Canadian Heritage Committee on May 18th, 2023

[Karen Hogan]

It's not up to me to comment on policies set by the government, but I can make recommendations on their implementation by the departments.

I could, therefore, communicate with the people at Statistics Canada, who are experts on statistics. However, if the agency isn't the focus of the audit I'm conducting, I won't make recommendations for the agency. That doesn't mean that I won't communicate with the deputy minister to share what we've observed and found in order to improve the performance of that government service.

[Martin Champoux, Bloc, Drummond, QC]

I found that part very interesting. Indeed, more and more fairly big companies that are expanding, particularly in the agri-food and agriculture sectors, are located in so-called remote regions. However, those companies have the same connectivity requirements as ones in urban centres. It seems to me, then, that by doing a study on those kinds of needs in a context where industrial parks are overcrowded and where companies need to move, that criterion becomes more important.

You're confirming, then, that you have the authority to make recommendations for reviewing the way some areas and some of those criteria are assessed.

Also, I found it interesting that, in your report, you make readers aware that Internet and mobile cellular services aren't the same everywhere and, consequently, affordability isn't the same everywhere. We know that, in remote regions, those services can cost a fortune. In fact, your report includes a recommendation on that.

In your opinion, is the response provided by Innovation, Science and Economic Development Canada, ISED—that these services will be provided through the universal broadband fund—satisfactory? Do you believe that the fund will be enough to help sufficiently lower the price that consumers, particularly those living in remote regions, will have to pay for Internet?

[Karen Hogan]

During the audit, I was concerned about the issue of affordability. I had a number of discussions on that topic with the deputy minister of ISED. I believe that, for the department, the decision to include household income or not in the definition of affordability is a policy issue. As a result, I had many discussions and I encouraged the deputy minister to discuss it with the minister. In my opinion, we have only a partial picture if price is the only factor taken into consideration. I hope that they will address this issue soon.

[Martin Champoux, Bloc, Drummond, QC]

Thank you.

I believe I have approximately two minutes remaining, Mr. Chair.

[The Vice-Chair, Conservative, Kevin Waugh]

No, you're there. In fact, I've given you a little more.

That does mean wrap up. Thank you.

We'll move on now to Peter Julian for two and a half minutes.

Peter, go ahead.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much, Mr. Chair.

Nice try, Mr. Champoux.

I want to come back to the consequences of not having high-speed Internet in place. I want to speak about the consequences for rural communities and for indigenous communities, like consequences for distance education. It's the reality of not being able, in more isolated communities, to access distance education, which so many people rely on to enhance their skills and gain more abilities to contribute to their community.

There's distance health as well. I know the B.C. government has done a lot to expand access to the provision of distance health so that people in more remote rural communities and indigenous communities can actually get access to health care.

It's also an issue of fundamental economic development. Having access to high-speed Internet makes a big difference in a community's ability to actually develop and build on its economic foundations. These are all fundamental issues.

You talked, Ms. Hogan, about the government spending only $949 million while they like to advertise that they've made available over $7.6 billion. I see that as a fundamental failure by this government to walk the talk and provide supports. Can you speak to what you see and what your report indicates in terms of the consequences of not having access to high-speed Internet for education, health care, economic development, etc.?

[Karen Hogan]

As you mentioned, many of us take for granted that we might leave here today and, on our cellphone, pay a bill before we head home. There are many individuals in rural and remote communities who can't do that, but putting a price tag on missed opportunity is really difficult.

What we saw throughout the pandemic was that so much of Canadians' lives shifted to an online environment. Many small businesses that don't have access to the Internet likely lost revenues, and that's a really hard thing to quantify. We can't get at that in our report. That's why it's so important not to look at the numbers for accessibility across the country and say that we're doing a great job, because the numbers for urban communities mask what's going on in rural, remote and first nations communities. It's about ensuring that all of our recommendations are addressed and that we properly cost how much it will take to reach those hardest to reach, because it is expensive and that hasn't been done yet.

