Industry Committee on May 14th, 2020

[Marie-Hélène Labrie]

We are in both Quebec and Ontario, and we've been working with both provincial governments. I would say that in the last year Quebec has been more proactive in launching their program without waiting for the federal government. Given that there was a delay, they decided to go ahead to launch their own program.

I know that the Ontario government is very dedicated, too, and we're working hand in hand with them, but I think there was a leadership in Quebec that made a difference in terms of accelerating the launch of their own program. They're also getting involved on both ends on permits, and on the Ontario side, they are very proactive on also wanting to fix the issues related to the rates of the Ontario Energy Board, which establishes the rates for access [Technical difficulty—Editor]

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you.

Could I hear from the other witnesses, please?

[Tony Geheran]

Maybe I could give you a Telus perspective.

We would certainly see that the Quebec government has been the most successful at working with industry and within the federal schemes to extract dollars to create opportunity to build.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you.

Could I hear from Rogers?

[Dean Prevost]

We've seen success, frankly, in several jurisdictions across the country. We've had success in B.C. and in Ontario as well, but it's a complicated process where they don't typically work as well together, so there's a lot of room to improve.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Rempel Garner.

You have five minutes.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Thank you, Madam Chair.

I'm just trying to pull something up. I want to go back to the comment about “threats”, because I don't really think that's a productive way for us to move forward.

I'm wondering if Mr. Geheran would maybe dial it back a bit and say that perhaps his CEO's approach at the CRTC wasn't the best way to build trust with Canadian taxpayers, people who are looking for access and government and legislators tasked with ensuring the best regulatory environment to determine that.

[Tony Geheran]

I would say that the $43 billion that we've remitted in tax receipts since 2000, the tax morality of our constituency, is the best sign to say that we would work with anyone and work effectively for the benefit of Canadians.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

What I'm trying to get at is that I think you guys are making a lot of money. That's fine. I'm a Conservative; I like to see people profit. However, I also want to ensure that we're not creating a barrier to economic growth because we don't have access to Internet in the country in such a way that we can grow over time. The year 2030 is not an appropriate target. It's not. It's ridiculous.

This is why I'm just wondering if, in the five to 10 minutes that you have here, you could tell us what your cost per gigabyte or your cost per unit is to deliver service versus what you charge. I'm trying to get a sense of.... When you guys say that you have to cut jobs and service, and that you can't build out to rural parts of the country given that you're in a highly regulated environment.... Why is that?

[Tony Geheran]

Do you want me to answer?

The cost for us to provide a spectrum to satisfy subscribers is $340 per subscriber in the rounds of recent spectrum auctions that we've had to participate in. The equivalency in Japan is $30 per subscriber. In Germany, it's $140. In the U.S., it's $200. When you have a geography the size of Canada and a population as small as—

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

I was asking per.... You would assume that would decrease over time, right? That's why I was asking what the cost per gigabyte in an ongoing plan would be, but that's fine.

[Tony Geheran]

It's not just getting the spectrum. You have to deploy the spectrum. You need infrastructure. You have to build the antennas, the network, the fibres and the backhaul. You have a lot more than just the spectrum.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Sure, and just to defend my colleague Mr. Dreeshen's honour because he's such a good guy, and I know he really cares about Internet access, I would like to point you to an article that was written on February 25 by Dr. Geist. It's called “Who Runs Canadian Telecom Policy Anyway?: Why the Telus Threats at the CRTC Will Backfire”. Because I don't have enough time, I won't go through all of it, but he does go through several examples of threats that Telus has made over the years in CRTC hearings with regard to throttling back either investment or whatnot.

I would just wave the white flag here. I think we're all tired of some of the bullying tactics that have been put forward, and we need to have a plan that delivers service to rural Internet providers. Big incumbents operate in a highly regulated environment, so how can we manage to give access to everyone in a short period of time while that continues to work?

I guess I would just ask you for maybe a collegial response versus the confirmation bias response that I got before.

[Tony Geheran]

I would say that we would be as interested as anyone in making a good economic return and supporting a national program to provide access to all Canadians. If we could all align on how we can make the spectrum assets work for us cost-effectively, that would do a big part of the job. If we were to align provincial, federal and private capital together to build out fixed infrastructure where it's appropriate, we could do that quite easily and effectively.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

How would you feel if we moved to a use-it-or-lose-it spectrum allocation system? I've heard from some people that when incumbents hoard access to spectrum, it actually stifles competition and reduces access and competitiveness for Canadians.

[Tony Geheran]

We don't agree with hoarding spectrum. We want spectrum. We want to deploy the spectrum, so we would be supportive of a program that reduced the time from allocation to deployment so that you could demonstrate that it was incentivizing the infrastructure builds that are necessary to get the coverage. I think we're—

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Again, that's certainly not what we're seeing because the spectrum largely goes to the incumbents, right?

[Tony Geheran]

No, it doesn't.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Do you think—

[Tony Geheran]

That's a falsehood.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

In what way?

[Tony Geheran]

If 40% of the spectrum is set aside for regional parties, in some cases since 2008, and the spectrum allocated since then has still not been deployed, how can you say that it all goes to the incumbents? It does not.

[The Chair, Liberal, Sherry Romanado]

Unfortunately, that's the time for that round.

Our next round goes to MP Erskine-Smith.

You have five minutes.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

In the course of the last few hours, we've heard a lot about the rural-urban digital divide. There's obviously another really important digital divide, which is between low-income and high-income Canadians. In some of these reports, I see that 60% of low-income earners are connected versus 95% of high-income earners, which suggests that income is, in fact, the greatest digital divide across our country in many cases.

I'm curious. We've seen traffic up four times according to, I think, Telus. What are the additional costs of that?

That question is for Telus and for Rogers.