Evidence of meeting #128 for Public Accounts in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was areas.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Jerome Berthelette  Assistant Auditor General, Performance Audit, Office of the Auditor General
John Knubley  Deputy Minister, Department of Industry
Ian Scott  Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission
Philippe Le Goff  Principal, Office of the Auditor General
René Arseneault  Madawaska—Restigouche, Lib.
Lisa Setlakwe  Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry
Pat Kelly  Calgary Rocky Ridge, CPC
Randeep Sarai  Surrey Centre, Lib.
Christopher Seidl  Executive Director, Telecommunications, Canadian Radio-television and Telecommunications Commission
Michelle Gravelle  Director General, Science and Research Sector, Department of Industry

10:20 a.m.

Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission

Ian Scott

The last step in the process, the maps, have been updated recently, which is an important step for applicants. We issued what was called a “decision guide” on Valentine's Day as a present to communities rather than industry.

The application guide, if you will, is a bit of an instruction kit to enable parties to understand exactly what has to be filed and how it has to be filed. We're accepting comments on that to make sure we haven't missed anything, and that the guide is well understood. The comment period's open now. As soon as that closes, then we will be making a determination about our first calls. They will be in the coming months.

10:20 a.m.

Liberal

David Graham Liberal Laurentides—Labelle, QC

Where are we inputting the resale of fibre service?

10:20 a.m.

Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission

Ian Scott

Pardon me?

10:20 a.m.

Liberal

David Graham Liberal Laurentides—Labelle, QC

Right now you can resell DSL, you can resell cable, you cannot sell fibre. Where are you on forcing companies that have fibre infrastructure to resell that service, to offer it to resellers?

10:20 a.m.

Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission

Ian Scott

At the moment, if you're talking about fibre to the home, then Mr. Seidl can add that it's in Quebec and Ontario.

Chris?

10:20 a.m.

Christopher Seidl Executive Director, Telecommunications, Canadian Radio-television and Telecommunications Commission

We do have interim tariffs in place for the resale of the fibre, so it's available. We don't have the final rates in place, but we're working on those now, and those will be coming out in a few months. It is in Ontario and Quebec right now, and we're working to extend that across the country.

10:20 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Thank you very much, Mr. Seidl and Mr. Graham.

Mr. Kelly.

10:20 a.m.

Calgary Rocky Ridge, CPC

Pat Kelly

Mr. Knubley, in response to Mr. de Burgh Graham's question, you spoke about having achieved acceptable value for money in several different ways. The findings of the Auditor General quite clearly say that they found that Innovation, Science and Economic Development Canada did not implement its connect to innovate program for broadband in a way that ensured the maximum broadband expansion for the public money spent. The program did not include a way of mitigating the risk of government funds displacing private sector investments.

Again, I ask you to square your acceptance of the Auditor General's findings and your earlier remarks.

10:20 a.m.

Deputy Minister, Department of Industry

John Knubley

There are always issues of value for money, and we agree with the Auditor General that in doing our work, we should pay attention as a priority to value for money. We are pointing out that in this case, this particular program was being delivered to the remotest areas where there was not a lot of private sector investment interest, and therefore it is important to understand that value for money is not just about competitive private sector investment.

It's also about leveraging funds with the provinces. It's about leveraging funds with the communities, and ensuring that you get the right technology to help the community in a way that will be long-lasting.

10:20 a.m.

Calgary Rocky Ridge, CPC

Pat Kelly

That is understood. There is no private sector investment to displace, because you were in an area remote enough that a private sector operator could never profitably invest in a place. I wouldn't consider that displacing private investment, just because you've spent money there and not had it matched.

10:20 a.m.

Deputy Minister, Department of Industry

John Knubley

I'll give you a few cases where the projects took place. One would be in northern Quebec, where we were very partnered with Quebec. In fact, the partnership there is probably a model for how we move forward with an integrated collaborative strategy. We had common applications and common investments. We provided, depending on the area, between 90% and 100% of the funding because there was no investment.

In northern Ontario, five communities are currently served by satellite. Again, no, there's private sector involvement in terms of the satellite, but in terms of moving to a more fibre-to-home operation—

10:20 a.m.

Calgary Rocky Ridge, CPC

Pat Kelly

Fair enough. I understand that, but the Auditor General states in the report that they are concerned that the program was to avoid displacing private sector investment, and they're concerned that is a failure of the department, that the department—

10:25 a.m.

