fast, reliable and affordable Internet.
    I thank you once again for the opportunity to speak here today and am happy to answer any questions that you may have.
     Thank you, Mr. Field. Well done.
    We're now going to move to representatives from Telesat. We have Mr. Stephen Hampton, manager of government affairs and public policy; and Michele Beck, vice-president of sales, North America.
    Folks, you have the floor for five minutes.
     Mr. Chair, good evening and thank you for inviting Telesat to appear today.
    My name is Michele Beck. I am the vice-president of North American sales at Telesat, and I am here with my colleague, Stephen Hampton, manager of government affairs.

[Translation]

    I want to thank the committee for undertaking this important study on infrastructure investments, especially in telecommunications.
    When it comes to broadband connectivity, we all depend on a daily basis on Internet networks, mobile networks, LTE and 5G technology, even more so since the beginning of the pandemic we are going through. The pandemic has exposed inequalities in Internet access in Canada, where rural, remote and indigenous populations are the most affected. This gap persists, and we must take immediate measures to bridge the digital divide by choosing quick deployment solutions and technologies, as well as by fostering affordable and high–quality connectivity as quickly as possible.
    Telecommunications networks are necessary infrastructure for economic growth and social inclusion. Governments from around the world have understood this and made considerable investments in their connectivity infrastructure in order to benefit from the economic performance it generates every year.
     We thank the committee for including telecommunications in this study.

  (1850)  

[English]

    Telesat is one of the largest and most innovative global satellite operators and a proud Canadian company with over 50 years of experience flying and operating satellites from our headquarters here in Ottawa. Today, we transmit hundreds of high-definition television channels to millions of Canadians; provide broadband and other lifeline services to rural, remote and indigenous communities; and deliver mission-critical services to Canada's security and public safety community. We offer these same types of services all around the world.
    In February we officially announced the most ambitious and innovative project of our long history, a $6.5-billion state-of-the-art low-earth orbit, or LEO, satellite constellation known as Telesat Lightspeed.
    Lightspeed will deliver significant economic and social benefits to Canada, including affordable high-speed broadband and LTE and 5G services throughout the entire country. Lightspeed will also deliver billions of dollars in economic growth and support thousands of high-quality, high-paying jobs, largely in STEM, in the Canadian aerospace sector. This comes at a time when economic investment and job creation have never been more important.
    Telesat Lightspeed is a perfect example of a targeted, strategic infrastructure investment that will transform the economic and social landscape and ensure affordable, fibre-like broadband connectivity everywhere in Canada.
    We would like to commend governments across Canada for investing heavily in broadband infrastructure, notably the Government of Canada for its partnership with Telesat to bridge the digital divide through Lightspeed, as well as the Government of Quebec for its recently announced investment into the Lightspeed project.
    Telesat takes a holistic, community-focused approach to affordably connect Canadians by partnering with local ISPs, mobile operators, municipalities and indigenous communities. Lightspeed will provide affordable, high-capacity backbone connectivity to a community, and the local partner will provide the last-mile connectivity to households, schools, hospitals, small businesses, as well as LTE and 5G.
    The new space economy is one of the fastest-growing industries in the world, with the global space industry estimated to nearly triple to over a trillion U.S. dollars a year over the next two decades. Next-generation satellite connectivity like Telesat Lightspeed is responsible for the majority of this growth and will seamlessly integrate with terrestrial broadband networks to provide affordable, ubiquitous high-speed coverage globally.
    The new space economy will not only unlock true universal connectivity but also deliver billions of dollars in economic benefits, innovation, IP generation and job creation for Canada. Given the substantial economic and social benefits, governments all around the world are betting big on this industry and are meaningfully investing in domestic space and broadband capabilities.
    Telesat Lightspeed is the largest space program ever conceived in Canada and is exactly the infrastructure investment Canada needs to bridge the digital divide and lead the world in the future of connectivity and the new space economy.
    Thank you very much.

  (1855)  

     I think you're on mute, Mr. Chair
    You got me, Andrew. That's the first time in a long time.
    It happens to all of us.
     Yes, it does.
    We have our first round of questions, beginning with Mr. Scheer from the Conservatives for six minutes, followed by Mr. Iacono for six minutes, then Mr. Barsalou-Duval, and then, for the NDP, Mr. Bachrach.
    Mr. Scheer, you have the floor for six minutes.
    Thank you very much, Mr. Chair.
    Again, thank you very much to all of the witnesses for some very in-depth presentations. I thought I might start off by asking SWIFT a question.
     Could you speak a bit more about how you're structured? How do you bring your different players together? Based on your testimony, I understand that you're not a for-profit company. You're a program that's set up to catalyze these types of investments. Can you help me understand exactly how your organization is modelled?
    Go ahead, Mr. Field.
    Thank you, Mr. Chair.
    SWIFT is a non-profit organization that was developed by the Western Ontario Wardens Caucus, the WOWC. The WOWC is an organization comprising 15 municipalities here in southwestern Ontario. In addition to the WOWC, we've been joined by five other non-participating municipalities. We really are a creation of the municipalities. We're a municipal organization. We are a separate company underneath that organization.
    Okay. Great.
    One of the things we're looking at in these various studies is how best the government can unlock some of the private sector investments in this and act as a catalyst. One of the things I'm very concerned about is what we've seen with the Canada Infrastructure Bank, which seems to gave become a corporate welfare model. We saw an announcement last week in which they gave hundreds of millions of dollars to a profitable energy company.
     How can we look at the telecommunications and broadband space and make sure that while we're trying to ensure that companies can make profits by providing a service, we don't end up picking winners and losers and getting into that space where we're subsidizing profitable companies?
    One of the things SWIFT does is that we actually run an independent business case analysis on any application we receive for funding. It's a very complicated process, but I'll make it quick here.
     Effectively, what we do is that we look at the payback period of the investment, and if we find that the investment without SWIFT subsidy would have a payback period of less than seven years, we don't touch it. Anything over seven years we will subsidize, but if it's under seven years, we figure that somebody is going to do that project on their own, so we will not subsidize it.
    Fair enough.
    Monsieur Péladeau, you referenced a recent CRTC decision regarding Bell and issues around telephones. Can you tell the committee how long it took the CRTC to come to a decision on that ruling?
    Thank you very much, Mr. Scheer.
    We've been going on for many months about the issues that we're facing in the telecommunications world. Certainly, as you know, there's a lot of influence in place in Ottawa with regard to how the former monopoly used to do business. We've been trying to convince.... In fact, we've been able to provide facts. The fact is that when competition is available to Canadians, they have a chance to benefit from lower prices and some innovation. Maybe you would like to have my answer on whether or not the process is fast enough, but I guess we will certainly always appreciate that it could go faster.
    That is what I was getting at. I was honestly curious about that one particular issue. I have heard from many companies involved in the telecommunication industry. They say that sometimes the CRTC takes so long to make rulings on whether or not one of the big established telecoms has to provide access, or on the wholesale pricing mechanisms of large telecoms, that this often screens out some smaller companies.
     You talked about competition, which I think is incredibly important. Competition drives innovation. It drives better service for customers, and it's something that the government should foster without kind of tipping the fingers on the scales. That's a roundabout way of my saying that, yes, that's exactly what I was getting at. In your view, would you say that in the CRTC itself, the process itself can act as a hindrance to competition? Is that something policy-makers should be looking at? How can we ensure that the CRTC makes some of these decisions within a guaranteed, or much shorter, timeline?

