Public Accounts Committee on Oct. 5th, 2023

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Thank you, Mr. Chair.

Thank you to all our witnesses for coming today and discussing this important report, which I believe all of us have an interest in.

Mr. Kennedy, the government signed agreements with six provincial governments to work together to close the connectivity gap. I think we can see from the chart the impact that has on moving things along faster. Would you mind just giving us the names of the provincial governments that you have signed agreements with?

[Simon Kennedy]

We have signed agreements with British Columbia, Alberta, Ontario, Quebec, Prince Edward Island and Newfoundland to date.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Looking at the chart, I think we can see that's where the rapid progress is being made, so it's clearly very effective when everybody can get pulling in the same direction and focusing on getting this important work done.

How does the universal broadband fund compare to previous government programs targeted at improving access to high-speed Internet?

[Simon Kennedy]

I would make two comments. One would be that there was a previous program of, I would say, more modest scale that focused on backbone technology. This wasn't like last-mile technology where you're connecting the house. It was basically designed to build the major pipes that reach the community but don't actually connect up to the individual house or the individual streets.

As I noted in my opening remarks, the scale of the universal broadband fund is quite a bit bigger than previous initiatives of governments past, under all stripes, I guess. There was a program in the, I'm going to say, late nineties or early 2000s, which was a modest program to connect to speeds of 5/1, so one megabit upload and five megabits of download. The current program is 50/10, so it's much faster.

However, the previous programs were really modest. On the UBF, as I mentioned, the scale of the funding is a factor of 10 versus all previous programs combined. If you add up all the previous programs and multiply that by 10, that's the size of the UBF. The UBF is actually the only really significant large-scale broadband program that's been launched in the last 20 years.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Okay.

I'll continue now with the UBF. One of the key recommendations from the report is to “improve the application review and application approval process”, as there was an issue with delays.

Could you explain what the approval processes for both the rapid response stream and the core UBF projects are? What are the contributing factors to the delays? Also, how many applications were received?

[Simon Kennedy]

Yes. I'd be happy to speak to that, and I can turn to my colleague Mr. Dagenais to talk a bit more about the specific process.

It's just to say that we opened a portal for applications to both the UBF and the rapid response stream. With the rapid response stream, we had about 10 times more applications for shovel-ready projects than were anticipated.

I'll be very frank with the committee. Had we known in advance that we were going to get an avalanche of shovel-ready projects, we might have set things up a little differently. Part of the delay.... The upside was that we had a lot more interest in the program than had been anticipated. As a result, some of the adjudication took longer than we would have wanted.

The universal broadband fund was a different sort of issue. The government announced the UBF. I think, at the time, it was about a billion dollars. As I noted in earlier remarks, a number of provinces stepped up right away and said, “Actually, we would like to match the money and work with you.” In effect, it was that activity by the provinces that allowed us to rethink some of the investment, like doing more in fibre optics, for example.

Quebec is the best example. Within a matter of weeks of the UBF being announced, Quebec announced that it wanted to fibre up the whole province, and it was going to make this major investment to do so. The result of that was that we had to put a pause on some of the investment activities. Rather than do what we would normally do, which is put out an RFP, get applications, adjudicate and then pick the applications and make the investment, we had provinces with significant money actively interested in investing.

In some cases, obviously, they came to the table with views. They had a view of the kinds of investments they wanted to make. Quebec, for example, was quite adamant that it wanted to make sure that it was fibre optics investment. That was not in the original conditions of our program. It would have allowed a broader range of technology.

In the case of Ontario, even though we had substantial resources available, they would not have been enough to cover the entire province. With the provincial government's investment, we could do a lot more, but obviously the province—as you would expect—is a sovereign level of government. It had views. Where it wanted to invest, we had already done an intake process. We had applications on the table. We needed to let Ontario look at what we had to see whether or not it matched its priorities.

There was a bit of effort involved to try to make sure that, when we did the work, we did it in a complementary fashion with our provincial partners. Frankly, that delayed the execution. The downside was that it delayed the execution. The upside that was we wound up with significant leverage for the federal dollars. It was a lot more money than we had originally anticipated spending, which allowed us to both increase coverage and provide higher-quality coverage.

