ARCHIVED -  Transcript - Prince Albert, SK - 1998/06/02

TRANSCRIPTION/

TRANSCRIPT

Service téléphonique dans les zones de desserte à coût élevé/

Service to High-Cost Serving Areas

et/and

Examen des politiques relatives à la télévision canadienne/

Review of the Commission's Policies for Canadian Television

CONSULTATION TENUE À:

Auberge Marlboro

67 - 13^ième Rue est

Prince Albert (Saskatchewan)

Le 2 juin 1998

CONSULTATION HELD AT:

Marlboro Inn

67 - 13^th Street East

Prince Albert, Saskatchewan

2 June 1998

Conseil de la radiodiffusion et des

télécommunications canadiennes

Canadian Radio-television and

Telecommunications Commission

Transcription / Transcript

Consultation régionale/

Regional Consultation

DEVANT/BEFORE:

Andrée Wylie Présidente/Chairperson

Cindy Grauer Conseillère/Commissioner

Steve Delaney Gérante d'audience/

Hearing Manager

Lori Assheton-Smith Conseillère juridique/

Legal Counsel

Marguerite Vogel Secrétaire/Secretary

TENUE À: HELD AT:

Auberge Marlboro Marlboro Inn

67 - 13^ième Rue est 67 - 13^th Street East

Prince Albert Prince Albert

(Saskatchewan) Saskatchewan

Le 2 juin 1998 2 June 1998

- iii -

TABLE DES MATIÈRES/TABLE OF CONTENTS

PAGE

Présentation au nom de/Presentation on behalf of:

¨ Hon. Bernard Wiens 7

¨ Saskatchewan Library Trustee Association 24

¨ Mike Badham 40

¨ Len Larson 51

¨ Rick Laliberte 59

¨ Canadian Co-operative Association,

Saskatchewan Region 68

¨ Credit Union Central of Saskatchewan 83

¨ Regional Libraries of Saskatchewan 94

¨ Lionel Roy 106

¨ Consumers Association of Saskatchewan 113

¨ National Farmers Union 118

¨ Rural Municipality of Val Marie No. 17 127

¨ Eden Regional Economic Development Authority 133

¨ Saskatoon School Trustees Association 151

¨ Rongenet 163

¨ Pahkisimon Nuy?eah Library System 175

¨ Family Farm Foundation of Canada 186

¨ Northern Lights School Division 202

¨ Mervyn Abrahamson 214

¨ Saskatchewan Library Association 227

¨ NORTEP/NORPAC 239

¨ Town of Kamsack 251

¨ New North 255

¨ Saskatchewan Wheat Pool 267

¨ Saskatchewan Association of

Rural Municipalities 280

¨ Myron Kowalsky 296

¨ Saskatchewan Seniors Association Incorporated 309

¨ Northlands College 322

¨ Association of Saskatchewan Regional Colleges 328

¨ Creighton School Division 337

¨ Ms Lorena Stiglitz & Ken Baker 356

¨ Carlton Trail Regional

Economic Development Authority 360

¨ John Gondek 374

¨ Bernard Dease 377

¨ Regional Municipality 461 382

Réplique au nom de/Reply on behalf of:

¨ SaskTel 386

Prince Albert, Saskatchewan

--- Upon commencing on Tuesday, June 2, 1998

at 09:00 / L'audience débute le mardi

2 juin 1998 à 09:00

THE CHAIRPERSON: Order, please, ladies and gentlemen.

Good morning to everyone and welcome to all of you to this regional consultation on an issue which is fundamental to telecommunications today.

My name is Andrée Wylie and I will chair today's session. Seated next to me is Cindy Grauer, the regional Commissioner for British Columbia and the Yukon. Also in attendance are Commission staff. To my immediate left is Steve Delaney, the hearing manager and to his left, Lori Assheton-Smith, our legal counsel and to her left Marguerite Vogel from the CRTC Vancouver regional office.

I encourage you, if you have any question at all, to consult with any of them, especially if you have questions relating to today's process.

Before I begin, I would like to say that we are happy to be here in Prince Albert. We thank your provincial government for its invitation and for this opportunity to hear your views on issues relating to the provision of high quality telephone service in high cost serving areas.

I would also like to welcome at this time all the people who will be participating in our hearing through audio/video links in Regina, Saskatoon, Swift Current and Yorkton. We take this opportunity to thank your provincial telephone company for making these links available for today's session.

As you know, this public consultation is part of a larger CRTC process. Canadian telephone policy has as one of its objectives the provision of reliable and affordable telecommunications of high quality accessible to both Canadians in both urban and rural areas and in all regions of Canada.

We are here today to explore how in the face of changes in the telecommunications environment we can ensure that we can achieve this policy.

Some of the issues that we hope to hear your views on include the following:

What should be the obligations of the telephone companies or their competitors with respect to providing telephone service in high cost areas?

If subsidies are required for high cost serving areas, what services should be eligible for subsidies and how should any subsidy be funded?

What types of technology are acceptable for high cost or remote areas? For example, is wireless or satellite technology an acceptable means of bringing communications to those areas?

To ensure that as many people as possible can participate, we are holding two sessions today, one starting at nine a.m. this morning and continuing on until we have heard from all people who have registered for this session and one which will start at 6:30 p.m. in this same location.

We may wish to ask a few questions of clarification after some presentations. However, I want to stress that our main interest is to hear what you have to say on the issues that we are exploring in a process that we want to keep as informal as possible.

While we often hear from groups that are familiar with telecommunication issues and the Commission's processes, we are also eager to hear the views and opinions of individual Canadians and other groups on the issues at hand.

At this point I would like to turn to Miss Assheton-Smith, our legal counsel, to address the particulars of the process we will be following today. Lori?

MISS ASSHETON-SMITH: Thank you, Madam Chair.

Those persons who have indicated that they wish to make an oral submission at this hearing, by registering in advance with one of the Commission's offices, will be called by the Hearing Secretary. If there are other people who are present today who wish to make an oral submission but who have not already registered, please speak to the Secretary and, time permitting, we will try to fit you into the schedule.

Anybody not in attendance when the Secretary calls his or her name will be called again later.

To make your presentation, when the Secretary calls your name, please come forward to the table at the front of the room. To ensure that the recording and transcription people will be able to produce an accurate transcript, please ensure that your microphone is turned on when speaking. Similarly, when you are finished speaking, please turn it off, otherwise we may get feedback.

Those of you who are participating remotely through a video link, please follow the instructions of the telephone company representative in your location.

The oral submissions heard at this consultation will be transcribed and will form part of the record of the proceeding. Anyone wishing to purchase a copy of the transcript should make the necessary arrangements with the official reporter who is seated at the table directly across from me.

In addition to your oral submissions, I want to remind everyone that written comments on the issues that are being considered here today may be submitted to the Commission at any time before January 30, 1999. Like the transcript, those comments will also form part of the record of this proceeding.

After everyone is finished with their presentations, we will take a short break, after which the telephone company representatives will have 15 minutes to respond to any comments raised in the course of this morning's session with respect to high cost issues.

The telephone company can also address any comments raised at this consultation in the course of its written argument, which is to be filed by January 30, 1999.

THE CHAIRPERSON: Thank you, Lori.

On the subject of sitting hours, I expect that we will sit this morning until approximately 12:30 p.m. Of course, this may differ, depending on the length of presentations and the number of people who appear.

We will recommence at 1:30 approximately and sit until about 5:30 to recommence at 6:30, as I mentioned before. We expect this evening to sit until approximately]y 8:00.

Before I turn to the Hearing Secretary to call our first presenter, I would like to ask if anyone has any preliminary issues they would like to bring up. I would also invite the representatives of the telephone company to introduce themselves if they are here at the moment.

MR. JOHN MELDRUM: Yes. My name is John Meldrum, I am the Vice-President and corporate counsel, Regulatory Affairs, for SaskTel. I have with me Candice Molnar from our Regulatory Affairs group and Josephine Bertrick from Public Affairs and as well there are two customer service representatives here from our Prince Albert office, Rick Tabin and Terry Salter and we will be pleased to address any customer issues that arise during the hearing.

THE CHAIRPERSON: Could we have these gentlemen stand up so that we can find out who they are? Thank you.

Thank you, Mr. Meldrum.

Any other matters that anyone would like to bring up? If there are no other preliminary matters from other matters, I would like the Secretary now to call the first presenter.

THE SECRETARY: Thank you, Madam Chair.

Our first participant this morning is the Hon. Bernard Wiens. I invite him to come forward, please.

THE CHAIRPERSON: Good morning, Minister and Messrs. Hersch and Cotter. We are happy to have you with us. To a certain extent, this is your party so we will be happy to hear from you as well.

PRESENTATION / PRÉSENTATION

HON. BERNARD WIENS: Thank you very much, Commissioners Grauer and Wylie. It's a pleasure for me to welcome you here and express my appreciation for the fact that you have come.

I want to recognize before I begin the Member of Parliament for Athabasca, Mr. Rick Laliberte, who is with us today, and all of those others who have come here to hear discussion on this important matter.

As you have already indicated, with me is Brant Cotter on my immediate right, the Deputy Minister of Aboriginal Intergovernmental and Aboriginal Affairs, and Bob Hersch, the senior adviser to me on telecommunications policy.

My portfolio is the Ministry of Intergovernmental and Aboriginal Affairs.

Again, I want to thank the Commission for holding a hearing here in Saskatchewan on this issue so important to all Saskatchewan people and Canadians. I also welcome the participants here and those at the video conferencing sites who have come to share their concerns and ideas about the future of telecommunications in our province.

We value the opportunity to present our views on methods that the Commission may wish to consider to ensure that basic telecommunications services continue to be universally accessible at affordable rates throughout Canada.

Connecting the people in communities of Saskatchewan has been a major concern for successive governments in this province over the past 80 years. As the Minister for telecommunications policy, the former Chair of our Crown Investments Corporation and a long time rural resident, I am pleased to be able to share our position directly with you as the Commissioners for the CRTC.

Today you will hear from many residents of Saskatchewan about the importance of telecommunications to their individual lives, their communities, their jobs and their organizations. I intend to offer a provincial context for the comments you will hear.

Saskatchewan is the most rural province in Canada. Only the Northwest Territories and the Yukon have lower population densities. This presents the Government of Saskatchewan with a number of challenges in ensuring affordable telecommunications access for our residents.

Clearly, subscriber density is the single most important factor in determining the cost of service delivery. The less dense the population, the more costly the infrastructure required.

Almost 30 per cent of Saskatchewan residents reside on farms, in small towns and villages and Indian reserves of less than a thousand residents.

Despite these challenges, we have managed to ensure access to high quality digital communications for the vast majority of our residents and with some of the lowest rates in Canada. Saskatchewan has been a leader in bringing leading edge telecommunications service to its residents at reasonable cost.

We have taken aggressive steps to ensure that to the greatest extent possible, residents in rural and remote communities have equal access to the same high quality advanced telecommunications service available to their urban counterparts.

This has been achieved through Saskatchewan's policy of public ownership of this important utility, prudent management and cross-subsidization of services throughout the province.

As Saskatchewan, along with the rest of Canada, moves toward a fully competitive telecommunications system, it is clear that traditional cross-subsidies that have supported universal affordable access will no longer be available.

As national policies promote competition in the telecommunications sector, it will be increasingly difficult for individual telephone companies or jurisdictions to address the needs of residents, especially in high cost serving areas.

In the absence of cross-subsidies and without an intelligent alternative national policy, it will become impossible for any carrier to provide service to a high number of rural and remote residents at rates that are comparable to those in urban areas.

The alternative we face is significant rate rebalancing for remote and rural subscribers of up to five times current levels. For some residents, this could mean paying $100 per month just for a dial tone. At these rates, many would be forced to discontinue and disconnect their service. This would have disastrous consequences for us all.

The business interconnectedness of rural and urban, the family connection, the access to emergency services, whether we are resident or visitor, all of these would suffer, weakening our economy, weakening our sense of Canadian community.

During the past decade, the federal government and the CRTC, as its regulatory agent, have assumed a national authority and jurisdiction over telecommunications. With this authority comes a responsibility to examine the application of telecommunications regulation on a national basis while accommodating regional needs.

Universal access is not just a Saskatchewan issue. It is crucial to Canada's identity and future wellbeing. We need to ensure that rural and remote residents have access to a full range of services if all of Canada is to participate in the new global economy and share in our nations development.

We agree with the positions taken by the Yukon, the Northwest Territories and many small companies across this country like QuebecTel which support the idea of a Canadian federation built on the premise of having one single strong system that connects our rich diversity and builds a single strong economy.

In practical terms, we are asking the CRTC to ensure that all Canadian citizens benefit, not only from essential telecommunications services, but from the unprecedented opportunities afforded by the information highway.

On the national stage, we believe the CRTC has been given the opportunity and the responsibility to fairly assess the needs of all the citizens of the regions of Canada served by the telecommunications industry.

In addition, we have this opportunity to consider the role of telecommunications in strengthening the national economic union and promoting common economic citizenship for all Canadians.

Roughly a century ago, Canada's leaders saw in visionary terms the need for a national railway, a ribbon of steel across this country as a crucial component of nation-building, one that linked Canadians to each other.

Today, with a different technology and a different but more intimate form of linkage to Canadians, we have under your leadership the opportunity to secure and enhance nation-building. These ribbons of fibre, real or virtual, are the ties that bind us as Canadians, all of us.

Universal access to telecommunications is, as Andrew Clement of the University of Toronto said, "an essential ingredient for stitching together communities and the nation". This sentiment has been recognized by the Government of Canada when it promised to, and I quote:

"-- develop a national access strategy...to ensure affordable access by all Canadians to essential communications."

In addition, it was stated that:

"-- where market forces cannot provide such services, the strategy will identify the means -- regulatory, financial or otherwise -- of providing them to people in rural, remote and northern communities."

It is essential to Canada's future that the federal government live up to this promise in the changed circumstances which are now upon us.

The basis for recommending a national mechanism to ensure universal, affordable access is not altruistic but good business for us all. First and foremost, residents living in rural and remote areas are primary producers of real wealth in Canada.

Our collective wellbeing, whether we live in Toronto, Prince Albert or on a farm outside of Melville is irrevocably tied to the ongoing success of primary producers in this country.

On this subject the Parliamentary Committee on Natural Resources recommended that:

"-- the costs of upgrading rural telecommunications infrastructure should be borne by all subscribers, both urban and rural."

This reinforces the concept of telecommunications as a public good. This committee recognized that undue financial burdens must not be imposed on industries conducting business in rural and remote communities.

Therefore, we must also recognize the needs of small businesses operating in rural and remote areas. Strong rural communities with healthy economies are important contributors to Canada's overall economy.

Secondly, universal connectedness among all Canadians benefits both consumers and service providers since the value of the telecommunications network is in the extent to which it connects everyone to everyone else.

Next week I will be meeting with the federal, provincial and territorial Ministers on the information highway. At that meeting we will discuss the importance of maintaining access to telecommunications in rural and remote areas at affordable prices and service levels that are reasonably comparable to those in urban areas.

This issue underpins many of the economic and social policy goals presently before us as Canadians from all regions. Without universal access, the nation's ability to participate successfully in the global economy will be put at risk.

We are suggesting two solutions for the consideration of the Commission. In the short term, we are suggesting that the Commission establishment of national contribution rates. We believe that the current differences in contribution rates magnifies economic disparities among regions of Canada.

These differential contribution rates create competitive inequality for those companies required to serve large high cost areas.

We have also seen how these rates cause distortion in the marketplace as companies attempt to reroute traffic to avoid high contribution areas. This undermines the development of a truly national communications market.

Second, in the long term we recommend that the Commission replace current contribution methods with a funding mechanism that is sustainable, explicit and competitively neutral.

It is our belief that this can be achieved by the creation of a national universal service fund similar to that created in the United States. We suggest a fund that is based on gross revenues of companies providing telecommunications services such as local, long distance, wireless, Internet and data services.

Fair and equitable contributions from all telecommunications providers, in all areas of the country, for all Canadians, will garner long term benefits for all providers of telecommunications services.

We firmly believe that failure to initiate such regulatory measures will have ultimately a severe impact on the economic survival and community development of many rural and remote areas across Canada.

On a more personal note, besides being the Minister of Intergovernmental and Aboriginal Affairs, I am also a farmer and a rural resident. In my home town of Herschel, 150 kilometres southwest of Saskatoon, we have fought long and hard to keep our community prosperous in a rapidly changing economy and world. Reliable and affordable telecommunication services have been an important part of our success.

Internet access is critical to new business creation and promotion, as is evident in a new aboriginal tourism business that is evolving. Farmers are more dependent on good and current information.

We are now in the process of expanding access and implementing new services like the 911 emergency system. It is clear that these services cannot be effective without universal local service.

Without a method of sustaining support for rural and remote areas, some people simply won't be able to afford even basic service. My fear is that the links that have held all Canadian communities for decades will begin to break down.

In conclusion, the province of Saskatchewan believes that the regulatory decisions and directions emerging from this hearing will have far reaching consequences.

The outcome of this process will influence the ability of rural residents to expand their business opportunities, to maintain contact with family and friends, to seek help in an emergency, to participate in community events and access the education and training resources that are ever more present and ever more needed.

Finally, these regulatory decisions will determine how we as a society continue to include all of our residents in the opportunities afforded by access to a global economy and growing knowledge-based society.

The decisions emerging from these proceedings will represent the final step in the transition from telecommunications as a public utility to telecommunications as a commodity to be bought and sold according to market forces.

The success or failure of this transition to a competitive environment will be gauged by the extent to which we retain an integrated system in which all telecommunications provers contribute equitably to the preservation of universal, affordable access in Canada.

We continue to call upon your leadership to ensure that national telecommunications policies accommodate the needs of rural and remote regions throughout Canada in our common interest.

Thank you very much.

THE CHAIRPERSON: Thank you, Minister. I have just a few questions and you must feel comfortable as to whether you want to answer them or discuss anything I raise.

I have also read the submission of the Saskatchewan government and it is also obvious from your presentation this morning that the emphasis is on a national system. The first problem, of course, will be to define in what circumstances anyone is eligible for the subsidy.

You mentioned this morning density. Would you also take into consideration such things as climate, the terrain, the proximity to other telephone services with different densities, et cetera, in defining the eligibility for any subsidy?

MR. WIENS: Yes. I think while density is the largest evident contributor to differential costs, I think the other issues you mention are important. I think the basic thesis that we have used as a province through our Crown utilities that wherever one lives in the province, the economy works better when everybody has an opportunity to participate.

Whatever barriers there would be, whether it is terrain or climate, should also be part of that. I think it is an economic fact, demonstrated maybe best by the Canadian medicare system, that when you create one system that serves everybody equitably, no matter where they live and where the service is provided, you actually can deliver a system that costs less and is more effective than systems which are fragmented.

The telecommunications system has that opportunity to now provide that economic infrastructure for our country.

THE CHAIRPERSON: My second question is in relation to having a national system where the subsidy is identical, where we have a number of telephone systems.

You raised the fact, for example, that the contribution rate as it exists now, as I understand you, should be a national one. You know that we are struggling with this issue at the moment with Bell Canada and the independent companies in Quebec to try to respond to the desire for a more equal contribution rate to eliminate bypass and to make sure that the small companies benefit from the same subsidies that, as is argued, the more densely populated rural areas get when they are served by Bell Canada.

This is a question you may not be comfortable answering, but the problem is the telephone companies will have different cost effectiveness, to arrive at a subsidy that is equal without having the authority in some cases to require rebalancing or increased productivity, et cetera.

I understand you properly that you would want a subsidy which is equal everywhere, a national subsidy. Wouldn't we have to look at the cost structure of the manner in which each company operates, how productive it is, because in the end, the subsidy is higher or lower depending on operational effectiveness.

MR. WIENS: As you know from our presentation, we believe just because of the fact that there is no universal fund now available or constructed for all services to contribute that in the short term we are stuck with the traditional subsidy of long distance to local. Those contribution rates vary.

We are suggesting that in the short term as competition emerges, we do make a calculation of what is fair nationally. I am sure there are accountants and actuaries who get very excited about making these kinds of calculations so that you and I don't have to. Their lives are made more meaningful for it.

I think at the end of the day it should be a fairly calculated common contribution rate that still requires companies to be competitive in the delivery of the service. I think without getting into detail which I don't understand as well as I understand the farming operation, but somebody does.

I am sure that somebody could calculate such a rate both in the short term for the common contribution on the long distance carrying and in the long term with respect to sharing the contributions of all the services and how they might appropriately link together.

THE CHAIRPERSON: I'm sure you understand that not all your pals are equally productive.

Thank you very much.

MR. WIENS: And sometimes some are called because every company should be required to deliver a high quality service at a reasonable cost and that is why a common subsidy into a calculated system is so important so that somebody can't ride on the back of a loosely constructed profit system.

Thank you.

THE CHAIRPERSON: We understand your position.

Miss Grauer, do you have any questions?

COMMISSIONER GRAUER: No.

Thank you very much for coming.

MR. WIENS: Thank you very much again for having these hearings here. I wish you a productive day in listening to the views of many Saskatchewan people.

Thank you.

THE CHAIRPERSON: Thank you, Minister. Thank you, Mr. Cotter, Mr. Hersch. I hope you have a good trip back. No snow, I hope.

Madam Secretary.

THE SECRETARY: Thank you.

Our next two participants are in Regina, so I would like to go to the Regina location and ask Isabelle Butters to come forward to make her presentation.

PRESENTATION / PRÉSENTATION

MRS. ISABELLE BUTTERS (Remote): Good morning, Madam Chairperson.

THE CHAIRPERSON: Good morning, Mrs. Butters.

The Saskatchewan Library Trustee Association represents 24 --

--- Technical difficulties/Problèmes techniques

THE CHAIRPERSON: Sorry for the interruption. We seem to be having a problem. The Court Reporter is not hearing you.

--- Technical difficulties/Problèmes techniques

THE CHAIRPERSON: We are still working on it, Mrs. Butters. Hopefully we will be back on in a minute.

--- Technical difficulties/Problèmes techniques

THE CHAIRPERSON: Just to let you know. We lost the transcript. If I could ask you to back up. Thank you for your patience. We appreciate it.

MRS. BUTTERS: Thank you.

Rural and remote libraries were very much at issue when in 1996 the review of regional libraries committee articulated as its vision that Saskatchewan regional libraries will provide equitable access to quality information services and resources.

As trustees, our responsibilities are many and as the review of regional libraries demonstrated, one of our responsibilities is ensuring equitable access to library services to a dispersed population.

Library trustees have been working with library staff and support that vision and have invested heavily in the telecommunications technology that make it a reality. We have used telephones and the Internet to ensure access to automated systems that can accommodate provision of cost effective library services to all libraries, including those in rural and remote locations.

City and rural library trustees have worked together toward this goal, seeing the benefit of using automated systems to enhance service --

THE CHAIRPERSON: Excuse me, Mrs. Butters. We seem to be having a problem. I have to apologize. Just a moment, please.

--- Technical difficulties/Problèmes techniques

THE CHAIRPERSON: Mrs. Butters, would you say something now to see whether we have you back. Just say hello. Mrs. Butters? Can you hear me?

MRS. BUTTERS: Yes.

THE CHAIRPERSON: Would you like to start from the beginning. We will give you this option if you wish. This has been so disconnected. It's up to you.

MRS. BUTTERS: I'm okay, if you are.

THE CHAIRPERSON: We lost you. You should start again. We apologize for this. The system is obviously not perfect yet. I will let you know when to go.

MRS. BUTTERS: All right.

--- Technical difficulties/Problèmes techniques

THE CHAIRPERSON: The connection is now functioning. Yes, we are ready to go. I bet by now you wish you had flown to Prince Albert.

MRS. BUTTERS: That might have been all right.

THE CHAIRPERSON: Go ahead now.

MRS. BUTTERS: We have used telephones and the Internet to ensure access to automated systems that can accommodate provision of cost effective electronic library services to all libraries, including those in rural and remote locations.

City and rural library trustees have worked together toward this goal, seeing the benefit of using automated systems to enhance service in our one province library system. To this end, an automated infrastructure was set up throughout our province to provide each library system with access to a central computer system that provides automated services to branches and users.

Over the past three years, rural and remote communities have been encouraged to automate their libraries, using the resources of their regional computer system. To facilitate this access, rural libraries have taken advantage of reasonably priced Internet access and are now able to provide the same, and sometimes more expensive, services than those provided in urban centres.

The vast majority of our service points and our patrons live in what will likely be designated high cost serving areas. There are many service points in communities of less than 100 people and, of course, many patrons living on farms down endless miles of country roads.

We know that this makes telecommunications services and infrastructure difficult and costly, but it is who we are, a predominantly rural people. Our way of life is as much inherited as it is chosen. Nonetheless, this does not mean that we have chosen or inherited isolation.

The success of our provincial telephone company and the success of its province-wide Internet services demonstrates our need for contact, for information and ultimately for a reliable and affordable communications system.

Although we deliver services through a number of low tech service mechanisms such as mailing items directly to patrons or delivering items to communities with courier delivery systems, we often make extensive use of the high tech tools available to us. Reliable and telephone service is vital to library services in Saskatchewan.

We cannot mail an item to a patron unless the patron has the ability to request it. Usually this is done with a phone call, an electronically placed request on one of our province's regional servers or an e-mail message sent to our inter-library loan staff.

The patron often cannot request items unless they are known to exist, which is usually determined with a phone call, an online dial-up search or an Internet search. As is the case with other library services, our use of technology and telecommunications is patron driven. Patrons demand it and we provide it.

We very much support the federal government's push to bring Internet access to our communities, schools and libraries as quickly as is feasible. I am sure, in fact, that library trustees have been promoting this idea longer than the government has.

There is no doubt that matching infrastructure grants and community access programs through Industry Canada has given us a tremendous boost. It is important to note that these grants are matching and do not address long term maintenance costs.

Volunteers in Saskatchewan have been working very hard to match every grant that becomes available and many began implementing these systems before they knew that grants were available. They worked because it had to be done because they believed in what technology and affordable telecommunications could do to improve library services.

Library trustees recognize the benefits of technology to provision of library services. They also recognize that cost is also a determining factor in implementing any service.

Since costs of communications is usually a local library board issue, local trustees are often given the task of raising money to pay the bills. It is estimated that at current rates, branch libraries are paying over $129,000 per year for telephone services.

The province's 150 branches that offer automated library services over Internet based links to regional servers usually have at least two phone lines, plus Internet access charges, and end up paying an additional $74,000 per year for these services.

The locations offering automated services and public Internet access services pay an additional $11,000 per year, and the number grows every week as new locations add more telecommunications reliant services.

Our concern with telephone costs in the context of the high cost serving areas in discussion is in part with classification for billing. From the research we have done into the issue, it is apparent that the opening of local telephone service to competition includes price caps for residential customers over the short term.

Library trustees will be very interested to see what the long term solution will be for residential customers since many of our services are ultimately aimed at being accessible from the home through telephone lines. Our more immediate concern is the lack of provision either short or long term to protect libraries from dramatic and ultimately unmanageable price increases for telephone service.

Libraries are currently provided with telephone service under the business rate structure from SaskTel. If libraries are classified as business with determining telephone service costs under a new competitive structure, it is safe to say that our rural and remote libraries will not be able to cope with the probable increase in costs.

This could bring our superior library services to an abrupt end for all but those who reside in cities or very large towns. Many of the Industry Canada sponsored community access projects in our communities in which our libraries are often partners would collapse under the pressures of impossibly high costs.

Library trustees currently deal with much of the cost of operating rural and remote libraries with various fundraising ventures. Fundraising is in fact so much a part of the Saskatchewan library scene that the entire November 1997 issue of Saskatchewan Libraries Association's Forum publication was dedicated to fundraising for the library.

In virtually every community in Saskatchewan with library service, you will find library trustees raising money to help maintain library services which are dependent upon reliable and affordable telecommunications.

Most libraries have done major fundraisers to purchase the computer equipment to make our provincial network a reality. Library trustees continue to do fundraising to keep the networking going.

Throughout this province, and I have to tell you this in order for you to understand the interest that trustees have in providing library service, there are library trustees making and selling breakfasts, lunches and suppers, making desserts, hosting community bingos, running sports pools, selling magazines, organizing celebrity auctions and silent auctions, selling oranges, arresting their friends for cash, making and selling innumerable craft items, holding book sales, selling community calendars, having tea parties, holding contests of all sorts, writing cookbooks, selling plants, hosting a Halloween arcade, making perogies, running concessions, selling local history books, fixing Teddy Bears, selling book bags, cooking countless hot dogs, hosting fall suppers, wrapping Christmas gifts, organizing bike-a-thons and read-a-thons, hosting fashion shows, hosting a murder mystery night, begging for donations, selling tickets to a no-show dinner, kissing pigs and selling raffle tickets on things such as afghans, wall hangings, gift baskets, cakes, Easter baskets, trips, art, televisions and cash.

Of course, these and many other fundraisers that trustees do pay for more than just telephone and Internet charges, but it is important to note that in a survey of 24 rural automated branches, telecommunications costs range from 13 to 63 per cent of the local board's typical budgetary responsibility for ongoing costs and fundraising revenue accounted for up to 97 per cent of total revenue.

Fundraising for library trustees is a part of the job, but a manifold increase in the cost of telecommunications could be so burdensome that fundraising activities could not cover expenses and, in the worst cases, libraries may have to discontinue services.

Why do trustees work so hard to maintain a relatively expensive library service in their communities? Library trustees do not need to look far for reasons. It all comes down to providing the best service possible with the services available.

Library trustees are in complete agreement with Carol Nyrie, branch librarian at the automated Glen Avon Library. She says:

"I believe that service has been vastly improved. I'm very excited about technology and automation and am looking forward to the fulfilment of the vision for a province-wide multi-type library system."

As Carol explains in her February 1998 article in Forum:

"We have seen what automated access can do for our libraries and our library patrons. However, we are concerned about the potentially detrimental effects of a locally competitive market."

Statistically it is easy to see that automated library services work. Take as an example our most automated region the number of inter-library loan requests within that region increased by 30 per cent between 1995 and 1996 and a further 46 per cent between 1996 and 1997. The number of manually processed requests fell by 44 per cent from 1996 to 1997 because 57,453 items were requested electronically.

It is apparent that the speed and efficiency of electronic access to the library has led patrons to expect more from their library. Saskatchewan library trustees are committed to fulfilling these expectations to ensure that people living in rural areas do not become Canada's information poor.

Statistics though do not tell the whole story. As library trustees, we are frequently told of patron success stories and these too keep us working to keep the library connected.

It is the farmer looking to diversify her operation to improve profitability and finding just what she needs on web sites accessed from the library computer. It is the parents whose only contact with their son in Bosnia is through a military web site accessed from the library computer.

It is the student applying for college, using a form from a web site accessed on the library computer. It is the pastor who downloads music for Sunday services for the congregation that has no organist.

It is the mom who talks to her son in Central America every Monday evening, using e-mail accessed from the library computer. It is the countless school children doing reports that are likely due tomorrow, using the Internet computer at the library to find just the right information. It is the branch library unable to find colouring pages for the children to use as story hour.

For the patrons and the many others that we serve, the Saskatchewan Library Trustees Association has made a commitment to library services. We have made a commitment to provide the best library services available and to provide those services as equitably as possible to all parts of this province.

We ask the Commission to join us in our commitment to these people and to this province, one, by ensuring that the non-profit status of public libraries be considered in decisions made affecting high cost serving areas; by providing public libraries with both short term and long term protection from the serious financial disadvantages of local telephone competition in rural and remote areas; and by ensuring continued subsidization to allow Internet service providers to provide equitably priced Internet access services to rural and urban residents.

Thank you.

THE CHAIRPERSON: Thank you, Mrs. Butters. We thank you again for keeping your cool under circumstances that could have been considered stressful by anyone but as self-assured a person as you are.

I will now ask Commissioner Brauer to address you two questions.

Thank you.

COMMISSIONER GRAUER: Thank you, Mrs. Butters. That was certainly a comprehensive presentation, so I don't have too many questions.

I am curious though. I wasn't clear exactly how many of your libraries offer automated services.

MRS BUTTERS: We have something over 150.

COMMISSIONER GRAUER: Out of a total of?

MRS. BUTTERS: Out of a total of 300.

COMMISSIONER GRAUER: Out of 300.

MRS. BUTTERS: Are now automated. This has all been done in the last three years.

COMMISSIONER GRAUER: Do all of those 150 offer the public access to computers and what not?

MRS. BUTTERS: I would say by far the majority, if not all.

COMMISSIONER GRAUER: And do I understand that a lot of those, if not all, have been assisted by partnership funding arrangements with various levels of government in addition to the fundraising activities of your trustees?

MRS. BUTTERS: I would say not the majority. I think many have access -- have put in the equipment before there were grants available. I think I said that some had done it before they knew grants were available and, in fact, before grants were available. Many of those small communities went out and raised the funds and purchased their computer before that happened.

COMMISSIONER GRAUER: Are you experiencing that in those libraries that have the public access and automated systems, there is an increased level of activity from those communities, in other words, the people in the community, are they finding it -- the new function of the library in an automated world is attracting greater patronage, if I can put it that way.

