Thank you, Mr. Chairman.
I am pleased to be here today with my colleagues Adam Scott, director of business and regulatory affairs with the telecommunications policy branch, and Shane Williamson, executive director of the knowledge infrastructure program in the science and innovation sector at Industry Canada.
As director general of the electronic commerce branch at Industry Canada, I am responsible for a program called Broadband Canada: Connecting Rural Canadians.
In 2009, 95% of Canadian households had access to basic broadband, defined as a minimum speed of 1.5 megabits per second. But in rural and remote areas, only 85% of households had such access. For the individuals, families, and businesses that do not have access to broadband Internet service, important economic and social benefits such as telehealth, business opportunities, and distance-learning are not fully realized.
As part of Budget 2009, Canada's Economic Action Plan, Industry Canada was mandated to develop the Broadband Canada: Connecting Rural Canadians program, a three-year initiative to extend broadband Internet service to as many unserved and underserved households as possible in rural and remote areas.
The objectives of the program are to increase the number of Canadian households in rural and remote areas with access to broadband service at a minimum download speed of 1.5 megabits per second at a reasonable cost, and provide essential infrastructure that allows them to participate fully in the digital economy.
The program provides a one-time, non-repayable contribution to support the expansion of broadband connectivity where it may otherwise not be economically feasible for the private sector to deploy on its own. The program provides federal funding, up to 50% of eligible costs, to eligible recipients that include the private sector or consortiums of companies, not-for-profit organizations, and provincial/territorial entities that build and operate broadband infrastructure through a competitive application process. Projects serving First Nations communities can receive additional funding from other federal sources, for up to 100% federal funding.
The program was designed to be technology-neutral and accepted a variety of technological solutions. Provinces and territories where plans to connect 100% of households were already under way were not eligible.
In the summer of 2009, prior to the launch of the program's call for applications, an extensive mapping exercise was conducted to determine where broadband coverage existed. This process called on feedback from provincial governments, regional broadband associations, Internet service providers, and private citizens, as well as Industry Canada's own abilities to research and identify areas where service was available. Through this exercise, 64 geographic service areas covering all of Canada were identified as eligible for funding.
In response to the competitive application process in the fall of 2009, 570 applications were received from 144 companies, requesting $974 million in total funding. All 570 applications were assessed against the program's criteria, which included coverage, cost, technological solution, sustainability, and project management.
The selection of projects for funding was based on three guiding principles: the ability to maximize federal investment by connecting the greatest number of households at the lowest cost; the ability to provide robust service of at least 1.5 megabits per second even when multiple users are online and during peak periods; and the need to minimize duplication wherever possible. Where projects overlapped in a particular area, the lowest cost-per-household project was selected.
In the spring of 2010, 98 projects were conditionally approved pending completion of the department's due diligence requirements. After the selection process to verify that projects met all program requirements, 85 projects from 41 recipients, representing approximately $118 million in federal funding, were ultimately approved, and contribution agreements were signed. These projects will provide broadband access to over 214,000 households.
Currently, there are 14 projects that are complete and over 45,000 households now have access to broadband. The remaining projects are in various stages of completion.
When all projects are completed in summer 2012, and together with provincial, territorial, municipal and private sector initiatives, it is estimated that less than 2% of Canadian households will remain unserved or underserved. If advanced mobile networks are included, less than 1% households will remain unserved or underserved.
The delivery of broadband service to rural and remote communities encourages economic development, spurs innovation and improves the quality of life in hundreds of communities across Canada. For example, Internet speeds of 1.5 megabits per second allow a user to stream and watch movies, download music and participate in online gaming. It allows users to place telephone calls over the Internet using voice over Internet protocol technology. From a business perspective, it allows video conferencing (using applications such as Skype) and the ability to run multiple applications at the same time.
Currently there are 14 projects that are complete and over 47,000 households now have access to broadband. The remaining projects are in various stages of completion.
We have seen first-hand how access to broadband has impacted individuals and businesses who were disconnected from the digital world. Most recently, we conducted site visits in remote regions of British Columbia. An owner of a resort talked about how high-speed Internet has significantly improved his business, reducing vacancy rates during low season, bringing both tourists and commercial clients to his resort. Evidence of this was the helicopter parked on the front lawn. A mining exploration company was staying at the resort for an extended period of time, due primarily to the availability of broadband Internet at the resort. The company was able to transmit valuable information gained in the field back to its headquarters.
In another project, the Ktunaxa Nation Council, which owns FlexiNET, has undertaken a project to expand and enhance broadband services. As a result of the project funded by Broadband Canada, they are now able to offer improved access to allow tasks such as land management to national language training, online banking, the creation of websites for local businesses, online courses, and the use of video-conferencing technologies to provide health services and telephoning by a voice-over-Internet protocol.
Of particular importance to the community is preserving the Ktunaxa language. Given the limited existence of native speakers of this language, the Ktunaxa Nation has been recording their language using various digital means. The FlexiNET network allows the Ktunaxa Nation Council to provide various online trading products to its community, thus ensuring that the language is preserved for future generations.
I would also like to say a few words about the knowledge infrastructure program, as it may be of interest to the committee. The knowledge infrastructure program was a temporary program established through Canada's economic action plan to fund infrastructure projects at Canadian universities and colleges. The objective of this program was to provide an immediate economic stimulus in local communities over the short term, while increasing the research and training capacity of post-secondary institutions over the long term. In total, 52 projects with approved funding of $95.5 million were located in communities of 10,000 residents or fewer. Through these projects, KIP funding has helped enhance the capacity of post-secondary institutions to provide training in rural and remote areas in Canada.
In conclusion, Mr. Chair, we understand the impact that access to broadband can have on individuals, businesses and communities across the country.
And we are very pleased that the Broadband Canada program has been able to contribute to closing the gap for unserved and underserved Canadians.
I appreciate the opportunity to speak to you today, and together with my colleagues we'd be pleased to respond to your questions.
Thank you.