Public Accounts Committee on Oct. 5th, 2023

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

Thank you, Mr. Chair.

It was great to hear that the Toronto subway will be getting coverage. I would point out that in rural Perth—Wellington our first responders sometimes don't have cell coverage, which is a really dangerous issue. I know we're not talking about cell coverage, but I would point out that I've been waiting for months for a meeting with Bell Canada to meet with stakeholders and municipal officials in my riding. If anybody from Ma Bell is listening, we're still waiting for that meeting. We're in the phonebook. Give us a call.

Mr. Kennedy, I want to follow up with you on questions earlier about Telesat.

An October 12, 2021, press release from Industry Canada stated that “Telesat Lightspeed will enable broadband Internet and LTE and 5G connectivity in Canada starting in 2024, ultimately connecting approximately 40,000 households”.

How many of those households will be connected in the year 2024?

[Simon Kennedy]

I'd have to go back and get the latest plans from Telesat, but the project has been delayed for a number of reasons. The company has been advancing the project, but it is not scheduled to be in service by 2024. The date has been pushed back. We would not anticipate having any households connected by the Telesat constellation at that date.

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

To that end, will you still be contributing $1.44 billion whenever that does come into existence?

[Simon Kennedy]

I think the government has been clear that it has been prepared to make an investment in the Telesat constellation if and when that project proceeds. There have been changes over the last couple of years. The committee may wish to talk to Telesat to get the latest details, but we're very hopeful that Telesat, a proud Canadian company that's been a leader in the telecommunications satellite business, will be successful with their LEO project. We would be hopeful to buy capacity and participate in that project if and when it launches.

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

With the greatest respect, according to an August of this year press release, they're looking at potential launches in mid-2026. Is that not just too late? Have we not missed the boat with Telesat when you have project Kuiper through Amazon, through Starlink?

Has Telesat missed their window of opportunity here?

[Simon Kennedy]

I think that may be a question best directed to Telesat.

What I would say is that there are a number of these LEO constellations that are being planned or have already been launched. It's a business decision from Telesat, but in our discussions with them, they believe there are market segments—

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

I want to interrupt because I have a small amount of time.

It is a business decision, but it's also a business decision for the Government of Canada, which is purchasing a $650-million equity stake with that investment. It is a business decision, but I'll leave that there because I'm running out of time.

Mr. Kennedy, could you come back to us with some numbers? You mentioned that 71% of rural or remote Canada would be connected to high-speed Internet by the end of this calendar year. Can you break that down for us by province and, within Ontario, by county?

[The Chair, Conservative, John Williamson]

I know, Mr. Nater, you have another tour, and we're at time. You ran over your question a little bit.

I'm going to come back to you for an answer on that, Mr, Kennedy, if you can just hold that for now.

First, I'm going to Ms. Bradford. You have the floor for three minutes, please.

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

Thank you, Mr. Chair.

I want to turn now to the issue of affordability and how it's measured.

Mr. Kennedy, the OAG report says that affordability is not fully measured by ISED when approving connectivity projects. One of the approval criteria for a universal broadband project is affordability.

Can you go into more detail about how ISED assesses a project's affordability for the consumer before approving a project?

[Simon Kennedy]

Thank you for the question.

I would confirm that affordability is the top concern for us in all of our work on telecom, including the universal broadband fund. I'd be happy to elaborate in more detail.

When project proponents come forward, we are very interested to know what prices they are going to charge, whether those prices are appropriate and whether they're comparable to prices you might find in the market. We don't want to have people, for example, in rural areas paying prices that are far higher than what would be considered reasonable, or that are out of step with prices in other similar markets and so on. We require, as part of the contracts we sign with companies, that they tell us what the pricing will be. That's a key consideration for us in terms of whether we proceed with the project. The key consideration for us is to make sure the price is affordable, appropriate and comparable to market prices in Canada.

The particular concern we've been discussing with the Auditor General is around the role of income.

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

Exactly. That's the important piece of the puzzle that I feel is missing right now.

[Simon Kennedy]

Yes. We have agreed with the Auditor General's recommendation to take that into greater account. We are working on that now.

What I will say is that it has not historically been the case—not just for Canada but also for advanced, industrial economies in the OECD that make these kinds of broadband investments—to have income in the local community be the primary criterion. There are a lot of technical reasons why that might be challenging.

We agree that income, obviously, is an important part of affordability. It's something we want to look at and figure out how best to take into account.