  (1900)  

     Thank you, Mr. Scheer.
    Mr. Péladeau, may I request that you bring your boom mike up just a tad to your moustache? The sound from your mike is popping a bit for the interpreters.
    That's perfect. Thank you, Mr. Péladeau. Go ahead.
    To answer that specifically, Mr. Scheer, it took a year for the decision. I guess you are right to mention that, fortunately, we certainly have some financial wherewithal that smaller companies probably don't have.
    I would say there is always room to improve our capacity to make decisions, and sometimes they can pick what would be the important thing. I remember I was called very quickly in front of the CRTC because we had an argument regarding the agreement for the distribution of a sports channel that also provided competition to the equivalent of TSN, called TVA Sports here.
    I guess these are things that could happen, but again there is always room to improve.
    Thank you, Mr. Péladeau.
    Thank you, Mr. Scheer.
    We're now going to move to the Liberals with Mr. Iacono. Before I give Mr. Iacono the floor, I want to welcome Angelo back to the committee. He was on the committee last term and then off for a few years.
     Angelo, welcome back. It's great to have you on board. You have the floor for six minutes.

[Translation]

    Thank you very much, Mr. Chair. I am very happy to be back.
    I want to begin by reminding the committee that our government is compensating for years of underinvestment in broadband infrastructure, since the previous Conservative government decided not to prioritize that sector.
    Since 2015, our government has implemented programs that will enable 1.4 million Canadian households to have a high–speed Internet connection. That is four times more than the number of households the previous Conservative government managed to connect through its flagship program.
    My first question is for Mr. Péladeau.
    How crucial do you think investments in broadband technology are for Canada's economic recovery and prosperity?
    Thank you, Mr. Iacono.
    Your question is very relevant. You are right to bring this up. As I said in my presentation, having a telecommunications network has become necessary to ensuring the productivity of a country's industry.
    Let's take Germany for example, which has actually said a number of times that it had to take initiatives in that respect and reinvest in its telecommunications networks, especially in terms of Internet access. Historically, we have seen how much Germans can focus on their industry and their productivity.
    That illustrates how necessary it is for governments to understand this and to ensure that we maintain a dominant position internationally, for the benefit of the entire country and, more specifically, of industry players and stakeholders.
    That said, once again, we have inherited a landscape that has been a monopoly for a long time. So you, as political decision–makers, must ensure to implement the necessary tools to broaden competition as much as possible, for Canadians' benefit, as competition is what enables innovation.
    Unfortunately, old monopolies are all too often dedicated to remaining in a monopoly. That is why it is your responsibility to break up monopolies and implement the measures needed for competition to exist and prosper, once again, for the benefit of Canadians.

  (1905)  

    Thank you.
    You said it well: as decision–makers, we must make changes. You say that this sector is still underfunded and that more can be done. So you agree with me in saying that, had the Harper government prioritized those investments, as the current government is doing, more Canadians, and more specifically, more Quebeckers would have access to high–speed Internet.
    Is that right?

[English]

     Thank you, Mr. Iacono.
    Mr. Péladeau, before we go to you, I need you to raise your microphone a bit higher. It's like a moustache. What happens otherwise is that the sound pops, which hurts the interpreters' ears.
    Is that okay now?
    That's perfect. Thank you, Mr. Péladeau.

[Translation]

    Mr. Iacono, We can only applaud the recently announced initiatives that will be implemented by the Government of Quebec in collaboration with the Government of Canada. Thanks to a significant investment, people will be able to have high–speed Internet. That will at least be the case in the areas we serve in Quebec.
    We have shown in the past the undeniable robustness of our networks, and God knows that the recent pandemic has given us an opportunity to prove this once again. We would have obviously liked to do so differently, but the circumstances have been such as we know them. That said, we have shown beyond any doubt that, thanks to state policies—implemented by the current government and by previous governments—Canadians can benefit from the strongest networks. So they can inform themselves, be entertained and communicate thanks to a very strong network.
    How do investments in broadband technology help make subscriptions to a high–quality Internet service more affordable, both for individuals and for businesses in Quebec?
    I had an opportunity to talk about this. For me, the reason is very simple: we must ensure the existence of conditions that foster competition.
    As a result of the previous monopoly, a certain number of constraints make those measures essential. I talked about poles and the CRTC's decision. That is also a task political decision–makers and regulatory authorities will have to carry out to achieve the objectives set by the federal government and the Government of Quebec. I am talking about the objectives established in the policies you announced.

[English]

    Thank you, Mr. Péladeau, and Mr. Iacono.
    We're now going to move on to the Bloc and Mr. Barsalou-Duval for six minutes.

[Translation]

    My first question will be for Mr. Péladeau.
    I have the impression that the infamous pole quarrels and difficulties in accessing poles have been talked about for the past five, 10 or 20 years. I am no longer sure how long this has been a topic of discussion. I am still young, but I have no memory of a time when newspapers were not talking about issues with access to poles.
    The actions of Bell, which has used subterfuge to try to prevent its competitors from accessing its poles, have been denounced by Rogers, Cogeco, the Federation of Canadian Municipalities and the Fédération québécoise des municipalités.
    Why has this situation persisted for such a long time? Can we expect the cumulative effect of pressure applied by Hydro-Québec and by the recent CRTC decision to be enough to resolve the issue of access to poles?

  (1910)  

    Thank you, Mr. Barsalou-Duval.
    Yes, we certainly hope so.
    Bear in mind that Bell Canada is one of Videotron's competitors. The pole network in Quebec is occupied mainly by Hydro-Québec and Bell Canada. That is certainly the case in our coverage area, anyway, which stretches from Gatineau to the Lower St. Lawrence. Next would be Telus, formerly Québec Téléphone.
    We had never experienced any issues, but Hydro-Québec's pole network is also quite extensive. We've always had an excellent working relationship with Hydro-Québec. How come? Simple. We don't compete with Hydro-Québec because we don't sell electricity. With Bell Canada, it's a different story. We believe one of the reasons why Bell put up all kinds of barriers was to prevent us from building our network and offering a new service at a competitive price to people who had not been able to benefit from competition.
    Bell Canada was their service provider, and it had never improved or upgraded the service it was providing to those customers. When we wanted to serve them, Bell Canada blocked us from accessing the infrastructure. It's a fairly rare occurrence. As you probably know, Quebec's premier called out Bell's president in the blue room of National Assembly, urging him to do whatever was necessary to ensure high-speed Internet service was available to as many Quebeckers as possible. I think that was a wake-up call. Bell realized that it had to stop doing what it was doing. In the meantime, the CRTC saw what was happening. The CRTC has the tools to act, tools the Quebec government did not necessarily have.
    Today, a coordination table has been set up. The CRTC is the watchdog, threatening to impose monetary penalties on Bell. That is what should happen. Unfortunately, a $10-million fine is like a drop in the bucket for Bell; it makes little difference to a company raking in $10 billion a year in operating profits. A $10-million fine is pretty low for slowing down the competition. The penalty should probably be stiffer.
    The last thing to keep in mind is that Bell Canada is a major service provider to the federal government and the Quebec government.
    Thank you.
    I should point out that I had no choice but to go with Bell for my parliamentary cell phone service.
    For years, remote, and even not so remote, areas have been calling for better access to high-speed Internet.
    In my riding, for instance, 668 households in the Marguerite-D'Youville regional county municipality are less than 20 minutes from Montreal but still do not have high-speed Internet.
    Do you think the federal government could have done something meaningful to fix the problem?
    In light of the recently announced agreement between Canada and Quebec, do you think things will work out this time? Do you think the problem around Internet access will finally be solved? Is this really it? They are saying it is, but who really knows, right?
    Again, Mr. Barsalou-Duval, we hope so.
    Given our past experience, we are hoping this will be it. To the credit of Bell's leadership, I will say that, as far as the installation of poles is concerned, the whole inventory or backlog issue appears to have been miraculously solved.
    That brings to mind the old expression caveat emptor, or buyer beware. Things seem to have turned a corner, but we have to keep a very close eye on what happens next.
    Again, I would point to the public interest. Today, we know full well that high-speed connectivity is essential, an unavoidable necessity. That's why we are deploying the effort and capital it takes to build a strong, high-performing network and offer services that match.

