By Christopher Guly
OTTAWA – The federal government’s Thursday announcement to spend another $2 billion on expanding broadband access to underserved communities as part of a $10-billion basket of infrastructure initiatives through the Canada Infrastructure Bank’s (CIB’s) Growth Plan leaves many unanswered questions.
“How is it going to be delivered? What’s the timeline? What communities will be prioritized?” wondered John Nater, the Conservative shadow minister for rural economic development. “We understand these will be loans, but we don’t know whether the interest rate will be competitive and how it will differ from commercial lending agencies.”
“I don’t have a ton of faith in the Canada Infrastructure Bank. It’s only approved nine projects; none of them have been completed,” he said in an interview. (Ed note: The questions of when and what are certainly pertinent, give the much-delayed launch of the federal government’s Universal Broadband Fund.)
(Nater’s leader, Erin O’Toole, called for the bank launched by the Liberal government to be scrapped entirely.)
Michael Sabia, who chairs the CIB’s board of directors and is a former CEO of BCE said at a news conference in Ottawa on Thursday that the $2 billion earmarked for large-scale broadband connectivity projects is separate from the federal government’s other broadband initiatives, including its yet-to-be-launched Universal Broadband Fund (UBF), whose value is pegged at up to $1 billion and was touted in last week’s throne speech.
“You should interpret this as a significant additional contribution that will connect at least three-quarters of a million households and small businesses at a time when that connection is an absolutely vital part of their economic lives,” he told reporters. “We set aside $2 billion, but if in our work with carriers and ISPs as we pursue this, there are more good ideas and more things that we can do, we will bring more capital to the table.”
At the same news conference, Prime Minister Justin Trudeau said that even before the Covid-19 pandemic amplified the need, his government recognized the urgency of providing Canadians with broadband connectivity, however its primary program, the $580-million Connect to Innovate launched in 2016, has connected very few Canadians so far, despite well over 200 announced projects.
“We know that digital connectivity is a creator of economic opportunities, a creator of more safe communities, and of growth right across the country,” he said. “That’s why we put forward historic investments in broadband right across the country, and we will continue to work with the minister of rural economic development [Maryam Monsef], with the minister of innovation, science and industry [Navdeep Bains] to move forward as rapidly as we can to create more connectivity.”
Neither minister was available for comment on today’s announcement. In June, Monsef said that calls for UBF applications would be go out “in the coming days.” It’s been a lot of days.
In last year’s federal budget, the government announced that it had a plan to deliver between $5 billion and $6 billion in investments for rural broadband over 10 years.
That included:
- the CRTC‘s $750-million Broadband Fund, which is driven by the country’s major telecommunications service providers whose total annual Canadian revenues amount to at least over $10 million;
- $1.7 billion over 13 years earmarked for the UBF, new investments in the Connect to Innovate program, and advanced new Low Earth Orbit satellite capacity to serve the most rural and remote regions of Canada; and
- a plan by the CIB to invest $1 billion over the next 10 years, and leverage at least $2 billion in additional private sector investment to increase broadband access across the country.
Meanwhile, facilities-based carriers are investing billions of dollars each year to build telecom infrastructure for fibre broadband, and fixed and mobile wireless, according to Eric Smith, senior vice-president of the Canadian Wireless Telecommunications Association (CWTA), who estimated that last year’s investments represented over $3 billion in wireless and over $3.4 billion was spent on the 600Mhz spectrum auction.
CWTA president and CEO Robert Ghiz told Cartt.ca he hoped that with Thursday’s CIB announcement, the federal government has “realized that to jumpstart the economy – during Covid and post-Covid – the telecommunications sector is going to be play a vital role, not only in the investments that it’s making, but the enabling investments that can take place because more people get connected and better connections happen.”
“I view this in two ways: You have people that need to get connected and get upgraded. But there’s also the investment in 5G,” he explained.
“What’s important is that, yes dollars are rolling out through the UBF and the Infrastructure Bank, but a regulatory environment that encourages investment that supports facilities-based competition is also vitally important. The telcos themselves invest billions of dollar per year in upgrading networks, building networks, and now getting ready to build the next generation of networks, which is 5G.”
Nater, the Conservative member of Parliament for the Ontario riding of Perth-Wellington, hopes the CIB initiative will involve a “meaningful commitment to a partnership with industry groups, municipal organizations and different stakeholders who are delivering rural broadband.”
According to a CIB backgrounder, its broadband initiative will target “underserved communities” to create “new economic, education and health care service opportunities.”
“Broadband projects for underserved areas have high capital costs but lack the user base density to commercially support the initial capital investment” – a gap the bank said it intends to bridge with “low-cost flexible financing for broadband projects “connecting many premises that would otherwise not be commercially viable.”
The CIB plans to partner with other federal and provincial broadband-connectivity programs (of which there are confusingly many) and engage with internet service providers “on projects that will not rely on those additional government programs.”
