Feds didn’t effectively deploy $500M on rural broadband: auditor general
TORONTO The federal government didn’t get the most bang for its buck when it doled out money from its $500-million fund for rural and remote broadband access, Canada’s auditor general concluded in an audit released this week.
Innovation, Science and Economic Development Canada launched the Connect to Innovate fund in 2016, aiming to award money for projects in hard-to -reach places where there’s no business case for larger players to build networks.
Nearly 3.7 million Canadians don’t have access to internet speeds greater than five megabits per second, limiting their ability to participate in the digital economy.
As such, competition for the funding was fierce. The program received 892 applications requesting a total of $4.4 billion, demand that easily outstripped available funds and heightened the need for efficient spending.
But the Office of the Auditor General of Canada, Michael Ferguson, found Innovation, Science and Economic Development Canada “did not implement the program in a way that ensured the maximum expansion for the public money spent.”
ISED didn’t ask applicants to demonstrate their projects wouldn’t be possible without public funding, according to the report. Nor was it transparent in the selection criteria.
It recommended the department consider a reverse auction process, where the government would propose a project and award it to the internet service provider that can deliver for the lowest government subsidy. It also suggested the department publicly outline how it evaluates projects so internet providers know what it’s looking for before filing applications.
The auditor general’s report comes as the Canadian Radiotelevision and Telecommunications Commission begins to accept applications for a separate $750-million fund for rural and remote broadband. Rural internet advocates say it’s critical for this funding to be deployed more efficiently.
For ISED’s part, Minister Navdeep Bains said he accepts the recommendations.
“Ensuring rural and remote communities are connected to the Internet is one of my top priorities,” Bains said in a statement.
The program has announced funding for 140 projects across Canada, mostly in Quebec (66 projects) and Newfoundland and Labrador (31 projects). Bains said this will eventually connect 900 communities, including 190 Indigenous communities.
But the auditor’s findings came as no surprise to Susan Church, who works to improve access to high-speed internet in Northern Ontario as executive director of the economic development nonprofit Blue Sky Economic Growth Corp.
When Connect to Innovate launched, Blue Sky Net was in the midst of 18 applications for provincial funding. These applied for national funding as well. The provincial funding was put on hold until the province learned projects got national funding, a process that took a year and a half, Church said.
“Essentially what’s been happening is there’s been no new network activity in Ontario for a long time,” she said. (Connect to Innovate has awarded funding to 10 projects in Ontario, mostly in the Ring of Fire.)
Most of Blue Sky ’s projects didn’t get funding, she said, so they remain in limbo while they wait on the province. Some were rejected because they offered “last mile” infrastructure to connect specific properties, rather than backbone fibre connections. Others fell short because of a mapping system used by the government that excludes projects from funding if a single property in a 25 square kilometre hexagon has internet speeds above the 5 Mbps threshold.
Church questioned the reasoning, saying this leaves gaps in service in towns with populations in the thousands. Seventy-two per cent of households in Northern Ontario have access above 5 Mbps, but that drops to 56 per cent outside of the five largest cities, she said.
“Let’s face it, getting 5 Mbps would be like heaven to some people, but it’s not nearly enough to do all of the things that we need to do,” Church said.
“We’re grateful to see big dollars go into innovation, but the very simple, basic need of connectivity has been overlooked … you can’t innovate if you can’t connect.”
Church advocated for a regional approach to funding, so people who know the terrain evaluate projects. She also pushed for a more granular look at which properties have internet access instead of writing off an entire area because one house has access.
The auditor recommended ISED and the CRTC publish a more detailed connectivity map that respects confidentiality of internet service providers’ data.