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