Industry Committee on Nov. 24th, 2020

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

Thank you, Madam Chair.

Mr. Bains repeated himself earlier. I'll ask a question concerning one of the answers that he gave me.

In fall 2018, the Auditor General's report noted significant delays in connecting the regions. At the time, the Standing Committee on Industry, Science and Technology recommended that the gap be addressed.

The Minister of Innovation, Science and Economic Development didn't talk about a strategy. Instead, he talked about a comprehensive approach, which is interesting.

The committee, the Auditor General and the writers of the Yale report suggested that the federal government, provinces, municipalities, public and private sectors, and non-profit organizations be brought together.

Do you think that this co-operation could happen soon, Mr. Kennedy?

If this is the case, I'd like to participate.

[Simon Kennedy]

It would be better to ask the minister this question, since it's more political in nature.

However, I can assure the member that we have an issue table and that we're working hard to coordinate with the key players when it comes to connecting the Internet and our communities. I'm confident that we have a good plan and a good system in place that will ensure coordination among the various players in this area.

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

In 2016, Internet access was declared an essential service.

Why is broadband Internet in the hands of the private sector in a public-private partnership, as Minister Bains reiterated? We're seeing failures in this system. It's hard to connect the last resident in the last mile.

[Simon Kennedy]

Again, you would have to ask the minister this question.

Across Canada, the Internet service providers on the ground include major players, but also small players. The decision was made to proceed in this manner. We believe that it's better to move forward based on this reality in Canada.

At the international level, there are certainly examples of countries that chose a different way of doing things. However, we must acknowledge that each option has advantages and disadvantages.

In Canada, we're working with the players on the ground. We believe that this approach will be successful. We expect to provide 98% of Canadians with broadband Internet by 2026, which is a fairly short time frame.

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

That isn't exactly what I would call a short time frame. However, I can understand that, for you, this is a realistic goal under the circumstances.

Since 2009, one program after another has been developed. Yet the remaining homes are being connected at a snail's pace. Isn't it fair to believe that broadband owners and most distribution infrastructure are deliberately delaying the deployment to get the most out of taxpayers' money? These taxpayers, who pay top dollar for the service in addition to funding the infrastructure, have been denied the right to a connection all this time.

This is exactly what's happening in my region. Here, a giant with three heads holds the monopoly: Bell, not to name names, Télébec and Cablevision du Nord de Québec. That last distributor obtained a subsidy from your department to install a backbone in the small municipality of Moffet in 2017. It has until 2021 to do the work.

We know that, with a backbone, the Internet service reaches the municipality, but not the homes located in the last mile. However, fibre optics does reach this municipality. In fact, fibre optic Internet service has been running since 2007, in other words, for 13 years. Assuming a provider is willing to roll out its own fibre, it would need to cover a network of about 50 kilometres.

Why does it take four years to roll out 50 kilometres of fibre?

A giant such as Bell, in my region, is strong enough to fund the project, even though not all the subsidies have been received yet.

Why can't programs designed to connect everyone be completed quickly, in this case, within five years?

[Simon Kennedy]

I'll ask my colleague to talk about this project, since I don't know the details. Projects related to Internet access are usually quite complicated infrastructure projects, which don't come to fruition in six months. Mr. Dagenais, who is responsible for the program, may be able to tell you more.

[Éric Dagenais, Senior Assistant Deputy Minister, Spectrum and Telecommunications Sector, Department of Industry]

Thank you for the question, Mr. Lemire.

You probably know that Quebec created an issue table on access to passive infrastructure, and we're participating in this table. The Canadian Radio-television and Telecommunications Commission, or CRTC, is also looking at the issue right now.

Regarding the project that you're talking about, which concerns the municipality of Moffet, I'd be pleased to review the project in detail to see whether any specific obstacles are impeding its progress and whether an investigation is warranted.

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

The program is running on schedule. However, it's progressing very slowly. At this point, it would be good to know the strategies, the service standards, the timelines, the estimated resource requirements, and the audits that you as a department are conducting to ensure that the connections are made as quickly as possible.

Let me make a suggestion. Could money be withheld or bonuses be given based on the speed of the work?

[The Chair, Liberal, Sherry Romanado]

I'm sorry, but your time is up, Mr. Lemire.

I will now turn to MP Masse.

You have the floor for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair, and thanks to our guests for being back today.

I'm going to follow up on something and correct it as well. I was using a term last time, “overturn”, which was incorrect. I stand corrected, and I appreciate it. What I was really looking at was the meddling—which is the word I should have used—with regard to the CRTC's decision.

It also resolves a statement from the Governor in Council that said:

Whereas, in considering the petitions and all of the information and advice received in respect to them, the Governor in Council considers that the final rates set by the decision do not, in all instances, appropriately balance the objectives of the wholesale services framework recognized in Order in Council P.C. 2016-332 of May 10, 2016 and that they will, in some instances, undermine investment in high-quality networks

My question from that is, what is the department's response to this having taken place? We've seen some market changes related to it.