MRS. BUTTERS: Yes. I think you are going to find, and we are already seeing, the young people are assuming it will be there. They are assuming that we have it. They read about it, they see it on TV, they hear about this access and they look at you as much as to say "Well, where have you been".

I think that they definitely accept the fact that it's a fait accompli and are using it to the fullest extent.

COMMISSIONER GRAUER: In many communities that is really probably the only place they may have access to these services.

MRS. BUTTERS: Oh, yes, oh yes, and many in these small towns or villages of a hundred or less population.

COMMISSIONER GRAUER: Thank you very much. Again, our apologies.

MRS. BUTTERS: Thank you.

THE CHAIRPERSON: Thank you, Mrs. Butters.

I will ask the Secretary to ask the next presenter who I believe is also in Regina.

THE SECRETARY: Yes, Madam Chair.

In Regina, Mr. Mike Badham. Would you come forward, please.

PRESENTATION / PRÉSENTATION

MR. MIKE BADHAM (Remote): Good morning, Commissioners.

THE CHAIRPERSON: Good morning, Mr. Badham.

MR. BADHAM: I think you can see me.

I want to thank you for the opportunity to represent the interests of urban municipalities in this future oriented review of telecommunications policy respecting service access.

It's appropriate to note that having access to this video-conference technology has made it possible for us to participate in this hearing today and to communicate with you in Prince Albert.

You heard from and will, I know, a number of very specific groups who have special interests that they would like to convey to you, but I will speak from the perspective of urban communities.

In this province there are more than 500 cities, towns and villages whose residents want to participate in the future. Almost all of these urban municipalities are voluntary members of our association, SUMA, Saskatchewan Urban Municipalities Association. Together we form a network of democratically elected councils which strive to provide a wide range of quality public services.

Communication is crucial to the operation of municipal services and to the quality of life for urban residents. This is particularly true for the hundreds of smaller urban communities which are located in rural or remote areas of this province.

Like transportation, our methods of communication have changed a great deal over the last century, but they are now more important than ever as we try to stay plugged into the global community.

Communities in this province developed as part of a local telephone exchange. These evolved into a provincial Crown monopoly that has accepted the responsibilities of universal service access along with the opportunities to become a world leader in technology.

Over the last few years competition in the long distance phone market has come to town, but Saskatchewan consumers continue to subscribe to their home-grown phone company because SaskTel provides more than just competitive long distance rates. It also continues to subsidize local phone service, despite reductions in long distance revenues. It recognizes other community obligations by helping to fund a host of cultural activities.

The local telephone service map has already started to change. In response to community interests expressed through SUMA, many local exchange areas have recently been amalgamated or expanded. This will further lower service costs by converting many long distance calls into local calls in rural and remote Saskatchewan.

As a matter of policy, SaskTel has also made it easier for communities to gain access to the world of Internet communications over local phone lines. Because SUMA recognizes this to be an important part of future economic development, we are now partners in a program to provide Internet technology to all or our members.

With our partners also in the rural municipalities, we have developed what is called Communilink. I have in front of me an access grant application form. This is being funded through some additional moneys that were remaining from the national infrastructure program from the past year.

Our expectations for telecommunications policies and practices in the future are straightforward. They are in tune with the principle recently adopted in the Saskatchewan Legislative Assembly, the principle that universal, affordable telecommunications is a public good on which the economic and community development of this province relies.

We do not believe that all public goods must be provided by public institutions or Crown corporations instead of private corporations. However, we do support the province's position that high cost rural telephone services should continue to be cross-subsidized from other system revenues, even after the gates are open for competition.

We in this province have learned from experience that open competition should be balance by public obligations. The practical application of this lesson is that competition can be successfully regulated or managed by agencies such as yours, the CRTC.

This arrangement can serve the broader social good as well as the private interests that legitimately expect a return on their investments. In short, urban municipalities would welcome seeing competition in local telephone service provision just as we have benefited from the competition in long distance services, but we are not prepared to accept the possibility that private companies could skim the cream by servicing only larger, more cost efficient urban communities.

If the CRTC were to permit unrestrained competition free from cross-subsidization obligations, the potential benefits to some consumers would be more than offset by disastrous consequences for smaller, more remote rural communities.

We understand that the removal of subsidies could have the effect of raising local phone rates in high cost service areas an average of five or six times the current levels. This would mean, we are told, that many households could be faced with paying more than $100 per month for basic telephone services.

It would be a sad irony indeed if local phone rates rose out of reach for some residents at the very time that in this province we are developing 911 communications systems which can now pinpoint the location of an emergency situation based on the location of the phone from which the call is made.

A lack of affordable access to local phone service would not always have life-threatening consequences, but there are many possible examples where the impacts of the quality of life would be very negative. Most public services as well as many private forms of activity rely on telecommunications technology. Health care, education, and you just heard from Ms Butters, library, other information services are all heavily dependent upon communications. Lack of phone access would constrict communities.

The concept of user pay can be an appropriate guideline for distributing costs in some circumstances, but it is not appropriate that inadequate resources would deprive residents of participating as members of their local community and extended communities.

The user pay concept is too often assumed to be applicable only to the consumers of services, but it can also be applied to those who benefit from being a service supplier in the same system. If private companies are using the established infrastructure and benefiting from their participation in this market, we would suggest they should also be paying for access into the market.

We already have some user pay models for service providers at the municipal level. For example, electrical and gas utility companies in Saskatchewan pay a franchise fee for the right to service urban communities.

Historically the situation was one of a natural monopoly gaining an exclusive franchise. More recently, however, as a response to natural gas deregulation, we have private companies now providing the same level of fee though to municipal governments, but it is collected as a surcharge on the transportation of the product.

Most concepts or models can be adapted to new situations. The important guiding principle here is to find a way to ensure that access can be broadened to multiple service suppliers which being still made accessible to all service consumers.

The particular mechanism chosen to ensure that cross-subsidization can be continued is less of a direct concern to us at SUMA. We have no particular expertise in the telecommunications area and we are quite willing to leave such judgments to the CRTC.

We are aware that the Government of Saskatchewan has made some specific proposals regarding a national universal service fund to collect and dispense funding for subsidized services. We hope that such concrete proposals as from the Government of Saskatchewan would at least receive due consideration.

In concluding, the lack of access to reasonable, affordable, local phone service is as unthinkable as it would be unspeakable. In an age where global linkages determine community viability, basic telecommunication services must be considered a fundamental right.

Consensus on this principle still leaves many options for the CRTC to consider in finding an appropriate mechanism to secure that right.

We appreciate the fact that you have recognized our right to speak to this issue in this respectful forum along with all the other interested parties who have presentations to bring forward to you today.

We look forward to the outcome of your deliberations by year end and hope that all of our members will be able to continue to talk about these fundamental policy issues using their local phone service for years to come.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Badham.

You represent urban communities in Saskatchewan or urban municipalities. On what basis do you determine a municipality to be urban rather than rural?

MR. BADHAM: Okay. In this province the term urban is applied to any, if you will, organized community, a village, a town or a city. Anything that is not that is considered to be rural, a rural municipality.

A rural municipality would be -- using the example of an unincorporated settlement where there may be a few houses, it may be where there are farms, but it doesn't have, if you will, a community boundary.

The term rural though can be used for, of course, smaller communities. That would be used often by people who would think of Regina and Saskatoon as being urban but they might consider the village of Filmore as being a rural community.

THE CHAIRPERSON: In effect you represent a very large percentage of the population of Saskatchewan.

MR. BADHAM: Yes. About 75 per cent of the population of Saskatchewan would live in what would be called an urban municipality.

THE CHAIRPERSON: And would be part of your association.

MR. BADHAM: Yes.

THE CHAIRPERSON: Have your members tried to determine what you would consider an affordable price for local service and is it your view that it could differ between what you call an urban community and, according to the definition we just discussed, as opposed to a rural one.

MR. BADHAM: No. Our association as such has not gone into determining what is an acceptable rate. We just believe that -- well, we are generally pleased with the type of rate we have at the present time. We wouldn't want to see any extraordinary shifts which would occur or might occur or, as it has been suggested will occur, without that particular subsidization.

THE CHAIRPERSON: Do you see the needs of what you call rural communities to differ greatly from urban communities, the communications needs of the more remote, less dense communities?

There is a debate often as to whether they need more or less than the urban communities as the environment develops and there is more reliance on telecommunications.

MR. BADHAM: I may have missed a bit of your question. If you are asking should there be more subsidization for a remote customer, if I can use that term, then I would say yes.

THE CHAIRPERSON: And also the development of enhanced services you would see as more important possibly in rural communities.

MR. BADHAM: Well, it's important for all communities that we all have access to the enhanced services that can be provided.

My question was simply to ask whether you feel that in urban communities there are services that are more equally accessed than in rural communities, therefore enhanced services become more important for rural communities to have the same level of service.

I am referring, for example, to the presentation on libraries. Presumably, if you are in a remote community, the type of connection Mrs. Butters was speaking about becomes even more important than if you have a library a few streets or maybe a mile or two from where you are because you are in a more developed community.

MR. BADHAM: I would agree generally with that statement, yes.

THE CHAIRPERSON: Thank you very much, Mr. Badham. You were fortunate to be with us without interruption.

MR. BADHAM: Thank you.

THE CHAIRPERSON: Madam Secretary, if you would introduce the next presenter, please.

THE SECRETARY: Thank you, Madam Chairman.

Our next presenter is in Prince Albert. I would like to ask Len Larson to come forward.

PRESENTATION / PRÉSENTATION

MR. LEN LARSON: Good morning.

Is everything okay? Can you hear me okay?

THE CHAIRPERSON: Could you pull the mike a little closer.

MR. LARSON: How is that? It's not buzzing now anyway.

THE CHAIRPERSON: Good morning, Mr. Larson.

MR. LARSON: Good morning. Thank you very much for allowing me this opportunity.

I am not here to represent anyone really. I am just a concerned citizen who lives in the country. Of course, I have talked to many of my neighbours and fellow workers and other rural residents who are very concerned about the possibility of this huge increase in basic rates which could effectively rule out even owning phone service, direct line phone service as we know it now.

A lot of people out there can't afford anything like that. I am not here to represent anyone. You will soon realize that it is not expert testimony by any means. I don't know what the Saskatchewan position paper is on. I tried to get one at the phone office yesterday. They didn't know what I was talking about.

I think it is well established that it is very necessary that we have phone service in the rural areas. This was discussed previously. In a lot of ways, it is more important for people in the rural areas to have phone service than it is for people in the city because you can always get to a phone in the city.

In the case of an emergency, you can always have ready access to libraries. When you start talking about remote areas, as we have seen recently, people have made good contact with the big wide world from far up north, contacting people all over the world-wide video Internet and all kinds of things like that.

We can live without a phone. I guess we can live without penicillin, at least for a while. It's an essential part of our modern day life. If we wish to increase the standard of living of Saskatchewan residents as opposed to decreasing or lowering the standard of Saskatchewan residents, it is essential that we maintain phone service for rural people at an affordable rate.

It is totally out of the question that it could be allowed to increase four times.

I suppose the question that we really must look at is how to go about doing this because I think we all agree -- I don't think anyone disagrees that it is very important for this to be maintained.

How to do it? I would ask that the CRTC to really be cooperative in looking at ways to maintain this. It would have to be through everyone getting together and allowing -- I think that it should be specially designed programs for the provinces individually. It's kind of hard to do a national one because the needs are so different in all the provinces, it seems to me.

There is no place that has a greater need for some kind of method for spreading out this subsidy than Saskatchewan because we have the most sparsely province, at least -- not in the Territories, but in Canada Saskatchewan does.

The needs are much different here than they are, say, in Ontario or even in Prince Edward Island where the population is small but so is it in Saskatchewan.

What I think would be the simplest way to do it is whatever legislation would allow this is for Saskatchewan to -- after all, Saskatchewan owns the service, it owns the equipment and it owns the lines and all that. I would like to see the provincial government just be allowed to levy a fee on all of the service providers which would allow them to cover the costs necessary to maintain this service.

The last I heard, it was something like $58 million that Saskatchewan needs to subsidize rural subscribers. The provincial government last year, as I understand, spent $18 million on provincial road construction so they are not going to spend $58 million subsidizing rural residents.

We have to find a way to raise that revenue. I think it would have to be just a fee for service for Sprint or whoever is -- maybe according to amount of service they provide, a tax on each one of these things. It doesn't have to be all them that has to pay.

SaskTel could pay a portion like the foreign service providers. I guess we have to accept too that sometimes things cost more when we live in rural areas. I think the rural subscriber, and I will probably get shot for saying this -- if he had to pay a portion of that too, maybe another 10 per cent or something, we can live with that.

That seems to be the simplest method of Saskatchewan anyways. That's the most important one because we own the equipment, SaskTel. I don't think that's the case in most other provinces.

I would like to see a made in Saskatchewan approach and I would just like Saskatchewan to be granted the authority I suppose in the legislation and the CRTC to giver their permission to do that. This is something that the CRTC will be watched and how you perform this because it really hurts us and hits us right now.

Frankly, most people don't really care if there is another 5 per cent Canadian content on the radio or not, but they sure do care when you tell them that their phone rate is going to go up five times its present rate. In fact, they may not be able to have a phone at all in the future.

I hope that you will give that some consideration. Like I say, I think the most important thing to think about is how to finance this. Everyone agrees a telephone nowadays is an essential service. We don't want to go back to the days when we don't have a telephone any more. I don't think that's going to happen one way or the other. Somehow we will work something out.

I think how to pay for it is the question and that's my proposal on how we should pay for it.

Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Larson.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you very much, Mr. Larson.

As you know, some people have suggested that we should look at a national fund. I gather you are suggesting a province by province, made in Saskatchewan solution.

One of the other things that we are facing in this new world is having to -- what I would be curious about is your sense of the priorities. There are some people who are still without phone service. Some of them are in remote and sometimes very challenging geography.

Then there is basic phone service and enhanced services which in the minds of some people are becoming as important as basic services, being able to access the Internet and various of these enhanced services.

What is your sense or priorities between those three?

MR. LARSON: Well, like I said, you have to accept some limitations due to remoteness and remote situations and increased costs, I imagine.

We want to expand these services. We want to get the highest level of service possible because it would bring us into the modern world. You might be in Inuktituk or something like that. As I was saying earlier, we have seen where through the Internet they are connected sometimes.

It is surprising in remote areas being connected with the world. We want to expand that service as much as reasonably possible. We certainly do not want to shrink it. That's all I am saying. We don't want to lower our standard of living and going back to the stone age, so to speak.

We want to be part of a highly balanced technological society. If we could do that in what are now considered pretty remote areas, I think that's wonderful.

COMMISSIONER GRAUER: Just briefly, you indicated that you think that people, yourself and the more rural parts of Canada, should be willing to absorb a portion of the cost of some of these things. Is that correct? Did I understand you correctly?

MR. LARSON: Yes. I think that's only fair. People always love to point fingers and say well, I think they should pay but not me, that sort of thing. That's only natural.

It is expensive living in the country. I live in the country. My wife and I both work. We spend five, six hundred dollars a month on transportation costs. Lots of times people have to burn fuel oil, very expensive. You can't get natural gas. I was quoted $17,000 to get natural gas to my doorstep.

That's just a fact of life. It costs you more to live in the country. You have to help people. If you are going to just turn it loose and say you have to live there and it costs you a lot of money, we aren't going to help you at all in any which way, well, you know, that is not the way we are going to develop this country. It is going to be total backwater in all rural areas and they will have nothing up there.

We have to make it possible to assist a little bit so people can service there.

COMMISSIONER GRAUER: Thank you very much. I appreciate you taking the time to come here today.

MR. LARSON: Thank you.

THE CHAIRPERSON: Thank you, Mr. Larson.

Madam Secretary.

THE SECRETARY: Our next presenter this morning is Rick Laliberte, Member of Parliament for Churchill River. Would you come forward, please.

PRESENTATION / PRÉSENTATION

MR. RICK LALIBERTE: Good morning, Commissioners and people of Saskatchewan.

THE CHAIRPERSON: Good morning, Mr. Laliberte. Go ahead when you are ready.

MR. LALIBERTE: I just want to address the Commission in saying that I believe you are trying to define two distinct areas of Canada or regions. That's urban, rural and northern. This province can probably give you a micro example of what the country is made of.

Being in Prince Albert, we are at what we call central Saskatchewan. Anything north of here, as we define the northern Saskatchewan rivers, is northern as you go further north into a remote region. Anything outside the urban reaches of the cities, the towns, is rural.

Now, I remember when telecommunications came into my village in the early seventies. As young people, we were interacted with being connected with the rest of the world from this little pay phone under a streetlight. Our first experiment with this new technology was in (native language / langage autochtone).

We dialled zero and just as fun as teenagers, as young kids, (native language / langage autochtone). All we were asking is do you have a bank? We didn't even know the protocol of telecommunications. We didn't know how to conduct ourselves. We saw this new connection we had never touched before and we were experiencing our connection to the rest of the province and to the rest of the world.

In some reaches, some remote areas, if you discontinue this access, it won't provide a means of interaction with this country and with the world.

The other medium of data and Internet connection are very crucial. Also, I want to lend my voice to saying that this communication or this medium also enhances our multicultural nation. It provides, as an example of myself being in a little village called Parliament, I can phone home or I can phone back into the constituency and use my language and preserve my language. Otherwise, being isolated in a huge urban centre, I could lose this language and be removed from it.

With two official languages in this country, I think the French and the English, it doesn't matter where you are in this country, you can walk to any pay phone and be connected and speak to whoever you decide in whatever language.

You know, the people of the world that find Canada as their home can easily dial overseas and be connected with their family members and interact in their language. This media promotes the preservation of our culture and our languages.

If you envision a symbol of Canada as the Canada goose and multinational corporations wanting to harvest the body of the goose, which is the urban, which is the juicy part of this whole organism. Vision the rural and urban and the northern as the wings. If you clip our wings, this nation will no longer be able to fly and to soar.

I think as a Commission you are challenged to look at the entire Canadian entity. Don't just look at the means of the urban, the rural, and the urban and the north. Preserve the access that we have, the privileges and the rights and the responsibilities that are called upon you.

For the integrity of northern Saskatchewan and the constituency I represent, I believe the farmers have provided life through nourishment for many people and the north through the traditional trapping, hunting, have made this country, have created the economic structure of this country.

Now we are calling at the large urban centres which seems to be the meccas for the economic viability, the economic cycles, to pay their share to make our costs viable to keep this vital connection amongst ourselves.

I lend my voice to all the people that have come before you this morning to say be reflective of the reality and don't force our children and our younger generations to choose a quality of life that could be cheaper because of choosing a location or the moving away from their homelands because it is cheaper to live somewhere. Keep a viable means for Canada and let us extend our wings.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Laliberte. You make a very poignant connection between multicultural, ethnic, aboriginal and all other Canadians through telecommunications.

We at the CRTC are used to looking at broadcasting for pursuing that goal. It's interesting to see it in the context of telecommunications. I appreciate the value of telecommunications for the capacity to connect in your own language. It's not something we usually think of, telecommunications without any cultural component.

On the more practical view, do you suggest that rather than just having one definition of high cost low density areas, we would have more than one rural and northern and possibly establish different subsidies on that basis?

Is that what I understand from you, that there may be an even greater need in northern communities, in the case of Saskatchewan, for example, north of Prince Albert as opposed to rural communities south of that line?

MR. LALIBERTE: I think the word equitable as a means of targeting, if you set your ideals as being equitable throughout Canada and then how you structure the formulas is your challenge. I could not define or begin to calculate the means.

I don't know the structure enough to be well versed in that area or suggest, but in terms of the reality, you look at a two litre milk in northern Saskatchewan is $8. There is no natural gas in northern Saskatchewan.

Then you look at cell service. You look at the wireless service that is under your jurisdiction as well which seems to have been deregulated, as far as I understand, but we won't ever have cell service in the far northern reaches unless it's subsidized by land lines. I think that's a demise already in terms of having the southern highway structures.

Because of economic and business connections, you will have cell service along the road, communities along major highways, but communities that are off the major highways won't have access to a wireless service, so what would a fleet net or two way radio communications, which are less confidential, and also very costly if you get into satellite communications, so I think try and be equitable on a basic service, telecommunications, data and Internet connection.

If you can bring back wireless on to this formula, I would welcome it.

THE CHAIRPERSON: Do you see, however, having the experience of more northern living, wireless or satellite communications if the costs were equitable as an answer to serving remote areas or as a substitute for wire line service, an acceptable substitute?

MR. LALIBERTE: Well, I looked at the advancement of technology in many medias. I looked at the possibility of the Microsoft regime or a multinational putting satellites at low level altitudes and having easy access for your computer for communications and possibly television in the very short future. Science and technology will give you a look into this future.

What are we competing with? What is the technological advancement that we are competing with? Can SaskTel compete with these multinational highly capitalized corporations that will look at the means of providing profit but also breaking the barriers of land lines or microwave distribution.

What are we dealing with? That's where -- I can't comment beyond that, but all I can say right now with the existing system and the existing regulatory bodies and whatever advancement and whatever influence CRTC has, that advancement should include an equitable cost efficiency for all people in Canada.

THE CHAIRPERSON: Mr. Laliberte, did you come from your constituency this morning or from Ottawa?

MR. LALIBERTE: I came from my constituency last night. The distances are too vast to be here in one morning.

THE CHAIRPERSON: Is it true that the lakes are frozen up there? There were five or six men on the flight I took from Saskatchewan to Prince Albert. They were obviously on their way fishing. The stewardess put a damper on their plans by telling them that the lake they were going to was frozen. I am sure she was lying.

MR. LALIBERTE: The story I can share with you is there's a lot of forest fires up in northern Saskatchewan that blew up in the last few weeks, so all the forest fire workers are out in their camps, but they will wake up with a sheet of ice on to their dishwash pans in the morning.

THE CHAIRPERSON: Probably with less work too. It probably has dampened not only fishermen's enthusiasm, but fires as well, hopefully.

MR. LALIBERTE: Hopefully.

THE CHAIRPERSON: Yes. Thank you very much.

MR. LALIBERTE: Thank you.

THE CHAIRPERSON: This seems to be a good time to take a 15 minute break. We will reconvene by my watch at about five to eleven.

--- Recessed at 10:40 / Suspension à 10:40

--- Resumed at 11:00 / Reprise à 11:00

THE CHAIRPERSON: Order, please.

It is my understanding that we have a preliminary matter before we recommence this morning's session.

MR. JOHN MELDRUM: Thanks, Madam Chairman.

I would just like to clarify that the technical problems that we experienced before weren't with the telecommunication links. So far at least the SaskTel telecommunication links have worked and we will keep our fingers crossed that we will be able to say that at the end of the day as well.

Thanks.

THE CHAIRPERSON: Thank you very much. I apologize if I used too generic a description of our problems.

Thank you.

Madam Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you.

Our next presenter is Roger Herman. Would you come forward, please.

THE CHAIRPERSON: Good morning, Mr. Herman. Go ahead, please.

PRESENTATION / PRÉSENTATION

MR. ROGER HERMAN: Good morning.

Thank you for allowing us the opportunity to address the Commission today.

The Canadian Co-operative Association, Saskatchewan Region, is pleased to have this opportunity to address the CRTC today to speak on the topic of service to high cost serving areas.

The Saskatchewan Region of the Canadian Co-operative Association is an association made up of co-operative organizations in Saskatchewan. Our members are the Saskatchewan Wheat Pool, Federated Co-operatives Limited, Credit Union Central of Saskatchewan, Co-operative Trust Company of Canada, The Co-operators Insurance Company, Dairyworld Foods, CUMIS Insurance, Community Co-operative Health Federation, Saskatchewan Federation of Production Co-operatives and the Saskatchewan Council for Community Development.

Two of the mentioned organizations, namely Saskatchewan Wheat Pool and the Credit Union Central of Saskatchewan, will be offering their own presentations to this Commission later today. They will speak specifically to how this issue of serving high cost service areas affects their respective organizations.

My presentation will instead address in more general terms how the co-operative sector in Saskatchewan views this issue. In order to understand the importance of accessible telecommunications services to the co-operative sector, it is important to offer a snapshot of the sector itself.

Co-operatives are an integral part of the province's economic growth and diversification. We are mature, stable and sustainable organizations, yet we are also moving into new growing areas of the economy.

Co-operatives are major players in the Saskatchewan economy. The two largest provincial firms are co-operatives. Billions of dollars of wealth circulate within the province because of the presence of co-operatives.

There are nearly one million co-operative memberships held in Saskatchewan. The sector employs an estimated 14,500 Saskatchewan residents and contributes an estimated $424 million in payroll annually to the provincial economy.

As mentioned, co-operatives are some of the largest businesses, but they are also sometimes very small organizations serving diverse needs in communities across this province. There are countless Saskatchewan communities in which co-operatives and credit unions are the only businesses providing gods and services to the residents of those communities.

All of CCA's member organizations have direct links with rural Saskatchewan. Two of the largest, Federated Co-operatives Limited and Credit Union Central of Saskatchewan, exist primarily to serve the needs of a network of smaller retail and financial services co-operatives located in towns and villages through the province.

Saskatchewan Wheat Pool has over 70,000 farmer members and Dairyworld Foods' producer members number about 2,000. From the multi-billion dollar international marketing giant to the grassroots co-operative health care clinic, one thing remains the same: Co-operatives exist to serve the needs of their members. By doing so, they strengthen the communities where these people live and work.

My presentation will not address specific technical requirements around telecommunications. Such discussions are best handled by those groups specializing in that area. Rather, my description of the nature of services required will be presented in more general terms.

Co-operatives in Saskatchewan, like any other enterprises, require contemporary telecommunication tools to conduct business. This means being able to communicate with our members, our suppliers and our markets as required.

Communication no longer means only having telephone service. It also means having access to technology which allows services such as electronic commerce or access to current and accurate information via the Internet.

While our roots may be historic and our members often located in rural Saskatchewan, our business activities have drawn us into the technological age and into the global economy.

As previously noted, such telecommunication needs are not unique to co-operative organizations, however, co-operatives are unique in the way in which they are structured and in the motivation for their existence.

Co-operatives by nature exist to serve the needs of their members and are controlled by these same members in a democratic fashion. Democratic control is a universal component of all co-operatives. Critical to the functioning of this democracy is effective communication between the members of a co-operative and those conducting the business of that co-operative.

Co-operatives are networks of people with common needs that have chosen a collective response to that need. Like any network, effective communication is vital to its sustainability.

As you will likely repeatedly hear, and have heard earlier today, Saskatchewan is a rural province. You mentioned earlier your flight from Saskatoon to P.A. and speaking to the fisherman. I encourage you on your flight back, in fact from Saskatoon either eastward or westward, whichever way you are proceeding, to take a moment and take a good look out the window, if the weather permits.

I think what you see will be far more telling than any of us can tell you today about the ruralness of Saskatchewan. I think you will see vast tracts of land without villages or communities. In fact, the farmyards are even quite far apart. I think that can be as telling as anything we can say here today.

The point of our ruralness cannot be overemphasized. That's what I am trying to say. The residents of this province and, therefore, the members of our co-operatives are spread over vast geographical areas. Neighbours are often miles apart and full service communities are growing increasingly distant for many rural residents.

Technology is often touted as a response to such isolation. Health information is to be offered electronically from fully equipped locations. Education and training is frequently and increasingly provided by distance education programs. Communities with limited information will access information from remote sites using the Internet and other technologies not yet developed.

All these solutions necessitate that telecommunication services be available and affordable and therefore truly accessible. Services such as 911 emergency response, which is taken for granted in urban settings, will be jeopardized by unavailable or unaffordable services.

Access to the information highway via the Internet will become a luxury available only to a few unless it remains affordable. The recent surge in households that are connected will quickly subside and Canada 's vision of being the most connected country in the world will fade unless provisions are made to ensure that such service remains truly accessible.

This is a precarious time for Saskatchewan's rural residents. Increasing urban migration means that many small towns are becoming villages and villages are in turn disappearing.

The number of farm families is declining and communities are looking for innovative ways to continue to provide basic services to their citizens. Most often the solutions come in the form of technology and telecommunications.

These services have become necessary for survival in rural areas. To deny such service or to put it out of reach is to deny the rural lifestyle. By default, Saskatchewan's co-operatives and credit unions and credit unions and in turn their many thousands of members are likewise facing the same issue.

Canada prides itself on being the best country in the world in which to live. This is largely a product of Canadians' access to universal services, including telephone and telecommunications. Let's be sure that decisions made affecting the accessibility of these services, even in high cost service areas, do not compromise this quality of life.

Telephone and telecommunication services must remain available, affordable and therefore accessible to all Canadians whether their home or business is in Toronto, Ontario, or in Frontier, Saskatchewan.

Attached to this submission is a letter of support for the Saskatchewan Region from Bill Turner, President of CCA National, headquartered in Ottawa. CCA National represents 35 co-operative organizations from across Canada with a primary membership base of over five million Canadians.

CCA National will be pursuing further correspondence with the CRTC on this matter at a later date.

Once again I thank you for the opportunity to speak on this important issue.

THE CHAIRPERSON: Thank you, Mr. Herman.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you, Mr. Herman.

You have spoken very eloquently on behalf of your members. I guess what I take from this is as full service communities in rural Saskatchewan decrease, the importance of telecommunications to access services is increasing. Is that a fair statement?

MR. HERMAN: Yes. I would fully agree with that.

COMMISSIONER GRAUER: As you know, as we travel across the country and we hear from a number of different people, it is becoming clear that basic service is one issue and enhanced services is another and in terms of priorities for you, what is the greatest priority for your members?

MR. HERMAN: Obviously the greatest priority is what we are familiar with. Historically or in recent history anyway, that has been basic service. It is being able to pick up the telephone and call your neighbour or call your agricultural products supplier or your grain handler in order to market your produce.

The suggestion, and I have heard this a few times today and I have seen it in some of the correspondence, is it seems that technology such as access to Internet and the information highway is now being described as enhanced services. I struggle with that a bit to describe it as enhanced.

It is obviously enhanced from what it was a few years ago, but I think as, I believe it was the woman from the libraries association that mentioned earlier today, that people have come to expect certain levels of services. I'm not sure that these so-called enhanced services are viewed as enhanced any more in some of our communities. They are taken for granted.

Where you draw the line as to which are most important, I would say perhaps having equitable accessibility to contemporary services is that point. I realize that is a deliberately vague response, but I think there is a certain risk in trying to draw those lines and define which side of that line certain areas should fall.

COMMISSIONER GRAUER: That was essentially a basic part of my question. You would no longer call that enhanced. That's pretty much basic I gather for you and your members.

MR. HERMAN: I think so. We repeatedly hear of some of our -- not our members ourselves, but in turn their members, the farmer members, the people living in rural Saskatchewan.

COMMISSIONER GRAUER: That's what I was thinking of. Yes.

MR. HERMAN: They are conducting their daily business whether they are a grain farmer trying to access information on sort of the latest trends in agriculture or trying to market some of their product or in fact looking for implements that they might be looking to buy.

Using Internet, using even the so-called enhanced services have become the standard.

COMMISSIONER GRAUER: Thank you.

Briefly, as you know, there is a considerable cost associated with ensuring delivery of these services to Canadians. We are investigating the mechanisms that might be available to pay for it.

Have you given any thought to that? There have been suggestions of a fund nationally, provincial funds. My question will be what, if any, portion of those costs would your members' members do you think would be willing to absorb?

MR. HERMAN: Again, it's a difficult question. I won't pretend to have an accurate or a well thought out response to it.

I alluded to universal services and to the things that make being a citizen of Canada sort of a luxury or something that we quite frequently brag about. I would again lump telecommunications services into a basic universal services offered to Canadians.

There's no denying that providing service to a rural or remote location is more expensive than it might be to an urban location. I think this is an occasion where some of these obvious elements of it can be set aside and it truly be treated in the same fashion as health care or access to social services.

Those types of things are also more expensive to deliver in certain areas of the country, but we attempt at least to try not to create disparities by limiting access. I think there is a real risk in increasing disparities by limiting access to telecommunications.

COMMISSIONER GRAUER: Thank you very much. I appreciate you coming.

MR. HERMAN: May I offer a personal comment and the end?

COMMISSIONER GRAUER: Please.

MR. HERMAN: Again, this is a personal comment and not related necessarily to my presence here with the co-operative association.

I would like to share a personal story, actually a tragedy in my own life from a couple of weeks ago, May long weekend. This doesn't relate to Saskatchewan specifically, but more to Manitoba, a couple of hundred of miles from here in an equally rural part of that province.

My brother is a farmer. I come from a family of farmers. His family, of course, he has young children. They live on a farm as well. On the May long weekend his 16 year old daughter was involved in a car accident, only about 200 yards from their farmyard.

Some of the other individuals that were in the accident were able to climb out of the vehicle and literally run to my brother's farmyard where my sister-in-law was at home. They ran to the house and the people in the house were my niece's siblings actually.

They said there has been an accident, we need to call an ambulance quickly. The young children that were said our mom is out in the shop. They picked up the phone, gave the extension to call their mother in the shop.

She immediately called an ambulance using 911 service and in turn hung up, picked up again, called my brother who was working on his tractor a couple of hundred yards from the accident scene, but out of sight from the accident.