  (1915)  

[English]

     Thank you, Mr. Péladeau, and Mr. Barsalou-Duval.
    We are now going to move to the NDP, with Mr. Bachrach for six minutes.
    Thank you to all of our witnesses for appearing today and answering our questions on some very important topics.
    My interest is predominantly in the provision of rural broadband. The region I represent in northwestern B.C. is a vast rural region. Many of the communities are extremely small and spread out and they struggle with connectivity.
    I'd like to start with some questions for our delegation from Telesat.
     Ms. Beck, your company was the focus of some attention in northwestern B.C. last year starting in August because a number of residents of the small rural community of Tlell on Haida Gwaii got a notice from their Internet service provider saying that their satellite Internet service was going to be ending in December. These residents had no alternatives. They had no ADSL. They had no fibre. They relied exclusively on satellite Internet.
    Fortunately, after a lot of advocacy, there was an agreement struck to extend the use of your geostationary satellite with the Internet service provider Xplornet.
    I wonder if you could describe that agreement for us and provide some assurance that your satellite, which we were led to believe is nearing the end of its useful life, and that agreement will get the residents of Tlell through until they have a more dependable option for rural Internet provision.
    Thank you.
    The satellite that is utilized today to provide the service into the remote areas of Canada, which Xplornet utilizes, still has many years of life remaining and it will certainly be able to provide service well past 2025.
    The LEO constellation Lightspeed service will have launched and will be able to provide connectivity services to many of these remote communities before the end of life, the actual official end of life, of that satellite, and there is a great optional alternative that will be able to deliver the 50/10 target service to all of these areas. We will be actively working with local ISPs and communities to ensure that the infrastructure is deployed in time and available and ready at the launch of the Lightspeed service, and we'll be able to transition off the existing satellite services and onto true broadband low-latency service using our Telesat Lightspeed constellation.
    Thank you, Ms. Beck.
    If I understand you correctly, the agreement you have currently with Xplornet is going to be long enough in duration to bridge those rural residents through to the introduction of your Lightspeed program and give them an alternative option.
    The satellite is certainly quite capable of bridging that. I would say the agreement we currently have with Xplornet doesn't go out that far, and it will be up to Xplornet to continue offering those services in the interim.

  (1920)  

    Thanks for that answer.
    I will turn now to your Lightspeed project, which you've described for us, the low-earth orbiting satellites. The federal government recently announced $600 million to improve coverage in Canada's remote regions. What is your company planning to do with this funding to improve connectivity?
    The partnership we have with the federal government doesn't provide for funding. It really is a commitment for capacity, and the objective is to deploy that capacity in some of the most remote and rural areas of Canada to effectively provide a cost-effective backhaul connectivity. We will be working with local ISPs, which will deliver Internet, that last-mile connectivity, to homes, schools, hospitals, and small businesses in these underserved communities today.
    Okay, so essentially, if I understand you correctly, the federal government is purchasing capacity on your network, and will then provide that to local ISPs so that rural people can achieve greater connectivity.
    Essentially, yes. It's a commitment essentially for capacity, and we are currently working with a number of ISPs to bring that connectivity to these underserved communities.
    Okay.
    Thank you, Ms. Beck, and Mr. Bachrach.
    We're now going to move to our second round of questions, starting with the Conservatives and Mrs. Kusie for five minutes.

[Translation]

    Thank you, Mr. Chair.
    Thank you to the witnesses for being here today.

[English]

    Mr. Field, I'm really taken aback by some of the comments of our new government representative.
    Welcome, it's very nice to have a new member here on the committee, but I would like to point out that the Canada Infrastructure Bank, on which we have had numerous meetings—and of course we have had the minister here previously and look forward to welcoming her again this week—they have yet to fund a single broadband project. In fact, the Auditor General—whom we had here last week, and who informed us unfortunately about the dismal performance of the government on rail safety—also indicated that this government is not even tracking its own programs to its targets. They can't even know if they are achieving them if they are not tracking them effectively.
    I am going to start, Mr. Field, by asking why are there so many funding envelopes? I ask because I know it's difficult for me to keep track of the different funding sources in an effort to achieve these rural projects you've talked about. How does having so many envelopes prevent getting the job done?
    Thank you.
    Again, I think the problem with having these multiple envelopes all searching to solve the same problem in the same geographical area is that you get overlap of responsibility. Also, by the very nature of having these multiple programs, there isn't a single entity that is responsible for solving the entire problem.
    I think what we saw happen in Quebec a couple of weeks ago is encouraging. The federal government has provided funding directly to the Government of Quebec in an attempt to.... I believe their target is to have 98% of the population served. Don't quote me on that number.
    I think programs like that make a whole lot of sense to me, but, again, having multiple entities all trying to solve a bit of the problem in the same jurisdiction is extremely inefficient. It's not effective in solving the whole problem and it leads to a lot of overlap and duplication of effort.

  (1925)  

    I'll continue with a theme you started with in your opening remarks, Mr. Field. That was collaboration among all three levels of government.
     I was on television in Alberta today regarding the new day care announcement in the budget. I'm not certain how that's going to succeed because from what I've from transport projects, for example, is that the provinces are blaming the federal government and the federal government is blaming the provinces.
    What do you think needs to happen in terms of collaboration at all three levels for success?
    Yes, I think it makes a whole lot of sense for the federal government to providing funding via a transfer payment to provinces and territories, but much like other infrastructure projects, let the provinces then figure out how to implement those solutions, working with the municipalities, of course. I think regional and local input to those programs and projects is important. I'm convinced that the further you get away from the municipality in the governmental hierarchy, you lose the plot a little. You don't have the local knowledge; you don't have the local flavour.
    In an ideal world I'd like to see all of the funds out there transferred to the provinces and territories and have the responsibility sit with the provinces and territories as to how they implement and how to resolve the problem.
    
