Evaluation of ISED Support to Extending Broadband Access to Rural and Remote Communities

From: Innovation, Science and Economic Development Canada

February 2020

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© Her Majesty the Queen in Right of Canada, as represented by the Minister of Industry, 2020

Cat. No. Iu4-274/2020E-PDF

ISBN 978-0-660-34349-5

Aussi offert en français sous le titre d'Évaluation de l'appui d'ISDE pour l'élargissement de l'accès aux services à large bande dans les collectivités rurales et éloignées.

1. Program Context

This is an evaluation of Innovation, Science and Economic Development Canada's (ISED) support to expand broadband access to rural and remote communities in Canada. This study includes the Connecting Canadians Program (CCP) and the Connect to Innovate Program (CTI), performed as a cluster evaluation, and represents the first time these programs have been evaluated.

Broadband internet is an essential service in Canada. Adequate internet services are of paramount importance to the economic and social well-being of Canadians. Some communities however, especially in rural and remote areas, continue to struggle to access these services.

A gap in broadband access exists between rural and urban communities. This gap has resulted from the increased cost of rural broadband infrastructure and reduced potential customer base per mile of service, that has limited Internet Service Providers (ISPs) investments in rural and remote communities. These market forces have largely focused private ISP investment in urban centers. As a result, rural and remote areas remain underserved with private investments alone.

The future of our economy, our prosperity and our society — indeed, the future of every citizen — requires us to set ambitious goals, and to get on with connecting all Canadians for the 21st century,

Jean-Pierre Blais, the CRTC's chair, at a news conference in Gatineau, Que.

There have been multiple players working to expand broadband service to underserved rural and remote areas in Canada:

ISED
Policy setting, national strategy, administering radio spectrum, assessment and mapping of broadband service availability, broadband infrastructure investment funding, and coordination.
Infrastructure Canada
Broadband infrastructure investments in rural and northern communities. 
Canadian Radio-television and Telecommunications Commission
Assessment and mapping of broadband service availability, setting service targets, and arm's length quasi judicial telecommunications regulator.
Indigenous Services Canada
Guidance and funding for broadband infrastructure and connectivity for Indigenous projects and communities, and funding for community and economic development.
Provinces/Territories
Supplement federal programs/policies with their own initiatives, broadband investment funding, and facilitate access to passive infrastructure.
Municipalities
Investments in broadband infrastructure to undertake their own projects or partner with ISPs, and provide access to existing infrastructure.

ISED Broadband Initiatives

Since 2002, several ISED initiatives have worked to expand broadband service to underserved rural and remote areas where low population density and difficult terrain make private sector investments uneconomic:

The CCP was established to help bridge the gap through projects that would provide households with access to 5/1 Mbps service where no business case existed for private sector ISPs, while the CTI provided support for high-capacity backbone (infrastructure that interconnects various pieces of network) and last-mile infrastructure (final leg of networks that delivers service to customers) in rural and remote underserved communities.

The overarching objectives of ISED's broadband programming is to increase access to broadband service for underserved communities in rural and remote communities.

The CCP and CTI are cost-shared programs, which provide one-time, non-repayable contributions (on a claim for reimbursement basis) to approved applicants. CCP has approved funding for 86 projects with a budgeted contribution spend of $207 million, and CTI has budgeted $483 million in contributions and announced 194 projects.

CCP Targets

CTI Targets

As the CCP and CTI programs were being implemented, the definition of high quality and high speed broadband service evolved.

Since the launch of CCP and CTI, there have been a number of policy changes and evolving speed targets that continue to challenge bridging the gap between rural and urban access to high speed service. In December 2016, the CRTC defined broadband as a basic service and announced new universal service level targets of 50/10 Mbps by 2031 (up from 5/1 under CCP and CTI), redefining the definition of "high quality" and "high speed" internet, and therefore the service gap between rural and urban centers. These new targets reflect service levels required for Canadian households and businesses to take full advantage of the internet. 