She informed him of this accident. The two of them in turn hung up their phones, ran to the scene. It turned out they were the first ones on the scene. Their daughter was seriously injured in the accident. An ambulance was brought to the scene. This is about 40 miles from the nearest larger centre.

The ambulance arrived and she was given the immediate response that they were able to give in a rural community. They rushed her to a neighbouring town that has a full service hospital in it, all the while being connected by telecommunications to the hospital and getting the best advice that volunteers can give in such a setting.

She was critically injured. Immediately the call went out, as typically happens in families, to brothers, to sisters, to uncles, to aunts, many of whom live in rural Manitoba and in rural Saskatchewan that this accident had occurred, the prognosis wasn't very positive and that we should probably consider trying to get there if we are interested in seeing her.

She was subsequently medivac'd to Winnipeg and was able to be kept alive for about another ten hours on life support. She subsequently died. It's a tragic end to a sad story.

My point is, and I appreciate your patience with me here, that while it had a sad end to it, many of the processes that were put into place, whether it was calling the ambulance service, whether it was calling my brother on his tractor, whether it was being connected with the local hospital or, just as importantly, putting into place that network of calls to the immediate family to get home, a lot of that stuff wouldn't have been able to happen if some of the advance services weren't available in that setting.

We all wish that the ending to the story would have been a little more positive. Unfortunately, it wasn't. I think it illustrates my point of the value of services in rural locations, whether it is Manitoba or Saskatchewan.

Thank you for your tolerance.

COMMISSIONER GRAUER: I'm sorry about your niece, but thank you for telling us that story. It certainly demonstrates that for many people it is an essential service and nothing but that.

Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Herman. We offer our sympathy to your family.

Madam Secretary.

THE SECRETARY: Our next presenters are Daryl Snider and Bruce Caler. Would they come forward, please.

THE CHAIRPERSON: Good morning. Mr. Snider and Mr. Caler.

MR. CALER: Bruce Caler.

THE CHAIRPERSON: Go ahead when you are ready.

PRESENTATION / PRÉSENTATION

MR. DARYL SNIDER: Thank you very much.

I am here representing the Board of Directors of Credit Union Central of Saskatchewan and subsequently the credit unions of Saskatchewan. Mr. Caler is the Manager of Finance for our local Prince Albert Credit Union. On behalf of both of those organizations, we would certainly like to thank you for the opportunity to appear before the Commission this morning.

I have shared with you a brief. Rather than reading through that brief, what I would propose to do is touch on some of the major points and perhaps add some observations as well. It's really not my intention, as I heard many others before me say, to dwell on the technical aspects of subsidy regimes or the technology options as I have neither the background nor the personal expertise to dwell on those for any great length.

In the credit union system, we are certainly a member based organization and very much member driven. We are most concerned about any policy issue that may potentially affect the ability of our members to access any range of services.

Pricing of services beyond the capability of our members, both in rural and northern areas, placing them in the range where they are no longer affordable creates a significant disadvantage, primarily as a result of their location in the province and also in the country.

If I may, I would like to just take a moment and perhaps share with you some information with regard to the credit union system and the way that we describe our credit union system is the composite of the autonomous credit unions within Saskatchewan combined with Credit Union Central of Saskatchewan.

In 1997, Saskatchewan credit unions continued to record strong and stable financial results. The membership within our credit union in Saskatchewan, you should know, numbers in excess of 500,000. The accumulated system assets grew to $6.16 billion, an increase of 1 per cent over the previous year, 1996.

Credit unions also experienced loan growth in 1997 of 11.5 per cent or $433 million. We continue to strive towards a high degree of stability within our system and credit unions have built equity from 4.2 per cent of total assets to 6.4 per cent of total assets over the past five years, we think a very significant accomplishment.

By the end of 1997, there were 151 autonomous credit unions in Saskatchewan at a total of 341 locations throughout the province. Again, it's important to note in over 130 communities, the credit union is the only remaining financial institution.

The credit unions in Saskatchewan employ almost 2,700 people with over $87 million in salaries. I think it's also important to share with the Commission that credit unions continue to secure member funds through the credit union deposit guarantee corporation in Saskatchewan which provides an unlimited member guarantee on deposits and as a result, no member has ever lost one dollar as a result of their depositing with credit unions in Saskatchewan.

I thought it important to share with you for just a few moments the scope of the activities because, as you have heard before this morning, co-operatives are a significant part of our Saskatchewan fabric and certainly credit unions are a significant co-operative financial institution within this province.

Certainly the direction of our lives is very significantly shaped by technology and telecommunications on a daily basis. All financial institutions are constantly seeking methods of providing services that speak to accessibility, efficiency and affordability.

Innovations in all banking systems are leaning in that direction. It is important to note that with the provincial population of rural people, sparse population exists, as you have heard already this morning, not only in northern areas but also increasingly so in southern rural areas.

Credit unions understand the importance of providing equitable access, ensuring a domestic alternative to large banks and international service suppliers. Credit unions serve all members rather than targeting the most profitable 20 per cent.

Unlike banks, credit unions are not leaving the communities in our province. Within our system, it has been necessary to come to grips with levelling costs in order to ensure that credit unions be able to continue to provide affordable services to our members in all areas of the province.

It is also important to consider the context within which Saskatchewan describes larger centres and small businesses. By national standards, our larger centres tend to be small towns and many of our small businesses tend in fact to be micro businesses.

The successes of these business will continue to shape the future of Saskatchewan and they must be affordable through telecommunication lines and telephone services.

I would like to just share you with the vision and mission of our system and leave that terrific and very relevant statement, but our system vision states that we are working together to build better communities and provide the best financial service anywhere, any time, any way.

Our mission in terms of achieving that mission indicates that we work together to enhance the economic and social well-being of our members. We provide access to a full range of excellent financial products and services. Through technology and product innovation, we are on the leading edge of service delivery.

Our knowledgeable staff and professional people and professional people make the difference. The result is prosperity for our members, communities and the credit union system.

The vision and mission that I stated relate closely to CRTC objectives outlined in the Telecommunications Act which in fact state:

"-- to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions,

-- to render reliable and affordable telecommunications services of high quality accessible to Canadians of both urban and rural areas in all regions of Canada."

We think that there is a very significant fit between the directions of our two organizations.

The basic question becomes whether there will be competition in Saskatchewan and, if so, will the benefits be shared equally or will there be an unfair burden on those living outside major centres. Will Saskatchewan as a whole be at a disadvantage compared to households and businesses in other provinces because of its small population and large geographic area.

Will previous capital investments in infrastructure be properly valued and will there be sufficient revenues to maintain and improve infrastructure in a province with few residents and a very diverse topography.

Credit unions have direct experience dealing with large corporations in high cost service areas. Banks in Saskatchewan have been closing branches in many smaller centres. In some of these centres they would be without financial services if a credit union branch had not replaced the banks. It is unrealistic to expect that competing telephone companies will enter this entire market.

The credit union system has expertise in providing financial services, in working within the co-operative structure. Experts in telecommunications should determine the structures necessary to balance competition with local service in the telephone industry.

With only a few major Saskatchewan centres having the opportunity to benefit from the introduction of local telephone competition, it is incumbent upon the CRTC to ensure that the residents and small business in other parts of the province are not disadvantaged.

THE CHAIRPERSON: Thank you.

I gather your interest is not only in ensuring that your customers and potential customers of credit unions have the facilities at affordable rates to contact you by technological means but is there also concern about some of the credit unions in the larger centres being able to have equal connection as between themselves?

Has that been an important factor, that the rural credit unions also be able to interconnect at affordable rates with the vast number of other credit unions?

MR. SNIDER: Yes. Exactly so. In fact, if any part of our credit union membership is disadvantaged and unable to participate in an affordable kind of communication network, it is a two way communication that we do participate in.

Within the financial services industry as within many other industries, we are looking very favourably towards the implementation of new technological methods. We have already heard this morning about the ability to communicate through Internet. We anticipate moving very quickly towards home banking.

These are services that will not be frills in the future but will be ways of life. We don't believe that our membership will be disadvantaged as a result of an inability to participate.

THE CHAIRPERSON: Is there currently a discrepancy between the level of technological capacity as between the credit unions?

MR. SNIDER: I'm not sure I completely understand.

THE CHAIRPERSON: Is every credit union at the same level of ability to interconnect with the others, assuming customers have the means.

MR. SNIDER: No. That is not currently the situation. We have a number of major projects under way in Saskatchewan to develop that interconnectedness. I don't know, Bruce, if you would like to share a bit more on that particular part.

MR. BRUCE CALER: For the most part, credit unions have recognized that it is important to have service locations throughout the province. As you will read in our submission, this led to the pooling there of our telecommunications costs for financial services.

All credit unions in the province essentially pay the same telecommunications costs for financial transactions. What this means is, for example, if you are using an automated banking machine in the northern city of La Ronge, you are going to get potentially the same service charges as you would as if you were doing it in Ottawa or Regina.

If we had not adopted this type of pooling method, it is quite conceivable that they use these types of services up there and pay the going rate, you would be looking at a cost of say $5 a transaction which is clearly just not acceptable to most people.

THE CHAIRPERSON: Are you prepared to say that you have instituted your own system of cross-subsidy internal to the credit union.

MR. CALER: Yes, we have. We realize that the success of having a credit union network across the province contributes to the success of even the credit unions in the larger centres. We are better credit unions simply because there are other facilities throughout Saskatchewan even though they are different organizations. The credit teller example is one way that we have recognized that.

THE CHAIRPERSON: You spoke earlier, Mr. Caler, of affordable grades. Is it your view that in the credit union model, everybody should pay the same rate or do you foresee or envisage the possibility that an equitable system would be require some higher rate in high cost areas, although subsidized?

MR. SNIDER: I think we would look towards an equitable system as we have at this particular stage.

Once again, I think what I mentioned a number of times in my presentation was the whole aspect of disadvantaging our members because of their location. Certainly we are experiencing in Saskatchewan a migration to urban areas. There are a number of initiatives to try to stop that flow.

I guess we as an organization are fairly concerned about instilling any more of those incentives which would in fact create that kind of flow. I think in response to your question we would look towards an equitable system.

THE CHAIRPERSON: Thank you very much.

Your presentation was interesting. I am from Ottawa. We do know of credit unions, but I would be interested to read your written presentation because I am aware of what an important infrastructure it is to this province more than any other.

Thank you very much.

MR. SNIDER: Thank you for the opportunity.

THE CHAIRPERSON: Madam Secretary?

THE SECRETARY: Our next participant this morning is Scott MacKenzie. I invite him to come forward. For the benefit of the court reporter, could you identify yourselves, please.

PRESENTATION / PRÉSENTATION

MR. SCOTT MacKENZIE: I am Scott MacKenzie. This is Mr. Ron Gillies from Lloydminster.

THE CHAIRPERSON: Good morning, Mr. MacKenzie, Mr. Gillies. Go ahead when you are ready.

MR. MacKENZIE: Good day, members of the Commission.

In response to the telecom public notice concerning service to high cost serving areas, the Regional Libraries of Saskatchewan have prepared a written submission that I would like to present to the Commission today.

In doing so, I would like to take a few minutes of your time to explain why the Regional Libraries felt that this question necessitated a written intervention. My brief talk here will not deal with technical issues of how a high cost serving area should be defined or specific recommendations vis-a-vis subsidies to such areas, topics which are dealt with in our written submission, but rather deal with the underlying concerns that prompted this intervention.

At first glance, it would seem that the question of telephone and/or telecommunications rates would be of only minor concern to public libraries. After all, libraries are concerned with books, videos, magazines, et cetera. Therefore, an increase in the cost of telephone lines should be viewed at worst as a nuisance.

Such an opinion, at least as far as the Regional Libraries in Saskatchewan are concerned would be entirely inappropriate. Indeed, I think I would not be exaggerating if I were to claim that access to a telephone line has become one of the key determinants as to the success of a rural library.

Likewise, I believe it would also not be an exaggeration to state that any increase in telecommunication costs, and I would like to most emphatically repeat the word any here, will mean the demise of many rural libraries in this province.

I am sure this Commission has become somewhat enured to apocalyptic scenarios, Chicken Little strips which claim that if you raise our rates, the sky will fall in. Certainly I and the other regional directors would not wish to be accused of fearmongering or of overstating our case.

Therefore, in my little time here and in the accompanying written submission, I hope to convince you just how vital and equitable telecommunications structure is for the continued viability of the rural library system in the province.

In 1995, the regional library systems in Saskatchewan began a concerted drive to automate the library functions in the rural libraries and to develop province-wide electronic networks. The ultimate goal of this project was to link all rural libraries in the province electronically by the year 2000.

The written brief which I am submitting to the Commission today goes into greater detail as to the development and nature of these electronic networks, so I will limit my remarks here to two brief statements of fact.

First, as of this moment, 150 rural libraries, over 50 per cent of the rural libraries in the province, have been linked to these electronic networks and, second, approximately $1.2 million, over $700,000 of which was raised at the local community level, has been spent on this project.

A final fact that should be kept in mind is that these electronic networks have been developed entirely over telephone lines. These are, I believe, impressive facts, but facts are meaningless in themselves unless given the context in which the relevance becomes clear.

The first thing probably anyone would ask to understand this is why do this? Why spend over $1 million to link rural libraries throughout Saskatchewan? The answer to this question is two part.

Part of the reason is to some degree this project is a natural outcome of the changes which are affecting us all, changes which are also instrumental in this Commission's mandate to examine the regulation of the telecommunications industry in Canada.

What I am speaking about here is the change in the economic structure of this country as it moves towards what has euphemistically called an information economy. Converging with this economic change is the way information itself is distributed, to some degree away from print and toward digitized formats.

Together these changes had a dramatic effect on how libraries, no matter what their size or their location, observe the mandate in their communities. However, as I said before, there are two parts to the answer to the question why do this and it is the second part which I think is far more salient.

The second part involves what we call in the immortal words of George Bush that vision claim because if the development of electronic networks in rural Saskatchewan is driven to some degree by changes beyond its control, if guided by a vision of what that end product should look like, in this way Saskatchewan is to some degree unique in Canada in that a province-wide initiative has been started to build the electronic library of the future.

What is envisioned for Saskatchewan is a province-wide electronic network that will allow all residents, no matter where they live, to have access to the same quantity and quality of information. However, to do this, it is a given that an equitable telecommunications infrastructure be available.

When I talked just now for a vision for the province by electronic library, I should also like to stress the co-operative nature of this project and the enormous amount of effort undertaken in rural communities to make this come about.

When I was selected to present this brief for the regional directors, I initially thought I was the most unlikely candidate to carry out this assignment. The main reason for my misgivings was that I am the most junior regional librarian, having moved to North Battleford less than four months ago.

As I worked on this brief, however, I began to see that my inexperience was in fact to my advantage. What this inexperience allowed me to see was stark clarity with something my colleagues had become used to. That is the enormous amount of volunteer time, dedication and effort expended in rural communities to make the regional library system work.

An example of how this communal system works can be seen in the town of Newburg's efforts to build a new library. Five years ago the local library board secured a commitment from the village and rural municipality to match funds they raised locally to finance the building of a new structure.

In the past five years this board, mainly through catering almost every function in the surrounding area, has succeeded in raising $53,000.

A month ago I attended a board meeting to discuss the cost of automating the library once the new building was finished. Having outlined these costs, particularly the ongoing telecommunications charges, one of the board members turned to the others and stated "Well, I guess we won't be able to put our pots away just yet". In fact, they will never be able to put their pots away. I think they accept that fact.

However, I would like to stress there is a limit to what these communities can afford. As I travel around Lakeland region and talk to local boards who pay annual telecommunication costs of $700 on operating budgets of $2,000 to $4,000 a year, I know they are already close to that limit. There are only so many turkeys one can bake, so many raffles and bingos one can put one. This number is finite.

What I fear and what I believe the other regional directors fear is that if telecommunication rates increase in any manner, then we will pass this breaking point and all the effort, time and dedication will have been for nothing.

I would like to conclude this talk with a brief mention of a flyer we recently received from the federal government. This is a copy of it here. They come all the time. It says:

"Calling rural Canadians. The Government of Canada wants to hear from Canadians in rural and remote communities --"

It goes on and on. At the very bottom it says:

"To order our workbook, call 1-888-781-2222 or consult the Internet at htpt. --"

Blah, blah, blah. Notice I have given equal billing here.

I find it somewhat ironic that I am sitting in front of this Commission arguing against any increase in telecommunications rates in rural Canada while at the same time the federal government is merrily distributing leaflets calling for a dialogue with that same constituency.

One has to wonder just what form of dialogue has been envisioned here. One way, two way. We all know any useful dialogues involves a mutual give and take as well as the technical means by which that dialogue can take place.

Should we fail in our intervention here, and should telephone rates rise in rural Saskatchewan, then I have one humble suggestion to the federal government for the next time it sends out such a flyer. Besides a phone number and an Internet address, it also include a postal address because that is the means by which many of the people in my part of the country will be responding.

I thank you for your time and hope you keep us in mind during your deliberations.

--- Applause / Applaudissements

THE CHAIRPERSON: Thank you, Mr. MacKenzie. I see you have some support already.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you.

As you know, we heard from the head of the library trustees earlier this morning which was very helpful. I have noticed you have automated 150 of the 300 libraries.

MR. MacKENZIE: Yes.

COMMISSIONER GRAUER: Do you have a plan to automate all of them? Is this something that is within your --

MR. MacKENZIE: Yes, by the year 2000 it is planned.

COMMISSIONER GRAUER: By the year 2000.

MR. MacKENZIE: Right.

COMMISSIONER GRAUER: I asked this morning what had been the role of the various levels of government in assisting communities in making this happen. I gather with the earlier initiative there wasn't much support, but it was picking up steam. What is the case at this juncture from now to the year 2000?

MR. MacKENZIE: The current funding is 50/50. We have just received $400,000 from federal government money which we have matched by $400,000 in the communities. Next year there will be funding on that. We are hoping for an equal matching next year. We could probably all told when we finish have $2.5 million of $3 million being spent.

COMMISSIONER GRAUER: In terms of the funding, 50 per cent is being funded federally to get your libraries automated.

MR. MacKENZIE: Yes.

COMMISSIONER GRAUER: I know we have heard from several people in rural communities that services are decreasing, whether it is banks that are pulling out and other full service businesses.

Has that resulted in an increased utilization of the facilities available at the libraries that are automated, for instance, the public access to the Internet and that kind of thing? Are you finding that your business is increasing as people withdraw services -- corporations withdraw services from communities?

MR. MacKENZIE: Often in some of these -- I can only speak for my region which I know somewhat. In some communities, actually the library is actually really the last institution left there, right, and it is actually the only site where you could go to get public Internet access if you wanted to get it in that town, right. No school, there is nowhere else, right?

In answer to your question, I would say yes. That's going to become the site for Internet access or to get electronic format information.

COMMISSIONER GRAUER: I guess what I am trying to get a sense of, in Saskatchewan the role of the library in some of these communities seems to be changing from being a source of books to really a source of all kinds of information, if it is public access to Internet --

MR. MacKENZIE: Well, that's what we are looking at.

COMMISSIONER GRAUER: Yes.

MR. MacKENZIE: When I talked about this idea of one province-wide system, right, it would move in that direction.

COMMISSIONER GRAUER: What, if any, is the relationship with schools in some of these communities with the library?

MR. MacKENZIE: Well, it varies, right? There are schools and libraries together in what is called school use libraries and in others they are not. Occasionally some libraries and schools have gone together on capital expenses, so they come together getting into CAP funding to get Internet access, right, so it varies on the communities, right.

It's quite flexible because of the nature of, you know, like I said these communities are quite different, right, so some may be more closer than others. They tend to work together though if they can, right?

COMMISSIONER GRAUER: Right.

Thank you very much. We enjoyed your presentation.

THE CHAIRPERSON: Thank you, Mr. MacKenzie, Mr. Gillies.

Madam Secretary.

THE SECRETARY: Our next presenter this morning is Lionel Roy. I invite him to come forward, please.

PRESENTATION / PRÉSENTATION

MR. LIONEL ROY: Good morning.

I am Lionel Roy and I am the Reeve of the RM of Lakeland. I am also on the Prince Albert Health Board. My ward and the Health Board covers north of the river, a long distance north of the river. It is something that is very, very important to us. That is to be able to have communications.

I'm sorry that I haven't prepared a brief for you or anything else like that because it just come to my attention the concerns of the people out there. I will just make a verbal presentation at this time. I understand that we have until January to put in a brief, so I will do that in due time.

I would ask that you let the record show, of course, that we oppose any increase in the rates in the rural communities of Saskatchewan or the remote parts of Saskatchewan, the reason being that many of our citizens, such as seniors people, people on fixed income and people on low income cannot afford any further increase in the telephone rates.

In fact, some of them are anticipating that their rates would go up to $250 a month. They could not afford that. These people, we ask them and we encourage them to stay in our communities. If they cannot afford to stay in our communities due to the fact that they cannot access emergency services such as police, ambulances, doctors, and first responders and people like that, they can't stay in our communities, so they are going to have to move out of our communities because it's not affordable.

We submit that such a drastic increase for telephone services would mean in simple terms they would be left without the means of contacting emergency services.

Our governments are on record that they wish to keep seniors and other people in their communities as long as possible. By increasing the costs of telephone services, communications services, for emergency services and so forth by five times, people will just not be able to live in our rural communities without being able to contact all the different services that they have.

This is not a hypothetical position but a fact. If these ridiculous increases were to be allowed, you would be taking the food out of our children, seniors and people's mouths because they would not be able to afford both if they had to have communication. I mean the money would have to come from some place. They just do not have that extra income, a lot of these people.

I submit that the communication is not a luxury but an essential service for the people in our rural communities nearly as much as heating and so forth so that you can live out in that community. It is very, very important to us.

If profit is the criteria for safety and welfare of the rural people, then it is a very sad commentary about society for the concerns and the needs of the people in our communities. As an example, they keep saying that they cannot provide certain services unless it makes a profit in the communities.

I can give you an example. Just north of Prince Albert here, from Park to Candle Lake and East Trout Lake, emergency services cannot be contacted on account of the lack of a tower, the lack of a communication. They depend on that. In the summer, the population out there is 10,000 people.

There are many isolated roads going north. People cannot communicate with emergency services because there is the lack of a tower there. Every time I approach the Minister, they tell me the competition is there and it has to make a profit. They can't tell me that all the towers from here to Lac La Ronge, for instance, are making a profit. They are not making a profit.

In the RM itself we have Cantel which put up a tower. Then SaskTel seen that they couldn't put a tower at Candle Lake and went and put a tower right next to Cantel tower. The bases are touching. Them towers aren't making a profit.

I would ask that when you take these things into consideration that it not just be for profit. It's a sad commentary, as I said, to our governments and so forth if it's going to be built on profit services and health and the welfare of the people is going to be based on profits only.

We have a 310-5000 now, a number for emergency services out here, but we are expecting that 911 will be a service that will be coming into service shortly. If these people can't afford to have telephones to contact emergency services, as I said, they are going to have to move into the urban areas and they will not be able to live in their own communities.

Not having all of the necessary information or resources available to me at this time, I am not able to provide you with all the implications that will happen if the increase in the services goes up five times. However, we do know that any increase in services to telephone rates in our rural areas will affect the lives of our citizens in a very serious way.

We ask, don't let profit jeopardize the lives of our people. Telephones are not a luxury, but a necessity. If the recommendation is anything but no increase in rural rates, you will be taking a very dangerous course, I would submit. We ask you, please don't let this happen.

That's pretty well the end of my submission. All I ma doing is asking you to really take into consideration the implications of the increase of telephone services where it's not affordable for the average person in our rural communities.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Roy.

You spoke of two concerns, I gather. One is that some areas do not have service. Your concern is that rural service not be at rates that are so high that people can't avail themselves of them.

Would you see the extension of service to those areas that don't have it as a priority?

MR. ROY: I certainly would.

THE CHAIRPERSON: Financially

MR. ROY: Top priority, yes.

THE CHAIRPERSON: Which may require some discrepancy in the rates in lower cost areas. You just want it to be an equitable discrepancy, if there is one, or is it your view that the rates, no matter what, should be equal?

MR. ROY: As to any service to the people, it should be affordable. Where the resource comes from, like any other services, it should come from governments, if necessary, to equalize the services.

I think that profit is not the criteria when it comes to emergency services, the ability to communicate with emergency services. Profit should not enter the picture at all.

THE CHAIRPERSON: I gather that in some cases you have seen competition at work then where if the competitor establishes a tower, the provincial telephone company establishes one as well. Is that what your reference to Candle Lake, I believe, was?

MR. ROY: That was in the RM of Lakeland where I am Reeve. They had to come to us to get permission to place those towers there. There was a Cantel tower. There was a phone service already in that area.

THE CHAIRPERSON: Before the competitor

MR. ROY: Yes.

THE CHAIRPERSON: I see. We look forward to your written submission, Mr. Roy.

Thank you very much

MR. ROY: I'm sorry that I wasn't better prepared for my presentation.

THE CHAIRPERSON: It sounded very good to me.

MR. ROY: I am bringing the concerns of our people and the concern of myself as a Health Board member representing the people out there, that they need this service for emergency services. This is what I'm trying to convey.

Thank you very much.

THE CHAIRPERSON: Thank you.

Madam Secretary.

THE SECRETARY: Thank you, Madam Chair.

We will now go to Saskatoon for our next participant. His name is Don Gilchrist. You can begin whenever you are ready, please.

THE CHAIRPERSON: Good morning, Mr. Gilchrist.

PRESENTATION / PRÉSENTATION

MR. DON GILCHRIST (Remote): Good morning.

I am here on behalf of the Consumers Association of Saskatchewan, Canada actually, the Saskatchewan branch. We believe that in Saskatchewan the result of a long term vision and deliberate sustained effort has been the development of a substantial economic and social infrastructure throughout the province.

In Saskatchewan, rural has not been equivalent to isolated or underserviced. This is an impressive achievement. It has come and it becomes apparent as one gets to know the province and appreciates the geographic challenges that have been met. Certainly we do not want the competitive evolution of the communications sector to undermine our achievement.

CAC Saskatchewan therefore supports the general availability of a wide variety of reliable, high quality telecommunications services at affordable and comparable prices. A sound national telecommunications policy must either be inclusive, that is ensure similar prices and services for all users, or find ways and related policies to support the needs of consumers and businesses outside the nation's urban centres.

The four guiding principles in paragraph one of the Government of Saskatchewan's submission to the CRTC are consistent with this position.

To the extent that the implied increases in costs for all users are tolerable, an inclusive infrastructure might be supported through the telecommunications system.

We agree with the government's submission on paragraph 7 that regional levies on long distance rates work to undermine the economic development in rural areas and by extension, throughout the province. If the required increases in costs for all users are not small, the competitively viable and neutral solution may well require some support from other government revenues. We see that as a national policy issue.

We have no comment on the technological issues since we have neither the expertise nor the experience to identify or evaluate the alternatives.

Thank you.

THE CHAIRPERSON: Good morning, Mr. Gilchrist.

I see you have colleagues with you in Saskatoon.

MR. GILCHRIST: No. These are other people that I have not even met.

THE CHAIRPERSON: I see. I didn't see anyone else for Saskatoon. It made me curious.

Has your association participated with other branches of the Consumers Association?

MR. GILCHRIST: We are in fairly close contact with the national office. I believe that you had other interventions from.

THE CHAIRPERSON: Other branches of the Consumers Association

MR. GILCHRIST: :Yes.

THE CHAIRPERSON: Is the view of the association as to how this matter should be handled the same in the different branches

MR. GILCHRIST: I think we are consistent with the national office certainly. I'm not aware of particular submissions that may have been made in the maritimes, for example.

THE CHAIRPERSON: They have not been yet, so they can see what you said and strive for consistency.

Would it be your view that the institution of a national system that would include all provinces is acceptable to the Consumers Association as a whole rather than a provincially based one

MR. GILCHRIST: We believe so. Obviously we want to see the details down the road.

THE CHAIRPERSON: How it would be -

MR. GILCHRIST: At this point, yes.

THE CHAIRPERSON: So you would be ad idem or think the same as SaskTel and the Saskatchewan government anyway that a national system is what we should strive for.

MR. GILCHRIST: In the end, we want to be competitive with other provinces.

THE CHAIRPERSON: But taking into consideration the particularities of the province, which as I understand it would, depending on the definition of high cost low density, the needs will vary per province.

MR. GILCHRIST: They will vary somewhat. My suspicion is that northern Ontario probably faces similar problems.

THE CHAIRPERSON: Yes, but probably not spread per population in as severe a way as Saskatchewan would be my understanding. The density would be such in some areas that the competition would be different possibly from a province such as Saskatchewan.

MR. GILCHRIST: It might be different.

THE CHAIRPERSON: It may not, the population relationships. I am not completely familiar with that.

We appreciate your presentation and hopefully your colleagues in the other provinces will read you.

Thank you very much

MR. GILCHRIST: Thank you.

THE CHAIRPERSON: As we can see, the audio/visual links are working marvellously well.

Thank you.

Madam Secretary.

THE SECRETARY: We look forward to returning to Saskatoon later in the day.

Now I would like to move on to Swift Current, please. We have two presenters scheduled in Swift Current, the first of which is Stewart Wells, representing the National Farmers Union.

PRESENTATION / PRÉSENTATION

MR. STEWART WELLS (Remote): Good afternoon. Welcome to Saskatchewan.

I am a farmer living 15 miles east of Swift Current. I have been told that my farm will fall into the high cost service area. I am here today representing the views of the National Farmers Union.

The National Farmers Union thanks the Canadian Radio-television and Telecommunications Commission for this opportunity to present the NFU's views on the important issue of telecommunication rates and services to high cost areas.

NFU members strive to develop economic and social policies which maintain the family farm as the basic food producing unit in Canada. An integral part of this work is to ensure the survival of rural communities.

The issue before the CRTC could potentially contribute to the increased health or demise of many rural communities. Farmers, fishers, loggers, parents, teachers, business people and other rural residents need affordable phone rates comparable to those enjoyed by urban customers. Farmers and other rural residents are using their phones more and more and for a wider variety of uses.

It is clear that increasing the rate of services will be offered over the Internet. Rural residents must have equitable, affordable, universal access to those services. Modern agriculture requires dependable, advanced telecommunications services as much as good roads or rail lines.

Farmers will always rely on trucks and trains to move their products. Increasingly, they rely on phones, fax and Internet service to capture the best prices for those products.

NFU members believe that affordable, equitable, universal access to telecommunications is a public good. If private corporations cannot supply such access to all citizens, then we may want to stop the current privatization of our telecommunications infrastructure or at least contain these private corporations within an extensive and effective regulatory structure.

The preceding is not a condemnation of the open market system. It is merely a recognition of its limitations. There are no mechanisms in the market to ensure affordable, equitable, universal service. To the contrary, the dictates of the market are quite different. Charge what the market will bear, provide service only where it produces a profit and maximize returns to investors.

Telecommunication is a vital service. Affordable, equitable access to the widest possible telecommunications services is a public good. The CRTC must exercise its power to ensure that the interests of Canadians are protected. The private interests and profits of telecommunications corporations must be subservient to the larger public good.

Given the predictable failure of the market alone to provide affordable, equitable, universal access for all Canadians to increasingly utilized and increasingly important telecommunications services, government regulation and possibly ownership is clearly needed to realize that goal.

The National Farmers Union recommends that affordable, equitable access to telecommunications service be the fundamental aim of the Canadian system and that privatization, deregulation and competition proceed only if they contribute to that aim.

Effective regulation and/or public ownership is essential to ensure that telecommunication costs for rural users do not rise above those enjoyed by urban users. A rise in the cost of rural telecommunications will accelerate the loss of rural residents, communities and infrastructure.

It will result in below optimum economic investment in rural centres and it will undo most of the work undertaken at considerable cost by federal and provincial governments to encourage investment and development in rural Canada.

The National Farmers Union recommends that all Canadian citizens in all areas of Canada receive basic phone service at the same affordable rate and that rates be set by government indexed to inflation and adjusted downward to reflect cost savings which result from advances in technology.

In pursuing the aim of affordable service, one must take into account that even if basic services are provided the same rate, rural and remote residents are at a disadvantage relative to urban users because a high percentage of the calls made by some rural and remote users are by necessity long distance calls.

In order to do business, purchase vital goods and services, access to the Internet and communicate with family members in nearby cities, rural and remote residents must make more long distance calls than residents of urban centres. This means that even if rates for basic phone services are equal, rural residents will pay more for comparable telecommunications services than their urban counterparts.

While market driven decreases in long distance rates may alleviate this situation slightly, the need to make more and more calls tends to cancel any potential savings. The solution to this inequity in cost is to increase the size of local calling areas and to allow free local calls by all rural Canadians to the nearest major urban centre.

The National Farmers Union recommends then that local calling areas be expanded to at least a hundred mile radius, that all Canadians be charged local rates to the nearest major city and that all local calls remain free of charge.

The National Farmers Union also recommends that all Canadians enjoy free local calling privileges to the nearest Internet service provider.

Equalizing the cost of basic telecommunications services, expanding local calling areas and ensuring local call access to the Internet for all Canadians will impose costs upon publicly owned and private phone companies that will not be covered by rates.

