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Results: 1 - 15 of 84
Jerome Berthelette
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Jerome Berthelette
2019-02-21 8:49
Thank you, Mr. Chair, for this opportunity to discuss our fall 2018 report on connectivity in rural and remote areas. Joining me at the table is Philippe Le Goff, the principal responsible for the audit.
This audit focused on whether Innovation, Science, and Economic Development Canada and the Canadian Radio-television and Telecommunications Commission, according to their respective roles and responsibilities, monitored the state of connectivity and developed and implemented a plan to meet the connectivity needs of Canadians in remote and rural areas.
Over the past 12 years, detailed examinations of the state of broadband access in Canada have included recommendations that the federal government lead the creation of a national broadband strategy. However, at the time we finished our audit, the government had still not agreed to take that step.
Innovation, Science and Economic Development Canada indicated that it was reluctant to establish a strategy with an objective that could not be reached with the available funding. The department had continued to follow an approach that expanded broadband coverage to underserved parts of the country according to when funds were available.
This approach left people in rural and remote parts of the country with less access to important online services, such as education, banking, and health care, and without information about when they could expect to have better access.
On October 26, 2018, the Minister of Innovation, Science and Economic Development announced that the federal, provincial, and territorial ministers for innovation and economic development agreed to make broadband a priority and to develop a long-term strategy to improve access to high-speed Internet services for all Canadians.
Ministers committed to a goal of establishing universal access to Internet speeds of 50 megabits per second download and 10 megabits per second upload.
Mr. Chair, with respect to the current state of connectivity in Canada, we found that the department relied on complete and accurate data to inform policy-making aimed at addressing the connectivity gap in rural and remote areas.
In 2016, the government launched its connect to innovate funding program to bring high-speed Internet to 300 rural and remote communities in Canada. We examined whether the department designed and managed this program to maximize the value for taxpayers. We found that the department did not implement the program in a way that ensured the maximum broadband expansion for the public money spent. The program did not include a way to mitigate the risk that government funds might displace private sector funds.
We also found that the department did not provide key information to potential applicants for funding under the program. As a result, some applicants had to invest more effort in preparing their proposals, and all applicants lacked full knowledge of the basis for selecting funding proposals. For example, there were a number of considerations for selecting projects, but the application guide did not specify the relative weight of each criterion used in the project selection process. Also, projects were less likely to be funded if they did not align with provincial and territorial priorities. However, these priorities were not made public. In our view, the department should have made the weights and priorities public.
Many Canadians in rural and remote areas had to rely on fixed wireless broadband solutions. We found that small Internet service providers did not have sufficient access to high-quality spectrum to support broadband deployment in rural and remote areas. For example, the department auctioned spectrum licences for geographic areas that were too large for smaller service providers to bid on. The secondary market for unused spectrum did not function well, partly because licensees had little business incentive to make unused spectrum available for subordinate licensing. In addition, the information on unused spectrum was not readily available to interested Internet providers.
Innovation, Science and Economic Development Canada and the Canadian Radio-television and Telecommunications Commission have agreed with our six recommendations, and we understand that the department has prepared a detailed action plan.
Mr. Chair, this concludes my opening remarks.
We would be pleased to answer any questions the committee may have.
Thank you.
John Knubley
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John Knubley
2019-02-21 8:54
Thank you, Mr. Chair.
Overall, the Government of Canada sees connectivity and broadband as a critical enabler. It really is the way for all Canadians to participate in economic growth, innovation and social inclusion.
Overall, we also agree with the recommendations of the Auditor General. I thought I should, at the outset, acknowledge the contribution of the former Auditor General Ferguson. We had several heated conversations—good conversations—about this topic.
John Knubley
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John Knubley
2019-02-21 8:55
I have just a few words, then, on the three specific areas of comment in the Auditor General's chapter: first, on strategy; second, on programs; and third, on spectrum.
On strategy, we agree on the need for a connectivity strategy, particularly in light of the CRTC decision in December 2016 declaring broadband a basic service and setting that 50/10 target. I personally believe that this declaration has created a significant inflection point for the delivery of broadband, which has required us to move from an evolutionary, step-by-step approach, addressing gaps, to a more collaborative, integrative approach to broadband.
As a basic service, the department's broadband programs predate this announcement from CRTC. As I said, they were designed to be step by step and to focus on specific gaps in services, coverages and speed. We focused on closing the gaps in speed between urban and rural areas in a way that carefully balances the public interest and private investment. We do want to avoid crowding out private investment in whatever we do.