In 2017, 37% of households in rural areas and 97% of households in large urban areas had access to 50/10 Mbps.

Federal Initiatives

Recent federal initiatives further support this evolving landscape:

Broadband Programs

These changes in strategy and investment have increased the scope of broadband programs since CCP and CTI were launched and emphasize the importance of future collaboration between funders to ensure access to timely non-overlapping funding in the future.

2. Evaluation Scope and Context

The evaluation was designed to meet Treasury Board requirements, respond to the 2018 Office of the Auditor General of Canada Audit, and inform future programming.

Evaluation Objectives:

  1. Meeting planned Departmental evaluation coverage and Treasury Board requirements through a clustered approach to cover CCP and CTI over the evaluation period (April 2014 to March 2019).
  2. Addressing the commitment to conduct an evaluation as a result of the Office of the Auditor General of Canada's 2018 Audit on Connectivity in Rural and Remote Areas.
    • The OAG's Report recommendation (reference number 54) states - For future broadband Internet funding programs, Innovation, Science and Economic Development Canada should adopt a program design that:
      • Maximizes the outcomes of public spending; and
      • Minimizes negative commercial effects on existing Internet service providers.
    • As part of the response to Recommendation 54, ISED's Detailed Action Plan committed to: ". . . conduct a program evaluation of the CCP and CTI programs that will assess the extent to which these programs achieved their expected outcomes. The evaluation will also assess program implementation and delivery, including work with partners. The findings will help to inform future program design."

The evaluation addressed the following questions related to relevance, design and delivery, and performance.

  1. To what extent does ISED's broadband infrastructure programming align with the Canadian government's priorities to have all Canadians able to access higher quality Internet services?
  2. To what extent is ISED's broadband infrastructure programming aligned with federal roles and responsibilities?
  3. To what extent has ISED's broadband infrastructure programming been implemented as planned – especially impacts of design and delivery, and lessons learned from CCP to CTI?
  4. What progress toward achievement of expected outcomes has occurred?
  5. Has the program been delivered efficiently?

3. Evaluation Methodology

Seven lines of evidence were used with triangulation to support and corroborate findings for each evaluation question.

1. Literature review

Utilized external third-party research and reporting on the relevance and need of broadband programming, the role and need for public institution involvement in the telecommunications sector, as well as documented benefits of internet access and other international indicators. Sources include: CRTC, The Economist, OCED, Statistics Canada, etc.

2. Document review

Provided background evidence on the relevance, design, and achievements of the programs. This included Memorandums to Cabinet, Treasury Board Submissions, federal budgets, Speeches from the Throne, CCP and CTI mandate letters, the 2018 report of the Office of the Auditor General of Canada on ISED's recent broadband programming, and application and progress reports for individual projects.

3. Broadband mapping data

ISED and CRTC mapping data was used to compare to the programs' targets of expanding 5/1 Mbps coverage to an additional 280,000 households, and 3-5/1 Mbps for northern regions for CCP; and expanding community connectivity to an additional 300 communities for CTI.

4. Key information interviews

Gathered in-depth information, including views, explanations and factual information on the evaluation questions. The interviews were semi-structured in nature with representatives of key stakeholders – ISED, CCP, and CTI staff; other government departments; and broadband units within Provincial and Territorial governments.

5. Financial data

Supported evaluation questions related to efficiency of program delivery. For example, operating efficiency was explored by comparing administrative costs as a percentage of total program expenditures. Data on actual vs. planned expenditures also provided indirect  information on efficiencies, identifying how projects were rolled out and potential delays in implementation.

6. Online surveys

Used to obtain information regarding the experience of funded and non-funded CCP and CTI applicants with the programs, as well as a limited number of questions related to performance. In addition, a survey of non-applicants was conducted, with limited application for the evaluation.