The disparity between the rates and costs can be recovered by a tax on long distance rates and from general revenues from the Government of Canada. This allows the market and competition to continue to deliver benefits to long distance users while providing affording, equitable access to all Canadians.

Therefore, the National Farmers Union recommends that moneys required be obtained equally from two sources, a tax on long distance calls and from the national treasury.

Further, market forces alone cannot ensure adequate and equitable spending on technology and infrastructure in rural areas. To the contrary. If infrastructure development and deployment is left to market forces, service will be uneven since deploying technology in rural and remote areas with fewer users to share in the costs is more costly than doing so in urban areas.

Since the market here again fails to provide adequate and equitable service, public funds from general revenues and from a tax on long distance calls would be necessary to purchase, install and maintain advanced telecommunications equipment in rural and remote areas.

The NFU urges the CRTC and the governments of Canada to interpret their mandates broadly, not merely to regulate private corporations in order to mitigate the most destructive effects of privatization and deregulation, but to question those imperatives and retain the right to employ whatever mix of regulations and public and private ownership they may deem necessary to best achieve the vital public good of affordable, equitable, universal access for all Canadians to the widest possible range of telecommunication services.

Respectfully submitted by the National Farmers Union.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Wells.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you very much. This is certainly a very comprehensive presentation in which you addressed certainly many of the issues that are on our mind today.

Just to clarify. You have been clear about the importance of what we call enhanced services, which is Internet access and the ability of your members to access these services.

It sounds to me from what you have said and also other people this morning that a very high proportion of rural residents and farmers utilize Internet access for marketing and pricing their products. Would you say that's the case?

MR. WELLS: Yes. It is increasingly the case. As markets vary and more and more farmers specialize in different types of crops, they are becoming used to accessing the Internet for their marketing and on the production side, for ordering parts and interacting with other sectors of the business.

COMMISSIONER GRAUER: Most of your members have this access now and it is really an issue of cost or price for you or is availability of these services an issue?

MR. WELLS: I couldn't give you any definitive numbers on the number of our members that are accessing this system on a day to day basis. The only numbers that I am aware of are the ones that have been generated by the provincial government in Saskatchewan, showing the number of minutes used by rural users to access the Internet. That type of data is readily available and those numbers I understand are quite high.

COMMISSIONER GRAUER: Thank you.

One other brief question. We have been already in the Yukon and northern British Columbia where there is actually a significant number of people who don't have service. As we are addressing all of these issues, we are looking at priorities.

I just wondered if you could give me your views on the priorities of basic service as opposed to service which ensures access to what we call enhanced services, which would include Internet, fax, whatever.

MR. WELLS: It seems to me that's quite a difficult question. We will always be able to find people who fall outside whatever existing system we have.

It would be our view that what we must do is strive to provide service to everyone. In doing that, in struggling to do that, we will be able to accomplish the goals that we have set out. It may require some real changes in technology, some real advances before we can have every single person enjoying all of the benefits of telecommunications.

COMMISSIONER GRAUER: Thank you very much. I appreciate you coming today.

THE CHAIRPERSON: Thank you, Mr. Wells.

Madam Secretary.

THE SECRETARY: Still in Swift Current, our next presenter is Larry Grant. I would ask him to come forward, please.

PRESENTATION / PRÉSENTATION

MR. LARRY GRANT (Remote): Good morning or afternoon, I guess it is now.

THE CHAIRPERSON: Good afternoon, Mr. Grant.

MR. GRANT: My name is Larry Grant. I am representing the rural municipality of Val Marie No. 17. I have got a small brief here.

The rural municipality of Val Marie No. 17 is a municipality established under the authority of the Rural Municipality Act of Saskatchewan and is located in southwest Saskatchewan.

The only urban centre within the boundaries of the rural municipality is the village of Val Marie. The village of Val Marie has a population of 150. It is also the centre of the Val Marie telephone exchange. There are 174 telephone connections within the Val Marie telephone exchange. This includes fax machines, telephones, support and so on.

The rural municipality of Val Marie is comprised of 33 townships, approximately 800,000 acres with a population of 523 people in 126 occupied residences. The vast majority of our residents are on single family farms carrying out a mixed farming occupation and require low cost telecommunications to access market news for the commodities they produce and must market on a global economy.

Mr. John Meldrum, Vice-President, Corporate Council and Regulatory Affairs for SaskTel speaks to the sparseness of the area in a May 19, 1998, letter to the Val Marie exchange. In that letter he states:

"Val Marie is one of the highest cost local service areas in the province due to the large distances between customers. Long distance minutes are currently the main source of the local subsidy which is used to keep the local rates affordable."

Deregulation of long distance phone calls has resulted in a loss in the lucrative long distance phone market to SaskTel. This revenue has gone to new players in the deregulated long distance phone market who have no desire to use their revenues to subsidize high cost areas.

High cost local service exchange if expected to pay full cost or even the majority of the cost of local phone service will become very expensive to local users and cost prohibitive, resulting in loss of customers. The cost to the remaining customers would then go up, resulting in the loss of more customers. The cycle would continue until the exchange failed.

In rural Saskatchewan, we looked at the deregulation of the phone service as yet another item on the growing list of abandonment of rural Canada by our senior levels of government. The lis of abandonment includes but is not limited to rail lines, health care, policing, transportation services and roads and telephone service.

When looked at individually, one may not worry about the loss of the service. However, when looked at collectively, it amounts to nothing less than wholesale abandonment of rural Canada by our senior levels of government and their agencies.

Remote rural areas require low cost service for telephones. This is an essential requirement because we are primary producers raising products that grade well and must be marketed into a world marketplace. Rural Saskatchewan requires affordable communications to enable it to compete in world markets.

Local service must be low cost and affordable. Whether service is provided by fibre optics, wireless or satellite technology is not as important as low cost service which provides access to as many as possible. A subsidy will be required to make local service accessible to rural areas at reasonable rates.

Because the CRTC has deregulated long distance telephone services, resulting in a loss of income to SaskTel which was previously used to subsidize local rates, it is essential that the CRTC put in place a new method of subsidization for local rates in the high cost rural areas.

We see one possible method as being a requirement for all phone companies operating in the province to be required to set aside a percentage of the lucrative long distance market revenues to establish a fund which would be used to subsidize the local rates.

Respectfully I submit this on behalf of the people in the rural municipality of Val Marie.

THE CHAIRPERSON: Thank you, Mr. Grant.

Do I understand that your rural municipality consists of some 33 townships?

MR. GRANT: Yes, it does

THE CHAIRPERSON: And Val Marie would be where the exchange is and where services to the extent that they exist would be situated.

MR. GRANT: No. The village of Val Marie is the centre of the exchange, of the telephone exchange

THE CHAIRPERSON: But also of other services, no doubt. Yes, it is.

THE CHAIRPERSON: To the extent that they exist in the municipality of 150, but Val Marie would provide other services. Would there be a library, for example, or a school?

MR. GRANT: Yes, there is a school. There is a regional library. We have an RCMP officer stationed in Val Marie. At the present time the RCMP have notified us that they are going to be withdrawing that police officer.

Our rail line, we have already been notified that our rail line is going to be abandoned. That is why we put in our brief that we are talking about the abandonment of rural Saskatchewan. We are a sparsely populated area. We see our services slowly being withdrawn. First it was health care. It just continues on.

THE CHAIRPERSON: And the growing importance of having telecommunications linked to at least partially replace onsite services.

MR. GRANT: As services are withdrawn to further and further distances away from our locality, then we need improved telecommunications to access those services.

THE CHAIRPERSON: Are there any of these townships that do not have telephone access?

MR. GRANT: Most of the people within the municipality have access to the phone.

THE CHAIRPERSON: Would it have access to the same level of service as Val Marie?

MR. GRANT: Yes, it would.

THE CHAIRPERSON: So the exchange, wherever there is connection, there is the same quality of exchange. So your concern is more the rate, that it would be affordable.

MR. GRANT: Our concern is the rates and that they are are affordable rates.

THE CHAIRPERSON: Yes, rather than extension of service per se.

MR. GRANT: Right.

THE CHAIRPERSON: Thank you very much for your presentation, Mr. Grant.

MR. GRANT: Thank you.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Thank you.

We will be returning to Swift Current later in the day. We are back to Prince Albert. I would like to ask James Leir to come forward, please.

THE CHAIRPERSON: Yes. Rather than break at 1:30, we will break after Mr. Leir's presentation. He has been here since early this morning.

Good afternoon, Mr. Leir.

PRESENTATION / PRÉSENTATION

MR. JAMES LEIR: Good afternoon.

I am James Leir and I am the Chairman of the Eden Regional Economic Development Authority. Our authority, or REDA, was started in November of 1993 and incorporated in 1995. It is one of 25 REDAs in the province of Saskatchewan.

Our area starts about 100 kilometres east of Prince Albert and it includes the northeastern Saskatchewan communities of Melfort, Tisdale, Nipawan, Arborfield, Carrot River, Choiceland, Macoun, St. Brieux, Zenon Park.

Primarily our focus is economic development and I am going to deviate somewhat from my written presentation, but I am certainly going to try to highlight a number of the points.

I have heard a lot of discussion today regarding what I would call changes or restructuring in rural Saskatchewan and rural Canada. We have seen some regionalization occur, be it in services offered by Crown corporations or be it in the public services such as health, education. This same kind of regionalization has happened in services; banks, consumer services, retail trade, the like of that.

I think an item to note is that while some communities are in decline, some communities are becoming stable or more of a regional centre for their area. It does create some unique challenges.

Our region has a trade area of about 50,000 people, more densely populated, our pocket of the province for a rural area. As a trade area, one of the items that became of important concern for us is that the local telephone exchange system that was in place really did not affect the changes and our trade area.

It has expanded. There has been some consolidation. You have to travel in order to get service. You are making phone calls for those services. What we have been, I guess, certainly lobbying SaskTel for was some telephone exchange amalgamation. We have seen some of that. SaskTel has gone from 360 exchanges to about 225 exchanges covering the province.

In our area, I am from Tisdale, a community of 3,500 people, the Mistatim exchange, drawing the Tisdale exchange, there are probably 8,000 or 10,000 people on one exchange from my pocket. We really wanted to see a broader exchange that might go up to say 30,000 people to cover our area because that's the trade.

My community has the Zeller's store for the area, so we do have people from Nipiwan and Melfort frequently travelling to Tisdale. There's some farm equipment dealerships in Melfort that people from Tisdale go to. There's a real interexchange and we are a regional trading area.

There certainly has been more proposed amalgamation so the right steps have been taking place, but maybe not at a level we wanted to see. Local or regional telephone service brought this issue to our minds.

We had a chance to talk to SaskTel about it. Certainly we were given the impression that we can't get exact statistics on what is the cost or value of telephone services in the area and what might be the cost to broader branch out the size of our telephone exchange. We can understand for competitive reasons, this information is confidential, but on the same hand we seem to think it would be reasonable that telephone exchange boundaries get larger.

I guess that point was brought to our attention, that SaskTel was what we think is a step in the right direction, a plan where someone could contact a neighbouring telephone exchange for a flat rate, maybe $5 a month, but limiting this within 40 miles which for some of our services, 40 miles doesn't cut the grade any more. You are travelling more than 40 miles for a number of services.

I think this is a good idea. I think this kind of dialogue with the Commission is getting things going as well. I have learned a little more on the SaskTel side of it. I guess that's what a dialogue is about.

I think through our dialogue with SaskTel we certainly are getting a better understanding on remote telephone service access and subsidization. As a result of the new competitive environment, we believe it's very important that we express our views to the CRTC at this hearing today in Prince Albert.

I have read the Government of Saskatchewan brief. Our members have had a chance to look over this submission here. We really support the development of national rural and remote telephone exchange plan, a universal fund which would have contributions from all the phone companies which could help maintain the quality of telephone services in rural Saskatchewan.

I noticed earlier you talked about enhanced service basic service. I guess I would submit I have heard stories of producers on the farm having a cost of getting a second line in in order to have a second line for fax or Internet. As much as the presentation from Swift Current alluded to the fact the service is the same in our area of Val Marie, I would submit it is probably different, the adding of a second line for a fax or modem, and I think that the increasing use of this in farming is making it a required service.

I guess to go a little further, a national fund would be a tool to help rural exchanges and not put companies providing rural service, like SaskTel, at a competitive disadvantage. The CRTC and all companies in the telecommunications business must realize the importance of the rural customer base.

SaskTel is a Crown utility owned by all the people of Saskatchewan with an obligation to provide quality services throughout Saskatchewan, but allowing competition to enter the market, target the most lucrative areas in the urban cities and just profit off of that creates an unfair business advantage.

Every company providing local and long distance service has an obligation to ensure complete telephone services are available across Canada at reasonable rates.

Using Saskatchewan as an example, one might have the impression that the taxpayers and the Crown utility customers, particularly of SaskTel, in Saskatoon and Regina subsidize the rural communities. I am originally from Saskatoon and I know some of the politics involved with that theory.

If you look at our population, in 1997, Saskatoon and Regina represented 370,000 of the 1,020,000 people living in the province. When one considers the income generated between long distance calls connecting rural Saskatchewan, Saskatoon and Regina, it is obvious that rural Saskatchewan generates significant revenue for SaskTel and its competitors.

On the broader scale, the economies of Saskatoon and Regina hinge on the strength of agriculture, forestry, mining, oil and gas and other key sectors in rural Saskatchewan that help drive the provincial economies, including the retail spending in the large centres.

Without rural Saskatchewan, Saskatoon and Regina would not be the centre for numerous companies with rural operations. Similarly, the economic base of large urban centres across the country depend on rural Canada. I think that's one thing to keep in mind.

If we have the costs out of proportion for having business and people in rural Canada, then who is going to harvest the natural resources that makes our economy tick. Just because Toronto or Montreal or Vancouver has head offices of operations there doesn't mean that they are not directly reliant on the economic base of the rural communities in order to maintain those urban centres.

They have a responsibility going both ways. If the rural economy is crippled, then their customer base is crippled. Then they are directly affected. It is everyone's business.

Telephone calls should not be a cheap one-way communication from cities outward. Price and equality should be the same at the other end of the line. The quality of telecommunications services should not deter business from operating and/or people from living in rural Canada.

If rural residents have to dial one tax as basic health, education and government services, plus agricultural and commercial services, then there is something wrong with the standard of living available to all Canadians.

We support the Telecommunications Act policy to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas of Canada.

I guess with regard to the specific items the CRTC outlined in its paper, we would submit that different types of high cost service areas will probably be established. There will be different needs. How to define those is real tough, especially for a group that doesn't have the facts and figures on what makes service viable and where are the profits to be made.

I would think that a census metropolitan area would be a low cost area. I would think that an urban municipality, as we heard from SUMA this morning, as defined by a collective group of individuals that have an elected group of representatives and a set of boundaries for an urban centre should expect the same enhanced services and the same rates. I think that is reasonable given the country that we live in.

I believe the more isolated areas, rural farms, maybe I should call them somewhat isolated, they have to be able to have an equitable rate and be able to have fax, Internet, enhanced services available to them at an equitable rate.

The remote locations I really don't have too much experience with, but I think again they require an equitable rate.

Urban areas smaller than census metropolitan areas should have those same prices. I think it's important because sooner or later you are drawing a line. Someone is a have and someone is a have not. If they are an urban centre, they should have the same rate. I think it is reasonable to expect this.

I believe that the rural high cost service areas where the farms are near an urban centre should in effect have a competitive rate. I think we have to have the same capabilities in those urban centres; Internet speed, size of calling area reflecting a trade area.

I guess one thing that comes to mind from some of the earlier comments, I would submit that municipal, provincial and federal governments should not have to subsidize local telecommunications services in order to maintain national service rates.

An industry as profitable as the telecommunications industry that is granted licences to operate a profitable business in this country to offer communications services has a responsibility to provide rate equality without government subsidies. I am firm in this belief.

I think it is unfair to expect customers to pay a basic rate and then as a taxpayer pay an additional rate in order to maintain service while some other company can be milking the cow and taking the funds elsewhere. They have the responsibility as an industry. If they are going to be permitted to be in operation, that is their responsibility.

I believe the taxpayer has taken on more roles than necessary for too many industries. Health and education is an issue for the taxpayer. Telecommunications is an issue for those that are granted the licence to practice in that industry.

The CRTC has to create a mandatory national rural and remote telephone exchange plan that every company providing telephone services contributes equally top provide the same services at the same prices to everyone.

Obviously we don't have access to the revenues and the costs for the companies to be able to provide those services and it's difficult for us to know what the right cost levels are. It certainly would be reasonable to expect every company to contribute equally and to maintain the universal service based on technology advantages.

It appears that long distance revenue could not be the sole source of revenue for a national fund. Other methods of communication could become methods of bypassing long distance contribution.

We look at the conference links we have here today. One day we might be doing that via Internet. There are other ways around the long distance. That's why all sources of gross revenues from telecommunications services, long distance, Internet, wireless and other forms of technology should be integrated into the model for contributions of transmission path revenues to the fund.

Without everyone contributing from all sources, then an unfair competitive advantage is given to companies that have no obligation to provide service access to everyone.

An unfair competitive environment will escalate the costs of high cost service areas to an unreasonable level and cripple the Canadian economy. If we don't have access to the resources in our country by having reasonable rates to have our workers and business and government services located in those areas that produce the value in this country, the whole economy is going to be crippled.

If it costs too much to live outside Canadian cities, who will live outside those cities? A high cost service fund has to keep local monthly telephone rates in line with census metropolitan areas, provide free Internet access at the same rates as the city and should have the same services, quality and speed, for example, on the Internet modems.

There has to be adequate equipment so quality services are available without waiting to access telecommunication lines and equipment. There's nothing worse than a wait, especially if someone is trying to make an important call.

I think we have to consider that the telephone exchanges are meeting the needs of the people in the area. The parameters of the fund would probably have to be reviewed annually, but I imagine you would need a term longer than that -- two, three years or so -- in order that you would give a chance to build and not be abused by industry.

Again, without knowing all the costs, it is really hard for us to understand every market sector and what type of formulas need to be put in place. However, the need for universal rates and service must remain the cornerstone of CRTC policy.

We wish to keep the CRTC informed on this important issue relevant to our area. In northeastern Saskatchewan, access beyond 40 miles to a larger telephone exchange system or to more than one exchange is important.

Rural Canada must not be abandoned or ghettoized with inferior high cost telecommunications service. Surely new technologies in wireless or satellite equipment can provide rural Canada top quality services for the same prices being charged to customers in census metropolitan areas.

Anything less just is not acceptable in a country as advanced as Canada. We are an active trading area and we need to be competitive. We have seen some growth in our area. That kind of growth can be curtailed if it is an unlevel playing field.

SaskTel and the province of Saskatchewan have their responsibilities, but all players in the telecommunication industry equally have responsibilities.

I would like to take this chance to thank you for the opportunity to be here today to discuss this important matter with the CRTC. Your deliberations are a challenging one. You will hear other viewpoints.

I guess the big question in my mind is when you make a decision, how does it affect everyone? What is the total impact of your decision? Is this just one group interested in their needs or is it a group interested in the broader needs of our country?

The broader needs of our country is to make sure that we do not create a two tier system of telecommunications service. It is important that rate parity be foremost on the mind of the Commission.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Leir.

Commissioner Grauer.

COMMISSIONER GRAUER: Again, your presentation was pretty comprehensive, so I don't have much in the way of questions.

Just so I understand you, though, you support the idea of a national fund and equitable rates across the country, not just here. I appreciate you don't have access to the facts and the figures and what not.

You will appreciate, as I think I said earlier, we have come from the Yukon and northern British Columbia where terrain has made it very challenging to get even basic service to a lot of people. Do you have any views on our priorities with respect to what we tackle first, if there is a limited amount of money to deal with all these challenging issues?

MR. LEIR: I guess the big challenge for the CRTC is to start looking at costs and benefits. I don't want individual needs to maybe get lost in that type of analysis, especially for the people in the Yukon.

I think on the broader scale there has to be a basic recognition of cost and benefits. I actually believe that in northern parts there is a great deal of wealth there, industry mining, this sort of area. I don't think it should be the mine's responsibility to pay for the telephone costs in that area, but surely there has to be some way of recognizing that everyone who has phone services in Ottawa, Toronto, Vancouver, to recognize the value of that mining industry up there and that a contribution has to be made in order to maintain people who would work in that environment.

Will the rates be the same as me living in Tisdale? Probably not. I would hope one day that we would have a new form of technology that would address that.

Based on the current needs, I am only familiar with the area that I am close to home on. You are going to have to develop, and I always use this word and people laugh when I say it, but I always say a matrix. I always believe in an approach of looking at items to address a series of priorities. You can't address them all completely, but we are going to have our priorities. We are going to have certain allocations in certain areas.

Obviously something has to be done in the Yukon and northern British Columbia areas, but on the same hand, something has to be done in rural Saskatchewan, rural Ontario, the Atlantic provinces.

I don't know what's new in emerging technologies, but I do have my suspicions that there has to be some wireless methods to help address the real isolated locations, at least as a centre, as a hub for that territory which will connect them via satellite back up to the main land so to speak.

I don't think we should be islands. I do believe in Saskatchewan, that it is of the utmost importance to our economy, an agricultural province, but more than agricultural; mining, oil and gas, forestry, that we do have fair rates across the board within the confines of the province.

I believe with companies such as competitors to SaskTel that have access to the lucrative markets, they have a responsibility of they are granted licence to do that.

COMMISSIONER GRAUER: Equitable rates. You are talking more within Saskatchewan. You think that there may be the need for flexibility across the country with respect to some discrepancy in rates.

MR. LEIR: There may be some rate discrepancy, but I think somehow there needs to be a goal of what would be the reasonable difference in rates.

I again don't have the figures to pin that down. I do believe in Saskatchewan it's not unreasonable for us to expect the urban centres all to be in line, and I mean competitive with Vancouver, Toronto, the likes and the same thing on the quality of service.

I believe for the people, particularly on the farm, they need more than one phone line or access. They have to. They are selling a valuable commodity. That's what we eat. That's what keeps processing alive in this province and other provinces.

I don't know how to tackle one. That's going to be a big infrastructure cost.

COMMISSIONER GRAUER: Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Leir.

We will now take a lunch break. We will resume at a quarter to two and start the afternoon session later than we had anticipated.

Thank you.

--- Recessed for lunch at 12:50 / Suspension pour le

déjeuner à 12:50

--- Resumed at 14:00 / Reprise à 14:00

THE CHAIRPERSON: Order, please.

Good afternoon. We will resume.

I ask Ms Assheton-Smith to call the next presenter, please.

MS ASSHETON-SMITH: Thank you, Madam Chair.

At this time I would like to ask Mr. Shaddock and Mr. Melvin from the Saskatchewan School Trustees Association to come forward, please.

THE CHAIRPERSON: Good afternoon, Mr. Shaddock, Mr. Melvin. Sorry for the delay.

MR. GARY SHADDOCK: No problem.

THE CHAIRPERSON: Go ahead when you are ready.

Thank you.

PRESENTATION / PRÉSENTATION

MR. SHADDOCK: Good afternoon and thank you.

My name is Gary Shaddock. I am Vice-President of the Saskatchewan School Trustees Association. With me is Craig Melvin who is the Executive Director of the School Trustees Association.

Our association represents 107 boards of education across Saskatchewan, both rural, urban and northern, who in turn have 195,000 students within their schools.

Included in our Saskatchewan School Trustees Association mission statement is a phrase that indicates that we are the voice for quality education for all children within Saskatchewan and with the definition of quality education, we look at equal access, equal opportunity, and similar costs. We are concerned that students should not be denied quality education because of location if costs were to increase.

In a knowledge-based economy, all students, regardless of age, location or ability, must have available to them appropriate learning opportunities. A primary goal of education is to sustain our democratic traditions. Access to the information highway is, or will be, essential for individuals to exercise their democratic citizenship in a knowledge economy.

Education and knowledge is the engine that will expand and develop the economy and our communities. As reliance on information and services provided for the Saskatchewan economy grows, the economic development of the province and electronic communications will become inextricably linked.

It is unlikely that telecommunication companies will seek to compete in rural and remote northern areas of Saskatchewan where the costs of service are substantially greater than in more densely population urban areas.

In Saskatchewan, and especially in the education sector, access to high quality communication services is an essential consideration for policy makers. Forty per cent of Saskatchewan K-12 students live outside major centres in rural and remote northern communities. Of this number, many are enrolled in schools with limited communication access.

While a majority of rural schools have Internet access, the best they can hope for without intervention is a dial-up service. Within a few years, high speed lines will allow urban centres to have real time video links and almost instant access to both commercial and government information.

There will be a distinct inequity in the accessibility of services for rural and northern education. This constraint on the learning opportunities available to those students can only be addressed by deliberate policy choice to ensure access at an affordable cost.

I take with interest this morning's presentation from the RM of Val Marie. It so happens that I am from that part of the province and Val Marie is within my school division. In that area we are facing declining enrolments. The ability to bus students to schools is becoming limited.

Our only opportunities now to continue to provide quality education is either to have the students sent to room and board in an urban centre or use its technology. In particular, our high schools in the school division are 50 miles apart.

Historically, Saskatchewan has responded to access inequities which first arose as the telephone systems were developed. Cities and larger more affluent rural communities were able to provide services to all individuals within their jurisdiction at reasonable cost.

Farms and remote schools and communities were not provided with service until the public policy decision was made to overcome the inequity. This decision resulted in the establishment of a Crown corporation as a means to ensure equitable access.

Today, this historical need remains to be addressed, but perhaps by a new approach. We are particularly interested in learning how the CRTC will ensure in a deregulated environment that service providers would in fact compete to provide services to rural and remote schools.

Access, however, means more than a physical connection. It includes access to high quality education, educational information and services provided through the communications channels, affordability and digital literacy, the means to use the available connections.

In Saskatchewan our basic telecommunications needs are similar to those of the rest of Canada. We use telecommunications for business, for knowledge and to overcome the barriers of distance. However, our telecommunications reliance is unusual as we need to provide service to a dispersed population over an immense geographic area. This results in a high cost service.

In our agricultural economy, rural needs for access are immense. Individual farmers to make their businesses viable need up to the minute information about more than just the weather. Information about stock prices and investments in the futures market is crucial for successful agricultural business.

Forcing rural businesses to pay extra costs puts Saskatchewan at a competitive disadvantage. Without subsidy or cost averaging, rural schools may be paying over $100 per month for a dial tone and $8,000 to $10,000 for a new school line. Such a four- or fivefold increase in costs of service delivery is prohibitively expensive, particularly in an environment where long distance tolls are already paid for many school-related calls.

It is estimated that the additional line charge per rural student would be in the order of $40 per year. As distance learning opportunities expand in the future, these costs will surely rise to the point where real educational inequities for students in rural and remote schools can no longer be overcome.

To further expound on this, with the recent cuts in education from government grants, and this has been happening for the most part across Canada, there are a number of areas in education that are screaming for moneys.

If the technology costs were to increase, then it would be a matter of boards of education having to make choices as to whether or not they would be able to afford Internet access or have libraries within their schools, higher educational consolents and also the number of teachers they would have within the school division.

Our children need high quality access. Canadian children need to learn about Canadian culture. Access to material about Canada from Canada is invaluable for both teachers and students. With electronic mail and the ability to both make and see web pages, school children are able to reflect on the role of their community in both a Canadian and global context.

As children in Regina view web pages made by children from St. John's, a new sense of Canadian community is born. By denying rural and northern children the same opportunity, we devalue their contribution to the Canadian experience.

Many rural Saskatchewan students at the high school level do not have direct access to every course they need. Distance education fills the gap for these students. Distance education is a challenging route for many students. They face isolation and motivation issues. Through the use of telecommunications, distance educators can mitigate some of these challenges.

The Internet is an excellent tool for teaching students to do research, to make discerning choices about sources of information and to detect bias. It is also a valuable place for older students to learn job search skills and to investigate educational opportunities at colleges and universities.

The Globe and Mail recently attributed the demise of the MAI to aggressive and innovative use of the Internet. Groups opposing the agreement used the available technology to inform and influence a significant number of citizens. Without the ability to access this public forum, students and educators will not be able to participate or even to observe debates on the world stage.

Canada has a world class information infrastructure available to schools, businesses and households throughout the country. Telephone and cable service provide the foundation for Canada's leadership in the information economy.

In order to maintain our leading position in the information technology industry, schools, businesses and households in rural and northern areas must have equal opportunity to access and use all of the available educations resources.

We need our governments' concern and intervention in order to ensure this equitable access. We must ensure that we continue to create Canadian solutions to distinctly Canadian public policy issues and be sidetracked by public policy choices made beyond our borders.

With respect, the Saskatchewan School Trustees Association recommends that the Canadian Radio-television and Telecommunications Commission ensure high quality telecommunication access for all Canadians, regardless of location and, two, the Canadian Radio-television and Telecommunications Commission ensure affordable telecommunication access for all Canadians, regardless of location.

Thank you.

THE CHAIRPERSON: Thank you.

Your concern is obviously affordable access to the school itself.

MR. SHADDOCK: Yes.

THE CHAIRPERSON: I would suppose to reach the objectives of the goals you have of having students learn how to use these tools, you would also want affordable service for them in their home as well.

MR. SHADDOCK: That would definitely be a plus. I guess firstly we would want it in the schools, but if they could get access from their homes as well, it would just add to their learning.

THE CHAIRPERSON: But in an average size school, one line is not going to achieve all that much for the number of schools in the school.

MR. SHADDOCK: At present right now the schools in our school division have three lines per school.

THE CHAIRPERSON: And that would be on average how many students?

MR. SHADDOCK: In the classroom, probably 15 to 20 students per classroom. The schools would be anywhere from 50 to 100 students.

THE CHAIRPERSON: Do you mean you would have three lines for the entire school?

MR. SHADDOCK: Yes.

THE CHAIRPERSON: For the entire school.

MR. SHADDOCK: Yes.

THE CHAIRPERSON: I suppose you can organize classes.

MR. SHADDOCK: Yes, definitely.

THE CHAIRPERSON: But no doubt the students who live in those areas that are high cost low density would also benefit from having affordable access to enhanced services at home.

You are not presenting today a concern about telephone access per se. You are speaking to special services over and above ordinary access.

MR. SHADDOCK: The ability for students in remote and rural areas to have the same opportunities as in the urban areas.

THE CHAIRPERSON: To enhance.

MR. SHADDOCK: Yes.

THE CHAIRPERSON: If we want to call it enhanced services.

MR. SHADDOCK: That's right. In our case the Internet would be a big focus.

THE CHAIRPERSON: Is there as well technological connections between the various schools. You represent all the schools in Saskatchewan.

MR. SHADDOCK: Yes.

THE CHAIRPERSON: At all levels.

MR. SHADDOCK: That's right. That is being developed and is being worked on so that in the future we would have an impact as well where they would be able to have centralized --

THE CHAIRPERSON: And reach others through affordable connection means.

MR. SHADDOCK: That's right, between the schools. That's correct.

THE CHAIRPERSON: We will read certainly your oral brief and the written brief will be on the record. We thank you for coming. We apologize again that we were a bit off schedule.

Thank you very much, gentlemen.

MR. SHADDOCK: Thank you for your time.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Thank you, Madam Chairman.

Our next presenter is Audrey Mark. She will have Mark Hoffman accompanying her. Audrey, we have you down for presenting on behalf of two different parties.

MS AUDREY MARK: That's correct.

THE SECRETARY: When you are finished the first, just hang in there and we will go right on to the second after questioning.

MS MARK: I could switch chairs if that would help distinguish between the two.

THE CHAIRPERSON: Good afternoon, Miss Mark.

THE CHAIRPERSON: Go ahead when you are ready.

PRESENTATION / PRÉSENTATION

MS MARK: Don Hoffman is the President of Rongenet. I am the past President of Rongenet and currently the Treasurer.

La Ronge is definitely a high cost serving area. It is located 240 kilometres north of the nearest city, Prince Albert, on a road which goes only to La Ronge and other isolated communities farther north.

La Ronge is not on a major intercity shipping route. The population of La Ronge according to the last census is 2,964 people. The population of the surrounding area brings the total up to around 9,000 people.

The primary industries in the area are government services, mining, fishing, wild rice harvesting and processing, tourism and education. The culture of the area is mainly Cree, Dene and Metis. La Ronge is lucky in the north as it has road access and it is supplemented by scheduled air and bus services, although the air services are extremely difficult to take part of.

Although La Ronge is not as small as some communities which are classified as high cost serving areas, there are many things that are not available: car dealerships, theatre, cinema, shopping malls, symphony, museums, hospitals, trains and variety.

La Ronge has basic services. However, there are only limited choices amongst those services. It is this lack of variation that both reinforces our isolation and makes the Internet such an asset to our lives.

Through public access computers in the local library connected to the Rongenet community server, a wide variety of services and information resources on the Internet are available to anyone in La Ronge.

Consequently, community members can enjoy the outdoor lifestyle close at hand, yet communicate to the world through the electronic connection. This is a boon to an area that has marginal appeal as a market because of its small population and the end of the road location.

In 1995, Industry Canada offered a program to communities to support the creation of community connections to the Internet. This was the Community Access Program and offered a matching grant of $30,000 to help communities provide a means by which the public in remote high cost serving areas could participate in the budding resources available through the Internet. In La Ronge, the CAP grant was matched by a group of organizations and individuals to form Rongenet.