    I don't think we've ever seen more examples of this than during the pandemic with health care transfers, long-term care facilities, etc., so I think your recommendation is very well taken.
    Can you give an example where we've seen this positive type of collaboration before? We've talked about how it should be. You've talked about how you think it should be done. Is there any jurisdiction that comes to mind where you've seen this done successfully?
    Yes. Certainly. The SWIFT program is an example of that. SWIFT is funded from transfer payments through Infrastructure Canada to the Province of Ontario. They have signed a contribution agreement with SWIFT, and we work directly with the Province of Ontario to implement this program. I think it works very well. It's very effective and it eliminates that duplication.
    Do you think it's feasible for these groups to be able to coordinate that? We have been waiting on the delivery of high-speed Internet for rural Canadians for a very long time.
     With all levels of government, you would think that the federal government in particular would have figured out how to achieve this.
    Do you think it's possible to achieve this?
    Yes, absolutely, I think it's possible.
    As I mentioned in my remarks, the provincial government has put a substantial amount of money into this in Ontario, most recently with an additional $2.8 billion on top of the billion dollars that was already there. The federal government has just added another billion dollars to its universal broadband fund.
    I think the political will is there. I think the finances are finally starting to materialize. Like most things, the devil is in the details. It will be really interesting to see how these programs are implemented and administered.
    Thank you, Mr. Field, and Ms. Kusie.
    We're now going to move on to—

[Translation]

    Thank you, Mr. Chair.
    Thank you to Mr. Field and the other witnesses.

[English]

    Thank you.
    We're now going to move on to the Liberals, with Mr. El-Khoury for five minutes.

[Translation]

  (1930)  

    Thank you, Mr. Chair.
    Welcome to the witnesses.
    My first question is for Mr. Field and has two or three parts.
    I understand the need for a more coordinated approach, but we have also heard that there is no one-size-fits-all solution for a country as geographically vast and unique as Canada. Looking at all the projects and investments under way, I understand where the comment comes from.
    The list is long. The Canada Infrastructure Bank will invest $3 billion. The universal broadband fund will provide $1.75 billion over 10 years. A total of $600 million will support low-earth orbit satellite capacity. The connect to innovate program will invest $585 million. The CRTC's broadband fund will invest $750 million. Broadband projects are eligible under the rural and northern communities infrastructure funding stream of the investing in Canada plan—$350 million to date—as well as under the first nation infrastructure fund—$50 million to date.
    That's a lot of programs. What can you tell us about that?
    I believe Innovation, Science and Economic Development Canada coordinated its efforts with federal, provincial and municipal partners to make sure the funding is allocated appropriately, to avoid duplication.
    Is it not better to have multiple programs and investments that target a wide range of solutions to make sure no Canadian is left behind?
    With a range of programs, are there not more opportunities to apply for project funding?

[English]

     Mr. El-Khoury, whom are you directing that question to?
    I said it at the beginning it was to Mr. Field.
    Thank you, Mr. El-Khoury.
    Go ahead, Mr. Field.
    Thank you for that.
    As you've mentioned, there are a number of programs out there. Again, many of the programs you've mentioned are being administered by different organizations, many of them through ISED. I do concur with you on that.
     Again, in addition to those programs, there are provincial programs and municipally led programs, and again, almost competing with each other. I use the word “competing” in a positive way, but in many aspects they are competing with each other to solve the same problem. I think that by co-ordinating those efforts, and by collecting the funding at the provincial and the regional level, there is a better opportunity to solve this issue in a more co-ordinated way.

[Translation]

    My second question is for Mr. Péladeau or Mr. Pruneau.
    Can you explain why the government's decision to stop using the hexagon model was seen as such a positive step in assessing underserved communities and households?
    Mr. El-Khoury, I'm not sure what you're referring to, so you'll have to tell me more about the hexagon model.
    The hexagon model means there are a number of steps.
    I'm conferring with my colleague, but unfortunately we don't have the answer. It's a highly technical question. I will have to get back to you.
    Is there another witness who can answer that?

[English]

    Mr. Hampton?

[Translation]

    Very well. I'll move on to another question.
    Mr. Péladeau, the federal and Quebec governments just announced an almost historic investment in high-speed Internet connectivity.
    What impact do you think the initiative will have on the day-to-day lives of Quebeckers? What will it do for businesses, schools and communications in Quebec?
    Some communities have long been trying to obtain this service. What will this initiative mean for them?
    The first thing I will say is that Quebeckers have been able to enjoy that type of service for the past 20 years. The 2000s marked the transition from telephone-based Internet access towards cable-based access. The switch was from copper wire to coaxial cable, and then to fibre optic cable.
    Those advances were closely tied to increased productivity and innovation among Quebec's businesses. Going forward, it was possible to download entertainment content and access all kinds of other services that are now available. That was all thanks to significant investments by telecommunications companies, especially Videotron and Cogeco. I think I can speak for our counterparts at Cogeco, since they service other areas as well. The result was that Quebeckers were able to enjoy the benefits of an environment that had previously been dominated by the long-standing monopoly Bell—a very good thing, indeed.
    The second thing I want to say is that all of those efforts created an environment that fuelled innovation and development from a customer service standpoint. That is quite significant. Of course, Quebeckers want access to an affordable telecommunications network—and they can have that thanks to competition—but they also want access to innovative services, so the service offering was expanded.
    Quebec has a rich culture, so we were able to create and offer services like Club illico, a Netflix-like service that showcases Quebec's vibrant cultural, television and radio talent.
    Finally, I will say that all of those efforts have benefited Quebeckers and will continue to benefit them, because competition is always preferable, a win-win for Quebeckers and Canadians.

  (1935)  

[English]

    Thank you, Mr. Péladeau and Mr. El-Khoury.
    I'm now going to move on to Mr. Barsalou-Duval for two and a half minutes.

[Translation]

    Thank you, Mr. Chair.
    It is often argued that telecommunications services cost as much as they do because of the country's size. However, a competition bureau submission to the CRTC reveals that the big three—Bell, Telus and Rogers—enjoy extremely high levels of profitability, even higher than other places in the world. As compared with the rest of Canada, Quebec has much lower Internet prices.
    Can you tell us why that is, Mr. Péladeau?
    I would tie profitability to investment, of course.
    A number of factors determine profitability, the first being operating income—the ability to generate revenue. A big chunk of a company's profits are reinvested, and yes, because of the country's size, those investments will have to be greater. It's important to recognize that fact. It is the reason why it has taken so long to provide service in rural and remote areas. Those investments were made much sooner in urban areas because they are so densely populated. In the face of those facts, initiatives like the one that was just announced are necessary.
    To reach the goal of connectivity for all residents, and perhaps to address socio-economic challenges, the Quebec government and the Government of Canada joined forces on a program to work with telecommunications companies to deliver high-speed Internet access to Quebeckers.
    That will require more significant investment given how big the area is. In addition, staying on top of the latest advancements in technology is an ongoing factor. That is key. We have seen it during the pandemic. Thanks to the strong networks we built, people have been able to work remotely, as we are doing now. That's a good example. Goodness knows, with so many people working from home, the network load has increased significantly, but our networks have not failed at a time when we needed them most. The current strength of our networks is the result of investments that were made in the past, which are now proving their value.