A total of 113 responses was received from the surveys from the funded and non-funded surveys. The funded survey had a 71% response rate and the non-funded survey had a 32% response rate.  The breakdown of survey responses and response rates follows:

Text version
Category of Survey Respondent Number of Survey Respondents
CCP Funded 20
CTI Funded 28
CCP and CTI funded 9
Funded (program not identified) 7
CCP Non-funded 12
CTI Non-funded 30
Non-funded (program not identified) 7

7. Case studies

Encompassed both CCP and CTI programs. The case studies were used as a major data source in the assessment of outcomes and lessons learned from projects. Each case study involved interviews with a sample of representatives from each project (e.g., ISP project leads and stakeholders from communities and/or regional or Provincial/Territorial representatives) and document review (e.g., project progress reports, and ISED's notes on the projects' fit to program criteria) where available. CTI projects are still underway and case study participants reported on their experience to date.

Case Studies: Location of CCP and CTI Projects

Text version

A map of Canada shows the geographic location of six CCP projects and three CTI projects.

The six CCP projects are:

  • Iwantwireless.ca Ltd – Alberta
  • A.B.C. Allen Business Communications Ltd – British Columbia
  • Columbia Basin Broadband Corporation – British Columbia
  • Bell Aliant Regional Communications, Ltd – Newfoundland and Labrador
  • Eeyou Communications Network – Québec
  • Tbaytel – Ontario

The three CTI projects are:

  • Northwestel – Nunavut
  • Kativik Regional Government – Québec
  • Western James Bay Telecom   Network – Ontario

4. Limitations and Mitigation Strategies

Although the evaluation encountered some methodology limitations, they were mitigated through the use of multiple lines of evidence and the triangulation of data.  This approach was taken to enhance the reliability and validity of the findings and to help ensure that conclusions and recommendations were based on objective and documented evidence.

CTI projects are still ongoing and progress reporting to date is limited.

Generally due to the stage of project completion with respect to the CTI program, certain performance information on ongoing projects was unavailable at the time of the evaluation. For many of the ongoing CTI projects, the extent to which projects will deliver on their planned outcomes is a moderate limitation for the study. This has been mitigated through review of the project plan, the current project stage of completion, the analysis of previous CCP and CTI completed projects, and other lines of evidence and triangulation of data.

Indirect social and economic impacts derived from broadband access for households and communities is not part of project reporting.

The programs and ISPs are responsible for the investments in broadband infrastructure and do not have mandates to collect and report indirect social and economic benefits stemming from broadband infrastructure. In addition, these indirect impacts may be affected by a range of other factors and take many years to observe:

To mitigate, case studies were used as a key source of information on beneficiary impacts for completed projects. In addition, the nature of these impacts were corroborated by the case studies and literature review, which identified similar beneficiary benefits. As a result the CCP and CTI projects are expected to benefit households and communities similarly.

5. Program Alignment with Government Priorities

Findings

The CCP and CTI programs are aligned to federal government priorities and continue to support advances in broadband coverage in rural and remote areas. 

The CCP and CTI programs are aligned with the government's key broadband priority of access to quality broadband for all Canadians.  The programs were aligned through their focus on backbone broadband and last-mile infrastructure to further enable community and household access to affordable, quality broadband.

In addition, CCP and CTI programs continue to be aligned to other key federal government priorities:

Internet Coverage Requirements

While CCP and CTI programs were aligned with government priorities and now most of Canada (96.9%) has access to the 5/1 Mbps internet service standard established at the time; internet coverage requirements continue to change to new standards, most recently to 50/10 Mbps. As a result, the rural gap is now assessed differently.  Currently, 37% of rural Canada has access to 50/10 Mbps.

The Federal budget announced an extension of the CTI program and additional funding, allowing ISED to proceed with CTI projects beyond 2021 to 2022-23. These additional projects were part of the original application assessment process and remain aligned to government priorities.  They also represent foundational projects required to enable communities to eventually meet evolving internet standards.

6. Program Alignment with Federal Role and Responsibilities

Findings

CCP and CTI programming is aligned to key federal roles and responsibilities, primarily in supporting broadband internet deployment through funding and partnerships, to underserved areas where no business case exists. A continued federal coordination role, working with other funders including provinces and territories, will be required to support future programming.  