I would also want to stress to members and to the chair that connectivity is very much a moving target. Technology is constantly changing and improving, and in this context, strategy is important, particularly as we set specific goals. However, it's constantly evolving. Only a few years ago our target was five and one, as opposed to 50 and 10.
As indicated earlier, work was already under way on a strategy this past spring. We established a federal-provincial-territorial connectivity committee. Federal-provincial groups have existed before, but we formalized it.
In June, the department launched a national digital and data strategy consultation, in which connectivity was the foundational component.
On September 25, Minister Bains released the economic strategy tables report, which focused on six sectors. This included the importance of broadband and digital infrastructure for economic growth, innovation and social inclusion.
Finally, on October 26 of last year, the federal-provincial-territorial ministers met. They agreed as a group to make broadband a priority, and to work together to that end. They agreed to a set of connectivity principles and to develop a long-term strategy to improve access for Canadians to high-speed Internet and mobile services. In other words, they accepted the 50/10 goal and the objective of serving Canadians with broadband as a basic service.
They did announce three specific principles: access to ensure reliable, high-quality service; collaboration to leverage all partners, and end fragmentation; and effective instruments, especially targeting market failures, so that government supports this where it is most needed in a real world context and does not crowd out private investment.
I would like to end my comments on the strategy by reminding members that the department has been very active in the digital and connectivity space for many years. It goes back to Minister Manley. There was a national broadband task force in 2001, led by David Johnston. If you look at their principles—I suspect I'll point them out to you later—you will see that they are remarkably similar to ones that are at the heart of our new strategy. The department has been committed for many years to providing programming around education related to digital and broadband activity. I can talk to you about some of those programs.
The second area of focus for the Auditor General was our two programs: Connecting Canadians, a $240-million, five-year program launched in 2014 to install last-mile connection for households; and our more recent program, connect to innovate, a $500-million, five-year program launched in 2016 primarily to support new backbone infrastructure to connect institutions such as schools and hospitals, and to ensure that communities have access to broadband.
I do want to stress that the findings of the audit focus solely on the design phase of the connect to innovate program. That's where we were at the time of the work of the Auditor General. I am pleased to report, and I have been asked to do so by Minister Bains, that the program will connect 900 communities across Canada. That's three times the program's original target of 300 communities.
Of the 900 communities, 190 are indigenous communities, some of them in the direst need of better high-speed Internet. I want to stress that above all what was targeted in this program were the areas of highest need for rural broadband, typically where the private sector is not inclined to go and that, overall, our $500 million program leveraged another $500 million, so that $1 billion is dedicated towards improved connectivity.
Let me just turn to the issue of spectrum and the issues raised there by the Auditor General. We certainly agree that the impact on rural and remote areas is a very important consideration when developing spectrum activities or licensing frameworks. We continue to develop policies that encourage service into rural areas to ensure that all Canadians will benefit from high-quality services, coverage and affordable prices. For example, we've just published a consultation on the development of similar geographic service areas for spectrum licence, known as the tier 5 consultation, which was referenced in the Auditor General's report.
What we have been doing is trying to drill down to a smaller geographical service areas so that we have a better understanding and mapping of what can be available to Canadians.
Also the 600 megahertz spectrum auction is scheduled to take place shortly. This spectrum can provide expanded rural coverage, specifically because we set aside 40% of the spectrum for regional service providers.
Let me conclude by just reaffirming that we recognize how important affordable high-speed connectivity and broadband is for rural communities and Canadians and that we all work very hard to ensure that we service and meet the objectives related to that.
Thank you, Mr. Chair.
Ian Scott
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Ian Scott
2019-02-21 9:02
Good morning, Mr. Chair.
Members, I'll forgo introducing myself and my colleagues, as the chairman has already done so.
We appreciate the opportunity to appear before this committee to discuss the findings of the Office of the Auditor General and to explain the CRTC's role in increasing connectivity for Canadians living in rural and remote areas of our country.
As the Auditor General's report noted, the commission has a limited but important role to play. Our job as an independent regulator is to ensure that Canadians have access to a world-class communication system that promotes innovation and enriches their lives. We believe that all Canadians, no matter where they live, should have access to broadband Internet services on both fixed and mobile networks. As the Auditor General's report underlines, connectivity is vital in today's world. Broadband is the critical tool we use to communicate with each other, educate and entertain ourselves, find information, apply for jobs and do routine activities from banking to accessing health care and other government services.