  (1940)  

[English]

     Thank you, Mr. Péladeau and Mr. Barsalou-Duval.
    We're now going to move on to the NDP, with Mr. Bachrach for two and a half minutes.
    Thank you, Mr. Chair.
     Mr. Field, I found what you said about the fact there's no single entity responsible for solving the problem very interesting, as well as your assertion that this creates inefficiencies and delays and such. One of the questions I've been trying to get an answer to from the government is which minister is in charge of delivering on the promises around rural broadband. Is it the infrastructure minister, the industry minister, or the rural economic development minister? It seems there's a lot of overlap among those departments, and yet there's not a clear answer on who's in charge of delivering on the promises. Do you have a sense of that, and do you feel that perhaps the overlap and the number of cooks in the kitchen is a liability when it comes to actual accountability for these promises that we're hearing?
    Thank you.
    I'm not going to comment too much on the political set-up, but I will reiterate that both at the federal and the provincial level many organizations, many groups, are all trying to tackle the problem of rural broadband, and I think that leads to inefficiencies and overlaps in trying to solve the problem.
    I have a really quick follow-up question. Another thing you mentioned was the presence of these grassroots ISPs in rural areas. You have groups that come together to solve the problem. They not doing it to make a lot of money; they're doing it because their community needs the service really badly. When we see these large envelopes of money become available for rural broadband delivery, we get much larger players interested in that same landscape. I'm wondering what happens to those small ISPs. How do we preserve their place in the mix, because in many ways they provide excellent service for their neighbours? Where do they fit in the current landscape?
    In the SWIFT program we found that about 20% of our funding went to the large national carriers, about 25% went to medium-sized regional players and about 55% went to those local carriers we were talking about. Not only did the local carriers participate to a very high level, but they also stepped up with some very competitive applications to the program.
    I think it's imperative that with any program that's looking to solve this problem, the government has to allow, in the policy and in the evaluation criteria it creates, for the participation of the small local carriers. These are the companies that spend money. They live in our communities. They spend money in our communities. They're important to the communities, and they certainly stepped up in the SWIFT program to helps us be successful.
    Thank you, Mr. Field and Mr. Bachrach.
    We're now going to go back to the Conservatives with Mr. Shipley for five minutes.
    Thank you, Chair, and to all of the witnesses as well.
    I apologize. It's interesting that I lost some connectivity at the beginning of the meeting, especially when Mr. Scheer was speaking. If I'm repeating any questions, I apologize.
    Most of my time will be directed to Mr. Field. We're familiar with each other. SWIFT covers my riding, so I have some specific questions.
    Mr. Field, very succinctly, when and who first formed SWIFT? How was it formed?
    SWIFT was incorporated in 2016 by the Western Ontario Wardens' Caucus.
    Thank you.
    It's mainly been a municipally led initiative?
    That's correct.
    Thank you.
    Recently we've had some announcements and some success, and when I say “we”, we've all partnered up here. You and I have spoken in the past that it's always been a problem, especially lately in Barrie—Springwater—Oro-Medonte in getting houses hooked up during the pandemic. We've had some great success and good announcements up here. A lot of homes are getting hooked up through your program. What has driven your success in this area in getting some homes hooked up for broadband? We've recently been able to announce that.

  (1945)  

    I think it's a number of things. First and foremost, it's been the financial support we've gotten from the federal, provincial and municipal governments to make the program happen, but equally important, the ISPs have really stepped up to participate in the program. I mentioned that earlier when I threw some numbers around. The ISPs put in roughly half the money to the SWIFT program. They certainly have a stake in the game and they've put their best foot forward to be as competitive as possible in the process.
     Mr. Field, as you well know, because we've spoken since, with some of those good announcements, though, came some people who were definitely disappointed because they just missed out. Perhaps you could educate me on what are some of the hurdles or what is the main hurdle that is causing some homes to still not be included in these announcements and in getting hooked up.
    Yes. The bottom line is funding, right? With the SWIFT program, our target was to solve 23% of the underserved population in southwestern Ontario. If my math is correct, that still leaves 77% of the population unserved.
     With future funding and future programs, hopefully, we will narrow that gap. SWIFT currently has a proposal in front of the federal and provincial governments called the “SWIFT 2.0 GigaProject”. The intention of that is to actually get to 95% of the population in southwestern Ontario via fibre, leaving the remaining 5% to wireless and low earth orbit technologies.
    That would be great news.
    Specifically, Mr. Field, as you know, because we spoke about it, certain areas of a subdivision, whether it be in Minesing, Anten Mills or Midhurst, get prioritized. I'm sure you're familiar with some of these names, because you're going to be doing some projects in them soon—
    Some get prioritized. How do you prioritize which houses on which street in a certain area get done? What criteria do these communities have to meet to get hooked up?
    Within the SWIFT program, we don't prioritize any given communities. We do run an open and competitive procurement process. Effectively, the ISPs bid on the areas that make sense to them to build in with the subsidy.
     We don't give priority to one community over another. We are very intentional in that. We let the market drive us to where the solution will be, noting that we don't have enough money to solve 100% of the problem. If we had the money to solve it all, it would be a very different, targeted approach.
    Again, Mr. Field, you have I have talked in the past. It's not the most cut and dried industry. It is a little confusing for a layperson. Could you explain it to me again? I get asked this question all the time. A certain street is getting done, but 50 yards down the road that street is not getting done. You say that it's a monetary issue. Where does that come in?
    Yes. The reality is that a network has to start somewhere and it has to end somewhere. Unless and until you have enough funding to solve 100% of a given geography, you're going to have areas that get served and areas that don't get served. Given the linear nature of the infrastructure, it really does result in a lot of cases with what you're explaining: you'll have the network stop at a certain point. House A will get service and, 50, 100 or 250 metres down the road, the next house does not get service.
    Okay. I—
    Thank you, Mr. Field.
    I'm going to allow one quick question, Mr. Shipley. You have about 15 seconds left.
    Go ahead.
    I was just going to sum up by saying that it's very unfortunate. If there's anything we can do to work towards getting those few houses that are left out added in, we'd be there to help you out in any way we can. If it comes down to in the form of money, there's only so much we can do with that, but we can ask our good friends in government to help us out a bit more there.
    Thank you, Mr. Field.
    Thank you, Mr. Field and Mr. Shipley.
    We're now going to move on to the Liberals, with Ms. Jaczek for five minutes.
    Thank you very much, Chair.
    Thank you to all the witnesses for your testimony today.
    I would like to ask Mr. Field a few questions.
    First of all, I'd like to thank you very much for explaining exactly how SWIFT came about. We had some complimentary words for SWIFT from the regional Niagara representatives who were here at our last meeting.
    You've talked a lot about consolidating programs. One of the federal programs, though, that seems to me to have been extremely useful, is the rapid response stream. In my riding of Markham—Stouffville, I have a number of small hamlets, much like Mr. Shipley has in Simcoe County. The Region of York forum is basically the coordinating agency for all the various applicants, the various ratepayers groups and so on, that come forward looking for improved broadband.
    In terms of the rapid response stream that was announced last November, two of my very small hamlets actually have received some assistance from the federal government through that particular stream. What is your experience in southwestern Ontario through SWIFT?

