Industry Committee on Jan. 26th, 2021

[Dean Proctor]

We'll happily do that. Is there a time frame for it?

[The Chair, Liberal, Sherry Romanado]

If you could get it to the clerk as soon as possible, it could be considered.

[Dean Proctor]

Thank you.

[The Chair, Liberal, Sherry Romanado]

With that, I will turn to MP Jowhari.

You have the floor for five minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Madam Speaker.

I'd like to thank the witnesses for their testimony.

Mr. Noyes, in a brief to the committee, ACORN Canada explained that the Government of Canada connecting families program will improve the affordability of telecommunication services for low-income families. They also said that it's far too limited in reach, citing the fact that only 5% of eligible families were participating in the program. In your previous response, you touched on a couple of the reasons. Can you give your point of view and explain why you believe there is such a low uptake?

[Raymond Noyes]

I believe I was told, in discussions we've had about this, that something like 22,000 families were offered this service and only about 5% of them took it up. One major concern that I heard was that the speed was much too slow. Since this was specifically for connecting families, the difficulty was that the family with more than one person online at the same time had problems.

To be honest, although I'm not necessarily an expert in the different programs, I do believe it might not have been publicized well. I think to myself that just maybe they were publicizing it online to people who aren't online.

[Majid Jowhari, Liberal, Richmond Hill, ON]

So speed was one. The communication or advertising or publicizing of it was another one. You also talked about the voluntary nature of the program. Can you expand on that one?

[Raymond Noyes]

All I can say is that I believe I was told that Eastlink in the Maritimes did not participate. I'm not sure which other telecoms have participated.

I think we're talking about a different kind of program during the pandemic. We're hoping to move toward the connecting families type of program for all low-income people after the pandemic. I would hope that when the time comes, all telecoms, as a gesture of goodwill, would be involved with this. If necessary, maybe there could be government subsidy. We all know that government has been helping—leaving nobody behind, as they like to say—and money for these things is probably available if it's considered to be a necessity. We at ACORN have come to believe, along with the Prime Minister, that the Internet is a necessity.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

In one of your responses, you mentioned that one of the reasons for low uptake could be that this program is for families, and low-income individuals may not qualify for that. Can you expand on that one? Is my understanding correct?

[Raymond Noyes]

Oh, yes, that much I do know about the Connecting Families program. It was limited to families with children and not available to single individuals. If I recall correctly, I think it was mainly limited to community housing, public housing. There were various limitations on it. The main thing was that single individuals like me would not be qualifying for that program.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

If I may, I'd like to go to your recommendation around the CBB and the $50. You talked about how, if a program such as CBB were rolled out, there would be higher uptake, there would be more accessibility, and the issue of affordability would be resolved. My colleague MP Masse brought up one of the challenges with it. How can we ensure that the benefit that's being passed on to the low-income family translates into an actual connection? If some of the low-income families are compromising between food and the Internet, how can we make sure that it translates into an actual connection?

[Raymond Noyes]

First of all, I want to clarify that the CBB that we're proposing is partly inspired by a program in the U.S. that is already happening. We see it as a step along the way. It would actually be less supportive of low-income people than the $10-a-month plan, if we could extend that.

In terms of making sure that those users who get that benefit are using it for Internet, I think it would be pretty simple to require that the individual provide proof that they're on an Internet service. It might be a chicken-and-egg problem where the person might not be able to afford to get hooked up and then have an Internet bill to show the government. I'm not quite sure how that could be addressed, but I'm sure there must be a way to establish that people getting that benefit are applying it to their Internet bill.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Noyes.

Mr. Lemire, you have two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

Mr. Philipp, do you think that the Government of Canada's current plan is to rely solely on low-level satellite technology to connect rural and remote areas to the Internet?

[Jeff Philipp]

No, I don't think there is one strategy that I've seen. I think that every time somebody proposes some new backbone option it seems to distract us in our quest to connect rural Canada. I don't think there is any move by the federal government towards one backbone satellite or fibre. I see lots of proposals to fund fibre. I have seen some discussion about funding going to Telesat to prepay some capacity on their LEO to make it more affordable in rural Canada.

I won't take us too far off the path, but there are some fundamental and very simple questions that we need to ask. I think Mr. Noyes touched on them. How do you subsidize low-income families, first of all, without requiring rafts of proof and more bureaucracy to make the program work? That will just take away from the funding. That's point one. Then, how do you encourage that competition to come? Those are two actually very simple questions with very simple answers. We've proposed this in the past, actually. It's by way of a reverse auction.