So Canadians need access to an unfettered Internet experience.
While we don't hold all the levers, there are areas where the CRTC can—and is—helping to advance this goal. A perfect example is the CRTC's December 2016 announcement that broadband Internet is now considered a basic telecommunications service.
At the same time, we established a new universal service objective, as just mentioned by the deputy minister. We call for all Canadians to have access to fixed broadband services at download speeds of at least 50 megabits per second and upload speeds of 10 megabits per second, as well as access to an unlimited data option. The latest wireless technology, currently known as LTE—long-term evolution—should be available not only in Canadian homes and businesses but also on major roads in Canada. By the end of 2021, we expect that 90% of Canadian households will have access to speeds matching the universal service objective. By our current estimates, it will take another decade or so after that for the remaining 10% to join them.
Mr. Chairman, 84% of Canadians have access to the Internet at the new speed targets today. However, many people, particularly those living in rural and remote areas, can only dream of this level of service. While 97% of households in urban areas have access to service that meets the universal service objective, only 37% in rural areas have similar access.
As a result, 16% of Canadian households or nearly two million Canadians still don't have access to the universal service objective speeds or unlimited data option. Fast, reliable, high-quality Internet is simply out of reach, whether physically or financially, in many parts of the country.
That message came through loud and clear during the CRTC's public hearing on basic telecommunications services. We heard from more than 50,000 people—individual Canadians, business owners and leaders of indigenous communities. Many of them told us they're being left behind in the digital age.
Coverage gaps, of course, vary by region. Smaller maritime and prairie communities often do not enjoy the high speeds of major urban centres. The worst off and most in need are almost always found in the Canadian north.
Efforts to close these gaps need to be coordinated, as they are a shared responsibility among numerous players. Beyond the CRTC, this of course includes Innovation, Science and Economic Development, as well as the provinces and territories, indigenous governments, the telecommunications industry itself and non-governmental organizations.
For its part, the CRTC has announced a new broadband fund. It will provide up to $750 million over the next five years to help pay for infrastructure to extend Internet and mobile wireless services to underserved areas. Our objective is to ensure that rural residents have comparable service to those in urban areas.
Of that $750 million to be made available, up to 10% of the annual total will be provided to improve services in satellite-dependent communities. These are communities that rely exclusively on satellite transport to receive one or more telecommunication services, such as telephone, fixed and mobile wireless, and Internet services.
Of course, when we launch our first call for applications this year, it will be important for potential applicants to know where the greatest needs are located. We agree with the Auditor General's report on this issue.
Last month—it has actually been a few months now—we published maps indicating the areas of the country that do not have access to broadband speeds of 50 megabits for download and 10 megabits for upload. The maps also identify communities without high-capacity transport infrastructure and where homes or major roads do not have access to LTE mobile wireless service. In short, the areas of the country that do not currently meet our universal service objective. We have asked Internet and wireless service providers to verify the accuracy of our maps.
This is consistent with our overall approach regarding broadband data. We make information available to the public in as much detail as possible, while respecting the confidentiality provisions of the Telecommunications Act.
In fact, we will soon publish an update to our annual communications monitoring report that will provide fresh data on broadband availability and other related information.
Moreover, a memorandum of understanding was established a number of years ago between the CRTC and Innovation, Science and Economic Development Canada. This agreement governs our collaboration and the data that is shared between our organizations. We're committed to sharing information on broadband infrastructure to support evidence-based decision-making. We're also committed to working with all levels of government as part of a collaborative effort to provide broadband Internet service to underserved Canadians.
Since announcing the details of our fund late last year, we've met with representatives from provincial and territorial governments, as well as all the relevant federal departments, to explain how the fund will work and to understand their broadband funding plans.
Mr. Chairman and members, extending broadband and mobile coverage to underserved households, businesses and along major roads will require billions of dollars in investment and infrastructure. There is no doubt that this objective is an ambitious one, in part because of our vast geography and shorter construction season in many parts of the country.
The CRTC's broadband fund is obviously just one part of the equation. It is meant to be complementary to but not a replacement for existing and future public funding and private investment.
Having detailed, accurate and up-to-date information at the disposal of the public and policy-makers will ensure that the funds are being directed to the most appropriate projects and communities. There's also no doubt that much work remains to be done. I'm confident, however, that this objective will be met in the same manner that railways and electrical grids were built in the past, by connecting one community at a time.
Thank you very much.