[Simon Kennedy]

Madam Chair, I'm happy to provide thoughts, generally, about this issue of balancing, as the minister discussed. I won't add any colour commentary to the Governor in Council statement because I think the statement, obviously, stands on its own. The CRTC is undertaking its own reconsideration, if you like, of the matter.

In terms of balancing, certainly as a department we are obviously seized with the issue of affordability. We have a variety of programs to support affordability. We want to make sure that Canadians, no matter where they live, get access to high-speed Internet. We certainly understand that this is a very, very important service to be made available.

With regard to wholesale Internet rates, I'll generalize. The issue is that while you want to have rates that are affordable and rates so that people will be able to get access to the service, there continues to be a question of areas in the country where there is no service built out yet, so you need a facilities-based provider to actually go in there and lay fibre to build out service and make the actual capital investment to actually build the network. Then there are areas—and one of the honourable members mentioned it earlier—with regard to reliability. You have areas where you have a network, but you need to make investments to maintain the network and upgrade it.

There is, I guess I would say, generally a concern that we make sure that the wholesale rates are such that they achieve the affordability objective but also don't inadvertently discourage the continued maintenance of the existing network so that it falls further and further behind because the business case to maintain it is perhaps not there, and we also don't want to discourage the build-out in the areas where there is no service. This is not an abstract issue. If I were to be absurd, if you set the rates at zero, there would be zero incentive to build out the network. Balancing—

[Brian Masse, NDP, Windsor West, ON]

Right, but what the decision spoke to, though, were the rates in competition in urban and suburban areas. This is conflating that to rural and remote areas. How is that justified in terms of a preamble like that and confusing the market? It led to some alterations. Then it related to suburban and urban capacity. Now it's being attempted to be bridged to rural and remote. I don't see the benefit to consumers in terms of competition and affordability.

[Simon Kennedy]

We're going to wait to see what the CRTC does in its reconsideration of the matter. As I said, I think the GIC statement probably has to stand on its own.

[Brian Masse, NDP, Windsor West, ON]

Okay, that's fair enough. Thank you for that.

I do want to move to auto policy. How much is left in the auto...? There used to be a separate auto innovation fund. That was merged to the larger fund. How much of that fund is left for auto investments? There have been some progressions—most thanks to Unifor in contract negotiations—that have secured more investment. Unfortunately, Canada's still one of those countries without a national auto policy, especially during almost a platinum age of auto manufacturing as we move to the green and clean and more competition. If you look at Detroit right across from where I'm at, they've had upwards of $12 billion of investment. We've had far less than that.

How much is left in the funds from the commitments that were most recently made? Do we have those numbers, perhaps?

[Simon Kennedy]

Madam Chair, I don't have the specific numbers available. What I can say is that we're in active discussions with the automotive companies. The government is clearly committed to the future of the automotive sector. I think that message has been given loud and clear. In terms of the specifics of what is currently in the fund, I don't have those available, but I can certainly provide them.

[Brian Masse, NDP, Windsor West, ON]

Yes, could you? I'd be interested in those. I know it's been amalgamated with other funds. There have been a series of other announcements, too, even some aerospace.... Getting an updated version of what's there would be very helpful.

With that, too, and in terms of the monies for innovation available for the hybrids and other things, I fought to get the Windsor minivan included in the $300-million program for auto incentives. Do we know what money is left in that fund? It was for three years at $100 million. Can we get a breakdown as to what vehicles were purchased with those funds and what's available still?

[Simon Kennedy]

I see that—

[The Chair, Liberal, Sherry Romanado]

Unfortunately, yes, you are out of time. I'm not sure if it's possible, but perhaps you can maybe circulate that information to the clerk, who can circulate it to the committee.

[Simon Kennedy]

I can follow up on that—

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair. Thank you to the witnesses.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

With that, we will now start a second round. We will not be able to complete the second round, as we have votes with respect to the main estimates.

I will start with MP Nater. You have the floor for five minutes.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you, Madam Chair. Thank you, Mr. Kennedy, and the other departmental officials for joining us today.

I want to follow up very briefly about something the minister said last week. I asked her how quickly the applications through the rapid stream would be adjudicated. I'd suggested four to six weeks, and she said that it would hopefully be less than that. I was hoping you could provide some clarity on how quickly those applications will be adjudicated.

[Simon Kennedy]

We obviously aim to go as quickly as possible. I think it will depend to some extent on how quickly we get applications in and the quality of the applications when they come in.

As the minister noted at the last meeting, there is a pathfinding service whereby we work with applicants to help them out with the application process. There are some dependencies in there, but we would aim to go as quickly as possible.

[John Nater, Conservative, Perth—Wellington, ON]

To that end, you mentioned how quickly applications come in. To date, have any applications come in?

[Simon Kennedy]

Maybe I'll turn to my colleague Éric, who runs the broadband program, just to see whether or not we received any. Again, I'm not aware one way or the other.