The federal government has a clear role to play in supporting broadband internet deployment to underserved areas. The CCP and CTI provide funding to ISPs in areas where market failure exists (i.e., too costly to build broadband infrastructure, and too few customers to recover costs) helping support a viable business case for the ISPs.  According to survey respondents, 71% of unfunded CCP projects did not proceed due to a lack of funds.  The federal government also co-funds projects with provinces to help ensure service availability throughout Canada.

This aligns with what ISP survey respondents believe to be the role of the federal government in supporting broadband deployment to underserved areas (Figure 1).  While most of these roles are funding related, the graph illustrates the importance of mapping data (location of broadband internet services and backbone infrastructure in Canada) to provide broadband connectivity gap analysis.

Figure 1

Text version
- Provision of capital infrastructure funding Provision of operational funding Provision of technical expertise Develop and maintain interoperability standards Competition/common market oversight Mapping and broadband connectivity gap analysis Loans Loan guarantees Tax incentives Other
Total Number of Survey Respondents Selecting Yes 100 49 19 42 45 70 47 45 60 26

Interview and case study respondents identified that the federal role differs from other stakeholders as it has a key coordination and collaboration role to support efficient national broadband deployment. 

Federal
Development of a national strategy, coordination of stakeholders, provision of technical advice, funding to overcome market failure, and acting as a catalyst.
Provinces/Territories
Identifying and communicating regional priorities, outreach to ISPs to inform them about the programs, outreach to communities to inform them of the benefits of broadband, helping ISPs and other partners develop applications and implement projects, provide project funding, and project monitoring.
Private (ISP)
Building and operating high bandwidth and reliable broadband services, offering service packages with affordable pricing, and (in cases where they had significant broadband expertise) identifying appropriate technical solutions.

Budget 2019 noted CCP and CTI type programs will continue to be foundational to support the connectivity path moving forward. New funding announced will further emphasize the need for a federal coordination role to support timely, effective investments, while minimizing overlap and duplication.

7. Design and Delivery – Program Improvements

Findings

ISED took numerous steps prior to the launch of the CTI program to improve on elements of the CCP program and make adjustments to account for more complex projects.

CTI was more complex than CCP due to a number of factors including: larger size and remote location of projects, nature of infrastructure requirements, multiple funders, and issues related to ownership of networks and use of third parties to help new organizations, such as, municipalities, small ISPs, and Indigenous groups roll out their projects. Due to the complexity of the CTI program and as a normal course for continuous improvement, ISED reviewed its design and delivery processes for CTI program improvement opportunities. The following outlines some of the considerations and changes made after the implementation of CCP and before the implementation of CTI:

1. Focus on Highest Needs

CTI funded infrastructure projects were typically more expensive, harder to build, and focused on highest needs rural, remote and satellite dependent communities as opposed to CCP's emphasis on cost per household. This contributed to the selection of projects in areas less profitable to the private sector that would not otherwise proceed without government funding.

2. Forms and Mapping Data

The CTI program simplified and updated online application intake forms to accommodate CTI's increased project complexity.  In addition, new mapping data was created to locate Points of Presence (PoP) and cross-referenced with community data to create an additional report/layer to the existing coverage data used for last-mile. [A PoP is a site in a network where a backbone network ends and connects to a local last-mile infrastructure].

3. Extensive consultations with stakeholders

Extensive consultations with PTs, ISPs, associations, parliamentarians, municipalities and Indigenous groups supported changes to CTI program design, including contribution ratios and enhanced flexibility in the type of projects approved for funding.

4. Program Delivery Consideration

Program staff considered alternative ways to deliver the program to enhance value-for-money (e.g., efficiency - reduce administrative cost and increase timeliness; and effectiveness - increase outcomes and reduce funding overlap). Alternative approaches considered included changes to: transfer payments (e.g., direct transfers to Provinces/Territories), application intake (e.g., one-time, continuous, etc.), and tax incentives.  Certain program delivery changes were not implemented at the time as these options were not clearly identified as an improvement for all stakeholders.