[The Vice-Chair, Conservative, Kevin Waugh]

Thank you, Peter.

We will move on now to the Conservatives. We welcome Alex Ruff to the committee.

Mr. Ruff, go ahead for five minutes.

[Alex Ruff, Conservative, Bruce—Grey—Owen Sound, ON]

Thanks so much, Mr. Chair.

Ms. Hogan, thanks so much for coming today.

I'm glad I have the chance to show up to committee today and partake, because this is such an important issue. I represent the riding of Bruce—Grey—Owen Sound, a very rural riding in Ontario and one that has the second-highest demographic of seniors, which presents another challenge. We'll get to that.

I want to commend you on the part of your report—I think it's paragraph 2.69—where you point out that “neither Innovation, Science and Economic Development Canada nor the [CRTC] could tell Canadians whether the affordability of Internet and mobile cellular connectivity had improved.” It's a pretty damning statement.

I want to provide additional evidence, as somebody who personally can't get over five megabits per second as service. I don't even get that because, of course, the service providers don't deliver what they advertise. It's only three any time I've checked it. I am one of many residents in my riding who have no connectivity. This in particular becomes a huge issue as the federal government moves more and more services, as you identified, to the digital realm. Then you don't have it.

I have a couple of points I want to get to. In your paragraph talking about not only the Internet service availability map.... I appreciate the question Mr. Shields brought forward about how there's a misperception. I have local Internet service providers trying to provide that service, but when they apply to ISED to try to get the maps updated.... It's going on two-plus years for them to even get the service they are providing put on the map or recognized.

Is this common in more than just my riding? Is this a common problem throughout Canada? I think you hinted at that.

[Karen Hogan]

We spoke to service providers and other stakeholders. A very common comment we received was that the maps were outdated over many months, as I mentioned earlier, and sometimes had inaccurate information. That's why we made a recommendation to the government to find a better way to challenge that. You need more timely information, but you also need to double-check and challenge the information to ensure the quality is there. The service provider shouldn't be the quality mechanism for having an accurate map.

[Alex Ruff, Conservative, Bruce—Grey—Owen Sound, ON]

I have another thing on the funding side in particular. The universal broadband fund is one of the key elements the federal government is using to try to provide support for this. My push-back on the whole fund in the first place is that the money seems to be flowing to the wrong sectors or wrong providers. The vast majority of this money, in my observation, seems to be going to major Internet service providers—the big telecoms—and not so much to the smaller and especially rural-sized areas, because they can't compete for it.

I was shocked and disappointed when—I know Tim is in the same neck of the woods, in western Ontario—the SWIFT or Southwestern Integrated Fibre Technology program, which was previously funded by the federal government.... Federal, provincial, municipal and private Internet service providers all had a fund. It worked well. The benefit of that program was that it concentrated more on the last five miles.

My biggest complaint about a lot of this funding is that it's going to service providers to put in Internet where they're going to go anyway—where the business model is. In the national strategy, the biggest shortfall is that it's not focused and that the money is not flowing to the most expensive spots in order to get to the last 5% or 10% of the Canadian population, in particular those in rural and remote areas.

Did you suss out any data that backs up my observation?

[Karen Hogan]

You had many observations in there. I'll try to tackle a few things.

I think money is going to larger service providers because most of it is about infrastructure. They're the ones bidding and can afford those kinds of projects. We know a lot of projects came from municipalities in order to expand access.

We can look at the funding. You talked about how costly it is to go the last mile. That was actually one of our recommendations. The strategy has not fully costed out what it will take to reach everybody by 2030. Those who are left are far and in remote areas, and this will likely be very costly. That's why we recommended that costing needs to be done now in order to make sure the resources and money are available to meet the 2030 target.

[Alex Ruff, Conservative, Bruce—Grey—Owen Sound, ON]

Chair, I recognize that I'm pretty much out of time. I'd just like a quick comment.

The national strategy is on the maintenance aspect too. We're getting lots of complaints that not only.... It's about the reliability side. It breaks down.