You go in and you say, “Who will build in these markets?” There's public competition for the funding. There has to be an open gateway to allow any competitor to come in. To the winner of this final round, the one that is the cheapest, you say, “You have to operate for this many years.” You know what? You have to operate that open backbone for all competitors. Now you are required to deliver service in that market at this level of service to the end-user, but anybody else can come in.

If Mr. Noyes signs up with the competitor running the backbone, the competitor should get the subsidy. Subsidies should go to the service provider that wins the business of the residential customer only if a subsidy is required. That means that if the backbone is operated cheaply enough in a fibre world, then you won't need that consumer subsidy.

In cases where you have families, it would be different in every market. In Nunavut you have five people per home. They need more than $50 because they're satellite-served. I think it's not a matter of saying that $50 should be the number. It should be dependent on the market and what it requires. The proof is simply that you are buying Internet and the service provider is selling it to you. You qualify, and the service provider gets a subsidy from the federal government: reverse auction.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Unfortunately, that's all the time for that round.

We now go to MP Masse.

You have the floor for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

I know we're pressed for time, so I have just a quick question on this, Mr. Philipp. It really is just to finish your thoughts here.

Is it fair to say that in your view, the spectrum auction currently does not offer the greatest advantages in terms of being affordable and accessible, and it needs to be modernized or changed? Our spectrum auction process in Canada is different from that in other countries. I think it all starts there, to be quite frank. People forget that it's a public asset. We own it. Could you complete your comments for the committee here?

[Jeff Philipp]

It's a very important question. We have participated in every public auction in the last 15 years. We have not been successful in one. Even with set-asides, we haven't been successful. There are some real challenges with how spectrum is being doled out. Once you hold that spectrum—and somebody asked earlier what good it was to Canadians if it wasn't being deployed. Another point is that anybody who does the math can see that you can't deliver 50 down and 10 up at a 25:1 oversubscription unless you have a very large amount of spectrum. You just can't deliver that much bandwidth because they're mobile subscribers. You can't. It's not like fibre to the home.

The spectrum auctions are critical. We've written lots on how they're done, and I'm sure Dean would love to share some of that. We have a completely different view. We are a very small operator. We're a facilities-based competitor that is open. We've built our own facilities. We own them, but even in our service agreement, we do not restrict our customers from reselling commercial air service, not even our retail customers, let alone a wholesale customer.

It's a loaded question. Yes, it is very critical as an asset for Canadians and as a revenue stream to ensure broadband in rural Canada. Yes, there are better ways to do it, but giving the money to a monopoly telco and hoping they will do differently from what they have done in the last 20 years is not one of them. It's not going to happen.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Thank you to our witnesses.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, and with that, because we are over time, I have permission from the last two MPs for us to stop there.

I would like to thank our witnesses for being here today. As you can tell, I think we are all united in terms of the importance of not only accessibility but affordability. When it is not affordable, it is not accessible for many Canadians, and it's something that we are working as a collective to address. Thank you so much for your assistance.

I'd like to now provide an update to the members of INDU in terms of our schedule, as we have multiple subjects still going. For this week, on Thursday at our next meeting we will be considering the draft of the ICA report, further to our December 10 meeting. We will finalize that, hopefully. Next week, we have on Tuesday the president of PHAC and the Minister of Health presenting with respect to vaccine manufacturing. Next Thursday, we have Minister Champagne and Minister Anand, again with respect to the study for vaccine manufacturing in Canada.

I understand from the clerk that we are still waiting to hear back from the vaccine task force representatives for the following week.

Of course, given the next study that we are commencing on vaccine manufacturing in Canada, if parties can make sure to submit to the clerk names of any additional witnesses that they would like to see, we will make sure they get invited to a subsequent meeting. I'm just going to turn to the clerk and see what would be the best in terms of timing: sooner, I guess, rather than later, so that we can start reaching out to folks to line those up.

Again, to our witnesses who are here today, if there are any additional briefs that you would like to submit to the committee with respect to this study on affordability and accessibility, please get them to the clerk immediately so they can be considered for the report we will be working on.

With that, are there any other questions from members? If there's a change to the schedule, I'll make sure the clerk sends that out to you.

With that, I'd like to thank all of you again.

I want to thank the interpretation and IT services for their hard work, as usual.

I also want to thank the clerk and the analysts for their assistance.

We are looking forward to eventually being all together in a physical room. For those who will be participating in person on the Hill, I ask that you please notify the clerk in advance so we can make sure that any lunch that needs to be ordered is ordered, and that we're not ordering too many by anticipating six MPs in a room when there are none.

With that, we will adjourn. Thank you so much.