8. Design and Delivery – Application Review and Contribution Negotiations

Findings

CTI undertook extensive review of applications to identify broadband service gaps, prevent duplication, and minimize displacing ISP investment. However, some applicants found the application process burdensome; and subsequent steps and processes to put in place a contribution agreement impacted the timeliness of project final approval and start-up.

To access CTI funding, applicants were required to meet specific criteria, including project eligibility (e.g., backbone and last-mile).  In addition, online applications needed to be completed in full by the application deadline (April 1, 2017).

Overall, 69% of CTI recipients were satisfied with CTI's application process. However, evaluation respondents (interviews, surveys and case studies) consistently identified the application review, due diligence and resulting contract negotiation processes as burdensome, contributing to project delays.

Application Review, Due Diligence and Contribution Agreement

To maximize cost-effective program outcomes, CTI programming was designed and implemented to focus on projects where no business case existed for sole private sector investment. Accordingly, ISED conducted extensive application review and due diligence, relied on by Provinces/Territories and other funders, to help ensure projects meet coverage and speed requirements and to minimize overlap amongst proposals and overbuild of existing services. This due diligence involved ensuring the applicant has the financial resources needed, undertaking an initial environmental review (e.g., adjusting project route), determining whether there is a duty to consult Indigenous groups, and verifying project specifics (e.g., equipment, sites, routes, timelines, ownership and maintenance network.  This work required time to complete and staff and applicants noted delays in approval notification and signing of contribution agreements which resulted in project delays. Provinces/Territories observed that these delays may have an impact on future projects.

Interviews, case studies, and surveys suggest that the technical details required during the application review, due diligence and resulting contract negotiation processes were burdensome. Respondents also expressed concern these requirements may prevent smaller ISPs and other organizations operating in remote northern communities from applying for funding.  In addition, it was noted these organizations may need further time to collaborate and enter into the contractual agreements required to meet the applicant and project eligibility requirements; and other flexibilities to enhance the range of applicant project types.

Examples of potential improvements

The following were identified by respondents of interviews and case studies conducted:

9. Design and Delivery – Mapping Data

Findings

As part of the extensive applicant review process, updated mapping data was used to identify broadband service gaps and prevent duplication of broadband coverage. However, the level of precise mapping data that could be shared with applicants was limited due to confidentiality.

ISED and the CRTC maintain comprehensive and precise mapping data that describes connectivity in Canada and is a critical tool to inform project proposals and to support other decision-making. Mapping data compares the specific location of network infrastructure, such as the location of PoP in relation to demographic information, such as population/households, communities, and roads. This overlaying coverage data in relation to demographic information allows ISED to assess which areas have access and where gaps exist to further support the assessment of projects during the application review and due diligence processes to prevent duplication, and minimize displacing existing ISP investment.

Public Availability of Precise Mapping Data

Due to confidentiality restrictions, applicants were provided with aggregated mapping data identifying areas without existing service, but not showing the precise edge of competing service providers' networks. Applicants that chose to submit projects in areas close to existing services were required to demonstrate market research which showed the lack of existing services where their project was proposed. 

Further, all projects in areas of existing services were adjusted during the due diligence (e.g., negotiation) phase to minimize any proposed overbuilding of existing services based on evaluation against the precise mapping of current services (only available to ISED and CRTC). Many respondents identified the negative impact on timing, including approval/start up delays caused by the lack of access to the most up to date mapping data required to support applications.

CTI Eligibility Map Illustration (New backbone and last-mile)

Text version

ISED's National Broadband Internet Service Availability Map is a comprehensive and precise map showing broadband internet services and backbone infrastructure in Canada. Coverage information is presented in 25km2 hexagons and shows geographic areas eligible for new backbone and last-mile projects, as well as ineligible urban areas.