We will be happy to answer any questions you may have.
Philippe Le Goff
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Philippe Le Goff
2019-02-21 9:13
Mr. Chair, I think I cannot comment on a specific case like that. We looked at the design of the program at the time of the audit, simply, and we determined that the approach would not facilitate value for money.
Philippe Le Goff
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Philippe Le Goff
2019-02-21 9:14
Mr. Chair, again, I would say that we looked only at the design of the program. It was among the criteria design determined by the department at the time that they would not focus really solely on value for money, but they had other criteria to make decisions.
Philippe Le Goff
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Philippe Le Goff
2019-02-21 9:14
I would submit, Mr. Chair, that the audit was designed to look at value for money, and it's what we looked at. We concluded on this thing.
Philippe Le Goff
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Philippe Le Goff
2019-02-21 9:15
Mr. Chair, I would say that our main concern about this was that, in some cases, private funds could have been spent anyway despite the program. Because the program existed, the private funds took advantage of that.
Jerome Berthelette
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Jerome Berthelette
2019-02-21 9:16
Mr. Chair, I think the philosophy behind the programs of the department is that they're looking to private funds to expand broadband. So when we looked at the program, we were looking at how you maximize private funding. There will be cases where private funds are not going to be made available because of the isolation of the communities, perhaps, and the cost. However, there may be cases where a combination of private funds and public funds is going to be needed, and ideally we will look to the department to make sure that it maximizes private funds and maximizes the benefit that we get from the public funds.
I think what we heard today is that they've managed to get a one-for-one investment from the private funds, and I think that's probably a good thing.
Jerome Berthelette
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Jerome Berthelette
2019-02-21 9:17
I think that, at the time, we were looking at how the program was designed. We were looking at making recommendations that would help to ensure that the department achieved its goal, which was to try to maximize the private funds. At this point, with the knowledge we have, I'd say they're being fairly successful at achieving that goal. But we haven't audited this, so I think I will hold off on saying whether it is as successful as it could be until we've actually audited what has transpired so far.
Ian Scott
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Ian Scott
2019-02-21 9:18
No, I don't believe the commission's hands are tied in any way. We have a very constructive working relationship with ISED in relation to these and the development of broadband maps and ongoing coordination. We too will assist the department in the federal-provincial-territorial discussions. So, no, the commission has a somewhat different role because we are an arm's-length, independent agency, so there are times when we are more insular, for lack of a better term. We must be, to respect our arm's-length relationship.
No, there are no impediments to our working toward fulfilling these broadband objectives.
Ian Scott
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Ian Scott
2019-02-21 9:19
There are a number of elements packed into that question. Perhaps I'll—
Mr. David de Burgh Graham: Feel free to take it apart.
Mr. Ian Scott: —take the last one first.
You're aware, I'm sure, that there is currently a review of both the Broadcasting Act and the Telecommunications Act under way. The government established a review panel that will be making its recommendations. We've made a public submission to that panel. One of the issues we have highlighted is the current and future importance of passive infrastructure, in particular as we look toward the deployment of 5G mobile technology. There will be more and more devices to be deployed not only on traditional rights of way, whether they be provincial or municipal, and poles, but also things like municipal-controlled or -owned bus shelters, lamp posts and so on. This will represent a formidable challenge in the future, and we have pointed out that as the legislation is reviewed, it will be very important that parliamentarians pay particular attention to that issue, so that we have a resolution, so that we'll be able to ensure that both broadband and wireless technology in the future is effectively deployed.
Ian Scott
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Ian Scott
2019-02-21 9:22
I am very pleased to answer that question because the premise is incorrect, with all due respect. We did not cut it. The target is 50 and we look forward to seeing that target fulfilled.
In the decision that we released when we set out all of the details for how one could apply for the fund, we allowed that we'd accept—in certain circumstances—applications for 25 megabit service where it can clearly be scaled up to 50. The reason for that is if we had not made that decision, there would be a lot of communities that would wait until well after 2021 because they simply couldn't get to 50 from where they are today, which might be three, four or five megabits per second.
We were not limiting but expanding the potential number of communities.
Ian Scott
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Ian Scott
2019-02-21 9:23
For the reason I just said. If we insist on accepting applications that can only reach 50 megabits, many of those communities will not be included. It's not to say that they will not get to 50. We will only consider applications at 25 megabit per second that have a clear path to 50. It will result in more communities receiving a higher grade of service sooner than they otherwise would.
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