Deputy Minister, Department of Industry

John Knubley

I would maybe rephrase it, not as a failure but as an agreement with the Auditor General, and note that every time we do a project on broadband in rural and remote areas, the challenges, the balance, the public investment and the private sector investment...we try to do the project in a way that does not crowd out private sector investment that otherwise would have taken place.

10:25 a.m.

Calgary Rocky Ridge, CPC

Pat Kelly

We all agree that's the objective. I understand that.

February 21st, 2019 / 10:25 a.m.

Deputy Minister, Department of Industry

John Knubley

That is why doing broadband is not easy.

10:25 a.m.

Calgary Rocky Ridge, CPC

Pat Kelly

No, I understand that—

10:25 a.m.

Deputy Minister, Department of Industry

John Knubley

The other thing I would just emphasize—maybe you should turn to the Auditor General office after I say this—is that they were looking at the design phase of our project. Again, I think we've moved past the design phase, and we're talking now about—

10:25 a.m.

Calgary Rocky Ridge, CPC

Pat Kelly

Fair enough.

10:25 a.m.

Deputy Minister, Department of Industry

John Knubley

—what actually was implemented.

10:25 a.m.

Calgary Rocky Ridge, CPC

Pat Kelly

I'll let Ms. Setlakwe speak for the moment I've likely got left.

10:25 a.m.

Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry

Lisa Setlakwe

If I could just add, I think that what the Auditor General said in particular was that we didn't specifically ask companies or applicants why public funding was required. In our estimation, we assessed that. We didn't specifically ask them to pronounce on that, but we assessed those things when we were looking at the applications. That was one.

10:25 a.m.

Calgary Rocky Ridge, CPC

Pat Kelly

Thank you.

Mr. Le Goff.

10:25 a.m.

Principal, Office of the Auditor General

Philippe Le Goff

Sure. I would add to what has just been said that there was no mechanism in the design of the program to verify whether the project would have been funded by the private sector at a lower cost.

10:25 a.m.

Calgary Rocky Ridge, CPC

Pat Kelly

Thank you.

10:25 a.m.

Conservative

The Chair Conservative Kevin Sorenson

I don't have any other questions, but I typically explain to our guests that, when we meet like this, we provide a report following it and I do as a result have a couple of questions that have been given to me by the analysts.

Before we get to those questions, I would that although this is a highly technical type of meeting that is televised, many Canadians may be watching it because they watch these types of programs—though their eyes may just glaze over. As Mr. Christopherson suggested, a majority of Canadians live in urban areas and say, “Connectivity problems, what problems? I can game, I can watch a movie, and I can do so many different things.”

However, the Auditor General's report explains the reason for this study, namely, that in 2016 about 96% of urban Canadians had access to broadband Internet speeds of 50 megabytes per second for downloading data and 10 megabytes per second for uploading data, but only 39% of Canadians living in rural and remote areas had access to those speeds.

I represent a riding that is not so much remote as very rural. Within my central Alberta riding, there are what we call the “special areas”, where I know that, when I get into those areas for meetings, I will just have to watch the phone trying to connect. This gap between urban and rural areas is part of why the Auditor General's office did this study, and out of the study, although there has been some improvement over the years, there are some troubling facts.

I should also say—and some of our analysts have worked on indigenous files before—that in paragraph 1.8 of its report, the Auditor General's office noted that “The Commission called broadband a 'transformative enabling technology' and concluded that any Canadian without broadband access is profoundly disadvantaged.” You know this, but I want the viewers watching to understand why this is so significant.

Governments have stated that we want to see improved health care for our indigenous people and those in remote and rural areas. We want to see specialized health, where they have access to specialized health. Part of the universal health care act says that universality, accessibility and reasonable access to common delivery are very important. Those are three of the five principles of the Canada Health Act. Well, specializing in health care in remote areas means that we need broadband, and that it has to be a priority.

I think all of us realize that it's going to be costly. It was costly originally to get a railway out to the far remote parts, but we said we had to do it. Consequently, this is what governments have said.

Health care, education.... If we're going to see indigenous and remote areas of the north, especially the eastern Arctic, improve their lot in life and have more opportunities, it's going to be through education. How do they do it? We do it through broadband, so that's why it's important.

If anyone is going to have a business in those special areas, in rural areas—so many home businesses are now starting up—they completely rely on being able to have the opportunities with this business because of broadband and access. This is part of the reason.

We have 15 minutes left, so pardon the rant.

Then we get into page 13 of the report, and we see, “Lack of transparency in the selection process”. This, to me, is one of the big problems, and we've talked about it today, the lack of transparency in selecting the processes for delivery.