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Results: 1 - 15 of 53
Jerome Berthelette
View Jerome Berthelette Profile
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.
View David de Burgh Graham Profile
Lib. (QC)
First of all, Mr. Berthelette, at the outset, condolences for the loss of Michael Ferguson.
Many more communities got service than intended in the program. The program had a target of 300 and, as we just heard from Mr. Knubley, some 900 communities got service, including some 190 indigenous communities. How is this a failure?
View David de Burgh Graham Profile
Lib. (QC)
I want to make sure of that.
In my own riding, some $13 million in federal money out of a $47 million project will put 16,000 households across 17 municipalities on fibre optic in a territory three times the size of P.E.I. In what way did we not get value for the money we spent?
Philippe Le Goff
View Philippe Le Goff Profile
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.
View David de Burgh Graham Profile
Lib. (QC)
Would not facilitate or did not achieve value for money? What we see in the projects that I've seen across the country is quite good value for the money considering that it typically costs $2,000 or $3,000 per household to connect rural to fibre. In a lot of cases, this program came in well below that.
I'm trying to understand the basis on which this didn't get value for money.
Philippe Le Goff
View Philippe Le Goff Profile
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
View Philippe Le Goff Profile
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.
View David de Burgh Graham Profile
Lib. (QC)
In the opening comments, there was a reference by Mr. Berthelette about displacing private funds. I find it to be a big, red flag when I hear that, because it's based on an assumption that private funds are interested in coming to these communities. What we see is that private funds don't come to the communities; they go into the downtown core of a rural area, if there is a downtown core of a village, and they'll offer service there, but everybody out of range, just forget them; they're not worth funding and not worth investing in. Private companies only come to those areas when the public invests money, and then they say they're going to lose their market share, so now they're going to start investing.
I have a lot of trouble swallowing the concept that this program in any way displaced private funds. If anything, private funds tend to displace public funds when they arrive.
How do you see that assessment?
Philippe Le Goff
View Philippe Le Goff Profile
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.
View David de Burgh Graham Profile
Lib. (QC)
On that basis, the 4,000 communities that have not yet received funding should, more or less, all have private investment coming in and we shouldn't need to continue to worry about this.
Jerome Berthelette
View Jerome Berthelette Profile
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.
View David de Burgh Graham Profile
Lib. (QC)
In the audit, it sounds as if you're not happy with that, but here you're saying you are happy with that. Are we happy with how the program went?
Jerome Berthelette
View Jerome Berthelette Profile
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.
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