Industry Committee on Nov. 30th, 2017

[The Chair, Liberal, Dan Ruimy]

I call the meeting to order. Welcome, everybody.

I'm informed that we might still get called out on votes.

[David Graham, Liberal, Laurentides—Labelle, QC]

We might not.

[The Chair, Liberal, Dan Ruimy]

We might and we might not.

I want to make sure that we maximize our time here, so we're going to get right into things.

Welcome to meeting 87 of the Standing Committee on Industry, Science and Technology. Pursuant to Standing Order 108(2), we will continue our study of broadband connectivity in rural Canada.

Today we have with us, from the Federation of Canadian Municipalities, Sara Brown, member, and Ray Orb, chair of the rural forum.

You are the only ones today. We were anticipating only having half an hour because of votes, but now we have more time to grill you.

Will you be sharing your time? I will leave it up to you.

Mr. Orb, you have 10 minutes. Go ahead.

[Ray Orb, Chair, Rural Forum, Federation of Canadian Municipalities]

Thank you.

Good morning.

I'd like to begin by thanking the standing committee for the invitation to participate in your study on broadband connectivity.

My name is Ray Orb, and I am the chair of the rural forum at the Federation of Canadian Municipalities and also president of the Saskatchewan Association of Rural Municipalities.

I will be joined today by Sara Brown, chief executive officer of the Northwest Territories Association of Communities.

The Federation of Canadian Municipalities is the national voice of municipal government in Canada. Our member municipalities, nearly 2,000 of them, come from every corner of Canada and represent 91% of Canadians. Our members include Canada's largest cities, as well as small, urban, and rural communities, and 20 provincial and territorial municipal associations.

FCM works on behalf of municipal governments to bring local solutions to national challenges and to empower communities of all sizes to build a more prosperous, livable, and sustainable Canada.

FCM has long advocated for increased federal involvement in developing the telecommunications infrastructure that is critical to the social, cultural, and economic vibrancy of Canada's rural, northern, and remote communities. We brought the municipal perspective to a number of federal consultations on telecommunications services, including spectrum allocation and the development of federal broadband funding programs such as Connecting Canadians and Connect to Innovate.

On behalf of our members, FCM worked closely with the Canadian Radio-television and Telecommunications Commission to shape their definition of basic telecommunications services, so we were pleased with the CRTC's announcement last year of a universal service objective which determined that all Canadians should have access to broadband Internet on fixed and mobile networks.

FCM also welcomed the federal government's announcement in 2016 that their new broadband program, Connect to Innovate, would invest up to $500 million to bring high-speed Internet service to rural and remote communities. Too many of our rural and remote communities lack basic access to the broadband services that so many Canadians take for granted, access that is vital for modern commerce and education. Mandating universal access as well as programs like Connect to Innovate will help change that.

However, in order to ensure the universal service objective of the CRTC is a success, funding programs from the federal government must be long term and predictable. Only through this sort of funding will project proponents be able to make long-term decisions about technology as well as the rollout of services and service packages.

The fact is that no two communities are the same, so different technologies will be required for accessing affordable and reliable broadband services. That's why FCM supports flexibility in defining eligible broadband infrastructure in federal funding programs. Both backbone and last-mile components of broadband infrastructure are necessary elements if we hope to reach the goal of universal access. If funding programs only allow last-mile projects, many rural communities without modern backbone infrastructure will simply be left behind.

FCM believes that each of these pieces is important to the development of successful broadband services. It's so important that any federal funding program for broadband infrastructure prioritizes the hardest-to-serve underserved areas. Simply put, broadband Internet access has become fundamental to modern life and has the power to transform rural and northern Canada.

Modern networks contribute to economic growth by improving productivity, providing new services, supporting innovation, and improving market access. They give Canadians the capacity to collaborate, work, share, and learn. Unfortunately, the broadband gap is a reality in underserved communities. Too many Canadians are without broadband coverage, while others remain underserved by insufficient bandwidth and insufficient network capacity to meet user demand.