Examples of potential improvements

The following were identified by respondents of interviews and case studies conducted:

10. Program Outcomes

Findings

Actual and expected program outcomes have exceeded, or are forecasted to exceed, the original targets for both CCP and CTI.

  1. CCP:

    With the substantial majority of CCP projects completed at the time of this report, according to mapping data, an estimated 350,000 additional households received (or will receive) access to planned coverage as a result of the CCP program.   This will exceed its target of 280,000 by 70,000 households, or 25%.  Coverage across Canada has increased from 92.2% in 2014 to 96.9%. In addition, over the same period, an additional estimated 380,000 households received access to 5/1 Mbps or more, as a result of private ISPs.

  2. CTI: 

    The CTI program is on track to surpass its goal of 300 additional connected communities with an estimated 900 communities impacted by new PoP and other upgrade projects, including 190 Indigenous communities. Higher capacity PoPs can deliver higher network speeds to end users.

Many service improvements were noted by stakeholders as a result of ISED projects, including faster internet speeds and improved pricing.

Figure 2 identifies, based on CCP and CTI funded survey respondents, the service improvements resulting from ISED funded projects.

Figure 2

Text version
- Reduced cost of service packages Improved download/upload for similar pricing (increased value) Greater variation in packages offering lower priced options Faster speeds Greater reliability Increased redundancy (e.g., better assurances of network availability) More traffic capacity/less congestion Availability of special handling options (e.g., accelerated handling of data) Other:
Total Number of Survey Respondents Selecting "Yes" 19 36 17 41 35 26 35 13 16

11. Indirect Program Benefits

Findings

Positive social and economic indirect impacts of expanded access to affordable, quality broadband in underserved areas were identified at the community level.

1. Improved public safety

Improved coordination of emergency services - fire and flood emergency alerts, evacuation notices, current emergency status, ability to return home after evacuations, ability to call 911 when in very remote areas for business or recreation.

2. Improved access to public services

Easy access by the public to government information and forms, and the ability to complete forms online, e.g., building permits, notices of board meetings, general communication on government affairs.

3. Improved access and quality of education

In some rural areas they are now offering "Grade 12 at home" from online sources where it's not locally available, including remote access to high school and colleges.

4. Improved access and quality of Healthcare

Increased access to quality broadband makes it easier for households in rural and remote communities to access digital health services.  This includes the ability to contact your doctor, for physicians to share and access patient information, to implement tele-pharmacy and tele-ophthalmology, or to obtain test results.  These services are even more critical because the geographic location of the communities makes in-person access to medical expertise very challenging.

5. Social good

Broadband allows members of the public who have left small communities for urban centers (or abroad) to return home (e.g., when they retire, or finish schooling), or to allow them not to leave at all, because better broadband services allow communications to be conducted remotely and members of the community feel more connected to urban centers through social media.

6. Business Development

Small businesses can reach potential customers outside the community, providing more opportunities for growth. Big businesses can work more efficiently with ready access to supply, at low cost; preventing lengthy and costly shut-downs.

12. Efficiency of Program Delivery

Findings

The CCP and CTI programs have been delivered efficiently in terms of operating and maintenance (O&M) spending and exceeding expectations for contribution funding leveraged. Although CTI contribution spending variances identified delays in implementation of CTI projects, allocated funding for fiscal year 2019-20 is forecasting almost full expenditure.

For the purposes of this evaluation, the efficiency of the programs has been measured using the following financial metrics:

Funds Leveraged - Funding leveraged though ISED programming was higher than expected, further maximizing the outcomes of public spending and further demonstrating value for money.

Figure 3a

CCP:

Text version
Funding Source - CCP Total ($M) %
CCP  $208.90 36.30%
Recipients (self-funded) $329.80 57.30%
Other Federal $9.40 1.60%
Provincial $22.70 4.00%
Municipal $1.60 0.30%
Private $3.10 0.50%
Total $575.50 100%

Figure 3b

CTI:

*Other represents a diverse population of funders including: Provincial/Territorial, Municipal, ISPs, and not-for-profit orgs.