Rongenet is an association which shares an e-mail server and the cost of a high speed line out of La Ronge to the Internet. This server is located in the office of one of the founding organizations, NORTEP/NORPAC. NORTEP/NORPAC stands for Norther Teacher Education Program and Northern Professional Access College.

Members of Rongenet are connected to the server in several ways. Those in the same building as the equipment are hard wired into the server. Some members dial in through a modem reserved for their use. However, the majority of members dial into a hunt group of modems set up for Rongenet by SaskTel.

Members pay a quarterly fee based on the type of connection that they use. This membership fee ranges from $30 per month for the hunt group to $200 per month for a high speed exclusive access. This fee was designed as a flat rate fee because many of the members have restricted budgets.

This is particularly true of the schools and libraries that, along with Saskatchewan Education, the Community Development Officer of La Ronge and a representative of Visions North, a business development organization, were the primary applicants in the Community Access Project.

In December 1996, there were ten users of Rongenet. In December 1997, there were 99. These users actually represent more than just those 99 people because many of those are into schools and into organizations that have their own internal servers and therefore represent more in the area of 1,000 to 2,000 people.

This dramatic increase is due to both the affordable availability of the Internet access and the vast amount of information and connections to the world available through it.

This link is allowing small businesses in La Ronge to market their products worldwide. It is allowing students to acquire firsthand information about other places in the world. It is allowing family members to keep in touch over long distances and communicate with others in an emergency.

The La Ronge CAP project is only one of many in Saskatchewan. The federal government through Industry Canada has invested millions of dollars in this program.

The predicted effects of CRTC policy of deregulation renders this Industry Canada investment as a waste of money, unless there is some method of ensuring affordable telephone isolated communities such as La Ronge. Although we would have preferred a greater variety in local services, the CRTC could close down marginal markets like La Ronge in the name of competition.

When the CRTC hearings first became known, the Rongenet board did not feel that the organization would be affected. However, that is clearly not true.

The discussions did not include increases to the high speed data line used by Rongenet to connect its members to the Internet. However, an increase in rental costs of telephone lines, the so-called dial tone costs, will have a very dramatic impact on the organization to the extent that Rongenet may have to fold.

The connections to the hunt group are business line rentals. Each of these connections cost Rongenet $42.65 per monthly. We have expanded to 23 hunt group lines. In the current predictions, the cost of these lines is rumoured to increase anywhere from $100 to $200 each. Even at the smaller of these two numbers, a 238 per cent increase is outrageous and not in any way affordable.

The usual response is "Let the users pay. Raise your membership fee to cover the increase". Imagine how well that work when the users also have to pay 200 to 450 per cent more for their home telephone line as well. That is the reality, $120 at the home and $120 at the Rongenet end. Users will start closing their Internet connections and revert to using their home computers as game consoles.

Most homes have one regular telephone line. On this they connect their telephone and the computer. Our members rarely have a separate line for their computer, although having the regular telephone on the same line might apply to some telephone services, the market will change with the implementation of a higher cost. That would be a false hope.

Telephones are not seen as essential in this area. In a small community where you can walk to visit your neighbours, a telephone is a convenience. It is entirely possible if the costs go up an exorbitant amount that people will decide to remove them altogether and rely on their feet or their more prosperous neighbours to supply their service need.

It is not unusual in northern Saskatchewan to have to call a band office, school or a neighbour to track a person down. If anything, the Internet connection creates a perceived need for people to rent a telephone line.

The Internet has helped to reduce our isolation by making an international connection for people. Initially it was regarded as an education tool, something one purchases to help the children with homework.

In many cases it is seen as a form of entertainment, certainly by people who can play world class bridge with people from anywhere or children who communicate with other children over student chat lines.

Fishing camps are now receiving reservations through the Internet and through e-mail. Businesses receive orders for local materials in a similar way.

People working in La Ronge away from their families in other parts of Canada or the world can keep in touch through e-mail. It has also stimulated a new retail opportunity as people are requiring local support for their computers. One year ago, one had to travel to Prince Albert for computer purchases and support. It is a two and a half hour drive from La Ronge. Now there are three small businesses supplying this need locally.

The future of the Internet promises to break down the isolation in even more ways. When the local technology is upgraded, students in one room school houses, which still exist in the north, will be able to participate visually and verbally with multiple classrooms in schools far away.

Home-based business will be able to flourish with clients around the world. Tourists will be able to see and hear audio/visual experiences others have had visiting northern Saskatchewan. Local community groups will advertise their services, meeting times and key people on the community server.

More importantly, northern organizations and people will not have to spend hundreds of dollars and hours travelling to meetings in the southern part of the elsewhere.

I would personally like to thank you for coming to Prince Albert. It is the first time I haven't had to drive to Regina for a meeting in about six months, so I appreciate it.

All of this promise vaporizes if telephone and Internet service are priced out of the reach of even middle class working people, let alone students, people on fixed incomes or non-profit institutions or small businesses.

If remote telephone services require subsidization from long distance services in order to continue at a reasonable cost, then this type of subsidization must continue.

Without affordable telephone service in all parts of Canada, communications now available will break down or dissipate. At a time when politicians discuss national unity, it is unfortunate to isolate a significant sector of the population.

No matter how it is handled, telephone rates in high cost serving areas must remain comparable to those available in urban centres and must remain reasonable for anyone to afford. Otherwise, much will be lost. Rural business will be unnecessarily hampered and unable to compete with urban equivalents.

People who open small businesses at home, often due to losing jobs because of corporate or governmental cutbacks, will be unfairly held back. The global marketplace so touted through federal policies such as the free trade agreement will be closed off to those in the high cost serving areas.

People gravitate to those places where the infrastructure is accessible and reliable. This infrastructure includes roads, electricity, heating fuels, sewer, water and telephone services.

Rural and remote communities are further marginalized by lack of competitive availability of any of these services. There must be some kind of remote or rural factor built into the telephone service charges to prevent the loss of this important piece of infrastructure.

It is essential that the CRTC ensure that its mandate to render reliable and affordable telecommunications services of high quality accessible to Canadians of both urban and rural areas in all regions of Canada be fulfilled.

Thank you.

THE CHAIRPERSON: Thank you, Miss Mark.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you.

I notice you said the business line rate in La Ronge is $42.65 a month.

MS MARK: Yes.

COMMISSIONER GRAUER: Is that a standard business line rate?

MS MARK: Yes.

COMMISSIONER GRAUER: What is the residential rate?

MS MARK: I think it is $30, $35, I think.

COMMISSIONER GRAUER: It's in the thirties.

MS MARK: I'm not exactly sure.

COMMISSIONER GRAUER: I was just curious. I don't know if you were here this morning, but as you know, we were travelling across the country. Saskatchewan generally has very few people who are left without any kind of phone service. We have been in the Yukon and northern British Columbia. We are going across the country where we have some areas with no phone service, difficult to service areas.

The other thing we are hearing is that you are certainly making clear today that where the basic dial tone was once sufficient, in today's world from what I understand from you, that's no longer basic, that you require more enhanced services which require an enormous amount of investment.

Would you be willing to pay anything here? Do you think in La Ronge the citizens can pay anything more? Are you saying no increases or just -- I think the figure you said was upwards of a hundred dollars a month.

MS MARK: Yes. This is what we have been hearing from SaskTel and other places, that it could go as high as that, or even up to 400 per cent more.

I think everyone believes that phone services, like everything else, are going to rise. I think it would be the rate of rising and the total side of it. Basing it at even a 100 per cent increase in your telephone is going to make you think twice about continuing with that, but 200 to 400 per cent is going to make you stop dead and think about it for sure.

I don't think the reader can say no, we can never face any kind of an increase because we all know as technology changes, even though people say that technology becomes cheaper, the cost of the new technology doesn't seem to be going down that much.; People are still making major investments.

I think what we are going to be seeing more of is like was said -- actually, we are kind of surprised ourselves by how much this Internet connection has taken off with individuals in their homes. I believe people will be expecting increases in phone services, just not of a major amount.

COMMISSIONER GRAUER: Thank you very much. I appreciate your taking the time to come today.

THE CHAIRPERSON: Thank you, Ms Mark.

I understand this is not the end of your presentation.

Madam Secretary.

THE SECRETARY: Thank you, Madam Chairman.

My apologies to Mr. Hoffman. I believe I referred to you as Mark Hoffman and it is indeed Dan Hoffman. My apologies.

Ms Mark, would you please proceed with your representation for PNLS.

PRESENTATION / PRÉSENTATION

MS AUDREY MARK: I am also the Director of the Pahkisimon Nuye?ah Library System in La Ronge. The Pahkisimon Nuye?ah Library System provides library services to schools, public libraries, government and special libraries in northern Saskatchewan and also to individuals living in remote areas where a library does not exist.

PNLS, which is an easier form of the name, and its member libraries are part of the province-wide public library system. This allows people in our communities to have access to an incredible source, the Saskatchewan Union Catalogue, or SUNCAT.

Libraries are following a vision of seamless access to library services for all people in Saskatchewan. This means that your library card allows you to use the materials in any library in the province in the same way as you would use it in your local library, no matter where you live.

This vision is founded on a stable, affordable telecommunications system. People in northern Saskatchewan have access to limited resources locally because of small budgets and inadequate facilities.

Through the province-wide Library Electronic Information System, everyone in the north with an Internet access can discover what books and other materials are available to them, not just provincially but also in their own and their neighbour's libraries.

Some day in the near future a homebound person will be able not only to see but have delivered either physically or electronically those books and other resources held throughout the province. But this vision might never come to pass if subsidies are lifted and those of us in the high cost serving areas must pay the actual cost or a substantial portion of the cost of local telephone services.

Saskatchewan is unique in Canada for its philosophy of cooperation and serving the public good. Nowhere else in Canada is a multitype library network like that expressed in the PLEIS system in existence.

This province-wide initiative has been made possible through partnerships of libraries from many jurisdictions, the Government of Saskatchewan, SaskTel and Industry Canada. In the past three years, millions of dollars have been invested in creating the structure.

This is an incredible resource for people in northern Saskatchewan. We live spread out in small communities. La Ronge, with an area population of 9,000, is the largest community in the region. That population of 9,000 is within an hour and a half driving of the centre of La Ronge, so it is not La Ronge itself.

Yet, people with an Internet access can use the substantial collections of the big cities and the even larger collection of the whole province. Then, through the interlibrary loan system, these resources can be brought to a person's home in northern Saskatchewan.

This is an amazing service. It helps to reduce the isolation of our small communities and to equalize people's access to resources, allowing them to be better prepared to participate locally and elsewhere in Canada in a more active style.

This system also allows the people in institutions in northern Saskatchewan to use local resources more effectively. Sixty-three per cent of the people in northern Saskatchewan are of aboriginal descent. Consequently, the library collections in the region celebrate aboriginal culture and heritage.

We have unique collections and materials in Cree and Dene. Through the electronic connection, these resources are shared with others in Canada and as far away as Australia where aboriginal issues are equally important.

So this investment in local collections benefits other people in the world and helps us participate as contributing members to the network of libraries.

Yet, this structure could collapse if local telephone line rentals increase dramatically. For example, at this time, a library patron in Black Lake, a community accessible only by air, can request a book on snowmobile repair from a library in Swift Current in ten minutes through the fax and e-mail interlibrary loan system.

Should fax lines, computer lines and telephone lines soar beyond the meagre rural budgets, this request can take five days to two weeks to get to Swift Current by mail. This is more distressing when the closest snowmobile repair shop is 544 kilometres away by ice road to La Ronge.

Libraries have been in the forefront of offering public access to the Internet. This is part of our commitment to reduce the gap between the information rich in the urban areas and the information poor in the rural areas.

Libraries have been active partners in Industry Canada's Community Access Projects. Part of this partnership has been the delivery of courses on how to conduct research on the worldwide web.

Several public libraries in northern Saskatchewan, such as the Senator Myles Venne School Public Library in Far Reserve near La Ronge, have been involved in this type of community training. We have been instrumental in promoting the use of the Internet as research resource. However, increased rentals combined with meagre budgets may force libraries to withdraw from these partnerships or withdraw the public access computers.

For example, an average public library budget in northern Saskatchewan is only $30,000. With this money, libraries must pay for staff, books, public programming, postage and telecommunications and anything else related to their service.

At this time these libraries may pay $1,440 a year to rent three telephone lines, a staff Internet connection and public access terminal. With the possibility of $120 per month each for telephone service, this $1,440 will buy only one line.

To maintain these connections, the library will have to choose whether books, staff or computers are more necessary to provide adequate library services to their community.

Libraries in Saskatchewan have historically fought to reduce this gap between the information rich in the urban areas and the information poor in the rural areas. Libraries are committed to work together to maintain that fight and reduce this gap to the best of our abilities. However, those abilities are already stretched to the limit.

Libraries fully support the CRTC mandate to:

"-- render reliable and affordable telecommunications services of high quality accessible to Canadians of both urban and rural areas in all regions of Canada".

If high cost serving areas require subsidization from long distance services in order to continue at a reasonable cost, then this type of subsidization must continue. We realize that the motive for this type of change is to provide competition and choice.

To those of us living in an area where there are not many choices, this is a noble goal. However, we realize that as a marketing area, we are small enough to not have a great deal of power to control these choices.

If it means that our budgets must be used primarily for electronic connections in order to participate in these worldwide resources to the exclusion of literacy programs, such as the Summer and Northern Reading Programs, and the reduction of adequate staff and materials, then libraries in northern Saskatchewan will be regressing and the gap between the information rich and poor will increase.

Electronic connections and basic telephone services are essential to the libraries in northern Saskatchewan. They need to be reliable and affordable. It is essential that the CRTC ensure its mandated and the limited financial resources available to those of us in high cost serving areas be kept in the forefront of your decisions regarding the implementation of the telephone deregulation.

Thanks.

THE CHAIRPERSON: Thank you, Ms Mark. What was the source of the name PLNS?

MS MARK: Pahkisimon is a Cree word and Nuye?ah is a Dene word. They stand for sunset. Actually the Dene word is the second stage of the sunset where the sun is going down behind the trees.

THE CHAIRPERSON: Thank you.

The collection you are talking about would be peculiar to that area in that it would be in Cree and Dene, the catalogue, the SUNCAT, if I remember.

MS MARK: SUNCAT is actually the resources of the whole of the province, but within all of those provincial resources we have material in the north that is specifically Cree and Dene.

Actually we ourselves act almost as an archives for northern issues and northern materials, so even government materials, we have some of the original photographs that were taken when some of our organizations were starting up.

THE CHAIRPERSON: So there would still be in some cases a need for delivery. Does that go on at all?

MS MARK: Yes.

THE CHAIRPERSON: If it is an entire book one wants, presumably one would have to wait the time it takes to get the physical object transferred.

MS MARK: That's right.

THE CHAIRPERSON: And back to the library.

MS MARK: Yes.

THE CHAIRPERSON: Because not everything is on line no doubt. That catalogue, you would certainly need the catalogue to be electronically available so that one can either order for physical delivery or download whatever they want to see.

MS MARK: That's right and there is actually a national and international connection because the catalogue and the interlibrary loan system are across Canada. That means those people who are Cree and Dene speakers in the Northwest Territories and northern Ontario and Alberta also have access to our materials.

The people in universities in other countries even who are doing research in this area have access to the information about this area that we hold and it is available to them on interlibrary loan.

THE CHAIRPERSON: And this access in remote areas would be from -- there must not be a library in each of these areas. There would be a connection of some sort in any community.

MS MARK: We are working actually on a project right now , the Seamless Access Project, and trying to make it available so that it doesn't have to be -- you don't physically have to go to a library to find out. You can actually stay at home on your home computer and not only find out that we have that particular item but order that item from your home.

THE CHAIRPERSON: Yes, but you would presumably want to have a central wherever possible, a publicly accessible building.

MS MARK: Yes.

THE CHAIRPERSON: Internet facility or computer facility for those who don't have the facilities in their own home.

MS MARK: That's right.

THE CHAIRPERSON: Thank you very much for your presentation. We understand. We heard from libraries already, but there is a very peculiar need in the more remote areas, especially where, if I heard you, the population -- is that correct, 63 per cent aboriginal?

MS MARK: Yes.

THE CHAIRPERSON: So there would be linguistic requirements as well that demand greater electronic access at affordable rates.

MS MARK: Yes.

THE CHAIRPERSON: Thank you very much.

MS MARK: Thank you very much for your time.

THE CHAIRPERSON: Ms Mark and Mr. Hoffman.

Madam Secretary.

THE SECRETARY: Thank you.

Our next presenter this afternoon is Wayne Hovdebo. I would ask him to come forward. With him is Earl Nicholson.

THE CHAIRPERSON: Good afternoon, Mr. Hovdebo, Mr. Nicholson.

Proceed when you are ready.

PRESENTATION / PRÉSENTATION

MR. WAYNE HOVDEBO: Thank you very much.

I am Wayne Hovdebo. With me is Earl Nicholson.

We are pleased to be here this afternoon to speak with you. We are representing the Family Farm Foundation of Canada. The Family Farm Foundation of Canada is an organization involved with education and research geared to the betterment of the family farm and of its survival.

We have members and projects dealing with issues of national and regional interest geared toward the family farm and to agriculture and farming. We are primarily centred in Saskatchewan. Most of our members are here. Our organization was founded I think 16 years ago.

Earl Nicholson and I are both members of the foundation. We live in the Prince Albert vicinity. We both farm in the Birch Hills area which is about 30 miles to the southeast of here.

I am going to at this point go into our presentation and refer to some notes of which I handed you a copy. I propose to quickly go over it and we will elaborate on a few points. Hopefully, if there is time, if you would care to ask us questions. I have noticed that you have done that with us. Perhaps we can have some interchange there.

THE CHAIRPERSON: We will take the time.

MR. HOVDEBO: Thank you.

To begin with, Saskatchewan is the most rural of all Canadian provinces. There are less than four households per kilometre of telecommunicative infrastructure. Most of Saskatchewan is defined by the CRTC as a high cost service area. Exceptional costs and significant barriers to come in providing services are the definition for this.

In our thinking and deliberating about agriculture, we realize that all of Canada benefits now and in the past from the economic contribution of this province and its farmers. Saskatchewan is a wealth producing area for Canada.

At this point, Earl, I would ask you to elaborate on that particular point.

MR. EARL NICHOLSON: Thanks, Wayne.

I just wanted to highlight the fact that agriculture in western Canada on particularly the prairies of which Saskatchewan is the major portion, we contribute a significant contribution to the gross national product in Canada.

Of that gross national product, a high percentage of it has to be exported and sold into world markets. For many years, since before my time, we had the reputation as being the bread basket of the world. It is very important that we work at maintaining that status as being a supplier of good quality agriculture products. To do that, communications technology, affordable communications technology, is very important for us to be able to maintain and achieve that status.

These world markets that we deal in are demanding that we make some changes and local changes as well sort of give rise for us to maybe take a longer look at value added and those sorts of things. To achieve this, we also have to have access to information and affordable access to communications technology.

I think with all these changes that are happening, this contribution we make to the gross national product, we have to also recognize the benefits go a lot further than Saskatchewan's borders. The larger centres, right to the seaports which export our products, there is economic benefits all the way down the line.

I think if we were to sort of put at risk our ability to maintain our reputation in the world markets, I think all Canadians would feel the impact of that.

MR. HOVDEBO: Our notes go on to talk about costs of upgrading. We make the point here -- I am not going to dwell on all of these. I would leave it with you. We want to ensure that the costs of operating our system as we speak of it today are equitably spread over the entire telecommunications network system.

The next point we make is that CRTC must consider the rural realities of Saskatchewan. I think that other groups that I have listened to have made this point as well. Our business is to market. Suppliers and so on and low population, declining infrastructure and so on make this, you know, more important as time goes on.

The farmers of Saskatchewan live on our farms and conduct business from our farms. We run our business from rural Saskatchewan and the telecommunications service have been for years and years a very integral part of how we do business.

The old rural telephone companies started back in the tens and twenties of this century and have been very important. Of course, now with Internet, fax, e-mail and so on, we rely on them greatly. There's not much choice. We need to use this.

The economic impact of telecommunication competition without some form of subsidization would be disastrous for many farmers and rural residents of Saskatchewan. An interesting note here, we in our little town of Birch Hills through technology today have an architectural firm which is Canada-wide.

With the technology available, they run a firm there of some substance. Of course, 20 years ago I would suggest that wouldn't have been possible. They are able to do it because of our telecommunications system.

Right now we, not necessarily in the farming community but the large community, our town in our community, not necessarily the people who produce grain and so on are still benefiting from these sorts of things.

Earl, I think there's another example that we may mention in our home town.

MR. NICHOLSON: Yes. We have a firm that's working in the electronics field. They at one time were building guidance systems for ships, to guide ships through the icebergs in the north sea. Now they are able to do that because of this affordable communication technology. They are able to do that in our own home town.

The interesting spinoff from that is that our farm equipment and our vehicles and everything else require that electronic expertise to, you know, repair and keep those machines operating. This fellow has become very busy helping farmers out when we have a problem with some of the new machines that we are working with.

He is purely there because of communication technology. It is quite a benefit to our local community.

They talk about when the hardware store closes or the car dealer closes, it is so devastating. It is in a way, but the reality is I can buy a car in Halifax just by phoning someone. Today that's not hard to do. That may not be economic activity we should be focusing on, but rather on this kind of thing that is more or less in sync with the changes that are occurring around us.

It has worked very well for this particular business too.

MR. HOVDEBO: Our next point then goes on to talk about access to information and how it is vital to economic decision-making for farmers and how we need this in order to compete in international markets.

We fear that if changes take place and rural service becomes much more expensive, there will be people who simply will not have it. In our view, this would make them into second-class citizens. I don't think that anyone feels that that is particularly fair. I think the word particularly is pro in understanding. We feel quite emphatic about that particular point.

We go on on our next page to talk about health care. I am sure everyone is aware that health care has been undergoing changes to consolidate and to less places, more services but further apart. Of course, telephone systems must be in place to make this work properly, the 911 system and so on.

The same sort of thing is happening with financial services. There are less centres with financial institutions, banks, credit unions and so on. With the technology of today, we are able to overcome the distance by using telecommunications.

Schools have been mentioned by other presenters here today. Schools, of course, are very important to farm families. Even from a point of view of safety and bad weather, communications between buses and schools and so on is very important.

Education again has been mentioned by others. I will just quickly mention it. There is a lot of information that is needed and education models, fax, e-mails and Internet connection are of very much importance to the education system.

We go on to mention elderly people. I know that this is not an issue, I'm sure not only in Saskatchewan, but elderly people depend on the phone as a lifeline essentially.

The 911 service is gaining more and more popularity and more of Saskatchewan is being covered by 911. Of course, we promote this. It's a matter of safety and accessibility as well.

Young people travel great distances for schools, training and so on in this province. We need a good equitable telecommunications service to ensure volunteers in community activities and educational training opportunities. For instance, Ed has a turn that comes up. We have a fairly substantial distance, Ed network going on in Saskatchewan and it's improving all the time. It's being used extensively.

I personally have been involved with it. I think that it's very important to us and it works quite well.

Earl has served on school boards for a number of years and perhaps would like to comment on this a bit as well.

MR. NICHOLSON: Just to give you an example of how important this technology is to us, our local experience here is that through the years there have been cuts to funding and so on. As a result, the administrators have had to make several adjustments

We were able to do that by rearranging some things. Teachers would rise to the occasion and work a little harder. We managed to still maintain and achieve that goal of equal access to education for everybody, but it is really being tested.

The one thing we have done is here locally we have amalgamated three school divisions to try and get the administrative side a little more efficient. That gives us the opportunity to expose students to a broader range of programs as well.

After watching all these changes and cuts with no significant impact on programming, the last cut that was made in our old school division, there were 1.4 positions cut and seven programs went with it. Then red flags are all over the place because now you have cut almost as much as you can possibly do.

To fill that gap, what we have done is used distance education technology to sort of supply some of those things that were lost in some of that. For us to provide equal access to education to our rural residents, communication technology is one of the very few ways that we can, you know, fill in these gaps, so it is very important to our education system.

MR. HOVDEBO: I will go on quickly here because I know that time is of the essence and you have several people after us.

Our next point talks about community and I will just leave it at that. The point that follows is talking about the importance of communications and being in the loop. I guess everybody understands that type of technology these days. We want to have it equitable and fair.

We go on to mention safety of people that are in perhaps violent situations that rely on telecommunications, primarily telephones and so on.

Essential services to elderly people, to doctors, government agencies and family people who might be far away is also part of what telephone does for us here.

The rather large point that is second to the last is talking about the fabric of our society. We in Saskatchewan have become very accustomed to having a good telephone system and it becomes part of who we are and what we are socially. We are accustomed to this. Anything that would jeopardize that sort of ability to use the telephone system would certainly jeopardize our way of communing and our way of life.

The CRTC has a reputation to be fair and as a result, we are here today to try to promote the idea that we think being fair means that we need equitable service for rural and remote areas.

To sum up, we could perhaps say what is the solution. We know that we are in a changing world with changing times. Who is going to pay for some of these things? I think that I would like to say that we would like to tell the people of Canada to look to the Saskatchewan example.

SaskTel has been the amalgamation of several rural telephone companies and Saskatchewan government telephones. They have streamlined it over the years into what SaskTel has become now. SaskTel has used some areas of its business to pay for other areas. We in Saskatchewan feel that is justified.

We have other examples of doing this sort of thing in Saskatchewan. Let me talk just briefly about SaskPower and SaskEnergy. I know that I couldn't on my farm have ever afforded to put a power line in or a gas line in, but we have done it. We have done it because the system makes some money and we subsidize one area from another and in the end, we all have it and we use it and it becomes equitable. We are doing quite well in rural Saskatchewan because of these programs.

Another one that I almost hesitate to mention is because there is some controversy about it, but I have noticed no political party has ever lost an election over this one. This is our bus company. The darn thing loses money every year, but I think if any political party were ever to cut STC out, they would probably be cut out themselves because we in Saskatchewan depend on our bus company, even though it loses money.

We don't mind paying a little bit of tax money towards it because that's our system. I guess what I'm saying is these three systems, the telephone system, the power and energy system and our transportation system are things that we have done as a larger community in Saskatchewan and we are quite proud of them. That's how we feel that things need to be continue to happen in the future.

We realize it won't happen exactly the same. There is going to have to be some adjustments, some minor changes. But I don't think they are problems that can't be overcome.

Anything else to sum up?

MR. NICHOLSON: No. That's it.

THE CHAIRPERSON: Thank you, Mr. Nicholson and Mr. Hovdebo.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you.

I take it from your presentation that for the most part you are members, if I can call it that, in your communities that you speak of. There is not a lack of level of service required. In other words, it sounds to me as if the farmers that require fax or Internet in addition to basic phone have that, that the schools have access to distance education, so it's not so much a need for more services to your communities, but what really concerns you is the risk of vastly inflated prices for that service.

Have I correctly summed up your situation?

MR. HOVDEBO: I think you have summed it up very well. We by and large are speaking for the part of Saskatchewan which is agricultural.

For me to say that's true in some of the northern areas probably wouldn't be my place to say that, but I would imagine that's not quite true, but yes, we farmers in Saskatchewan, we use the telephone a lot. I suppose you can never say something is 100 per cent good. There are probably some areas where it's not true, but by and large we have good service in Saskatchewan.

COMMISSIONER GRAUER: I'm curious to know what percentage of your members would use the Internet and access it for e-mail and other things.

MR. HOVDEBO: I would suggest -- well, it's growing all the time. I don't know. I would suggest that probably on our executive at least, I think well over half of us communicate back and forth with fax machines at least and another fair group are on Internet.

I personally am not yet. It's probably because -- my kids tell me "Get with the real world, dad", but I'm not really good with computers and I suppose it's time that I learned that. That's on a personal basis.

THE CHAIRPERSON: I believe so.

MR. NICHOLSON: If I could add something.

THE CHAIRPERSON: Yes.

MR. NICHOLSON: I think another thing that's happening as far as the need for use of the Internet, I have been involved with the Soils and Agronomy Council and we have seen a shift from our Department of Agriculture sources providing extension information to farmers over to fertilizer dealers, chemical dealers.

Now we are sort of shifting to getting our extension information from people that have an axe to grind. When we see now where we may have to go into value added, we may have to do some additional marketing, all those changes I feel like the time has come where we all have to face the fact that we have got to become computer literate and learn how to use the Internet to our advantage because I think that will be a very important part of this change that we are going to have to participate in.

COMMISSIONER GRAUER: I guess my last question is I appreciate your concern over the cost of these services. Would you and your members be willing to absorb a portion of increased costs that might be involved in extending some of these services to other Canadians?

MR. HOVDEBO: I would suggest that we certainly would be because we have been doing that in Saskatchewan all along. I guess our point is let's be fair about it and let's not leave out some areas at the cost or the enjoyment of more densely populated regions.

To say no would be against the philosophy of what we are saying here, but let's be fair about it.

COMMISSIONER GRAUER: I understand.

Thank you very much. I appreciate your taking the time.

MR. HOVDEBO: On behalf of the Family Farm Foundation, thank you very much. We appreciate the opportunity to have this time to express our views.

Thank you.

THE CHAIRPERSON: Thank you, gentlemen.

I didn't know farmers had axes to grind. I thought they only ground grain.

Thank you.

MR. NICHOLSON: We are very resourceful. We try and do everything.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Thank you.

Our next presenter this afternoon is Dale McAuley.

THE CHAIRPERSON: Good afternoon, Mr. McAuley.

PRESENTATION / PRÉSENTATION

MR. DALE McAULEY: Good afternoon.

I am here on behalf of the Northern Lights School Division. I will be speaking in terms of the impact that it will have on our school division as a whole.

First of all, I would like to give you a background of the organization, of education in northern Saskatchewan, if I may.

Northern Saskatchewan is a large region of nearly 265,000 square kilometres which covers almost half of the province. Little old me, trying to speak for half of the province, I feel indeed very proud to be given this opportunity.

Administratively, it is referred to as the Northern Administrative District. The southernmost boundary corresponds roughly to the tree line. It is bounded by the provinces of Alberta, Manitoba and the Northwest Territories, to the west, east and north.

The population of northern Saskatchewan is sparsely distributed over this area. According to the Department of Health 1995 statistics, there was a total northern population of 35,000. Of this population, the majority are of aboriginal ancestry, which is 80 per cent.

In addition to a number of schools operated under First Nations governance, northern Saskatchewan is served by three provincial divisions, Northern Lights School Division, Creighton and Ile a la Crosse. The school divisions serve the needs of students from Kindergarten to grade 12 through direct instruction in each home community or neighbouring community or by tuition agreement with adjoining jurisdictions.

The school divisions are incorporated within provincial legislation and operate under the direction of an elected Board of Education under the Education Act. A number of post-secondary institutions provide educational programs and services to northern residents.

Northlands College is the provincial regional college in northern Saskatchewan. I believe there will be someone here to speak on behalf of Northlands College later on this afternoon.

Additional adult education is provided through the federal and provincial agencies, being the Saskatchewan Indian Federated College, the Dumont Technical College and the Gabriel Dumont Institute as well as NORTEP/NORPAC who are organized under the mandate of the NORTEP Board of Governors which is made up of the Board of Education from the Northern Lights School Division, Creighton and Ile a la Crosse, the Prince Albert Grand Council and the Meadow Lake Tribal Council.

Northern Lights School Division education delivery model, I would like to go into that one. The Northern Lights School Division presently operates 25 schools in northern Saskatchewan. Total enrolment for this year is approximately 4,392 students.

Trends over the past indicate a slight increase in most communities from year to year. Transfers of schools to First Nations administration has affected total enrolment, however, the process of transfer has now neared completion. Previous studies have recommended larger, full service jurisdictions in the Langlois and Scharf report which was done in 1991 in conjunction with the Saskatchewan School Trustees Association, 1994.

At present, the division is able to provide a reasonable comprehensive range of educational services. Examples, special education, counselling, high school, industrial arts, home economics to the communities that it serves.

It is the intention of the division to maintain existing schools in the small communities and to extend as much as possible a level of program in the needs of our schools. This represents a significant change from previous practice when students were often required to complete schooling away from their home communities.

In the Board of Education's consultation with elected community representatives, the need to maintain each community's culture and language was expressed repeatedly. In addition, the importance of family and family support systems were emphasized.

The community school is viewed as an integral part of each community's attempt to enculturate its young people. Providing education therefore must respect the educational needs of the people and the social concern and economic needs of the community.

Northern education challenges. In northern Saskatchewan, parents wish for increased employment training opportunities for their children and young people. Community representatives expressed the concern that northerners be trained to qualify for existing and new careers presently available within the region.

At present there is a sense that the employment opportunities available to northerners are limited by the lack of community and regionally based post-secondary training programs. The need for new and more responsive measures to reduce unemployment are obvious.

Low family incomes are a northern reality. On average, northern family income is 30 per cent less than the provincial norm and 40 per cent less than the national family income. These statistics were given from the Northern Saskatchewan Training and Needs Assessment report for 1994.

In order to provide equity of education opportunity to northern people, it is recognized that costs are higher in the north for a variety of reasons and that service support in most communities is limited.