Under Canada's current approach to broadband policy, there is a significant lag in bringing the broadband speeds and technologies that are widely available in urban areas to Canadians in rural and remote regions. Any federal plan to improve rural connectivity must take this into account.

FCM also believes that a lack of broadband adoption on the part of Canadians is due, to some degree, to the issue of cost. That is why any federal plan must make affordability a priority.

Now I'd like to turn it over to my colleague Sara Brown to tell you about the challenges that Canada's northern and remote communities face in accessing broadband services.

[Sara Brown, Member, Federation of Canadian Municipalities]

Thank you very much, Ray.

In Canada's north, many communities simply cannot participate in Canada's digital economy because they are unable to connect to reliable high-speed Internet. Northern and remote communities face frequent outages and technical problems without a backup connection to ensure continued service. The impact of inconsistent service is clear. When northern and remote communities can't take part in today's digital economy, out-migration becomes a serious challenge.

Securing northern and remote access to broadband will provide the same competitive advantage found in other parts of the country, contributing significantly to economic development, health, education, and safety.

As outlined in FCM's submission to the standing committee, we believe the federal government should develop investment strategies for northern and remote communities to bring their Internet services up to the standards of urban centres, including when it comes to speed and redundancy. In order to address the unique challenges remote communities face in connecting to Internet services, there is a strong need for a specific strategy for satellite-dependent communities.

FCM also believes that the federal government needs to utilize local knowledge in data collection to ensure that accurate and up-to-date information is used when funding decisions are made. Municipalities have front-line expertise about the challenges our communities face in accessing broadband. That makes us key partners in developing future federal funding programs.

The federal government plays a critical role in ensuring broadband Internet services are available to all Canadians, regardless of where in the country they reside. To realize this vision, we believe that all orders of government must work together and in full partnership.

On behalf of Canada's cities and communities, we thank the standing committee for the opportunity to take part in this proceeding, along with other parties' contributions and recommendations.

Thank you.

Merci. Mahsi cho.

[The Chair, Liberal, Dan Ruimy]

Thank you very much for your presentations.

We're going to go to Mr. Bossio. You have seven minutes.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Thank you both for being here this morning. We appreciate your testimony.

I think it's fair to say that no one size fits all when it comes to delivering rural broadband. There are unique challenges that exist there, and really it's the municipal levels of government that are the feet on the ground and that understand the unique challenges that exist within their own communities.

Looking through that lens, what do municipalities think is the best way to deliver rural broadband to their particular communities?

[Ray Orb]

I can take the first crack at that, and if Sara has a comment, she can answer as well.

I think there needs to be some flexibility in how that's delivered. I know that in some provinces it may be delivered in other ways. Alberta has some unique ways. They're working in partnerships with some companies. In Saskatchewan, our approach has been a bit different, because we have a monopoly. We have SaskTel delivering most of the broadband services. There is some satellite delivered in the northern part, but we're really relying on our provincial organizations to work with our provinces and the industry in those provinces.

I would say flexibility, depending on the size of the communities, is a factor as well. We have a lot of diverse communities. Rural communities in Saskatchewan, as you know, Mr. Bossio, are somewhat different from those in Ontario, but we have the same challenges because we just don't have good coverage out in the rural areas.

As one further comment, in our province we're doing a really good survey of the shortfalls where there isn't good Internet coverage. Each municipality is being marked to determine where the lack is.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

With the municipalities, to try to get more specific, there are a lot of utilities that are owned both municipally and provincially. Municipalities are of course responsible for the roads. Do you not feel that it would be a good idea to try, through those partnerships between private entities, utilities, and municipalities, to run conduit wherever it's possible when rebuilding a road? It's the cheapest time to lay conduit down. As far as working with utilities goes, you have the existing hydro lines that go past every single home. Right now the utilities companies are charging a fortune for companies to run fibre across their poles to deliver that type of service.

Is FCM putting pressure on its own municipalities, and provincially with its utilities, to try to bring about those circumstances in which we can work in that partnership?