I had a local area in my riding where just this past weekend.... Again, the only thing seniors depend on is their phone and Internet, and the companies...that maintenance breaks down. That's unlike 30 years ago, when a lot more people were on land lines and everything like that. It was dependable. It got fixed quickly. Now it's taking 72 to 96 hours.

Anyway, I recognize that I'm out of time, Chair.

[The Vice-Chair, Conservative, Kevin Waugh]

Thank you, Mr. Ruff.

We'll move to Mr. Housefather for five minutes, please.

[Michael Coteau, Liberal, Don Valley East, ON]

I think I'm next.

[The Vice-Chair, Conservative, Kevin Waugh]

Oh, okay.

It's Mr. Coteau, then, in studio, as we say. You have five minutes.

[Michael Coteau, Liberal, Don Valley East, ON]

Thank you very much, Mr. Chair.

I believe that in my province of Ontario, probably the most important sector is the agriculture sector, and of course rural Ontario plays the largest role in making sure that sector stays healthy. I think it's a $50-billion sector in Ontario. I've gone out to farms. I'm not from a rural community, but obviously Don Valley East depends on our farmers, or else we wouldn't be able to survive.

I've seen some of the technology they use and the mesh networks they put on farms that connect to a farmer's smart phone. They're able to monitor crops and look at humidity and the yield rate, and they make improvements based on this data and technology. Without question, we need to invest in and to continue to support our rural communities in order to continue to grow that sector, which is, without question, among the most important sectors in Canada.

I noticed that in the report there was a lot of money left over in some funds. One of the recommendations was that we need to improve the process for applications and the approval process. What does improving the approval process mean, and what's the challenge there?

[Karen Hogan]

We've really focused on the CRTC and Innovation, Science and Economic Development Canada. We looked at the commitment they made as to how long it would take to review an application and provide notification of whether it had been approved for funding, and then at how long it actually took.

When it came to the CRTC, it took almost two years to go through that approval to assess the application versus the 10 months they had told applicants it would take. When it came to ISED, it was almost a year, yet they had communicated it would take a month. When we asked them why this happened, the main issue was that they received much more volume than they had expected. There's definitely a desire to help improve connectivity across the country, so now those two entities need to improve their administrative matters in order to get funding and approvals done better.

The last thing I would add there is that, when we talked with certain applicants, we learned that the CRTC sometimes took almost two years to communicate with someone. Just not knowing meant that some providers abandoned their project, so even though it might have been worthwhile, it was no longer going to happen.

[Michael Coteau, Liberal, Don Valley East, ON]

Did you do any analysis of the complexity of the application process?

[Karen Hogan]

I'm going to ask Sami to look at that.

[Michael Coteau, Liberal, Don Valley East, ON]

I have a whole bunch of questions, so I'd like a really quick answer, if possible.

[Sami Hannoush]

We did look at the complexity, but the complexity is well beyond the approval process. There's the whole implementation of the project and delivery right to the end. We tried to look at it, but there weren't many projects that had gotten to completion for us to review.

[Michael Coteau, Liberal, Don Valley East, ON]

I also noticed you made recommendations to look into emerging technology, like satellite technology. We all know of the Starlink project that's happening. In terms of the technology that's emerging, did you do a deep analysis of the satellite technology that's coming forward and how we could leap into new technologies to accelerate this entire process?

[Karen Hogan]

We didn't focus so much on emerging technology. We looked at what's out there and really focused on the use of spectrum licences, where radio frequency bands are used in areas where you don't have hard cables. We made some recommendations around improving access to spectrum and sublicensing that we hope will help improve access in some of the rural communities.

Some changes that were recommended in our 2018 audit were put in place. They were just put in place, so it's too early to know whether the change to how spectrum is managed will actually yield better results for rural communities.

[Michael Coteau, Liberal, Don Valley East, ON]

I know that the scope of an audit involves looking at existing programs and doing an analysis, but at the same time, you may come across ideas that people bring forward within the system.

Did you come across any alternative deployment systems like co-operatives and things like those that you would recommend the government start looking into?