Industry Committee on Nov. 19th, 2020

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Thank you, Madam Chair.

I will take this opportunity to thank the deputy and Mr. Kennedy, and especially Mr. Dagenais, for their work, especially during the last four months as we rolled out the UBF. I certainly realize how much they know on this file. It has been a pleasure to work with them. They've answered every question I've ever had, and I know they will for all my colleagues here around the table.

It was great to hear you speak about how we need it in our tool box—many different tools, because this is a great country, from coast to coast to coast, and it was clear that a one-size-fits-all program wasn't going to address the needs of Canadians as we connect from coast to coast to coast.

Mr. Kennedy, can I ask you for clarification on the CRTC issue where you said that our government did not overturn that decision? I'd like to get that clear for my colleague Mr. Masse.

[Simon Kennedy]

I'm very happy to do that, and if the honourable member will indulge me, I will give one other point of clarification as well.

To be clear, the government did not overturn CRTC's decision on wholesale access rights. The government declined to intervene, because the CRTC has an ongoing proceeding to re-examine the issue itself. I'd be happy to share that with the committee, but I can say categorically that the government did not overturn CRTC's decision. The CRTC is reconsidering the matter of its own accord, and the government is awaiting the results of CRTC's reconsideration.

As one other small point of precision—I feel bad about this, but just to clarify—Mr. Masse had asked about whether we negotiate or whether we're locking in pricing for the broadband agreements we have. I said that that's not the case, but in fact it is.

We ask for the pricing that is to be charged by the applicants. The pricing can be a factor in which project we choose. Let's say, for the sake of argument, that there are two projects that are both equally great technically, but one of the proponents is going to charge a lower rate. That might actually give it a higher score. Those rates are in place for five years, after which the proponents are free, if they wish to change the rates.

I should have been clear about that. We're not negotiating the rates; it is part of the application. We consider it in the application. Then those rates are in place for the five-year period required by the program. I apologize for that, but I just want to be clear about how that works.

Thanks.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Thank you, Mr. Kennedy. That was a question I had for you, too, because it was my understanding that it was part of the due diligence that the department was doing.

Can I also ask you and Mr. Dagenais, why is this UBF going to be better? As you know, because you hear me say it all the time, I'm from a really rural riding, not just a rural riding. How is it going to help, especially the rapid response stream? What impact is it going to have in connecting really rural communities?

[Simon Kennedy]

Madam Chair, I think we've tried to build in a bunch of enhancements to make this a better program. As Mr. Dagenais explained earlier, the old hexagon model is gone, which actually allows us to be much more granular about where there is Internet access and where there is not. We now have a very sophisticated tool—that's available to anybody who wishes to go look on the Internet—to actually see where the access is now and which areas are considered underserved or served.

It has actually been the case in previous programs that applicants would make applications, and when we would go out and look, it turned out that there were some parts that they planned to serve that already were served. Having much better data in the hands of proponents leads to better projects, so this mapping data is being made available through this mapping tool.

We have a pathfinder service so that small communities, particularly rural communities, Madam Chair—there are a lot of small communities that don't necessarily have full-time staff who are engineers who do this kind of stuff—can get help from us to go through the application process and make applications.

The other thing is that we have, obviously, more money, and we have the rapid response stream, which is specifically designed to look at these opportunistic projects where we can move very quickly. That, we think, will be of great help, particularly where, for example, you have a project that's in play now that has to go out to 98% of an area and there's another 2% somewhere. With a little bit of extra money or a little push, you could get to that other cluster of houses or whatever. We think that the rapid response stream could be very helpful to take advantage of those opportunities.

The other thing I would say is that, at the other end of the spectrum, the additional money that the government has put in to potentially partner up with the Infrastructure Bank means that we may be able to do very large projects at scale—tens of thousands of households at once—and that was not something that was really easy to do previously.

I'll stop there.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Deputy Minister.

It is now Mr. Lemire's turn for two and a half minutes.

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

Thank you, Madam Chair.

In its 2018 fall report “Connectivity in Rural and Remote Areas”, the Office of the Auditor General concluded that the federal government had not developed a national strategy to provide broadband Internet access to rural and remote areas owing to a lack of funding. Then came the 2020-21 estimates. My questions are straightforward.

How much more government investment is required for all Canadians to connect to broadband Internet? Do the recently announced measures close the gap completely? Why hasn't the government established a coordinated national strategy, as recommended by the Standing Committee on Industry, Science and Technology and the Office of the Auditor General, rather than creating a number of separate programs and strategies?

[Simon Kennedy]

Madam Chair, the ministers may be better suited to answer that question.

As for our department and our employees, we now have a strategy and a very clear objective, which is to provide a download speed of 50 megabits per second and an upload speed of 10 megabits per second, often referred to as 50/10 speeds. We have allocated considerable funding to advance projects. We have set up systems and infrastructure, such as the pathfinder service to provide support and the connect to innovate program for communities.