Text version
Funding Source – CTI Total ($M) %
CTI $320.00 48.60%
Recipients (self-funded) $120.30 18.30%
Other  $218.10 33.10%
Total $658.40 100%

 

Budget variances were identified in CTI's annual contribution funding, based on the completion timeframes of CTI projects.  The observed contribution spending gaps in 2017-18 and 2018-19 funding, as per Figure 4, reflect timing delays in CTI projects over that period.

Figure 4

Text version

Figure 4 is a bar chart that shows CTI contribution spending gaps in FY2017-18 and FY2018-19:

  • In fiscal year 2017-18, actual expenditures ($7,224,000) differed from budgeted expenditures ($80,875,000) by $73,651,000 (91%).
  • In fiscal year 2018-19, actual expenditures ($68,230,000) differed from budgeted expenditures ($249,025,000) by $180,795,000 (73%).

Case study, interview and survey consultations identified a number of internal and external factors contributing to CTI project delays, including:

  1. Higher than anticipated applicant volume (CTI nearly double CCP)
  2. Project complexities and locations
  3. Extensive due diligence and application review
  4. Partner consultation and readiness

CTI projects were often complex, involving multiple partners and covering difficult terrain in the most remote regions in Canada. The program implemented a number of steps to address potential challenges, including extensive application review and due diligence to help ensure projects meet coverage and speed requirements and to minimize displacement of private sector investment. In addition, staff provided guidance to recipients and pre-populated some data to help applicants complete their statement of work requirements for a contribution agreement. Even so, project delays were noted by the variance between budgeted and actual program spending.  Variances in program spending are mainly driven by: delays in due diligence review and negotiation of contribution agreements; and delays experienced by recipients during project construction (e.g., due to weather, changes to equipment or routes, time to obtain permits and licenses, procurement processes, etc.).

Figure 5 illustrates that actual total CCP and CTI operating cost (direct salary and O&M) were below budget by $868,000 over the evaluation period.

Figure 5

Text version

Figure 5 is a bar chart that illustrates that actual total CCP and CTI operating cost of $18,188,000 was $868,000 (4.6%) below the programs' total budget of $19,056,000 over the evaluation period.

When O&M costs are calculated as a percentage of total costs (including contribution spending), the actual proportion of O&M cost is higher than planned; mainly due to the lower CTI contribution spending to date.

Budgeted administrative costs (direct salary and O&M) as a percentage of total cost was anticipated to represent approximately 3.3% of total cost (including contribution spending).  To date (2018-19), actual administrative costs for CCP and CTI as a percentage of total cost is 6.3%.  As indicated above, while total actual administrative costs were below budget, CTI contribution spending was substantially below budget for 2017-18 and 2018-19, increasing the actual proportion of administrative costs over total costs. 

The Programs have used a greater percentage of direct salary and O&M than planned due to delays in implementation in the CTI program and declining budgeted operating funds available in later years based on the original funding profile.

Despite the spending variances, with significant CTI contributions forecast to flow in 2019-20, it is expected that the substantial majority of the spending gap will be eliminated in 2019-20 and any excess O&M costs will be absorbed by ISED.

13. Recommendations

The findings of the evaluation led to the following recommendations:

  1. Process Improvements– ISED should examine its processes for application intake and review, project selection and approval, and negotiations of contributions to identify opportunities to:
    • Further streamline processes and improve the timeliness of project approval and implementation; and
    • Allow more flexibility for small ISPs and non-ISPs to demonstrate eligibility and meet technical requirements.
  2. Enhance Coordination– ISED, in consultation with key federal partners, should clarify and communicate to stakeholders the federal roles and responsibilities related to broadband programming and examine the feasibility of an enhanced coordination role, including the establishment of a "single window" for stakeholder inquiries and interactions regarding projects and funding.
  3. Mapping Data Improvements– ISED should continue to work with the CRTC and ISPs to enhance the level of precision of publicly available mapping data (while considering confidentiality of data).
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