[Ray Orb]

Our approach to FCM is that it's important to have a three-way partnership of the federal government, the provincial government, and the municipalities. Taking advice from members like you is where we want to be on this issue.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Are you seeing any examples of municipalities taking this approach? The federal government has partners, and you and I have had a lot of conversations about this, and we work exceptionally well together in trying to find solutions. However, part of that solution is to get the municipalities more involved. They shouldn't just be waiting for the solution to come to them; they should be helping to drive the solution forward. They should be doing this through laying conduit and by putting lobbying and political pressure on the provinces and utilities to be part of that partnership. Are you seeing any examples of this starting to occur?

[Ray Orb]

We're seeing this, and we know that in Alberta in some cases the municipalities are working on that. There are as many as 80 municipalities, I believe, in one area that have grouped together. We could get that information to you, Mr. Bossio. I think they're doing some partnering.

When I was in Edmonton, Alberta, last fall, we sat in on a workshop where the companies came and talked to the municipalities. They've established a basis for what we want delivered out in the rural areas, and I think it's working quite well.

I'd like to give Sara a chance to comment as well.

[Sara Brown]

Our challenges are a little distinct in that we have a significant backbone connectivity issue and it's not a matter of the last mile. As well, there are many fewer opportunities for municipal governments to participate. Our communities are so tiny that their capacity is very much a challenge. It's not a matter of the service being delivered in the community; it's getting the service to the community.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

We know there are a lot of underserved areas in northern and remote areas. Even in the northern part of my riding in southern Ontario, I couldn't get any companies to bid on a CTI project. They said there just wasn't enough density. Even with 75% of the capital costs paid, the cost to license a spectrum takes away from their efforts to create enough revenue to put forward a project.

Do you see satellite becoming the default for those communities? How can we improve on the satellite coverage? You're always going to have the latency issue, but are there any other avenues you're exploring that could help to solve part of that problem?

[Sara Brown]

Some solutions have been discussed, and I know that with adequate funding they would be feasible. As it stands right now, though, there will probably never be a business case for affordable Internet-type services in our communities. That's part of the challenge.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

I know there was a funding announcement to run a backbone up into the northern part of the country. I know that's going to provide some of the backbone coverage. If there's enough of a backbone up there, is it still too remote to do a microwave POP, linking the microwave towers together in order to bring that to the backbone? If the distance is still far too great, are you going to have to rely on satellite coverage?

[The Chair, Liberal, Dan Ruimy]

Could you reply very briefly, please?

[Sara Brown]

The distances are great, and microwave wouldn't be feasible for most locations in the territories.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Bernier.

Mr. Bernier, you have seven minutes.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you very much.

I have one question for you concerning your members. Do they have a preference with the services that they want to be delivered to their community?

I will be a little bit more precise. When we have towers, sometimes there's a big discussion in a community that they don't want telecommunication towers in their municipalities. I know that the Minister of Innovation, Science and Economic Development has the power under the Telecommunications Act to be sure that we can have towers that will deliver to the community.

What is the thinking of your members? Do you think they're open for more towers in cities, or are they a little bit against them?

[Ray Orb]

If I can answer that, Mr. Bernier, I think that our members in the rural area would be open to towers. We're in areas where the population is quite sparse and we don't have too much infrastructure, so a tower is actually welcome. We have towers now, but they're really few and far between, and that's why there is a lack of coverage.

When companies put in new infrastructure, they put the hard wiring in with the services that go into the homes, so they need to be hooked up to the tower at some point. The idea of a tower being unsightly is not an issue for our rural members.

[Maxime Bernier, Conservative, Beauce, QC]

That's good news, because in some municipalities in my own province, it can be an issue. That's a challenge for the minister, because everybody wants to have good services. Thank you very much.

I just want to say to my colleagues that I tabled a motion last Thursday, November 23, for a study on the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act. I don't know if you're ready to vote on that.

[The Chair, Liberal, Dan Ruimy]

Did you want to...?

[Maxime Bernier, Conservative, Beauce, QC]

Could we just ask if they agree with the motion?

[The Chair, Liberal, Dan Ruimy]

Okay.

We'll start with Lloyd and then Terry.

Do we want to just read the motion? You have to tell us what motion you're reading.