These additional costs to deliver education are further compounded by low economic performance within the region and the resultant lack of municipal and education tax base.

It is also accepted that rural education differs from urban education. Similarly, the unique features of rural and northern municipalities are recognized in legislation. Frequently northern Saskatchewan is considered to be real because it is more similar to rural Saskatchewan than it is to urban areas.

Northern Saskatchewan differs significantly from other parts of the province. The languages, culture, lifestyles and the geography are unique. As an important part of the province's historical and cultural landscape, the Board believes that these unique features are worth preserving. The division has long been engaged in the process of attempting to do so.

These efforts manifest to a certain extent the instructional program of our schools. Language and culture programs are what I am referring to. Much more effort is essential, however the Board of Education believes that more resources are required for research and development to preserve their heritage and provide equity of educational opportunities to northern people.

I will now go into the northern Saskatchewan new technologies. In building a northern economy for the next millennium, the Board believes that the information highway services provided by telecommunications are more important than ever in northern economic and social development.

Access to information and the ability to share information is critical to our capability of improving the quality of services to northern remote communities. Furthermore, affordable access to basic telecommunication services is also imperative to promote northern expansion and diversification of its economy.

Northern communities with access to advanced telecommunications have the capacity to be more effectively integrated into the global economy. In overcoming some of the barriers of the market size, time and distance, telecommunications can create jobs and ultimately level the playing field for northern communities and businesses.

While technology alone will not bring about the economic growth, it can definitely be an important catalyst. Presently all Northern Lights Division schools have been wired to high speed Internet LANS and by June of 1998 all 23 communities in northern Saskatchewan where Northern Lights schools are located will have high speed Internet access through direct PC installed in all of our schools.

These schools will provide public access to their technology. Most of the technology and infrastructure mentioned above came about through a cooperative and collaborative process which involved 27 communities, local governments representing the New North.

Northern Association Saskatchewan Association of Mayors. I am also fortunate in being one of the Mayors in northern Saskatchewan coming from the oldest community western Canada, which is Cumberland House.

Visions North, Northlands College industrial Canada, Saskatchewan education and Northern Lights School Division. Through these joint partnership projects, applications were approved assessing the grade and number of grants. These projects will provide opportunities for northern people which will provide further educational opportunities, increased business opportunities, more employment and more employable labour pool.

The projects will hire 27 youth in 27 communities to supervise 25 Internet access facilities. These sites will become open to the community for skill development and training aimed at potential community development initiatives. The project will also hire four supervisors and place them regionally throughout the north.

The supervisors and youth workers will be trained and then provide their knowledge and skills to other interested communities and members. The youth workers will teach community member access search to retrieve and input information of the worldwide web.

Youth workers and supervisors will create and maintain web sites and gather statistics and information useful to the communities and businesses. A mobile computer lab will also be assembled and used in communities to assist with the training.

It is expected that these projects will improve northerners' abilities to access the worldwide web information sources which will enhance education, business and other service sectors.

Finally, by training local people to train others, sustaining the project becomes possible.

Requirement for maintaining new technologies in northern Saskatchewan. In conclusion, much partnering in the work has taken place in northern Saskatchewan to provide community access to quality telecommunication infrastructure, training and services.

During the past three years the Government of Canada and the Canadian Radio-Television and Telecommunications Commission have introduced competition into the telecommunications sector. In its agreement to harmonize its policies with those of the federal government, Saskatchewan has also opened its market to the competition.

The Board believes that the market is at risk of becoming polarized under the telecommunications system guided solely by the market forces. People in high density urban areas will experience decreased rates, increased quality and significant advances in the applications of new technologies while people in northern remote areas may experience the opposite.

The Board believes that maintaining universal and affordable access to the increasingly important resource of telecommunications will be the key factor to building the social and economic fibre of northern Saskatchewan in the global environment.

I have additional information as well, but I will just leave it for the Commission to read at their leisure.

THE CHAIRPERSON: Yes. Thank you.

You can leave it with the Secretary and it will become part of the record.

Thank you, Mr. McAuley.

I gather from your description of what's available or what will be available at the end of June that you are satisfied that all the areas for which the Board is responsible will have at a minimum high speed Internet access by the end of the month.

Your concern is that that remains available at affordable rates.

MR. McAULEY: Yes. We were very concerned about the maintenance of what has been implemented from partnership concepts. We have been working very hard for the past couple of years now to try and get the optics and also the infrastructure in place. If we cannot maintain that, it will be a shame and such a waste of money.

THE CHAIRPERSON: Because of the cost rising.

MR. McAULEY: Because of the affordability of running the technology.

THE CHAIRPERSON: And the second concern appears to be that as newer technology develops, you continue as well to have that available to you at affordable rates.

MR. McAULEY: Yes.

THE CHAIRPERSON: Do you have any comment about whether affordable rates should be equal to rates below the tree line or whether in your view despite a subsidy, there could be a higher rate in these high cost areas.

Is your view of equity equal rates or do you countenance the possibility that there would be a difference?

MR. McAULEY: You look at the geographic area of northern Saskatchewan, I think it should be the opposite. I think the rates should be going down instead of up. It's pretty hard as it is to live in the north with all the additional costs. The costs are higher in all northern communities.

To have some kind of -- well, they are talking about some kind of national mechanism for costs to be the same across the country. It would be, I guess, in our terms fair, but in specifically in northern Saskatchewan, having a balance of access and equal affordability would be sufficient.

THE CHAIRPERSON: Thank you very much for your comments. You will leave your written comments with us.

MR. McAULEY: Yes.

THE CHAIRPERSON: Thank you, Mr. McAuley.

Madam Secretary.

THE SECRETARY: Our next presenter this afternoon is Mervyn Abrahamson. Could he come forward, please.

THE CHAIRPERSON: Good afternoon, Mr. Abrahamson. When you are ready.

PRESENTATION / PRÉSENTATION

MR. MERVYN ABRAHAMSON: Good afternoon.

I will introduce myself briefly here for those that don't know who I am and that's probably everybody here. I am Mervyn Abrahamson. I am from a small community in northern Saskatchewan, one of the communities that is served by the Northern Lights School Division.

When we talk about isolation, if our own local store, the one business in Pinehouse, is closed to go to the next corner store is just over 100 kilometres. If our fuel tank is empty and we have no gas for some reason, it has happened once in the last five years, the next service station is just over a hundred kilometres away.

THE CHAIRPERSON: Lets push the car, eh?

MR. ABRAHAMSON: When we are talking about isolation, I think we rate as one of the isolated communities in Saskatchewan and perhaps in Canada. If we go west, it's a hundred kilometres. If we come this way, it's about 200 kilometres to the next service.

I will not be making any detailed presentation, any statistical presentation. That has been done and will be done more ably by others. I will rather be outlining a view of a larger community as seen from my perspective in a somewhat remote northern community.

Many of my friends and associates in this community live with a feeling of isolation. That feeling of isolation is rooted in our distance and also in the fact that their first language is not French or English, but is either Cree of Dene. Many of the children start school not speaking English but speaking generally Cree. A few are Dene speakers.

I have been a resident of northern Saskatchewan for the past eight years, two of those years in a Dene speaking community and the last six years in a Cree speaking community as first language. They all speak English at some point.

This follows managing a business in Toronto. I worked as an assistant research technician at the University of Saskatchewan. I run my family farm. I served as a member and President of the Canadian Honey Council of the Saskatchewan Bee Keepers Association, as a board member of Bee Made Honey Limited and a board member and Vice-President of the Manitoba Honey Producers Cooperative.

For these last eight years, I have chosen a home and a life in northern Saskatchewan. We have been involved there, my wife in education, myself in computer service for a store up there.

Some people would argue that the infrastructure costs to a more remote community should be carried by the community itself, that the more concentrated population should benefit from a lower cost of service. I, however, have observed, as has been mentioned here, that one of the central hubs of activity are the larger centres.

The root source of much of the economic activity in our country is often the more remote regions. For instance, the head office and the packing plant for much of western Canada's honey industry was located in Winnipeg. It employed about 25 people.

The several hundred people producing the honey, looking after the bees, doing the root work, lived in rural parts of Saskatchewan and Manitoba, distributed across the whole of the two provinces.

While timber resources are invariably remote, the houses built with the lumber produced, are mostly in the population centre. Power dams are remote and we have that situation in northern Saskatchewan. The main user of the power is the population centre.

Coal, petroleum, potash, grain, gold, uranium, limestone, all produced and extracted in what would be remote parts of the country, but the benefits of these products flow to the population centres, not only the benefits of the product itself, but the economic benefits from their production.

I now live in an area where we are obliged to or have the opportunity to, depending on your viewpoint, share services with the industries exploiting the natural resources of the area. We, our children and our grandchildren, share a narrow road. Its shoulders and ditches are studded with boulders. It's surface is coated with dust, snow, mud, slush or ice, depending on the season.

We share that road with resource trucks, including log trucks, lumber trucks, mine supply trucks, uranium trucks. My friends near the major centres carry a cell phone. If they have a problem on the road, they simply call in and say "We have a problem. We are at such and such a place and we may need help here."

It's quite common for people at Pinehouse Lake when they are coming in, if the weather is at all inclement or any problems at all, to phone from the telephone 200 kilometres from home and say "We are on our way, expect us in three hours or whatever". If they are not there in three hours, somebody may go out and meet them. They may sit on the road for a couple of hours.

I am telling you this because I want you to understand what isolation can be and the isolation some people live in. Our community is a community of about a thousand people.

Some may argue that we in this community are being subsidized in our communications service. We on the other hand could argue that our area is being unfairly exploited by the removal of our resources, whether uranium, gold, timber, copper, base metals, perhaps some day diamonds, without the full value being left to those residents in the region.

I was pleased to see that our Premier, Roy Romanow, acknowledged that fact at a recent meeting in La Ronge. We should consider our nation, province and community as a whole body. The argument about which part subsidizes which other part could be compared with any living organism, and I consider our nation to be a living organism.

Rather than subsidizing each other, they are symbiotic and the healthy body cannot exist without the mutual appropriate effort of each part. We living in the north do at time suffer the perception that our needs, our safety, our children's futures are worth little consideration in the rush to exploit the region's resources.

While the cost of serving remote area users may seem inordinately high, I believe that the cost of providing basic service may and should be considered as a part of the total cost of developing and exploiting the resources of our remote region.

The costs of remote communications access as a whole should be part of the cost of developing the national economy rather than being considered as a cost of providing a particular service to the low density population of our region.

The cost could be considered part of the cost of gaining access to rich resources. At some point developing technology might result in global systems where the cost of providing down link service would be properly shared on a multinational basis and this point in itself perhaps is a valid consideration regarding maintaining a national presence in remote service providing.

Getting into our own situation, the office phone in our remote centre is a value to us, the subscriber, but it is at least as great a value to the many vendors that we communicate with, whether in Saskatoon, Regina, Winnipeg, Toronto, Montreal, Vancouver. Those are all places that are on our telephone list every month with multiple calls because we are buying from them. Is the communication more of an advantage to the buyer or to the seller? I think it's probably equal.

In the event of a major basic service cost increase, the business needs of the store where I work would probably be incentive enough to retain service, but many of my friends and neighbours would no longer keep this valuable communication and safety link.

It has been mentioned that our income in the north is much lower than the national average. The income in the north is not as equally divided, I don't believe, as it is across the country. A person living on welfare, and I can tell you about one particular individual that has a disability.

He gets around on crutches. There is not very much work for that disabled person in our community. He gets his $325 plus a $10 disability benefit. He lives on $335 a month. He can't afford very much increase in the cost of service and he's not alone. He's one of the people there that I am talking about.

There are many people, many of my friends and neighbours there, that are living on that kind of an economic base. They cannot afford an increase in basic service. It is imperative to develop a funding methodology that will not result in further marginalization of those citizens living in the remote part of our nation.

With your indulgence, I would like to give you a couple of examples, again about living in isolation. These both relate to living in isolation. These both relate to the transportation sector.

The store where I am employed ordered a small replacement part for some customer's equipment. The supplier just off Dufferin Street in Toronto sent the item. It cost approximately $8. He sent it to us by courier so it would get there quickly.

The courier company delivered the item to a freight company in Saskatoon who makes weekly deliveries to Pinehouse. The result was, including courier costs and what they call beyond charges, a delivery cost of $47, a delivery time of just over two weeks.

In preparing for this presentation, I contacted SaskTel to receive a copy of the Province of Saskatchewan's submission. I was not able to download their document from Internet since we didn't have the correct equipment hooked up. I tried it from the Northern Lights school in our area too and I wasn't able to download it.

I contacted them and they agreed to send it up. They said they would send it by courier. It took me some time to persuade them that courier service wouldn't do any good because it would be no quicker than sending it by freight truck. The cost was not the consideration. It was simply what service was available.

They finally sent it to me by fax. Again, we did use the telephone service to get it, but I got the report. Priority Post, in spite of their good intentions, can only deliver it on the Tuesday and Friday taxi mail delivery to Pinehouse.

These are conditions that are not known nor obvious to almost all residents of our country. I say most residents, but I can almost say to any residents of our country except those of us that experience it. The only services that are delivered on a relatively equal manner between us and the citizens of the rest of the country are telecommunications and the sunshine and rain.

While I was typing this paper, we were experiencing a rare time when our telephone long distance service was out of order. For most of the day as I typed this, customers were not able to use their credit or Interac cards to make purchases. We could not place orders. We could not get price quotes. Except that an off duty RCMP officer happened to be in his office, we could not contact the police. They like the rest of us, could not call outside of the community. They could not get calls in. We had no emergency service.

A major fire that day was burning to the south of us and we could not contact or be contacted by our friends and family members in other communities. It is not surprising that a feeling of alienation and abandonment sometimes develops.

Consider options that will support or at least not interfere with the continued development and provision of satellite or other technological innovations. There must be continued effort to provide cellular or other dependable communications service to those with the furthest distance to emergency services.

Talking about cellular service, I am thinking of not the people who live in Pinehouse or Cumberland House or La Ronge, but I am thinking about the people that are out anywhere between Pinehouse and La Ronge and are involved in the logging or mining or other forms of industry.

The future of our nation depends on a cohesive network rather than economic islands with remote exported resource territories. It is important to our future as a nation that we avoid any actions that could reinforce feelings of alienation, even though that feeling of alienation may be rooted in other causes.

In communication, we have a major role in minimizing and at least not increasing any feelings of alienation.

I would like to thank you very much for the opportunity to present here. I am happy to answer any questions anyone may have. That is all of my presentation.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Abrahamson.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you.

I take it from your presentation, much like the gentleman who appeared before you, that your principal concern with respect to Pinehouse Lake is not the availability of services, but the concern over increasing prices. Is that a fair assessment?

MR. ABRAHAMSON: No.

COMMISSIONER GRAUER: Oh.

MR. ABRAHAMSON: I am very concerned about increased service, particularly cellular service, at some point down link service, that will provide access to the people that are out at a fishing camp. I'm not talking about tourist camps now. I am talking about the people who are out earning their living, pulling nets in the middle of the winter at 40 below and have no communication service from their work site to any emergency services.

I am very concerned about those. I know they can't be provided instantly, but I am very concerned that the development continue to move toward providing service to everyone who needs it.

COMMISSIONER GRAUER: Okay, but within Pinehouse Lake you have adequate services in your view.

MR. ABRAHAMSON: Yes. Within that island community we have I feel adequate service. I think we are well served by SaskTel. Just a couple of years ago they put in a fibre optic cable. From that time on our computer works fine. Our long distance communication by modem and so on is adequate.

I don't think that if they are doing their bookkeeping that they would say that fibre optic cable is paid for.

COMMISSIONER GRAUER: But you are concerned over the longer term over the extension of services to the more remote places and what not.

MR. ABRAHAMSON: I want to see a methodology that will maintain development of services without a major increase in costs, yes.

COMMISSIONER GRAUER: Thank you very much.

THE CHAIRPERSON: Thank you for your presentation.

I think this seems to be a good time to take a 15 minute break. We will be back in 15 minutes. Ten to four according to my watch, and I think I am on Prince Albert time.

--- Recessed at 15:35 / Suspension à 15:35

--- Resumed at 15:50 / Reprise à 15:50

THE CHAIRPERSON: Order, please.

Madam Secretary, the next presenter.

THE SECRETARY: Thank you, Madam Chairperson.

Our next presenter is Asa Kachan.

PRESENTATION / PRÉSENTATION

MS ASA KACHAN: Good afternoon. My name is Asa Kachan. I am the President of the Saskatchewan Library Association.

THE CHAIRPERSON: Good afternoon.

MS KACHAN: On behalf of the Saskatchewan Library Association, I would like to thank the members of the Commission for providing this opportunity to respond to Telecom Public Notice 97-42, service to high cost service areas.

The Saskatchewan Library Association is concerned about the ramifications of deregulation of the telecommunications industry, particularly with respect to the impact which may be felt by public academic special and school library users and workers in this province.

We believe it's vital for the Commission to consider our views and our deliberation together with those of other organizations represented here today. In adding our voice to this debate, we hope to ensure an outcome based on the principle of equitable access to telecommunications service for all Saskatchewan residents.

The history of the Saskatchewan Library Association goes back to 1914 when a group of 17 individuals began to press the government of the day to provide rural communities with library facilities and services. It was not until 1942, however, that the association developed a strong presence.

Since that time, our association has been and continues to be a major voice and efforts, both provincially and nationally, to further the principle of freedom of access to information.

In upholding this principle, we supported the creation of the National Library and the Canadian Library Association and we helped to create the finest regional library system in Canada.

We have contributed to the formulation of legislation, most recently in 1996, which has ensured that all areas of the province, even its most geographically remote areas, receive library service. These regional libraries, those outside of Regina and Saskatoon, are funded collaboratively at a ratio of approximately 50/50 by local municipal levies and provincial grants.

We have been part of the development of this fine library system, seeing the delivery of services evolve from the books in wooden crates model to one featuring the most sophisticated automated systems and networks.

While some people might look back on those wooden crate days with nostalgia, they are gone forever and we can be proud of what has been accomplished in the past 40 years. In the past three years alone, over 150 of the 300 libraries in Saskatchewan have been connected at a cost of $2.3 million, $250,000 of this from the federal government, $650,000 from the provincial government and the remaining $1.4 million from local governments and fundraising initiatives.

This isn't the time to be complacent, however, because along with the technological advancements come new issues and sometimes threats to the continued delivery of library service. The SLA is represented here today because of such a threat.

Saskatchewan people have invested in an infrastructure that goes far and deep into rural and remote Saskatchewan. We are not here today asking you to develop an infrastructure but we are asking you to help us keep the ones we have.

The division statement of the Saskatchewan Library Association reads:

"The Saskatchewan Library Association will be a principal voice in the effort to make the knowledge, information, inspiration and understanding found in libraries accessible to everyone in the province."

Among our beliefs and principles are the following. Libraries are valuable assets to the community by adding to and reflecting the quality of life in the community. Libraries are also an essential part of a community because of the many forms of information they provide and because they want to be an active participant in community life.

Libraries provide opportunities for new experiences and discoveries and libraries nurture an informed democracy and a compassionate pluralism.

The threat as we perceive it results from the inherent conflict between what we as an association continue to strive for and what may result from the removal of subsidies to high cost service areas.

If, as is anticipated in such a scenario, the costs of securing and maintaining telecommunication lines increases to as much as $120 per month in rural and remote areas of Saskatchewan, then we will see the closure of libraries in these communities and the visions and principles of our association will be substantially -- pardon me, the vision and the principles which our association has upheld will be substantially weakened if not destroyed.

To illustrate the impact which the lifting of subsidies will have on Saskatchewan library workers and users, I would like to present a couple of examples of existing services that stand to be adversely affected or lost.

The University of Saskatchewan Youth Study Program provides students in remote areas of this province, including students north of Prince Albert, with access to Internet technology. This technology enables the two way transmission of course work, along with innumerable resource materials and people netting opportunities through chat lines.

The data network must be able to sustain not only text data, but more graphical representations and the students receiving the benefits of this technology are able to work towards degrees through the university's distance education program. They would otherwise be greatly restricted by the constraints of time and distance in pursuit of their educational goals.

In a rural community, a local farmer is looking to diversify his crops. Through his local library's network access, he can access on line government information, the vast collection on crop development at the University of Saskatchewan and information from other provinces and elsewhere in the world.

Clearly in this case improved access to information leads to better economic decisions and that in turn leads to a healthier economy.

In a small community 120 kilometres from Saskatoon, a student has suddenly learned that the deadline of applications to the Kelsey Institute is within the week and her school counselling office has run out of application forms. Her school librarian is able to access the Kelsey web site and print a copy of the application, thus saving the student from missing the deadline.

Finally, from a library in another small community, part of the Palliser region, the librarian writes and I quote:

"I don't know what to say about the service. It's a priority to people in the small community. If it were not for the Internet, we would be unable to have information readily available to us. If our rates are increased, we will not be able to maintain the excellent system we have for small town Saskatchewan. It almost seems that certain people want to do away with our communities. Do they want us all to live in the city? Our province is noted for its farming. If we keep having everything taken away from us, what will happen to this province?"

The above examples provide examples of the important place libraries hold in communities throughout Saskatchewan. They are indicative of our richness of life, the strength of our values, the determination of our people and they reveal the crucial role of information, not just in the context of world events or in terms of decision-making at national or provincial levels, but in the every day challenges, goals and achievements of individuals.

The process by which we as individuals assimilate every day experiences and attach mean to them results in a culture and a collective value system. Without access to information, which is the foundation of knowledge and wisdom, the individual and hence society will suffer.

Since the time a few short years ago when the Internet began to have such an impact on our lives, the provincial and federal governments have both made pronouncements regarding affordable telecommunications service as a public good.

The Government of Saskatchewan has suggested four principles for achieving this goal in rural and remote areas. These principles include the need for quality advanced services at reasonable rates for these areas; the preservation of universal service as a national goal; the equitable contribution of telecommunications providers to the achievement of universal service, and the competitively neutral basis upon which this service should be pursued.

The federal government has also expressed its beliefs in equal access in a document entitled "Securing our future together, preparing Canada for the 21st century", published in 1997. In this document the following statement of belief is made, and I quote:

"The Liberal government believes that rural Canada needs a strong information technology infrastructure. People living in rural Canada should have access to the same enabling tools and information resources as their urban counterparts."]

Furthermore, one of the objectives of the Telecommunications Act of 1993 is:

"-- to render reliable and affordable telecommunications services of high quality, accessible to Canadians of both urban and rural areas in all regions of Canada."

The CRTC has acknowledged that regulatory tools will be necessary to ensure that the stated objectives of accessibility will be achieved.

In comparing the vision statement of the Saskatchewan Library Association to the stated beliefs and principles of the provincial and federal governments and the CRTC, it is clear that our visions and beliefs are for all intents and purposes the same. We are all working for the betterment of Saskatchewan people to try and ensure, each in our own way, that Saskatchewan people, regardless of where they live, have access to the resources they need to maintain or improve their quality of life.

The province's libraries do this by making information available in a well organized and networked format for all who need it. The government and the CRTC provide the infrastructure and the regulatory mechanisms by which this information may be transmitted.

Perhaps there are some minor differences in philosophy or approach, but really we are all singing off the same songsheet.

There are many stakeholders involved in this issue, government, service providers, libraries, but let's not forget who stands to lose the most if the subsidies are lifted or some alternative regulatory structure is not found to replace the current system.

It's the people of Saskatchewan, especially those living outside major cities and towns, who will lose. It will be the students, the elderly, the small business people, the independent learners, the physically and mentally handicapped without the benefits of urban amenities who will lose the most.

It's safe to say, I hope, that everybody speaking before you today has the welfare and the public good of these people in mind and let's not disappoint them.

Thank you.

THE CHAIRPERSON: Thank you, Ms Kachan.

I agree with you we are all singing from the same songsheet, but the question appears to be who is going to pay the piper.

You mentioned a very high, if I'm not mistaken, $2.1 million.

MS KACHAN: I believe it was $2.3 million.

THE CHAIRPERSON: $2.3 million that was spent via federal grants, provincial grants and fundraising to install an infrastructure that would permit high level technological exchanges between libraries -- presumably between libraries and their customers.

MS KACHAN: Yes.

THE CHAIRPERSON: Those were just for the installation of this infrastructure, those funds. Then the libraries are left to their own devices for paying the operational costs of operating, maintaining, whatever access fees are charged. What is the source of the libraries' funds?

MS KACHAN: Actually I referred to that as well. In terms -- it varies obviously from various sectors. University libraries are funded differently from local libraries.

THE CHAIRPERSON: Do you represent public libraries or all libraries?

MS KACHAN: Libraries in general. The Saskatchewan Library Association represents libraries in general, although those most affected by this clearly are the regional libraries in the rural and remote areas. I actually addressed their funding as well a little earlier in the brief.

Their ongoing funding is essentially a 50/50 split, so it's a collaborative effort between local municipal levies, and this is for communities outside of Regina and Saskatoon. The remaining 50 per cent comes from a provincial grant, so we have in this province --

THE CHAIRPERSON: Which would go to help pay for operational costs.

MS KACHAN: Ongoing costs, staffing, materials.

THE CHAIRPERSON: And presumably the cost of operating this infrastructure as well would come at least at the 50 per cent level from the provincial government.

MS KACHAN: Yes.

THE CHAIRPERSON: I don't have any more questions. We will have the transcript of your presentation.

We thank you for coming.

MS KACHAN: Thank you.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Our next presenters this afternoon are Elie Fleury and Bruce Ruelling. Would you come forward, please.

PRESENTATION / PRÉSENTATION

MR. ELIE FLEURY: Good afternoon. I would like to thank you for this opportunity of making a presentation here.

We want to make our presentation in two parts. We are from La Ronge. We are with a program known as NORTEP/NORPAC which is a northern teacher education program and a northern professional access program.

What I want to do is give an overview of the program and Bruce will then raise the communication concerns so that you can tie it up with the program that we represent.

As I said, NORTEP is a northern teacher education program. It was established in the north to train teachers approximately 22 years ago. The second component of the program, NORPAC, is an arts and science program, Northern Professional Access Program. This program is designed to prepare students for further studies in the southern institutions, post-secondary institutions. We offer two years of arts and science in the north.

In NORTEP, the NORTEP is a Bachelor of Education program. It is a four year program in the north. The way that the program is designed is that the students from the northern half of Saskatchewan come to La Ronge on campus to take the program.

They are at La Ronge for three weeks of the month and then one week of the month we have a field component with our program which allows students to go back to their home communities and are placed in the schools in their home communities for that week. That's the model, the structure of our program; three weeks in La Ronge, one week back in the home communities.

The second component of our program, the NORPAC program, is similar. Three weeks in La Ronge, one week in the north. That's the way the program operates.

The governance of our program has five representations from five different jurisdictions in the north. There is the Northern Lights School Division which has approximately 30 schools, 32 schools, throughout the north. There is the Ile a la Cross School Division to the west and Creighton School Division to the east.

There is the Meadow Lake Tribal Council to the west and the Prince Albert Tribal Council, which is located here in Prince Albert but covers most of the north. We have representation on our Board of Governors from those five jurisdictions.

That gives you some idea of our program. We have within our program well over a hundred students throughout the north. With that, I wanted to lay the foundation for the communication concerns that we have.

With that, I will pass it on to Bruce to raise the other issues and concerns.

MR. BRUCE RUELLING: Thank you, Elie.

Thank you very much for allowing us to present here. I will read briefly and make some comments which I hope are appropriate.

1976 I guess is when the program started. We graduated 216 students from the program with a Bachelor of Education students and we have 79 students who graduated with the two year Arts and Science program.

Students who attend the NORTEP/NORPAC program come from communities scattered throughout northern Saskatchewan from La Loche to the west, Uranium City to the north, Creighton to the east and Montreal Lake to the south. I guess we sort of don't look at Prince Albert as north. For us, the geographical centre of the province is a couple of hundred kliks north near "Reaqwin".

Many of the students of families whom they leave behind to attend classes which are held in La Ronge, that is children, husbands, others from their family. Except for the students who live in La Ronge or close proximity, our students need to maintain a home -- a lot of them need to maintain a home in their home community, also staying on campus, if we can call it that, in La Ronge. There is a need for them to maintain regular contact at home.

Some of our students are also single parents, quite a number of them actually are, who leave their children at home in the care of close relatives, family, friends. Again, regular contact is kept via telephone. The family is at home during the three weeks the students are attending classes in La Ronge.

The welfare rate in northern Saskatchewan is more than 50 per cent. Therefore, many of our students do not have telephones because of the cost of telephone rentals and the cost of maintaining a phone. This makes it difficult for us to contact students while they are out in the field or for the students to contact us in La Ronge.

Many phones in the north are localized for long distance costs. That means that we can communicate -- call them, but they can't call us, so to speak. It's local service because of the difficulties they have with controlling it when they are travelling and that.

NORTEP/NORPAC takes in 50 to 60 students each year. That's in the spring at recruiting time. It's necessary to make telephone contact. With new students coming into the program, this involves spending hours on the telephone.

Initial telephone contact is necessary because of a time element to register students. Also, we rely heavily upon our local school boards for selection of students. We do not select our students just on academics alone. There's recommendations from the local school boards in the communities which prioritizes, which helps us in student selection.

Planning an orientation of these new students in June and the nature of mail delivery in the north is not good. From La Ronge, for example, it takes about seven, eight days to get a letter off to the west side for La Loche, Buffalo Narrows and Bow Valley area. We have a cut-across road. There's no mail service through there. It goes down to, I think, North Battleford and then around.

There's no telegram service in the north. Communication by radio is obviously very expensive. Also, our cellular service, we have a corridor which goes north from here to La Ronge. I did have a cell phone for a while, but I got tired of talking to myself because I was the only one I could contact.

When I travel from La Loche to La Ronge, for example, it's about 440 kliks. The last 70 kliks or so I can use the cell phone. The rest there's no cell coverage at all.

In addition for the need to contact the new students recruited for the program in the spring, there is a need to maintain regular contact with the students while they are out in their field placements as well as contacting schools throughout northern Saskatchewan where our teacher students are placed.

The field coordinator at NORTEP/NORPAC is responsible for arranging placements within northern communities for our students. Again, this takes many telephone calls and many hours of telephone usage.

In addition to maintaining communications in northern communities served by our program, it is also necessary to maintain regular contact with other partners to the south which include the colleagues and departments within both the University of Saskatchewan and the University of Regina as well as Saskatchewan Ed.

To operate its program, NORTEP/NORPAC has a total of 18 telephones -- I didn't know that, but I guess it is -- in its office as well as cellular telephones for those who are required to spend a lot of time travelling. That would be Elie and others that deal with the universities a lot. They can use cell service from here to La Ronge. NORTEP/NORPAC spends about $18,000 on telephones per year to operate this program.

I guess the absence of other means of communications in the north -- newspapers, we have a newspaper out of La Ronge. It's a weekly edition. Like I said, it takes about seven, eight days to get to the other side, so it's I guess late when it gets there a bit.

Of course, telegraph we don't have. E-mail is in some locations, but it's very limited. The costs of communication via radio and the geographical distribution of communities and the need to maintain regular contact throughout the north, there is a great need for more subsidy in the north.

I guess the big thing is telecommunications has been developing rapidly and well in a direction. I guess we would hate to see a slip backwards in the communications because of especially for students.

We find that in the north, when you get information of what's available or accessible to our residents, we get it a little bit late and our response time is later because of mail service and stuff like that. This would only delay it more and decrease a lot of opportunities, I would think, in the north.

I guess that's all the comments I have. If there's any questions.

THE CHAIRPERSON: Thank you, Mr. Fleury, Mr. Mr. Ruelling.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you. I really have just a couple of questions of clarification.

I can tell from your presentation that your program is highly dependent on phone service. Clearly, you have some difficulties communicating with your students. The present phone rates are proving too high for them to maintain phone service. Is this what I understood with some of them?

MR. RUELLING: I guess we would love to have it -- you know, the cost of the telephones reduced, but we try to live with reality. You know, sometimes this can happen. Of course, there's always room for improvement.

We have situations with students. When they are away, if they don't have a localized telephone, obviously some people, perhaps children and that, will abuse the telephone and run their bill so high that they can't afford to pay for it. Their cheapest method is localizing.

COMMISSIONER GRAUER: I see what you are saying. They don't have access to long distance because they have chosen a block service to keep others from using it. I wasn't quite clear on that.

MR. RUELLING: Okay.

COMMISSIONER GRAUER: The extent of service is adequate generally in the area you serve with respect to the availability of services.

MR. RUELLING: In most locations, yes, but not all locations. There's a couple of communities like Garson Lake and Descharme Lake, which are small communities, and also with Northern Lights School Division. I went through the frustrations to try to get communications to those communities.

Fortunately, it appears this fall that if everything goes well, we will have some satellite direct communications where the students in those two locations will actually access Internet for the first time.

COMMISSIONER GRAUER: That's wonderful. I can appreciate your concerns about an extraordinary increase in phone rates.

Would you, understanding that the increased investment in terms of providing whether satellite phones or other extension of these services, it does have a considerable cost attached in some cases -- would you as a community, do you think you would be agreeable to absorbing some of those costs, none of those costs?