The funding we have right now will allow us to connect at least 98% of households across the country. Clearly, we have a pretty detailed plan and enough time to move it forward. Our goal is to connect almost the entire country in the next six years.

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

You think the funding that was announced is sufficient, then.

We haven't seen any funding in nearly two years. The $750 million announced last week is a transfer from the investing in Canada plan.

In your view, what was sacrificed in the plan so the money could be transferred to the program to connect Canadians?

[Simon Kennedy]

I don't think it's a matter of anything being sacrificed. The department received an additional $750 million. That is new money.

The Canada infrastructure bank will earmark $2 billion. I think any questions about that $2 billion should go to the people at the Canada infrastructure bank.

We now have more money than we did to—

[The Chair, Liberal, Sherry Romanado]

Thank you, Mr. Kennedy.

Our next round of questions goes to MP Masse.

You have the floor for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

First and foremost, I understand—and that's what I was trying to get so delicately out of the department officials—that they didn't bake in price guarantees as part of the decision-making. I understand that's part of how the evaluation may take place, but it doesn't guarantee Canadians who are going to be the recipients of these contracts certain pricing, which would need other types of regulatory involvement, should the pricing escalate beyond their means and what they can pay for. That was quite clear from the beginning.

I stand by my assertion regarding the CRTC. It may not technically be an overturning, but we can look at a myriad of different press discussions about cabinet basically not supporting its independence, and that's one thing that's of importance.

I would like to follow up, though, with respect to the spectrum auction. How difficult is it, really, to do an auction? Yes, it was people in a room together—I understand how it works—but it seems that the rest of the world is able to do this type of high-level meeting, especially when there's a limited number of people, registered people, and processes for it. How difficult is it really to have an auction virtually?

[Simon Kennedy]

Madam Chair, to address the previous question on pricing, the pricing is part of the contribution agreement for five years, so there's a guarantee. There's an open-access requirement on the pipe that is built by the proponent, so other competitors can come in and ride on that pipe. The CRTC then has regulated rates—

[Brian Masse, NDP, Windsor West, ON]

Let me back up, then.

Can you provide to the committee the exact prices—the minimum threshold and the maximum threshold prices—from all those contracts? Can you provide them to the committee? I want to know that, because I think it's important. You just said that for five years they're protected by certain rates, so I'd like to know what those basic rates are and how much data they can download, for each of the types of agreements that were signed.

[Simon Kennedy]

Madam Chair, I'll have to get back to the committee on what we can and cannot provide, but I'm very happy to follow up on the question—

[Brian Masse, NDP, Windsor West, ON]

Why can't you provide this? This is public money and these are public contracts—

[The Chair, Liberal, Sherry Romanado]

Mr. Masse, for the sake of the translation, can I ask that you not cut off the witnesses, please?

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

[Simon Kennedy]

I'm happy, Madam Chair, to get back to the committee.

The honourable member had other questions. I can quickly try to give an answer.

I'm sorry; I'm now having a senior moment.

[The Chair, Liberal, Sherry Romanado]

Unfortunately, that's all the time. I'm sorry about that.

Our next round of questions goes to MP Cumming.

You have the floor for five minutes.

[James Cumming, Conservative, Edmonton Centre, AB]

I want to go to the rent subsidy program. We heard from the minister that it's waiting in the Senate and we expect it shortly, but one thing that is really concerning to small business owners is that the government is great on announcements but not on execution. We've seen with several of the programs that there have been issues, going forward, with execution.

I understand this is going to be administered by CRA. Can someone within the department tell me whether the processes and everything has been put in place so that when this becomes legislation, people can start to apply in very short order?

[Simon Kennedy]

Madam Chair, I'm going to have to suggest that the committee get in touch with the finance ministry. That's not something we are responsible for directly delivering. I'd be a little loath to speak to it, since it's colleagues who are responsible.

[James Cumming, Conservative, Edmonton Centre, AB]

But in your interactions with that department, surely there must have been some discussion, when you develop a new policy, of how it is going to work and how quickly you can get it to market. I know the minister is concerned about this, as are we.

[Simon Kennedy]

I would say, Madam Chair, that in all of our discussions with our colleagues in Finance, the Revenue Agency and others on these supports for business, I can assure the members that the civil service has been keen on moving as quickly as possible and that ministers have been trying to move things as quickly as possible to get these various supports and changes in place.

But again, I can't speak to the details, because we don't administer that program.

[James Cumming, Conservative, Edmonton Centre, AB]

Okay.

We heard about the deferrals that have been provided for businesses under GST/HST and about a variety of other deferrals and loan programs. All of this is either deferrals or debt.

Has the department done any study on the potential cliffs that these are going to create for small businesses? What kind of action can you take once all of those numbers come due?

[The Chair, Liberal, Sherry Romanado]

My apologies, Mr. Cumming; we're having problems with translation.

I'm just going to check with the clerk.