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

Yes, I would argue that, versus some communities that are much smaller.... South Korea has come up. Canada is a huge country with a wide discrepancy of income in the indigenous and rural communities. Their income is not the same as that of somebody working on Bay Street in Toronto. Something that is fairly priced in the market in Toronto is not going to be affordable for people in some of our more remote communities, yet it's more expensive for the companies to provide the service in these remote communities. It's a bit of a catch-22.

[Simon Kennedy]

What I would say to that is that we agree income is an important consideration. It's just that, in the way in which we roll out a major project in a given rural area, a criterion for figuring out the price wouldn't be to say, “Well, the income in that catchment area is x and, therefore, we want the price to be lower.”

Typically, in the programs we have.... For example, if we're concerned about accessibility for people on low incomes, there is a program called the connecting families initiative, which provides broadband Internet access for a very low price. It's $20 a month and available for people with lower incomes. There are other channels, if you like, that we use to deal with that issue.

We have not, at least to date, used income in a community as the principal driver of figuring out what the reasonable price should be.

[The Chair, Conservative, John Williamson]

Thank you very much, Mr. Kennedy.

Ms. Sinclair-Desgagné, you have the floor for a minute and a half.

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

Thank you, Mr. Chair.

In this minute and a half, I'd like to get a few answers from you, Ms. Eatrides.

What have you done concretely in the last eight months, since Minister Champagne gave you the mandate to increase competition in telecommunications in Canada?

[Vicky Eatrides]

I'll respond briefly, then turn the floor over to my colleague.

As I mentioned earlier, we've restarted our review of Internet services because, obviously, it's not working: we don't have the competition we wanted.

Also, on cellular services, we've created regulations so that smaller companies can also compete with larger ones in the markets.

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

Could you provide us with documentation that would tell us, for example, what your plan is, what your timeline is, whether you're going to do a task force or impose sanctions? It would be very interesting for us to know concretely what is going to be done.

As you said, on the competition front, we're among the dunces of the OECD, so it would be really nice if we could do more.

[Vicky Eatrides]

Absolutely, yes.

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

Do you have anything else to add, Mr. Hutton?

[Scott Hutton, Chief of Consumer, Research and Communications, Canadian Radio-television and Telecommunications Commission]

We've launched two major projects.

First of all, we've put a lot of emphasis on our new cellular plan to make sure there's more competition. It's a model based on negotiations and exchanges, as well as network usage. It's something completely new, something we haven't done before in cellular services. Naturally, this is already having an impact on cellular service prices, which are now increasingly reasonable. We want to make sure that this progress continues to improve our position, as you say, by international comparison.

The other major project concerns wireline service to the home. We have already put in place preliminary measures, such as a reduction in the price that competitors pay.

We've also given an important indication about fibre optic access. We'll be looking at this very soon and making decisions. Again, the old plan didn't include fibre optics. Now, Canadians are turning to this technology, and that's where there will be an impact on the market.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Desjarlais, you have the floor for 90 seconds.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

Thank you to the witnesses for being with us today.

It's often that I find myself in this committee present with two important facts. One is an audit that has very clearly demonstrated that there is a discrepancy between the kinds of outcomes that Canadians in urban centres often have in comparison with indigenous folks. These are massive. On this committee over the last two years, I've heard about clean water, missing and murdered indigenous persons, housing injustice and, today, the Internet. These are all reinforcing what I think the Auditor General must also see clearly, that there is a massive divide. There is a serious issue, a systemic issue, of how Canada has, for the better part of its history and it continues today, disenfranchised indigenous people from a type of justice.

With all due respect to the witnesses, the answers we've received today are very similar. To a question in my first round, I heard that 42.9% of first nations have access. Rather than hear an admittance that this is a massive failure and a red flag and a very serious discriminatory number, we heard heard that 12% was good enough. I beg to argue that we need to do far more. We need to change our perspective on these kinds of issues of equality.

To the Auditor General, what do you feel needs to be done? We're seeing a very dangerous trend. These divides are continuing—the digital divide, the urban-rural divide and the indigenous and non-indigenous divide.

Can you comment on that?

[The Chair, Conservative, John Williamson]

I'm afraid Ms. Hogan cannot comment on that, Mr. Desjarlais. I hope perhaps another member might grant some time for Ms. Hogan to respond to that, but I need to keep things on track. You did run over your time.

I apologize about that. That was a good question, but it will have to wait.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Maybe John can ask it.