MR. RUELLING: I myself am not a community, so I couldn't speak for the communities.

COMMISSIONER GRAUER: Speak for yourself.

MR. RUELLING: I have difficulty speaking for myself. Nobody wants my opinions anyway.

COMMISSIONER GRAUER: I do.

MR. RUELLING: Thank you.

Well, I guess we have learned in the north to adjust. If the weather gets cold, we have to go and cut more wood. It's not something we want. I guess I would like to see if you are going to have added costs that there would be some added services.

I don't mind paying a little bit more for the remote other areas to be services a little bit too, but I would hope that concept goes right across Canada.

COMMISSIONER GRAUER: That's what I'm asking. That's what I'm suggesting.

MR. RUELLING: Yes. You see, I could give you a specific example of communication concern in the north. On the west side, we do not have cellular service, but we do have in most cases, not all cases but in most cases, we have fleetnet opportunities.

You have some of the trucking outfits that have that. An example was about 35 miles south of La Loche last fall there was a school bus -- well, a van carrying a basketball team from the school. It hit icy conditions, went in the ditch and on its side.

The fortunate part is nobody was seriously hurt. The other thing that they were fortunate in was the fact that there was an NRT, Northern Resource Trucking semi coming behind them and seen it happen and had fleetnet and called in and got some people to come out and pick them up. Otherwise there was no service that way. It is very, very expensive for fleetnet.

COMMISSIONER GRAUER: Yes.

MR. RUELLING: In the south they have subsidies for communications for school buses, but we can't access it in the north because we don't have cellular service.

COMMISSIONER GRAUER: Thank you very much. I appreciate you taking the time to come here.

THE CHAIRPERSON: Thank you, gentlemen.

Madam Secretary.

THE SECRETARY: For our next presenter, we are going to move to Yorkton. I would ask Bernard Rink, the Mayor of Kamsack, to make his presentation now.

PRESENTATION / PRÉSENTATION

MR. BERNARD RINK (Remote): Good afternoon. My name is Bernard Rink and I am the Mayor for the town of Kamsack, Saskatchewan.

THE CHAIRPERSON: Good afternoon, Mr. Rink.

MR. RINK: I would like to thank you for allowing me this opportunity to be heard.

Our town is situated in a predominantly rural portion of Saskatchewan and, therefore, that is why our town motto is "The garden of Saskatchewan". Our town depends on telecommunications for the majority of its services because it is a vital link between our town and the rest of Saskatchewan and Canada.

Kamsack town council and I are duly elected to represent 2,264 persons in our town alone, plus the fact that our neighbours in the surrounding municipalities number in the 8,000 to 10,000 persons and also depend upon rural telecommunications. This should warrant a strong concern regarding the preservation of equitable and affordable telephone service in rural or remote areas in the province of Saskatchewan.

The position that I wish to convey to the Canadian Radio-television and Telecommunications Commission is that telecommunications services are extremely important in rural Saskatchewan and must be maintained at all costs.

The apparent traditional method of subsidizing local telephone services through long distance revenues must be maintained and, therefore, the CRTC is petitioned to keep in mind this process.

It is realized that with new competition being allowed into the province of Saskatchewan in the telecommunications business, it forces the current Crown corporations to look for other means of being competitive. However, an important point becomes apparent as to whether it should come at the expense of the persons utilizing the telecommunications service in rural and remote parts of Saskatchewan.

It is the opinion of the council and I that the process should not ignore the rural people of Saskatchewan who have worked to build this great province and its network of telecommunications in order to satisfy large corporations because of money, but rather look at ways to preserve this vital service.

It is further realized that the subsidization method has been utilized in the past and is becoming too costly to maintain. However, to sacrifice a vital service for the sake of funds does not make moral sense and thus it is incumbent upon the CRTC and the rest of Canadians to find a viable solution to this dilemma.

As suggested, there may be a venue to establish a universal fund that could take into consideration the subsidization costs without increasing costs to the ratepayers to maintain the current universal and affordable telephone services and perhaps this should be explored further.

The current telecommunication companies do have the means and resources to do so and, therefore, should be directed by the CRTC who govern these companies to explore various options.

To summarize our position, it is felt that the CRTC should be aware of the importance of telecommunication services to rural and remote areas of Saskatchewan such as our town, the town of Kamsack and area. Secondly, it is important that this vital service is not sacrificed at the expense of big business. Thirdly, this service should be maintained even though it means that subsidization is necessary.

I would like to say thank you to the members of the Commission for taking the time to listen to my presentation which I make on behalf of the town of Kamsack.

Have a nice day. Thank you.

THE CHAIRPERSON: Thank you, Mr. Rink.

Do I understand from your presentation that you don't share the view of the Saskatchewan government that it should be a national fund? When you say that the CRTC should tell the telcos to continue subsidization, are you of the view that this should be solved telco by telco?

MR. RINK: Well, I think our idea is that it really needs to be province by province because everybody's costs and needs are quite different. We need to have something that is workable for the various provinces in our country. That would mean more than one particular plan of attack or whatever terminology you wish to give it.

THE CHAIRPERSON: Thank you very much, Mr. Rink. We appreciate your speaking to us from this distance. It has worked very well.

We thank you for taking the opportunity to speak to us on these issues. Thanks.

MR. RINK: Thank you.

Madam Secretary.

THE SECRETARY: We are back in Prince Albert for our next presenter, Max Morin. Mr. Morin has a slide presentation which will be projected off the wall behind me. If everyone can get a vantage point for the presentation.

PRESENTATION / PRÉSENTATION

MR. MAX MORIN: Thank you.

My name is Max Morin. I am co-chair of New North. For your information, New North is an association of northern municipalities in northern Saskatchewan. We would like to thank the CRTC for giving us the opportunity to make a presentation.

New North represents 37 northern communities within the northern administration district. We will be presenting a map here very early. Paul Dale is assisting me. He is the Executive Director of our association.

We would just like to at this time show the map so we can sort of have a vision of what we are talking about.

Northern Saskatchewan represents half of the province of Saskatchewan. There's 37 municipalities in northern Saskatchewan and we are quite remote. Like, in the far north you have Uranium City, Camsell Portage, Fond-Du-Lac and Stony Rapids. Those are the four municipalities in the far north around Lake Athabasca.

Then you come down to the west side, you have La Loche, Descharme Lake and we have communities from 2,000, La Ronge representing about 5,000 people and then small settlements that represent as low as 100 -- in some of those small settlements 50, like Bear Creek.

Communication infrastructure was set up in the northern area in the mid-1970s and communication has become a vital part for the survival of northern communities.

We have four distinct people living in the north. We have the Dene people. They have their own language, their own culture. We have the Cree, we have the Metis and then we have the non-aboriginal. We all live in northern Saskatchewan. There's about 35,000 people that live in northern Saskatchewan throughout the northern administration district.

Background. Technology is being introduced in the north today. Telephones came first. In some communities, we don't have telephones as of yet, like Descharme and Garson Lake they have a radio communications system. Faxes were introduced in the larger communities. We have faxes. The smaller settlements again I referred to and some of the hamlets, they don't have faxes and the Internet is becoming a vital part of communications.

We have been working with Northern Lights School Division. Bruce Ruelling and Elie Fleury just made a presentation. We are trying to get remote and small communities access to direct PC through the Internet.

The new social and economic development initiatives are being introduced into the social economic picture in the north. We have a young population. Sixty-five per cent of our population is under 15 years of age. You have to understand that there's a lot of high unemployment in a lot of our aboriginal communities.

Canada's north is rich in natural resources and that contributes to the economy. Northern Saskatchewan is the poorest region in terms of social and economic conditions. I will show you a map that was taken from -- well, maybe I can just mention it.

MR. PAUL DALE: It's right here. The Canadian Fact Book on Poverty, 1989 statistics. It is still relevant today.

MR. MORIN: In the dark areas are the poor areas of Canada. Northern Saskatchewan has been identified as one of the darkest regions. It continues to be one of the poorest regions in Saskatchewan, especially the aboriginal community. We are quite concerned and we are trying to work with both the federal and provincial governments to make it a better place to live.

There are initiatives happening right now. We just figured we would bring that map to you because it was a concern to us. There is a considerable employment and income gap between the north and south which makes basic service less affordable. Our position now is that the current subsidization remain intact.

Coming back to your question, we would prefer a national subsidization program where it is accessible by any telecommunication, being 18 "gees" print or Bell Canada or SaskTel. At least it is accessible for all companies.

Canada needs to preserve affordable universal services, including communications, to ensure all of its citizens are presented equal opportunities and there needs to be a balance between market forces and social objectives.

If the subsidy is removed, it worsens the social and economic conditions in the north, causing Third World conditions in the north. Development in the north will become more costly, causing resource development activity to decrease, which will have an impact on Canada's economy.

I just wanted to mention a few extra items. I also represent the Health District in northern Saskatchewan. We are quite concerned about accessibility by our people.

If the subsidization is removed and the cost is as great as five to eight times higher than it is now, people will only be able to get a dial tone. They only will be able to afford the basic service to access emergency. We are in the process of having maybe teleminutes introduced into the north.

If access or affordability isn't there for the lines, it's going to cost too much, then transportation of our people will continue to be transported to Saskatoon or Prince Albert or North Battleford and it is costing the provincial and federal governments quite a bit of money as we speak because transporting our people to these urban centres for medical reasons is quite high.

Municipal governments, we have a municipal government -- like Bear Creek I will take for an example. It's a settlement. It gets $43,000 a year to operate and that's basically all the income it has. It hasn't got a tax base and if it did have a tax base, the people are unemployed. They wouldn't be able to pay their taxes, so you can't raise any new funds to try and subsidize your own services in your own community.

A lot of our people are getting restricted phones as we speak because long distance as it costs now is quite high and restricted phones, people can phone you but you can't phone long distance. It is only for local calls. A lot of our old people can't get access to it.

In Saskatchewan, for example, you have to have $200 downpayment if you are a first time user. You have to pay now to get a dial tone, you have to pay an extra $120, so it is $320 off the bat that an old age pensioner that somebody who is on welfare will have to come up with. They are not allowed to on their welfare cheque or on their old age pension. They are on fixed incomes.

That's the concerns we have. We would prefer that CRTC seriously looks at that issue because if they remove the cross-subsidization from the telephone rates, our municipalities and our people won't have access to the phones and will have to get them cut off. I guess we are back -- we are going backwards instead of forward. We are going back to the stone age.

We will probably have to communicate by moccasin telegram or smoke signals or whatever, you know. I think the CRTC was set up to try and improve the communications system.

That is basically where we are coming from. If you have any questions, we will be open to answer them.

THE CHAIRPERSON: Thank you, Mr. Morin.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you.

Speaking of smoke signals, we were in British Columbia in Prince George last week. The Bavine Lake Nation came. They didn't have any phone service and said that in fact smoke signals were -- they made a bit of a joke.

I'm curious to know, what is the availability of phone service in the area you are speaking of? Is it generally available, but that cost is an issue, or is it simply not available?

MR. MORIN: It's available in most communities on the west side and I think some of the east side communities, the west side being, Ile a la Crosse, La Loche, the east side being Cumberland House and Sandy Bay.

We have fibre optic lines that were installed by SaskTel. We have SaskTel teletowers, micro towers, microwave towers.

Small communities like Garson, Bear Creek and maybe Descharme are the ones that haven't got access, maybe only by radio telephone. Those are the ones that don't have accessibility, but most communities do. The far north communities don't have the fibre optics. It takes a little while before it clicks in, but they have access to phones.

A lot of our community people can't have access because they can't afford them and even that $200 downpayment some of them don't have it unless they have a co-signer.

COMMISSIONER GRAUER: I was going to ask you, what is the average monthly rate?

MR. MORIN: The average monthly rate, if you have access to long distance and everything, you are probably talking about $150 to $200.

COMMISSIONER GRAUER: What about without long distance?

MR. MORIN: Without long distance, the rental of the phones and the lines, you are probably talking maybe between $50 to $70 a month.

COMMISSIONER GRAUER: So it's a basic monthly rate of between $50 and $70 for most people up north and long distance is on top of that.

MR. MORIN: Right.

COMMISSIONER GRAUER: You mentioned a fee of a hundred dollars. Is that an installation fee or is that what you were referring to as basically --

MR. MORIN: To get the basic dial tone right now, it costs us $30, $35.

COMMISSIONER GRAUER: How much?

MR. MORIN: $35. If you are going to do away with the subsidization, then you are looking at maybe $150 to $200 over and above the $200 that you have to put down as a first time user.

COMMISSIONER GRAUER: You mentioned the possibility of paying five to eight times --

MR. MORIN: Right.

COMMISSIONER GRAUER: Five to eight times as much as you currently pay.

MR. MORIN: Right.

COMMISSIONER GRAUER: Where have you heard that?

MR. MORIN: We sort of estimated that if they do away with the subsidization that is currently there from long distance from the urban communities, subsidizing rural and remote communities, it could be as high as five to eight times.

We are just using those estimates to justify that the subsidization right now is in the neighbourhood of millions of dollars to northern and remote communities and rural communities. Taking the same figure and incorporating it into what it actually costs you.

COMMISSIONER GRAUER: I can certainly imagine that from that perspective, it doesn't matter much if it's available if it is going to cost five or six hundred dollars a month.

MR. MORIN: Exactly. People just won't be able to afford it. Like I said, we will be stepping backwards instead of moving forward. In a lot of our schools, our children are just starting to get access to the Internet.

In the Northern Lights School Division -- I came from Ile a la Crosse, which is our own school division there, we are just starting to get hooked up. This September now we are hoping the kids in the school will be able to get access to the Internet, but if it's going to be out of reach, we won't be able to do it.

COMMISSIONER GRAUER: Thank you very much for coming. It helps us get a much better understanding of the issues.

MR. DALE: I just wanted to make a point and I guess stress some of the points that we had up there.

There is a social side and an economic development side, I guess. Recently there has been a lot of development in the north, not only northern Saskatchewan, but there is a lot of development as far as resource extraction.

If you look at it from a point of view of a business person coming into the north to develop whatever it is that they are developing, whether it is forestry, mining, or other industries, it's going to cost that much more for them to get in there and develop that resource extraction.

That extra cost is going to impact on their decision as to whether to go in and actually develop that, meaning that there is going to be an impact on the whole Canadian economy. There is more and more reliance on resource extraction in the economy of Canada. I just wanted to stress that point.

COMMISSIONER GRAUER: I appreciate that. Thank you both very much.

THE CHAIRPERSON: Wait a minute. Legal counsel has a question for you.

MS ASSHETON-SMITH: Just before you go, Mr. Morin. I wonder if you have an extra copy of your slide presentation for the Hearing Secretary so that we can assure that it goes on the public record.

MR. MORIN: Yes, we do.

THE SECRETARY: Thank you.

THE CHAIRPERSON: Thank you, gentlemen.

Madam Secretary.

THE SECRETARY: Our next presenter is Leroy Larson. I invite him to come forward. He is accompanied by Mitchell Demyen.

THE CHAIRPERSON: Good afternoon, Mr. Larson. And would you perhaps spell your name. Is it Mr. Demyen?

MR. MITCHELL DEMYEN: Please spell it for the court reporter and for myself so that I have it right.

MR. DEMYEN: D-e-m-y-e-n.

THE CHAIRPERSON: Thank you.

Go ahead.

PRESENTATION / PRÉSENTATION

MR. LEROY LARSON: The Saskatchewan Wheat Pool is pleased to have this opportunity to address the Canadian Radio-television and Telecommunications Commission in order to speak on a subject that is important to our producer members and the overall organization.

The Saskatchewan Wheat Pool is a publicly traded cooperative comprised of about 74,000 member-owners. It is the largest western Canadian grain handling company and employs more than 3,000 people with almost 1,600 of those located in rural Saskatchewan.

Over 30 per cent of the grain, oilseeds and special crops delivered to country elevators on the prairies move through Saskatchewan Wheat Pool facilities. These consist of approximately 325 country elevators in Saskatchewan and parts of Manitoba and terminal elevators at Thunder Bay, Vancouver and a jointly owned facility at Prince Rupert.

In the interests of diversification and the expansion of opportunities to our member owners, we are involved not only in the provision of agricultural services, but a wide range of value added further processing initiatives throughout the prairie provinces.

These include wheat and oat milling, baking supplies, barley malting, oilseed crushing and processing, ethanol production, crop research and biotechnology, fertilizer manufacture and distribution, farm supply retailing, cattle production and auction sales, and hog production and meat processing.

Through our democratic structure and cooperative philosophy, Saskatchewan Wheat Pool develops and promotes various policy positions on issues important to our producer-members. Our policy on rural development forms the basis for our submission on the CRTC's public notice 97-42, Service to high-cost serving areas.

To ensure the needs of the membership are met, the Saskatchewan Wheat Pool accepts it has a role in rural development beyond farm policy and commercial activity. In fact, this is not the first time Saskatchewan Wheat Pool has encountered and addressed the issue of telephone services in rural areas.

In 1996, members found that the local telephone areas had not kept pace with consolidation of rural communities. Often incurring costly long distance charges in order to conduct any business activity, members appealed to the provincial government to extend local telephone areas to all farms within a major trading area.

More recently, as new technology grows in importance, members have attempted to resolve some of the unevenness rural areas encounter in accessing it.

Members have advocated improving cellular telephone service and reducing the cost of installing a second line into farm homes for fax and Internet service, in short, arguing for an effective ramp to the information highway.

Through our involvement with the producer members, the Saskatchewan Wheat Pool is committed to acting as a responsible leader, working for positive rural development. Our long term objective is to sustain a rural population base that provides a critical mass for both social interactions and the adequate provision and support of necessary services, such as telecommunications.

The agri-food industry holds significant future potential in terms of both commodity export and value added activity. As an organization, we believe in that potential and have committed $270 million to the expansion of our full service elevator and farm supply network.

However, for the agricultural industry to realize its full potential, it requires efficient, competitive and affordable communications. Yet disadvantaged in terms of population density and construction costs, rural residents are challenged to develop and maintain that infrastructure at a reasonably affordable level.

In today's climate, characterized by deficit reduction, deregulation and pressure to eliminate subsidies, obtaining assistance for that infrastructure may prove more difficult. However, failure to maintain affordable access will diminish the ability of rural residents to function independently in the future.

The issues addressed today have the potential to exacerbate and entrench both rural/urban and regional differences associated with telephone service. While competition in the marketplace can reduce inefficiency, the CRTC must recognize that competition cannot solve all problems.

In a fully competitive marketplace, it is unlikely that costs associated with providing and maintaining service to sparsely populated rural areas could be recouped by charging a reasonable rate on low volumes.

Although Saskatchewan Wheat Pool is presenting this submission on behalf of our producer members, the potential ramifications of the issue extend to all rural residents. The Saskatchewan government estimates if current subsidy levels decline, basic telephone rates for rural residents could increase five to six times over present monthly charges.

Beyond the direct financial impacts of being able to contain costs, it is also important to address the social issues that it would create. As population continues to decline and services concentrate in fewer communities, rural residents increasingly rely on the telephone.

Anxieties created by concerns over the adequacy of such basic services as education and health care would be heightened if telephone services were less accessible. Never mind that reduced access to the telephone could ultimately threaten access to such services as doctors, teachers or emergency response.

While cellular telephone coverage or other technological advances may reduce inequities that currently exist, several concerns must be addressed before an alternative becomes a realistic option.

Even if cellular coverage is extended to all rural areas, many residents are concerned with such issues as privacy and ability to conduct business on unsecured lines, or affordable access to technology such as the Internet or faxes in a reliable manner.

Furthermore, many rural residents are concerned that while moving toward cellular coverage may minimize up-front costs, they would lose the ability to control their overall costs as they would incur charges for air time on all calls.

As a business operation, the Saskatchewan Wheat Pool also relies on the services and economic possibilities made possible by an affordable communications network. Like many businesses today, the public telecommunications network is an essential component in our every day business activities.

However, given dispersion of our activities across the province, the telephone network takes on a greater importance. Excluding the head office requirements and those of our affiliated companies, the Saskatchewan Wheat Pool relies on 755 handsets, 246 fax machines and 841 data lines to conduct business activity in rural Saskatchewan.

Let me illustrate through a few examples the variety of ways we use the telephone network.

With today's grain industry demanding greater efficiency, the Saskatchewan Wheat Pool has refined its ability to track, monitor and manage inventories. At the heart of our communications network is a telephone system that provides reliable, efficient and up to the minute data transmission. In fact, a single inland terminal may require more than 25 telephone lines to support its operation.

Our recently announced livestock initiatives, including both hogs and cattle, is a part of our operations that are very much based in rural areas and as such relies heavily on the telephone network.

Over the next five years, the Saskatchewan Wheat Pool plans to build 25 farrowing operations. Such facilities will provide producers with alternative markets for feed grains and provide employment opportunities in isolated rural areas.

Each farrowing barn requires six separate lines. Voice and fax keep employees connected and informed. Data transmissions enable centralized bookkeeping and monitoring of the operations performance.

While each barn is climate controlled from a centralized CPU, an indispensable fallback system of automatic dial alarms safeguards our investment by providing instance notification of temperature variation, fire or break-in.

The Saskatchewan Wheat Pool has a labour force of almost 1,600 people in rural Saskatchewan. E-mail, voice mail and broadcast capabilities through the telephone system provide a vital link to our staff and are indispensable in keeping employees connected.

As the Internet develops in the future, this link may grow even more important as there is great potential to disseminate information or even provide educational and skills upgrading opportunities.

Meeting our members' needs and ensuring future corporate success requires ability to gather and disseminate information quickly, accurately and cost effectively. As a service based organization, the Saskatchewan Wheat Pool relies heavily on the two way flow of information between both the business and its customers and the organization and its producer members.

Any compromise to the current telephone network that would reduce the level of access or disrupt that information flow would have severe operational implications.

As the demands of the marketplace continually evolve, we will increasingly rely on a telephone network that is flexible enough to incorporate new technological features as they are developed and respond to new requirements as they arise.

Ensuring this link can be accessed in a cost effective and reliable manner in the future is very important. From our operational perspective, rural areas cannot be excluded from the benefits afforded by such a telecommunications network.

Historically, our society recognized the importance of ensuring everyone had relatively comparable access to a basic level of services. In instances where the market failed to provide that level of service, most governments in Canada offered some form of intervention. They recognized that if the country was to develop, the higher cost should not preclude the provision of telephone service to rural areas.

Yet today as long distance rates decline nationally, local service providers must stay competitive, severely limiting their ability to offset the higher expenses in rural areas. Given the province's large geographic area, its dispersed rural population and our relatively small urban base, the ability of rural residents to obtain telephone services at prices comparable with other regions of the country appears tenuous.

However, it is our hope that through the CRTC's investigation and subsequent deliberation, it is considered necessary to ensure all rural residents and business have access to services at rates reasonably comparable to urban counterparts.

Therefore, we wish to support in principle the Government of Saskatchewan's proposed national universal service fund. This would ensure that all Canadians would have affordable access to a similar level of service.

The Saskatchewan Wheat Pool and its members rely on the service and economic opportunity made possible by the current telecommunications infrastructure. We wish to promote a positive attitude and vision toward rural Saskatchewan, which includes promoting initiatives that help farm families stay on the farm.

Believing that the continued support and development of the rural telephone infrastructure is warranted, we have chosen to make this submission. Such support is a prerequisite for our long term goals as it ensures that people can attain an acceptable quality of life in rural communities.

Saskatchewan Wheat Pool will continue to work for positive change. We believe in an inclusive approach to solve the obstacles that we often encounter and are prepared to cooperate nationally with other stakeholders to address the issues. For our members, to undertake this sort of action there must be guaranteed reasonable and affordable access to the required tools.

Thank you very much for the opportunity to make this submission.

THE CHAIRPERSON: Thank you, Mr. Larson.

Mr. Larson, the picture you paint of rural Saskatchewan to the extent that it is connected to the Saskatchewan Wheat Pool appears to me to be a very organized, effective technologically connected business community.

Is it your view that the universal access to telephone on a subsidized basis should be looked upon in the same manner or in the same sense of priority for this type of business as opposed to some of the communities we have heard from, for example, in the far north where there is hardly any service or where accessibility to schools, libraries and so on is highly dependent on communications links and it is unrelated to business.

MR. LARSON: Well, communications is very important to any business. I look back at our farmers and the rural communities. A farm is a business in itself.

THE CHAIRPERSON: You agree with me. I have no problem with looking at -- you paint a picture of a business. My question is to what extent should a fund, be it universal, provincial or otherwise, subsidize business on the same level or with the same sense of priority as subsidizing remote communities who are not in business.

I assume your business is a lot more cost effective as a result of technological means. I am impressed by the extent to which your business is technologically connected and uses technology, presumably with some cost effectiveness.

My question is, should business to that extent be subsidized in priority to other concerns?

MR. LARSON: Because of the vastness of agricultural Saskatchewan and the small population that is in rural Saskatchewan, a cost to an individual producer or farmer could be extremely high if the current method of support is not available.

Once you start losing some of the access to telecommunications that farmers require and rural residents require, I don't think it's too much different than what we have heard from northern Saskatchewan and isolated communities in that people will start dropping off from accessing these services if they can't afford them.

It would be difficult for the rest of the business community to function if the infrastructure starts to break down in that manner.

The larger centres of Prince Albert, Saskatoon and Regina rely very heavily upon the contribution by rural and isolated areas to make an overall economic strategy for Saskatchewan. We see the need for accessible telecommunications at a reasonable cost to all people in Saskatchewan.

THE CHAIRPERSON: Thank you, Mr. Larson, Mr. Demyen.

Madam Secretary.

THE SECRETARY: Our next participant this afternoon is Sinclair Harrison. I invite him to come forward. He is accompanied by Aaron Deschene.

THE CHAIRPERSON: Good afternoon, Mr. Harrison and Mr. Dechene.

PRESENTATION / PRÉSENTATION

MR. SINCLAIR HARRISON: I want to thank you for allowing us a few minutes to make a presentation today. Thank you again for coming to Saskatchewan to hear the presentations. I understand if you had stayed in Ottawa, certainly you wouldn't have had the representation and having the opportunity to present in person has a greater effect we believe.

I think it has some significance that you came to Prince Albert. I am sure you are aware that Prince Albert is the geographic centre of this province so it means that you understand equal access to this panel. I think that's significant that the northern people had equal miles to travel that we in the south had to travel here to make our presentation.

The Saskatchewan Association of Rural Municipalities represents 298 rural municipalities. I believe you heard from our urban counterpart, SUMA, earlier today and the New North presented just a few minutes. With the three organizations, we represent local government in Saskatchewan.

As you are well aware, there are three levels of government in Canada, the federal government, the provincial government and the local government. SARM is not local government. We represent local government, the 298 rural municipalities. SUMA represents the cities, the towns and the villages.

We are here today to largely support the presentation that the provincial government made earlier on a universal service fund. We will support that with a three or four page document.

Historically, Saskatchewan has faced and overcome many obstacles to establish a variety of social programs and services. Two of the largest challenges have been geography and the sparse population density.

Developing roads, hospitals, power and telecommunications infrastructure has required economies of scale of a provincial magnitude. To achieve the economy of scale, the people of the province have in the past directed their governments to form Crown corporations to provide needed utilities to consumers in all geographic locations.

Implicit in this was the understanding that the cross-subsidization from high revenue to high cost areas would be needed. This ensued that regardless of a person's geographic location, the cost to avail themselves to service would be relatively equal and stable. SARM maintains that the established social policy objectives should not be compromised for the sake of competition.

Conversely, the creation of a competitive marketplace is also in the interest of the public good. It can drive technological advances, provide cost efficiencies and meet the ever changing needs of telecommunication consumers.

Small business, large corporations and private individuals alike contribute daily to global economic growth through the tools provided by telecommunication companies. A free enterprise system is responsible for the quality of life enjoyed in this country and the general principles of deregulation is supported by SARM.

SARM is concerned, however, that the cost of obtaining telecommunications services in a competitive environment will increase beyond the reach of many people living in rural and remote areas. Our discussions with the provincial government officials indicate that the price increases in the order of five to ten times are likely.

At the present time, rural Saskatchewan rural ratepayers, rural subscribers, are being cross-subsidized to the tune of $112 million. That's what's coming out of rural and high populated areas to help provide equal access to telecommunications.

As new service providers will concentrate their efforts on large urban centres where costs are lower and profits are higher, the availability of new technologies and services in rural areas will be hindered. This will have the effect of excluding many of our residences from the opportunity to access both the local and global economies.

Equally as important is the need to ensure all people have access to and may partake in our growing knowledge based society. It is clear then that the move from monopoly to competition must not affect the public good telecommunications service provide.

The largest barrier will be the cost to the rural and remote consumer. SARM believes that the universal service fund being proposed by the Government of Saskatchewan is a reasonable mechanism to ensure universality of service.

The universal service fund would be competitively neutral and allow new service providers to be good corporate citizens by contributing to the strengthening of Canada's social and economic fabric on which they depend.

Agricultural producers already faced with high input costs and low profit margins can ill afford to absorb further expenses, especially for basic phone services. Increases in the costs of doing farm business are indirect as well.

Rural businesses supplying everything from tractor parts to chemicals will be forced to pass their increases on to consumers, resulting in additional farm expenses.

The inability of agriculture producers to finance additional phone lines for Internet access, for example, will have two major impacts. Firstly, the producer will be unable to surf the marketplace for goods and services. Secondly, the supplier of goods and services will be unable to maintain their revenues because they cannot communicate in a cost effective manner with their clientele. Indeed, even the cost of credit and debit card transactions will rise, thus further fuelling inflation in the rural economy.

The resultant failure of the rural based business will exacerbate the economic disparities existing between urban and rural residents.

Rural local governments also face challenges in maintaining professional and modern administration. Fax machines, Internet and telephones are essential in the effective and efficient delivery of municipal services. Telecommunication tools will become increasingly important in land title transactions, roadway data, along with planning and development tools becoming automated.

In order for municipal offices to exchange information and update provincial databases, affordable telecommunications services must be available. Any increased costs will be passed on through higher property tax to rural residents. This will further reduce the attractiveness in living in rural Saskatchewan.

Large livestock operations, manufacturing facilities and other industries will be restricted in rural areas if basic communication costs are prohibitive. The loss of jobs mean off-farm income will be even more difficult to obtain. The lack of disposable income causes reduced investment in agriculture, which affects the entire province.

Small communities with no viable businesses will cease to exist. Saskatchewan has experienced this in the past when the construction of highways around and not through small communities was taking place.

Again today, with the abandonment of railroads and the corresponding grain elevator closures, communities are being isolated in the same manner. These communities are unable to withstand the added pressure that would result from greatly inflated telephone costs.

Many of the economic impacts have social ramifications. For example, in a country as diverse as Canada, certain residents should not be disadvantaged simply due to their geographic location. Basic public services such as police, fire, education, health are all administered so as to ensure as much as possible equality of access.

Indeed, federal transfer payments to provinces are based on equalization philosophy. The concept of USF preserves this philosophy.

Rural depopulation is caused to a great extent by the inadequate supply of public services. In Saskatchewan we are currently working on ways to improve rural protective and health services by establishing a province-wide 911.

An initiative is also under way to establish a province with a medical information system whereby physicians in rural areas may consult with other doctors in urban areas and access central medical databases.

These systems can only work if rural residents have affordable access to telephones. Also required is a seamless network as the potential exists for some new providers choosing not to offer the 911 feature, if they choose to enter the rural market at all.

Operating costs for both systems will also be prohibitive if a deregulated environment and some rural medical clinics may be unable to finance the needed connections. Consideration must be given to closing the gap between urban and rural standards of living prior to the competition coming on full stream.

Saskatchewan also has a network of libraries in rural areas that offer Internet access, a service that is used by young and old alike. Library trustees suggest that this service is threatened by potential cost increases. The quality of education in rural areas will therefore suffer also.

We have situations in this province where we have kids riding on school buses for two hours one direction, so that means that they cannot go back to access public libraries in the evening. They can access it through television or through computers and the Internet, so it's important that we make that Internet connection to rural Canada as affordable as possible.

The system of telecommunication hardware in rural Saskatchewan has been developed and paid for by the provincial residents. While new carriers will be obliged to contribute to the construction and maintenance of that system, it is ironic that many who paid for the initial network will now, unless protection is provided, not be able to afford to use it.

Telecommunication is a public good and increased telecommunication costs essentially penalize those choosing to live in rural areas. Rural people contribute to social programming, protection and health services along with education just as their urban counterparts do, yet cannot expect the same level of service.

Action is being taken to correct these inequities. The CRTC must not allow telecommunications service provision, which is so pervasive that it is taken for granted -- Saskatchewan has a 98 per cent penetration rate for phone service at the present time -- to become a luxury that will only be provided at reasonable rates in urban areas where large faceless non-Canadian based corporations can make huge profits.

The established universal service fund where the telecommunication providers contribute equally and on a competitive neutral basis will ensure that these objectives of the Telecommunication Act are met.

In pointing to two subsections of the Telecommunication Act, subsection 7(a) spells out that:

"-- to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions"

And 7(b) spells out:

"-- to render reliable and affordable telecommunication services of high quality, accessible to Canadians of both urban and rural areas in all regions of Canada."