  (1950)  

    Thank you.
    It's my understanding that a number—I believe there have now been three projects—have been awarded in southwestern Ontario under the rapid response program.
    Just to clarify, I think the existence of all of these various programs isn't necessarily a bad thing. It tells me that there are multiple levels of government taking this seriously and trying to resolve the issue.
    Again, I go back to the analogy that each program is taking a piece of the pizza but nobody is eating the whole pizza. I think that's what we have to get to—solutions whereby we're resolving the entire problem rather than taking little bites out of it here and there.
    SWIFT is in that category as well. We were tasked with resolving 23% of the problem. That leaves a lot of the problem unresolved.
    I will go back to your statement that you would prefer to see the federal government simply transfer a block of money to the provinces and territories, for them to then disburse as they see fit, obviously with some consultation regionally and so on. Having been a member of the Ontario legislature for over 10 years, I have some sympathy for that position, but now being, obviously, at the federal level, I would say that the federal government does have a responsibility to the taxpayer to make sure that the distribution of these funds is done based on some logical criteria.
    In your view, what criteria should be used to disburse funds in the way you suggest?
    I think you could eliminate the population argument, that x per cent of the population gets x per cent of the money.
    I think ultimately you have to look at the need and the unique nature of the territory, the geography, you're trying to serve.
    Going back to my earlier argument—that bringing this down to the regional level, having local input, is very important to resolving this issue—resolving the issue in southwestern Ontario is going to be very different from resolving it in the Northwest Territories. There are different challenges, different geographies, different settlement patterns, and all sorts of things that make each one of those areas unique. I think if it is brought down to the provincial and regional levels, those levels will be better able to understand and adapt to those requirements.
    It's an interesting concept.
    It seems to me, certainly from the perspective of my own community, things are working quite well now.
    If I have some time left, Ms. Beck, could you just give us some idea of the affordability of the services you're trying to provide through Lightspeed? How does the cost compare to that for conventional fibre?
    Telesat Lightspeed service doesn't compete with fibre. We're not here to compete directly where it is affordable and economical to deploy fibre.
    We target regions where the business case is strained, to really bring fibre to these very rural and remote areas of the country and, equally, around the world.
    You actually have to compare the cost of deploying fibre to these most rural areas that are far from existing fibre today. That's where the LEO Lightspeed service and the backhaul connectivity become more economical to connect all of these remote communities.
    Sometimes it's distance and sometimes it's geography that creates the challenge in deploying fibre or even microwave connectivity to reach these communities.
    We do target the areas that are the hardest to serve and the hardest to reach, but we can do that on a more economical basis than could be done by deploying a terrestrial network solution.

  (1955)  

     Thank you, Ms. Beck and Ms. Jaczek.
    We are now going to move on to our third round of questions, starting with the Conservatives and Mr. Soroka for five minutes.
    Have we lost Mr. Soroka?
    Part of the problem was I was talking with my staff at the time.
    No problem, go ahead.
    Pardon me for that.
    Thank you, Mr. Chair.
    Mr. Field, your organization's regional broadband project indicates that you're receiving $63.7 million from the federal government, approximately 30% of the total project cost. What caught my eye was that the funding came from the new building Canada fund.
    I am curious. Since you say you need more money, have you applied for other programs through the universal broadband fund or through the Canada Infrastructure Bank?
    As it's currently developed, SWIFT, as a municipal organization, cannot apply directly for funding through the universal broadband fund. The same goes for the Canada Infrastructure Bank. As a municipally led organization, we're not in a position to apply for funding under the CIB rules.
    I know you had talked about consolidating the different funding options. In my riding I had an issue where an Indigenous group has a program whereby they can service other Indigenous communities, and they are plowing fibre optics directly into the communities, which is great, but then they bypass so many along the way because that was never part of their program, so I'm seeing the failures from these different funding options.
    Through SWIFT, have you mitigated that or are there still some loopholes in your organizations as well?
    Absolutely, we address that head on and upfront.
    It's very clear in any contract we sign with an ISP that if they run fibre in front of a premises, they will serve that premises.
    Far too often we hear from residents in southwestern Ontario telling us they can see some fibre hanging that they could probably touch; they just can't get access to it. Under the SWIFT program, we don't allow that. If a design passes somebody's home, they have to serve that home.
    I don't know if my next question is for Mr. Pruneau or Mr. Péladeau.
    Last year when the minister announced the results of the 600 megahertz auction, he noted that the government set-aside policy had created more competition for Canadians, but we are hearing that set-aside bidders have a poor track record of deploying spectrum in rural communities.
    What is your company's experience with this, and would you agree there should be a “use it or lose it” condition to ensure that spectrum is deployed in rural Canada?
    Was that for Mr. Péladeau, Mr. Soroka?
    It's his company, but I know Mr. Péladeau is answering as well, so if Mr. Pruneau could answer, I'm fine with that.
    Okay, go ahead.
    Our experience in the province of Quebec is that we've used all of the spectrum we have bought so far, and I'm satisfied with the spectrum specifically. I'm not sure if the other operators across Canada have used the spectrum they bought and satisfied the spectrum option, but in our case we did. That probably explains why the service we provide to Quebeckers is a great service; it's very reliable, and we cover approximately 90% of the population now with our network in the province of Quebec. We have used the spectrum we bought.

  (2000)  

    Yes, Mr. Pruneau, that's what I'm saying. I'm glad you used it, but with regard to the companies that buy the spectrum but don't use it—which is now potentially out there so that you or your company could be using it—do you think there should be a “use it or lose it” condition when these companies buy the spectrum?
    Obviously, I understand the reason for making some spectrum available to operators is that it be used, and there are conditions in the spectrum licensing conditions that request us to develop our network with the spectrum we bought. It is probably already provided for in the spectrum licensing conditions right now.
    Okay.
     Ms. Beck, do you think the programs are addressing the needs of Canadians to access the Internet?
    What funding options have you applied for?
    We have traditionally not applied for any funding programs as part of broadband deployments. We have actively worked with local and regional ISPs, indigenous and community-led ISPs. They have been the applicant for funding and they have come to Telesat to secure the backhaul satellite connectivity to connect their communities.
    Thank you, Ms. Beck and Mr. Soroka.
    We're now going to move to our next speaker for the Liberals, Mr. Rogers, for five minutes.
    Welcome, to all of our witnesses, this evening. I have a question for Mr. Field first of all.
    Mr. Field, you noted the municipal contributions and involvement in many of the programs that you are involved with, and of course you identified the challenge of a coordinated approach and how that poses its own challenges. In the launch of the universal broadband fund, our government included a new service called the “pathfinder service” in order to assist small applicants especially with the application process. To my understanding, this was really well received, as small municipalities face challenges with capacity, especially during the pandemic period. Do you have any experience with this service, and if so, did you find it helpful? Is this something that should be considered in other federal funding programs, particularly as it applies to smaller and more rural and remote communities?
    Thank you for that.
    Yes, in fact I was able to use the pathfinder service for an application that I assisted with on Pelee Island, a small island in Lake Erie here in southern Ontario. It's a very small community with about 350 residents. They didn't really have the resources to fill out some of these rather complicated applications. I think that is exactly what the pathfinder service was there for, as kind of what I think they call a concierge service, to help the ISPs and the applicants through the process. We did use it in the UBF application I assisted Pelee Island with, and it worked very well.
    Thank you, Mr. Field.
    Perhaps I'll go to Mr. Péladeau on this one with regard to the CRTC.
    Can you discuss how the recent ruling from the CRTC on old cell rates will help address the connectivity gaps in rural and underserviced communities?
    You are referring to last week's decision?
    That's correct.
     I will piggyback a bit on my colleague's response to the question of your colleague Mr. Soroka.
    I think it's very important. Our experience for the last 12 years now, since the government decided it would set aside spectrum to make sure there will be competition, is that in certain areas of the country this goal or objective has been met. Should we say that it has been met everywhere? The answer is no. The answer is no because at a certain point, the participants at the auction.... I refer specifically to what we call the AWS auction that took place in 2008. It was open for companies that were probably not the ones that would build networks. After 10 years, it ended up in the hands of Shaw, and it has been able to build on Freedom Mobile and Shaw Mobile.
    We know what's actually taking place. This is why I said, when I spoke earlier, that we're getting back to square one regarding how competition will take place in certain areas of Canada. This is for sure. Quebec is a very competitive landscape and it has been able to provide people with much lower prices for cellphone service because there's a fourth competitor or player in the marketplace.
     Will the MVNO model be able to provide this? With the rules we have right now, it's tough for me to answer completely because the rules of the auction forbid comments on this. However, what we're seeing is a balance between organizations and companies that are able to piggyback on the network to make sure they will build and provide what we call a facility-based network, which will include significant investments. It's not going to flip the assets to a new owner for the purpose of making money or making a transaction. It's here to stay, and it will stay so that Canadians are able to enjoy competition with a fourth operator.