In terms of the specifics—

[The Chair, Conservative, John Williamson]

I'm afraid that is the time. I appreciate it.

I allow witnesses to finish their thoughts, but that was a good segue.

Ms. Sinclair‑Desgagné now has the floor.

You have two and half minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

I have questions for the Auditor General.

Based on what you've seen and reported, do you think infrastructure and investment are sufficient to increase cellular connectivity across Canada?

[Karen Hogan]

During our audit, we did not look at the infrastructure and its capacity. However, we did find that the department had not determined how much it would truly cost to extend cellular coverage and high-speed Internet services to those currently without access. If you don't know precisely how much you'll need to invest, it's hard to know whether you'll reach your goal, or whether industry and government are investing enough. That's why we recommended that the department properly assess the cost of extending services to people in areas still without coverage. Since they are in more remote areas, it will most likely cost more.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Precisely.

I have a question for you, Mr. Kennedy. When do you think you'll have that figure mentioned by the Auditor General?

[Simon Kennedy]

We're confident that the money we have now will enable us to achieve our goal of connecting 98% of households. What remains to be determined is the amount for the remaining 2% of coverage.

We agree with the Auditor General when she says we need to determine how much will be needed to close the gap, but I don't have that figure at this time.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

When do you expect to have that figure for the remaining 2%? Do you have a timeline?

[Éric Dagenais]

I think we should have it by the beginning of 2024.

[Simon Kennedy]

I believe that's the case. There's still a little more work to be done to move forward with what's currently on the table and identify all the elements. For instance, it's possible that our current investments will allow us to go further. If so, it will cost less.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

I understand all that, but I'm asking when you think you'll have that figure. Do you think you'll have a sense of that figure by the end of 2023 and be able to provide it to the committee?

[Simon Kennedy]

Ultimately, it will be up to the government to announce those details. That said, I honestly think it's realistic to think that in 2024 we'll have a good sense of the results borne by efforts underway.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Are you talking about the first quarter of 2024 or the second?

[Simon Kennedy]

It's hard for me to provide specifics, but thank you for the question.

[The Chair, Conservative, John Williamson]

Thank you very much.

We're now returning to Mr. Desjarlais.

Mr. Desjarlais, you have the floor for two and a half minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I want to turn now to the backlog, this procedural delay, this application-review delay, that's been outlined in the Auditor General's report. It makes clear that some applications have been waiting over two years for a decision. I have actually met with many folks who have applied—particularly indigenous communities from northern Alberta that have applied to the CRTC's broadband fund—and have never received a response. This is quite serious, and it's quite concerning that, after two years, a group could declare interest in a program to help their community and not have any advice, follow-up or decision. The OAG stated that it's not a good business practice to make applicants wait for two or more years for a decision, and I agree with that.

My question is for the CRTC chairperson. Do you agree that it's a bad business practice to keep applicants waiting for more than two years?

[Vicky Eatrides]

Certainly, we know it has taken too long in the past. We would agree with that, and we agreed with the Auditor General's comment on that. As I said in my opening remarks, we are improving our processes. We are doing better, and we've seen the numbers. With the first call for proposals, it took us 10 and a half months from the end of the call to make decisions on the applications. Again, we can have a discussion around what that involves and collaborating—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I'm sorry, but how do you think the delay and uncertainty affects the communities?

[Vicky Eatrides]

Obviously, delay is not good. We don't want to see a delay. It leaves a lot of uncertainty. That's why we're looking to move more quickly, and we are moving more quickly. Now we're making decisions—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Do you think it's possible that we've lost partners because of the delay?

[Vicky Eatrides]

I certainly hope that's not the case. We are doing everything internally to move more quickly, again, collaborating with partners. Whereas before it took 10 and a half months, now we're down to six months from the end of the call for proposals to the decisions coming out. That's the work we're doing internally to improve that process.

We've also launched a public consultation to see how we can do better externally. How do we make that process easier for the people who are applying to us? How can we better engage with them? What kinds of special streams can we have, for example, for indigenous communities? We're doing a lot of work to get better on that front.