Thank you, Mr. Chair.
I would like to acknowledge that this is likely a final appearance at the public accounts committee in this wonderful room, and I think it is a significant moment.
I want to start by thanking the Auditor General and his office for their report. This is an extremely important set of issues. We accept the recommendations and are moving forward to improve rural and remote connectivity.
As I said, I think it is a very important set of issues. As officials, we are doing our utmost, working with the CRTC, to improve rural and remote connectivity.
Our three sets of comments related to the Auditor General's report, by way of introduction, are first on strategy, second on programs and third on spectrum.
On strategy, we agree on the need for a connectivity strategy, particularly in light of the CRTC decision in December of 2016 declaring broadband a basic service. I personally believe that this declaration has created a significant inflection point, which has required us to move from an evolutionary step-by-step approach to a more collaborative integrated approach to broadband.
The department's broadband programs predate this announcement of broadband as a basic service. They were designed to address specific gaps in services, coverages and speed. We focused on closing the gap in speeds between urban and rural areas, in a way that carefully balances public interest and private investment. I would also add that connectivity is very much a moving target. Technology is constantly changing and improving, and in this context a strategy is important, particularly as we set specific goals.
As indicated earlier, work is already well under way. This past spring, we established a federal-provincial-territorial connectivity committee. This committee worked to examine service levels, priorities, principles and gaps and to coordinate plans of action.
In June, the department launched a national digital and data strategy consultation where connectivity was the foundational component. On September 25, Minister Bains released the economic strategy tables report, which focused in six sectors on the importance of digital infrastructure for the economic growth of the economy. On October 26, federal, provincial and territorial ministers for innovation and economic development agreed to make broadband a priority. They agreed to a set of connectivity principles and agreed to develop a long-term strategy to improve access to high-speed Internet and mobile services for all Canadians.
I do want to stress the three principles that were announced: one, access to ensure reliable high-quality services; two, collaboration to leverage all partners and to end fragmentation; and, three, effective instruments especially targeting market failures so that government supports this where it is most needed in the rural context.
I would like to end the comments on the strategy to remind members that there was in 2001 a national broadband task force, led at that time by David Johnston. It started in January 2001. If you look at their principles, you will see that they are remarkably similar to the ones that are at the heart of our new strategy.
Second, on programs, the audit scoped in two programs. Connecting Canadians is a $240-million five-year program launched in 2014 to install last-mile connection for 280,000 households that did not have access to Internet speeds of five megabits per second for downloading data and one megabit per second for uploading data. The second program, Connect to Innovate, is a $500-million five-year program launched in 2016 to support new backbone infrastructure to connect institutions such as schools and hospitals and to ensure communities have access to that backbone infrastructure.
I want to stress that the findings of the audit focused solely on the design phase of the Connect to Innovate program. That means the program was in the early stages of program rollout and the assessments were made in that context.
I am pleased to report—and I have been asked to do so by Minister Bains—that the program will connect 900 communities across Canada. That's three times the program's original target. Of the 900 communities, 190 are indigenous communities, some in the direst need of better high-speed Internet. I want to stress that, above all, what was targeted in this program were the areas of highest need for rural broadband.
In total, projects funded under the program will provide $1 billion towards improved connectivity.
In terms of other programs, I thought it would be important to mention that we have two other initiatives under way that are of relevance to rural broadband.
First, I'd like to note that budget 2018 committed $100 million to support projects that relate to lower-orbit satellites and next-generation rural broadband. These low earth orbit satellites have considerable potential to provide Canadians living in rural and remote areas, especially in the north, with significantly improved access to Internet and wireless services at more affordable prices.
I also want to mention our initiative that we've called Connecting Families, which is an important public-private partnership oriented to low-income households. To date, nine industry service providers have voluntarily partnered with the government to offer low-cost home Internet service to hundreds of thousands of eligible low-income Canadian families. Already, nearly 3,000 families have signed up for $10 Internet in the first two weeks. This is not, of course, all rural; nevertheless, it is significant in that context.
Last, in terms of spectrum and the issues raised there by the Auditor General, we agree that the impact on rural and remote areas is an important consideration when developing a licensing framework and spectrum activities. We continue to develop policies that encourage service into rural areas to ensure that all Canadians will benefit from high-quality services, coverage and affordable prices.
For example, we've just published a consultation on the development of similar geographic service areas for spectrum licence, which is known as the tier 5 consultation. What we're doing there is trying to drill down to a smaller geographical area so that we have a better understanding and mapping of what can be available in a smaller geographic area.
Also, in March 2019, the 600 megahertz spectrum auction is scheduled to take place. This spectrum can provide expanded rural coverage specifically because we set aside 40% of the spectrum for regional service providers. In this context, we put in place stringent deployment requirements to ensure the spectrum is used across the country, including in rural areas.
Let me conclude by saying that we recognize how important affordable high-speed connectivity is for rural communities and Canadians. We continue to work as hard as we can to service them. We see connectivity as a critical enabler of economic growth, and that is why we agree with the Auditor General concerning the need for a strategy, pursuing value for money whenever and wherever we can, and fully considering rural dimensions in spectrum auctions.
Thank you, Mr. Chair.