  (2005)  

    Thank you, Mr. Péladeau and Mr. Rogers.
    We're now going to move on to the Bloc and Mr. Barsalou-Duval for two and a half minutes.

[Translation]

    Thank you, Mr. Chair.
    Mr. Péladeau, I want to talk about something that hasn't come up a lot during the meeting, but it's something you mentioned in your opening statement. I'm referring to the potential repercussions of Rogers purchasing Shaw, specifically, its impact on competition.
    Would you mind elaborating on the issue?
    I'd be happy to.
    The presence of a fourth operator has unequivocally been shown to be a good thing. In or around 2007-2008, the government introduced conditions that were conducive to competition, conditions that benefited Canadians, especially Quebeckers and people in the Maritime provinces. Eastlink, owned by the Bragg family, comes to mind; the telecommunications company became a fourth player in the market out east. The conditions to attract competition to the marketplace had the effect of driving down prices.
    It's entirely appropriate that the government would want to take the necessary steps to create a more competitive marketplace. Not only does it lead to lower prices, but it also encourages innovation. Of course, customers care about the prices they pay telecommunications carriers, but it is not just prices they care about. Innovation also makes a difference. Increasingly, companies like Videotron are able to develop solutions that did not previously exist, solutions that are available to Quebeckers going forward.
    Videotron provided high-quality service. It had a very reliable network offering faster Internet speeds. Now, we are entering the era of 5G technology, and thanks to the competitive environment, that technology can be rolled out more quickly in Quebec and Canada. I will come back to this shortly, but the competitive landscape allows for new technologies to be deployed. That's what we have observed in the past few years.
    As I mentioned earlier, the purchase of Shaw by Rogers is creating something of a barrier in the competitive environment. The players that came into the market were not looking to become long-term telecommunications carriers. They were funded by foreign players or private companies that were not interested in building the conditions conducive to sustainable competition. Luckily, Shaw was the one that bought Freedom Mobile, previously Wind Mobile. That created the conditions conducive to competition.
    Unfortunately, however, the deal that was announced would take us back to square one. That fourth player that was able to provide competition will disappear if the deal goes through as announced. That's why we are calling on the various regulatory authorities to approve the deal, whether it be the competition bureau, the CRTC or Innovation, Science and Economic Development Canada, if—and only if—measures are taken to ensure a provision for the divestiture of the wireless carrier. The government must see to it that a long-term fourth competitor can be accommodated, to preserve the competitive landscape.
    That landscape will drive innovation, competition, lower prices and customer satisfaction, ensuring the service customers receive meets their expectations.

  (2010)  

    Thank you.

[English]

     Thank you, Mr. Péladeau and Mr. Barsalou-Duval.
    We're now going to move over to the NDP, with Mr. Bachrach for two and a half minutes.
    Thank you, Mr. Chair. I have another question for Ms. Beck regarding the Lightspeed program.
    There has been a lot of media attention on Starlink, Elon Musk's low-earth orbit satellite provider. I am wondering if you could speak to how Lightspeed differs and provides a unique product offering from that program.
     Yes. Thank you.
    Lightspeed differs. We are essentially a B2B company. We provide backhaul connectivity in working with carriers, ISPs and other integrators. On the other hand, the Starlink service is a direct-to-user consumer offer. Their model puts the small dishes either on or beside people's homes, and they serve those homes directly.
    Telesat looks at basically a holistic view of providing connectivity to the community, so we provide a big, fat, capable broadband trunk into the community that serves the community at large. We can connect the 5G towers so that they also have access to LTE or 5G services.
    We provide sufficient connectivity, and we can trunk gigabits' worth of connectivity, so there is sufficient connectivity to connect enterprises that need as well those gigabit-per-second speeds in local or municipal governments, business and schools, as well as households. We can serve 50 by 10 services and target each of those homes. If services want higher tiers and the ISP is prepared to offer higher-tiered services, we can also support that. We can scale with the demand of the community.
    Those are the key differences. It's direct-to-user versus a B2B solution where we trunk that capacity and we work with the local service providers or regional service providers that will manage and maintain the service locally.

  (2015)  

    Thank you, Ms. Beck and Mr. Bachrach.
    We're now going to move on to the Conservatives, with Mr. Kram for five minutes.
    Thank you, Mr. Chair.
    I would like to thank and welcome all of the witnesses to the committee this evening.
    I am particularly interested in hearing from the witnesses from Telesat, since I read the article about them in last week's Financial Post. First of all, what is the timeline for Telesat's Lightspeed system of satellites to begin low earth orbits and be fully operational?
    We will be launching satellites at the beginning of 2023. We will be in service in the northern latitudes by the end of 2023. Between those times, we'll be doing beta testing and working with our customers. We'll have full global service kind of mid-2024.
    Where will the satellites be built?
    That's a great question. We are working with local partners in Canada, and the satellites themselves will be assembled, integrated and tested at a facility in Montreal.
    I should say that the constellation as a whole will be operated from here in Ottawa. We're going to be building a facility in Quebec as well, for the technical operations, and then we'll have landing stations throughout the entire world.
    Where will the satellites be launched from?
    Unfortunately, Canada doesn't have a launch capability, but we are working with various launch providers. We've already announced one partnership with Blue Origin to launch some of our satellites. Stay tuned for some upcoming announcements.
    Okay. Fair enough.
    I can certainly see the benefits for consumers and the benefits for communities from having high-speed Internet access, obviously, but I was wondering if the witnesses could speak to the direct high-tech jobs that Telesat would be creating. How many jobs are under your roof, so to speak?
    Yes, absolutely. Telesat is scaling quite dramatically with this Lightspeed program and investing significantly in it. I should say that last year we hired about a hundred people. We're at only about 350 in Canada today. This year, we'll be hiring many more than that.
     The recent announcement we made with the Government of Quebec will see the creation of 600 new jobs and the maintenance of another 650, and I should say that there are going to be more at our headquarters here in Ottawa as well.
    All right.
    The article in the Financial Post was titled “Canada's Telesat takes on Musk and Bezos in space race to provide fast broadband”. How would the witnesses rate Telesat's chances of getting a system of low earth orbit satellites into space before Elon Musk and Jeff Bezos?
    Telesat competes in one of the most competitive and dynamic global industries. You see exactly that in who we are competing with. There is one question we get a lot: How will you compete? We've been doing this for over 50 years, and when we first started looking at low-earth orbit satellite architecture, we really looked at what our customers needed today and then built a system that would deliver that in the most affordable, technically advanced way possible.
    Telesat has a very long and storied culture of innovation, and we're world leaders in engineering. That comes through in the Lightspeed constellation. MIT has looked at multiple constellations in great depth and has said that our constellation is the most efficient and technically savvy. That's great. It points to the innovation pedigree that Telesat has.
    We feel that we're coming to market with the best constellation. We know the markets and our customers very well. We provide services in Canada today, but we also provide services all over the world. We feel good coming to market.
    The same Financial Post article mentioned that SpaceX and Amazon were going to focus on the “consumer market” while Telesat was going to focus on what it described as “deep-pocketed business clients”.
    Could the witnesses elaborate on who these deep-pocketed business clients are? Why would they prefer to do business with Telesat over SpaceX or Amazon?

  (2020)  

    My colleague Michele spoke about this in answering the earlier question about us compared with Starlink. It really comes down to the direct-to-consumer model that Starlink and Amazon are using and the model that Telesat uses. It's what we've used for 50 years. We partner with a local ISP, bring capacity into the community and then provide a holistic solution for the entire community, which includes things like LTE and 5G.
    Thank you, Mr. Hampton and Mr. Kram.
    We'll now move on to our final speaker for the final set of questions from the Liberals.
    Mr. Fillmore, you have the floor for five minutes.
     Thanks very much, Chair. I appreciate that.
    Thanks to the witnesses for sharing their time and expertise this evening.
    I want to ask a question of our witnesses who are in the business of providing terrestrial broadband. Before I get there, I just want to correct the record so that we have a good record of the conversation at this committee for this important study.
    One of the Conservative members brought up the Auditor General's report on rail safety and seemed to paint the report in a negative light, as if it were some sort of damning report. I need to clarify what in fact the Auditor General's report said, as follows:
Overall, Transport Canada made progress in addressing recommendations from our 2013 audit in the areas we followed up on....We found that Transport Canada improved its risk-based planning for oversight. In particular, the department significantly increased the number of its planned risk-based inspections. We also found that Transport Canada made progress in conducting more audits of railway companies’ safety management systems.
    So the problems that the Auditor General was reporting on included the time range of 2013 to 2015, the time of the Harper government. The actual conclusion, I think, from the Auditor General's report was that the current government was able to achieve what the previous government was not with regard to rail safety. I thought it was important to leave an accurate record of our discussion here tonight.
    We had another Conservative member of the committee who in the context of the greatest investment in community and national infrastructure in this country's history seems to find fault with the level of funding, and at the same time had actually run a federal election campaign on a promise to reduce infrastructure funding. So the internal conflict is a little hard to square. Needless to say, I think we've heard from our witnesses tonight that the level of investment we're seeing in national infrastructure is appropriate and is being very well received.
    Having dispensed with those distractions, I want to bring it back to the reason we're here tonight, which is connectivity, and go back to the witnesses who are in the business of terrestrial broadband. The UBF is a national program. Our government has committed to working in every province and territory to support projects that ensure that every Canadian has the access to the digital opportunities they need and deserve in this era. I think it's evident with the recent announcements with the Government of British Columbia and Rogers in addressing the connectivity gaps along the Highway of Tears, for example, and with the recent agreement between the Government of Quebec that committed $800 million to fund the acceleration of broadband projects to connect every Quebecker by the end of 2022. Going further, last Thursday we announced almost $11 million in combined funding with the Tlicho government to bring high-speed Internet to rural residents in the North Slave region.
    Where I'm going with this is that I wonder if any of the broadband witnesses could discuss whether—and if so, why—it's so crucial that these investments in broadband be seen as shared responsibilities that must include partnerships with the private sector as well as the federal government, provinces, territories and municipalities. My question is about the importance of that kind of collaboration and why that's important.
    Who would like to jump in on that one?
    I'll pick one: Mr. Field, go ahead.
    Thank you.
    Yes, I think it's vitally important that all levels of government and the private sector participate here. Ultimately, in these subsidy programs the money ends up in the hands of the ISPs themselves. We want to make sure the ISPs are contributing to that and are investing in their own networks.
    I would go back to my statement earlier that this problem exists because of that market failure in these rural areas. It's not profitable for an ISP to invest in an area with very, very low population density. Therefore, the subsidy is required. I think it's important for the federal government to invest in this and the provincial governments and the municipal governments in the areas where these investments are being made.
    Of course, at the end of the day, this is all coming out of the same pocket. It's all coming out of the taxpayer's pocket. I think it's incumbent on all levels of government to make sure that these programs are happening in the most efficient and effective ways possible.

  (2025)  

     Thank you, Mr. Fillmore and Mr. Field.
    Folks, we've come to the end of the meeting.
     First off, I want to take this opportunity to thank all of the witnesses. You've spent two hours with us today. We truly appreciate the time you've taken out of your busy schedules to come to participate in the study, and thus in the final report that we're hoping will reach the floor of the House of Commons sooner rather than later.
    To members as well, thank you for your participation and interventions today. Once again, it was a very productive meeting at the transport, infrastructure and communities committee.
    With that, before I adjourn this meeting, members, I want to remind you of the aircraft certification study we're finalizing. I'd like to take a moment to remind you that we have distributed the report on the aircraft certification study to each member, and if members have any suggestions for edits....
    What I'm trying to do here, folks, is to expedite the meeting that we would otherwise have when the analysts bring back the draft, and not spend a lot of time discussing any changes that you want to make. I'd prefer to do that beforehand, so if any member has suggestions for edits based on what you have received, it would be extremely helpful if you could submit those to the clerk so that we can have them in writing in both official languages for when the committee begins consideration on that draft report.
    Along the topic of reports, the analysts will soon be drafting the report for our the study on the Canada Infrastructure Bank. It would be helpful for the analysts if members could submit their drafting instructions to the clerk upon receiving that draft report as well.
     I'll leave it there. Do members have any questions on that?
    I just have a quick question, Mr. Chair.
    Sure, Taylor.
    In your last comment, you said that we should submit drafting instructions upon receiving a copy of the draft report. I'm just wondering about the timing of drafting instructions for the report, which I assume would come before the draft.
    Mr. Clerk, do you want to comment on that?
    Mr. Bachrach is quite correct. If we could receive any drafting instructions, just send them to the committee's general email, and I'll forward them to the analysts, which will really give them a leg up and a real hand in drafting the report.
    Mr. Chair, perhaps through you to the clerk, is there a timeline on that? Obviously, it's as soon as possible, it sounds like.
    Thanks, Taylor. It's a great question.
    Mr. Clerk, we have a calendar of events that we're going to be presenting to the committee at our business planning session, and we're trying to do that on Tuesday, taking a half near the end of the meeting on Tuesday to discuss some preliminary business. With that, we'll establish that calendar, I'm assuming—albeit we are going to have the first report within the next month or so before the committee, once the drafting instructions and edits are made by members of the committee.
    Following that, the next report, I'm assuming, is going to be a few weeks after that, Taylor, so depending on what's is talked about on Tuesday at our business planning session, I'm hoping to have that, with respect to your question about timing, within the next, say, four or five weeks on that second report.
    Thank you, Mr. Chair.
    Am I accurate on that, Mr. Clerk?
    Yes, on all of that, but for the Canada Infrastructure Bank study in particular, I believe it would be useful for the analysts if we could have any drafting instructions within the next week or so. That would really be helpful.
    Okay. Is that fine, Taylor?
    Excellent. Are there any further questions?
    Once again to the witnesses, thank you very much for your time today. It is very much appreciated.
    To the members, thank you for your interventions.
    Everyone, have a great night.
    We're adjourned.
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