I guess 7(b) spells out in spades what this whole set of hearings is about. Certainly I think all the presentations today reinforce that the legislation should be upheld.

Service to high cost areas in this case to over 70,000 Saskatchewan farms and 298 rural municipalities clearly requires some mechanism to mitigate social and economic impacts. Potential monthly costs in excess of a hundred dollars to acquire dial tone puts basic phone service out of reach of many rural residents and business.

In fact, in numerous cases the annual property tax on a section of agricultural land could be lower than the cost of phone service in a deregulated market. The true value of a telecommunications network is in its accessibility and coverage. Compromising either one will negate the benefit of a competitive marketplace.

Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Harrison, Mr. Dechene.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you.

I have a number of questions actually. You mentioned a figure of $113 million a year, I think it was, which was the figure quoted to you as the subsidy from urban to rural in Saskatchewan presently.

MR. HARRISON: Right.

COMMISSIONER GRAUER: And that the removal of that subsidy would result in increased phone rates of five to ten times for rural subscribers.

MR. HARRISON: That's right.

COMMISSIONER GRAUER: What is the average rate in rural Saskatchewan now?

MR. HARRISON: In our particular area in the southeast, and I guess it's somewhat universal throughout rural Saskatchewan, it's $25 for the basic, just to put the phone in before you use it.

COMMISSIONER GRAUER: It has been suggested to you by government officials that if the subsidies are to be removed, your phone rates could be $250 a month.

MR. HARRISON: That's right.

MR. AARON DECHENE: One example that we had been given at one of the meetings that we attended with government officials was in a deregulated environment, the local phone in Kindersley costs you $17 a month. You go five miles outside Kindersley and the actual cost for providing that service is $170 a month. That gives you some idea of the magnitude of what happens in that instance.

COMMISSIONER GRAUER: They talked about the rates and the cost of service in Kindersley and five miles out did you say, or just the rate in Kindersley and the cost of providing service five miles out.

MR. DECHENE: The rate in Kindersley I believe is the cost for providing service five times out so, you know, if they are going to recover that cost, it is going to have to be $170. I assume the $17 in Kindersley is making them some money because they are using it to subsidize the rural areas.

COMMISSIONER GRAUER: As you know, we are travelling really all across Canada and talking to people in various communities about the issues around serving high cost areas, in fact making an attempt to define what is a high cost area and how best do we subsidize this.

We have already been to Yukon and British Columbia. Some of those communities don't have phone service, so it's still notwithstanding subsidies, a challenge to be extending service to some communities.

If the amount of the subsidy required in Saskatchewan to maintain your rates is going to be $113 million a year, and you have phone service in most communities, we are going to have to set some priorities if we are to have a national fund, set some priorities with respect to service.

How would you suggest that we approach this in terms of communities that have no service, communities that have basic service that need enhanced service, the levels of subsidies? Do you have any suggestions for us there?

MR. HARRISON: Well, we would support ideally everyone in Canada having telephone service because it's such a way of life and our health and emergency services are tied very closely to it.

I think it's a principal within Canada right now. We have equalization between have provinces and have not. There are funds transferred every year from those provinces that have to those that have not.

There is an equalization principle in Canada right now. What we are saying is we should extend that one step further to the telecommunications system. To us that means our primary objective would be to have a phone in everyone's home in Canada, wherever they are.

COMMISSIONER GRAUER: Do you think there's a role then for various levels of government to support the subsidization of this, to keep it at rates that are affordable. By the way, what would you consider affordable?

MR. HARRISON: When you look at telephone service throughout Canada and you take an average cost throughout Canada, I guess that's what the acceptable cost is.

Those of us in government, naturally we don't want any more downloading or offloading than we already have. If you are suggesting to us that now at the local level we should part of our property tax towards telecommunications, I guess we would say the tax bill is full now and there is no room for anything more.

It is a matter of priority. Telecommunications is a very high priority in all homes. We are prepared to discuss it.

COMMISSIONER GRAUER: I wasn't suggesting actually. It was more a question. When you start to multiply $113 provinces times -- we have ten provinces and the various remote and challenging geography in parts of northern Canada --

MR. HARRISON: Well, there are some new technologies. Satellite phones are very expensive right now. Once the price of those come down, you don't have to build a tower any more. Towers are very expensive to construct.

Looking into the future, I think technology is going to help us through this high cost service.

COMMISSIONER GRAUER: Thank you very much. Thank you for coming.

THE CHAIRPERSON: Thank you, gentlemen.

Madam Secretary.

THE SECRETARY: Thank you.

Our next presenter is Myron Kowalsky. I invite him to come forward, please.

MR. MYRON KOWALSKY: Hello. Shall I proceed?

THE CHAIRPERSON: Yes, Mr. Kowalsky. We are waiting to hear you.

PRESENTATION / PRÉSENTATION

MR. KOWALSKY: Thank you very much, Madam Chair and Commission members.

First of all, I want to thank you for the opportunity just to be present today. I believe that the recommendations that you are about to make as a result of the hearings across the country will have a major impact, at least I hope they will have a major impact, on the type of communications that we are going to have across the country.

Your hearings provide people right across the country, and people like me in Prince Albert, the opportunity to present views and to have those views considered by you in the total Canadian context.

I hope your resulting recommendations will result in a universal telecommunications system for Canadians which will have the same value, the same profile, the same public acceptance as our universal medicare system has, a system that is the envy of the world.

The purpose of my presentation today is to emphasize the importance of universal affordable access to telephone service for all rural and remote residences and workplaces in Saskatchewan and Canada.

I want to state why a universal telecommunications system is important and make some suggestions as to how we could accomplish this.

I have been privileged to serve as an elected member of the Saskatchewan legislature since 1986. During this time, I have had many opportunities to hear from people and discuss our telecommunication system with constituents and how it impacts on people around the province.

When I heard this Commission was coming here, what I did was I thought I would mail out a little survey to my constituents, which I did. I kept it low key. I mailed out a householder. It looks like this. I will give each one of your a copy. This was distributed about ten days ago.

I didn't do any advertising on it, so the only people that would have noticed it and responded were those who were going through their flyers and found this tucked in amongst them and read it and then phoned my office or responded by letter.

What I did was I very explained in this what I interpreted the purpose of the CRTC hearings were. I asked them the question, whether or not they were in favour of making sure telephone service for rural and remote Saskatchewan is accessible and affordable through a national universal telecommunications fund or whether they were not in favour of this fund.

To date I have to say that I received responses from 75 households. Sixty-nine were in support and six were not in support. The 69 that were in support quite often would ask the question "Is it going to cost me more?" What I did was I responded "I expect it would cost the same as it does right now."

The six that did not support it generally stated that they favoured a user pay system all around and those people in rural and remote Saskatchewan should be prepared to pay for the telephones that they have.

I might mention that my constituency is a completely urban constituency here in Prince Albert, so this is a reflection of how urbanites in Saskatchewan feel. It's not scientific, but it gives you an indication as good as in the newspaper or a phone-in survey does these days.

As you are aware, we have nearly 100 per cent universality of telephone service in Saskatchewan. This is made possible through the collective support of all of our telephone subscribers.

I believe that SaskTel can compete in urban centres. What would happen is if they had to face competition, in urban markets if some competitor come in, they may have to reduce their prices. If they reduce their prices, that means they would not have the profits with which to cross-subsidize into the rural and remote areas.

I want to state emphatically what I believe my constituents want and what certainly my colleagues in the legislature want, as expressed by a vote that we had in the legislature approximately three or four weeks ago. We want universal accessibility to telephones to remain intact in Canada.

In fact, we want that universality to be extended to Internet services. Here are some of the reasons why we feel the universal telecommunications service fund is essential.

Approximately 28 per cent of Saskatchewan's population, or 280,000 people, reside in rural and remote areas of the province. I define that by communities of a thousand or less people. You have heard today earlier that SaskTel currently provides subsidies of $112 million annually for local access to these areas.

You heard earlier that if SaskTel could not maintain the present subsidy system that the people in remote areas would face increased costs. There have been several suggestions of what the costs could be, so I will skip those parts and go to what has not been mentioned.

I think an innovative approach as to licensing this can enhance the ability of clientele to utilize a communications system. One innovative approach that I as a teacher can relate to is computer literacy in a training program aimed at removing many barriers to usage. Knowledge of the system would certainly enhance the user service and also prevent many concerns regarding equipment breakdown due to inappropriate use.

Another avenue for telecommunications that could be explored and innovated is tele-health for remote and northern areas. I don't know if any of you have ever had a chance to travel to rural or remote northern areas of this province or in other provinces, but you are probably aware that many of the communities do not have a universal telephone system and certainly don't have doctors and nurses. Often times the weather is a factor which makes it difficult to access health services.

Many children in remote, rural and far north regions in this country have to leave home to receive an education. An education service through universal telecommunications could offer home education programs so that these children need not leave home through their grade school years.

In addition, Internet could offer many opportunities for the many industries that we have in particularly the northern areas and also in rural Saskatchewan, the part that is being farmed.

This has already been mentioned by many other people and I know that it's getting late. I am trying to not do too much repetition, although I know from teaching that repetition is something that is effective, but I know it's when you actually do it yourself rather than listen.

What I would like to do though is suggest that a funding mechanism patterned after our current SaskTel system be considered to provide this universal accessibility to a telecommunications system.

The purpose of this innovation would be to subsidize the construction and operation of the system to serve urban and remote areas. I think you would -- in order to get this done, you would have to first of all find out the cost that would be required across the country. Somebody would have to do that. I think we have the capability of doing it.

We know how much it costs here in Saskatchewan, but I think you can find that out across the country. Then have it paid for through a percentage of subscriber -- a percentage attached to subscriber fees on their basic monthly charges.

The fund set up for a universal telecommunications system would be governed by a body that's independent of government and would be comprised of representatives of stakeholders from the telecommunications industry, independent experts and subscribers from rural and remote areas.

This group would be -- that's not necessarily an exclusive list. This group would be charged with the responsibility of the practical implementation of a universal service funding mechanism. They could also have to think about the accountability of such a group.

This would be effectively almost like a tax. It would require federal legislation. I believe ultimately a group like that would have to be accountable, I believe, to the federal House of Commons.

In summary then, I want to say that the current method of service and funding is not sustainable over a long period of time. Therefore, we must develop an appropriate regulatory tool that can protect and expand rural services. Failure to do so in the long run will severely affect the economic survival and community development of rural and northern Saskatchewan and Canada.

Telecommunication is more than a basic commodity. It's a public service in which all sectors of our society now depend. Accordingly, it is our responsibility to provide an affordable, sustainable system for all citizens in Saskatchewan and in Canada.

Once again I thank you very much for the attention to the presentation and really for the steadfastness with which you just sit here and listen to all of us. That's rather impressive, by the way, to people in Saskatchewan, somebody who sticks with the job until it's done.

Thank you.

THE CHAIRPERSON: Are you planning to come back for the evening session?

MR. KOWALSKY: Well, good luck with the evening session. I guess it's time for you to have a break now too.

THE CHAIRPERSON: Mr. Kowalsky, you mention in your household flyer that telephones may be -- the sentence is "if telephones are completely deregulated", and this is a remark that I have heard from many presenters today .

If you don't think this is a fair question, you don't have to answer it. Is it your impression or is it the Government of Saskatchewan's impression that any province is in the process of being completely deregulated or what do you mean by deregulated?

MR. KOWALSKY: No, it's not my impression that other provinces are being deregulated. I am not aware of what is going on in other provinces at the time.

THE CHAIRPERSON: Is it your impression that Saskatchewan is about to become completely deregulated or is that used loosely to mean open to competition and therefore a shift in the ability to subsidize?

If I were receiving or hearing this, I would think that what is intended is a complete free for all which is hardly what we have anywhere. There have been changes but removed from rate of return regulation to price caps. We have opened competition, but there is a contribution rate. I hardly see that as complete deregulation, but anyway, I will let you comment.

MR. KOWALSKY: I think that complete deregulation is one of the possibilities. That's the possibility that I see as probably being not quite desirable, so I am pleased to hear what you say.

We have experienced deregulation, of course, in basic -- in long distance calls. In doing that, what we saw was a shift in the cost. We saw our long distance rates decrease and, although it's not complete deregulation it is a form of deregulation in telephones -- we saw our long distance rate decrease and in order to make up and be able to provide service and complete universal access or nearly complete universal access in Saskatchewan, what we had to do was increase our basic rates, our basic monthly telephone rates.

What I interpret here is that there is another move to deregulate and allow competition in the basic telephone access. I'm not opposed to that. I think competition is fine. I am just saying if we go that way, we should take care of this particular aspect of it.

THE CHAIRPERSON: My second question would be, and I raise it with you because it appears to be a government position that has specified quite clearly the amount of millions annually that presumably were a subsidy flowing from urban to rural areas, a very specific amount that has been repeated to us many times, and that it would result in increases in local rates in certain areas by as much as eight, and we have even heard ten per cent, I believe.

In the scheme that you seem to propose, what is your view about who should be responsible for determining the size of the subsidy required? As you recognize, each provincial telco has its own figures, its own subsidies, its own operational costs, et cetera, et cetera.

How would you see a universal fund without looking into each telco's operations or should this number be accepted, for example, by other telcos such as Bell Canada, Telus?

MR. KOWALSKY: I think that you would have to establish a study group or a body, you would have to establish a body that would actually be mandated with determining what the cost would be.

This would take a little while to do. It probably could be done within six months to a year. By a body which is given the authority to do just go out and study it and find out. They would be able to come up with it fairly closely.

On that basis it would be able to establish how much would need to be charged from everybody's basic telephone bill, what percentage would need to be charged to go into the fund.

When I just give my own feeling about the application of something like this to the entire country, it wouldn't be much different I think percentagewise than it is in Saskatchewan. It might even be cheaper because I think there are higher concentrations of populations, particularly in the east and in the lower mainland of B.C.

A small amount added to their bills or taken from their bills would go a long way, I think, to the rural parts of Canada.

THE CHAIRPERSON: We are assuming here that in central Canada there isn't a rural population that is proportionately as difficult to subsidize, but you are saying -- on the one side you are saying it may not be different per province. Is that what you said?

MR. KOWALSKY: No. I mean the entire country.

THE CHAIRPERSON: In the entire country.

MR. KOWALSKY: Yes.

THE CHAIRPERSON: That's why you have rejected and the Government of Saskatchewan has rejected a regional or provincial approach because it considers that Saskatchewan will have greater need.

MR. KOWALSKY: Well, not only that. I think we are at a juncture in communications where if we are going to have true competition, we can't have any provincial borders on it.

THE CHAIRPERSON: Thank you, Mr. Kowalsky. Thank you for bringing us your views. We apologize for being a bit late. I must say that I am glad you admitted that Prince Albert is urban because I come from a town in Ontario that has 10,000 people and I thought I was a bit city girl until I saw Prince Albert.

Thank you.

Madam Secretary.

THE SECRETARY: Our next participant this afternoon is Ed Simonar. I invite him to come forward.

THE CHAIRPERSON: Good afternoon, or evening -- I don't know.

MR. ED SIMONAR: It is still afternoon.

THE CHAIRPERSON: Welcome, Mr. Simonar. As soon as you are ready.

PRESENTATION / PRÉSENTATION

MR. SIMONAR: Thank you very much.

I am the President of the Saskatchewan Seniors Association Incorporated. I represent the older people of Saskatchewan and their concerns with the telephone.

The Saskatchewan Seniors Association Incorporated respectfully petitions the CRTC to continue the level of subsidy for rural and remote telephone service in Saskatchewan. The Saskatchewan Seniors Association Incorporated is incorporated under the Non-Profit Corporations Act of Saskatchewan.

The purpose of this association is to bring senior citizens together in one strong, non-partisan, non-racial and nonsectarian -- I just washed my teeth and I can't do a thing with them -- association that will work for the welfare of all seniors in Saskatchewan which shall respect the political, religious and ideological opinions of seniors at their own private concern.

The objective of the association is to offer leadership in promoting programs and activities that benefit all seniors in their chosen lifestyles to cooperate with other organizations in providing these same opportunities to work with other organizations across Canada with similar aids, to provide an organized forum for all seniors in Saskatchewan.

Our association is composed of 266 clubs with a total membership of 14,000. We can speak directly for these seniors and we feel we can speak on behalf of all seniors in Saskatchewan.

Approximately 275,000 people in Saskatchewan are of the age of 55 years or over. Demographic projections show that by the year 2006 the number of people aged 55 and over in Saskatchewan will reach 300,000. By as early as 2007, there will be approximately 50,000 people aged 80 and over in our province. It is readily apparent that affordable telephone service is a vital necessity for these people.

The Northern Administration District of Saskatchewan covers half of the land mass of Saskatchewan. There are approximately 40,000 people residing in this vast territory. Many of these people are remote from communities which can provide any measure of health, medical, dental, commercial and administrative services.

Telephone is the only communications link to these communities. The level of income in these communities is minimal. Any increase in the cost of telephone services would be a burden hard to bear and to many people, the cost would be beyond their reach.

Seniors are an ever-increasing component of the population in the north. They are vulnerable. Even for the more industrialized community of Creighton, with the centralization of medical and government services in southern cities, telephone communications is an ever-increasing necessity.

Seniors 55 of age and over constitute 20 per cent of the population. These seniors also experience an ever-increasing squeeze on their income. Increased telephone costs would be a financial burden to most seniors.

In southern rural Saskatchewan, larger farms have resulted in the exodus of a large number of people to larger communities. Rail line abandonment, the centralization of grain handling facilities, centralizing of medical services, centralizing of hospital services, centralizing of personal care homes and centralizing of commercial farm supply and shopping services has added to the depopulation of many southern communities.

Dependable and affordable telephone service is increasingly vital. With the decrease in population in the smaller towns and villages, the proportion of seniors to total population is much greater. The seniors are most vulnerable. Dependable and affordable telephone service is a prime necessity.

With an ever-increasing life span of seniors, many are outliving their pension plans, annuities and RRIFs. With low interest rates and investments, many seniors are faced with an alarming decline in income. These people cannot afford any increase in the cost of telephone service.

Seniors are faced with ever-increasing costs of prescription drugs. Seniors have the greatest need for prescription drugs, eye glasses, hearing aids and dental services. They require dependable and affordable telephone service to access these needs.

For seniors, dependable and affordable telephone service is a necessity, not a luxury. They must not be burdened with increased costs for telephone services.

Seniors clubs are charged a much higher than residential rate for telephone services. Telephone service to seniors clubs is necessary in case of sudden illness, falls, et cetera. Some seniors clubs in smaller communities have discontinued having telephone service. The clubs cannot afford the cost. Should the cost of telephone service be increased, many more clubs will have to discontinue telephone service.

They are vulnerable. These clubs cannot afford any increase in costs for telephone services.

The cities and towns where all services needed by seniors are concentrated benefit financially from the goods and services seniors purchase. We maintain that it is just and right that the subsidy for rural and remote telephone service be provided at not less than the present level of subsidy.

Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Simonar.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you, Mr. Simonar.

It must be very frightening to seniors to hear the kind of figures that we have heard today. I am very glad you are here. We appreciate you taking the time to make your presentation.

With respect to the seniors clubs, for instance, that have had to perhaps cut back on the service, what would be the rates that they would have to pay that would cause them to --

MR. SIMONAR: They are charged a commercial rate for their telephones as well as they are charged on their taxes as a business place. The seniors are being used terribly, I think.

COMMISSIONER GRAUER: Yes. Your presentation was very clear. It's not a lack of interest. I am very sympathetic. I really appreciate you taking the time.

Thank you very much for being here today.

MR. SIMONAR: Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Simonar.

Madam Secretary.

THE SECRETARY: Madam Chairman, at this point I would like to poll our remote locations to see if anyone is there that is scheduled to speak.

Can I begin with Tim Kidd in Regina, please. Mr. Kidd, do you have anyone there?

MR. KIDD: No, no one. We are fine in Regina. Thank you.

THE SECRETARY: Okay. Then we will check with you later.

How about Maureen McLeod, Saskatoon? I don't hear anything so we will go to Eva Quigley in Yorkton.

MS QUIGLEY: No, there's nobody here.

THE SECRETARY: Thank you, Eva.

Chris Dodson in Swift Current.

MR. DODSON: No, we are fine here.;

Thanks.

THE SECRETARY: Thank you. We will check with you later.

MS McLEOD: Sorry, were you asking Saskatoon a question?

THE SECRETARY: Yes, Maureen. Do you have anyone there presently that is waiting to make a presentation?

MS McLEOD: Sorry. I stepped out of the room. No, we don't.

THE SECRETARY: Okay. Thanks a lot. We will check back later.

MS McLEOD: Right. Thank you.

THE SECRETARY: Thank you.

THE CHAIRPERSON: I gather this completes the presentation for the day session.

I would now ask representatives of SaskTel to reply to any of the comments made here today or to indicate whether they intend to reply to the presentations made during this day's session.

MR. JOE McVEA: Madam Chairman, we will have a brief reply at the end of the day, if that would suit your purpose.

THE CHAIRPERSON: Yes. You don't need any time now.

MR. McVEA: No.

THE CHAIRPERSON: After the 6:30 session, the evening session.

Thank you very much.

I guess this completes the day session. We wish to thank all presenters for taking the opportunity to bring us their views during the day's session.

It has been a fruitful day and, as explained earlier, you can all rest assured that your views will form part of the record when we wrestle with the issued discussed.

Thank you to my colleague for participation, to the staff for their assistance as well as to the court reporter.

We also thank SaskTel, not only for its high performance audio/video links but also for helping to sort out the small problem encountered this morning at the facilities in Prince Albert itself.

We thank you all. We will resume at 6:30 and see some of you back then.

Thank you.

--- Recessed at 17:58 / Suspension à 17:58

--- Resumed at 18:35 / Reprise à 18:35

THE CHAIRPERSON: Order, please.

Good evening, ladies and gentlemen. Good evening to everyone and welcome to this regional consultation on an issue which is fundamental in telecommunications today, that is the provision of high quality telephone service in high cost serving areas.

My name is Andrée Wylie and I will chair tonight's session. Seated next to me is Cindy Grauer, the Regional Commissioner for British Columbia and the Yukon. Also in attendance are Commission staff, our Hearing Secretary, Marguerite Vogel, the furthest from me. She is from CRTC Vancouver office.

Next to her, legal counsel, Lori Assheton-Smith and our hearing manager, Steve Delaney. If any of you have any question, don't hesitate to consult them, especially procedural questions that you may have.

Before I begin, I would like to say that we are happy to be here in Prince Albert. In fact, we have been here all day already. We thank your provincial government for its invitation and for this opportunity to hear your views on these issues.

I would also like to welcome at this time all the people who will be participating in our hearing through audio/video links which are available from Saskatoon, Swift Current, Yorkton and Regina.

At this point I would like to ask legal counsel to address a few particulars of the process we will be following tonight.

AUDIENCE MEMBER: Can you speak up? We can't hear you.

THE CHAIRPERSON: Yes, I will. Is this better?

AUDIENCE MEMBER: Not much.

THE CHAIRPERSON: Can you hear me better now?

AUDIENCE MEMBER: No.

THE CHAIRPERSON: Can you hear me now?

AUDIENCE MEMBER: It's better.

THE CHAIRPERSON: Did you hear me at all?

AUDIENCE MEMBER: I can hear you now.

THE CHAIRPERSON: I would like our legal counsel now to address the particulars of the process we will be following during this evening's session.

MS ASSHETON-SMITH: Thank you, Madam Chair.

If you have indicated that you wanted to make an oral submission at this evening's session, the Secretary will be calling your name. When she calls your name, please come forward to the table at the front of the room.

If you are present here and you would like to make an oral presentation but you have not already registered, please speak to the Hearing Secretary and we will try to fit you into the schedule.

If a participant is not here when the Secretary calls his or her name, the Secretary will call upon them later in the evening.

For those of you who are participating remotely through a video link, please follow the instructions of the telephone company representative in your location.

The oral submissions heard at this consultation will be transcribed and will form part of the record. If you wish to purchase a copy of the transcript, please make the necessary arrangements with the official court reporter, who is seated at the table directly across from me.

In addition to oral submissions, I would like to remind everyone that written comments on the issues that are being considered here today may be submitted to the Commission at any time before January 30, 1999. Like the transcript, those comments will also form part of the record of this proceeding.

After everyone has finished with their presentations, we will take a short break, after which the telephone company representatives will be given 15 minutes to respond to any comments raised in the course of today's session with respect to high cost issues.

I remind the telephone company they can also address any comments raised at this regional consultation in the course of its written argument which again is to be filed by January 30, 1999.

Thank you, Madam Chair.

THE CHAIRPERSON: Thank you.

We will be ready now to hear the first presenter.

I would like to point out that the main reason for being here is to hear your views. We may have some questions of clarification, but generally speaking, we are here to hear from you in particular.

As was explained throughout the day, your comments will be transcribed and will form part of the record.

I would invite Madam Secretary to call the first presenter.

THE SECRETARY: Thank you, Madam Chair.

Our first presenter this evening is Brian Chaboyer. I invite him to step forward, please.

THE CHAIRPERSON: Good evening, Mr. Chaboyer. I hope we are not mangling your name too much.

MR. BRIAN CHABOYER: No, it sounds fine, thanks.

THE CHAIRPERSON: Please proceed when you are ready.

PRESENTATION / PRÉSENTATION

MR. CHABOYER: My name is Brian Chaboyer. I am currently the chairperson for Northlands College in the city of La Ronge.

AUDIENCE MEMBER: We can't hear you. I'm sorry. Why did we come here when we can't hear anything? We may as well go home.

THE SECRETARY: I think the technician is going to work on the mike back there.

AUDIENCE MEMBER: You fix one end, the other end isn't working. Get together on it.

THE CHAIRPERSON: Can you hear me now?

AUDIENCE MEMBER: Yes. Very good.

THE CHAIRPERSON: Thank you.

MR. CHABOYER: Can you hear now?

AUDIENCE MEMBER: That's better.

MR. CHABOYER: Okay. Northlands College is one of nine publicly funded regional colleges serving the post-secondary needs of rural and northern Saskatchewan. Northland College services four distinct geographical regions in northern Saskatchewan, encompassing an area of approximately 265,000 square kilometres.

Total population is approximately 37,000, comprised of 60 per cent First Nations, 27 per cent Metis and 13 per cent non-aboriginal people. The majority of communities have a population of fewer than 1,000 residents.

Northern Saskatchewan is a vast, underdeveloped, remote and sparsely populated region of the province. In the north, 56 per cent of the population is under the age of 25, compared to a corresponding 28 per cent for the province as a whole.

In the north, 61 per cent of families have an annual income of less than $30,000, while the corresponding percentages for Saskatchewan and Canada are 36 per cent and 29 per cent respectively. This indicates a significant income gap for people of northern Saskatchewan.

In the north, 36 per cent of adults have less than grade nine education while the corresponding percentage is 68 per cent for Saskatchewan as a whole. This indicates a significant education gap for people of the north.

The northern employment rate is 37 per cent compared to 63 per cent for the province as a whole. This indicates a significant employment gap for northern people.

There is a larger average number of people per dwelling, a higher percentage of single parent families. a greater percentage of alcohol and drug abuse, a greater suicide rate amongst youth, a greater percentage of children born to mothers less than 19 years of age, a greater tuberculosis rate and a higher level of criminal code offences. This indicates a significant socioeconomic gap for people of the north.

This excerpt is from the Summative Evaluation of the Multi-Party Training Plan 1993-98 and was prepared by the Business Advisory Services, College of Commerce, University of Saskatchewan.

Put side by side with the predominantly aboriginal population that is younger, growing faster, less educated and less employed than the population of the province as a whole is an emerging economic climate in the north that promises increased economic development activity and employment opportunities.

Production in the forestry sector is projected to double in the next five to ten years. Implications of that expansion included increased employment opportunities operations, the requirement for additional technical expertise in forestry management and significant potential to expand into the secondary processing of forestry products.

The emergence of eco and adventure tourism and government policies on the procurement of northern goods and services has the potential to significantly increase the northern small business sector.

The establishment of northern health districts and the impending construction of new health facilities provides opportunities for increased employment in the health professions.

The restructuring of the mining sector as northern mines move from surface mining to more technologically methods of underground mining will require labour force retraining, upskilling and a focus on professional careers such as engineering.

The ability of northerners to participate in this new economy is contingent upon education and training and access to information technology. Given the remoteness of northern Saskatchewan, information technology is crucial to the accessibility of education and training necessary for northern participation in the economy.

Affordable access to telecommunications services is imperative to the socioeconomic development of the north. Internet, teleconferencing and satellite delivery of university and technical education have become essential in the delivery of educational opportunities to remote northern communities.

If the cost of accessing that technology becomes prohibitive in remote regions, this will result in the further marginalization of northern people. The north cannot afford to fall even further behind the rest of the province and the country. The social cost will be too great.

Our recommendation: We strongly urge the CRTC to consider the ramifications of the withdrawal of telecommunications subsidies from high cost service areas. Increased social costs will far outweigh the financial cost of providing equitable and affordable service.

As a regulatory body, we encourage the CRTC to regulate telecommunications to ensure equitable and affordable access regardless of location. Licensing should be contingent upon service provision to a high density/low density market range whereby high density market profits subsidize the higher costs of serving low density, remote markets.

Canada has the potential to be a world leader in the emerging knowledge based economy. That potential will only be released if all levels of society have affordable access to information technology.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Chaboyer.

In the area where the college is situated, you have access to services. It is the cost of them that is a concern.

MR. CHABOYER: Yes. That is a major concern, plus we have several satellite communities that we would like to get more Internet access to and stuff like that.

THE CHAIRPERSON: Who do not have that service yet.

MR. CHABOYER: Yes.

THE CHAIRPERSON: They would have dial tone access. They would have telephone service, but not Internet service.

MR. CHABOYER: Yes.

THE CHAIRPERSON: Your concern is the extension of these enhanced services to the smaller communities as well as the cost to all the population in the north of enhanced as well as basic telephone service.

MR. CHABOYER: That's basically it.

THE CHAIRPERSON: And you would support the Saskatchewan government's plan for a Canada-wide universal fund.

MR. CHABOYER: Yes.

THE CHAIRPERSON: Thank you very much. Thank you for your presentation.

MR. CHABOYER: Thank you.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: We will go now to Swift Current and our participant's name is Bruce Probert. Could he come forward, please.

PRESENTATION / PRÉSENTATION

MR. BRUCE PROBERT (Remote): Thank you very much for the opportunity.

I am presenting on behalf of all of the regional colleges in Saskatchewan who have an association called the Association of Saskatchewan Regional Colleges, made up of board members and chief executive officers.

From the perspective of the Saskatchewan Regional Colleges, a fundamental guiding principle when considering telecommunications services is that rural and northern residents should have access to quality services at the same rates as urban residents. We want equal rates for comparable service.

To be consistent with the principles of both federal and provincial governments, we believe that a balance has to be struck between competition in the telecommunications industry and the objective to provide access to communications services to help support the economic and social viability of rural and northern Saskatchewan.

Access, which to me implies affordability, is of primary concern in the rural and northern areas. Approximately 58 per cent of the population of Saskatchewan lives outside of metropolitan areas, a metropolitan area being defined as 100,000 or more.

Regional colleges serve most of that population. In Saskatchewan, I don't know if you are aware of what regional colleges or community colleges are. They are very different animals in Saskatchewan than you see in most parts of the country.

We are entirely community based. Our budgets are too low. We don't operate out of large facilities. They are mostly rented facilities. We broker most of our credit programs from existing institutions, so our emphasis is on the delivery of programs and services. We aren't focused entirely on the development of new programs and accreditation.

Between the regional colleges and our partners, who are other agencies and institutions and business and industry and the communities, we provide a real broad range of programs and services with three primary objectives in mind. That is to train a relevant workforce, to provide access to training and career services and to further develop our systems to ensure sustainable delivery system in the rural and northern areas.

There are eight regional colleges in the province, each offering 300 to 400 short term and long term credit and non-credit courses and programs, all in response to identify training needs in their respective reasons. We are very reactive in that sense.

The colleges also offer career services to the general public and our students. We also provide income support for those in need while they are taking training.

I hope that gives you some sense of how community based we are as institutions. We clearly have an increasing reliance on telecommunications and on access to telecommunications technology, not only in our colleges which are highly centralized institutions within each of those eight colleges. We have a number of sub-offices scattered throughout the rural and remote areas.

We communicate via technology. It is most prevalent in the programs and services that we offer. Much of the training that we do is for smaller business and industry which really all of the business and industry in the rural areas is relatively small. Most of it relates to upgrading their technological requirements, for maintaining their competitiveness in a global marketplace.

Most students that we have that are pursuing degrees, diplomas and certificates are engaged in some form of distance education that involves technology. They may take a number of courses face to face which we can offer on site, but we certainly can't do that in all cases.

Most of them engage in some traditional print distance education courses, but at the very least all of our students, right from our university students to our basic education students, require Internet access for research purposes and a whole lot more.

Some courses that we offer on a regular basis utilize a number of different delivery mechanisms so that they can access master teachers. It includes satellite receiving sites. We call it the Saskatchewan Communications Network. We have onsite and offsite tutors who may interact through some sort of telecommunications technology, computer assisted and computer mediated courses.

We use compressed video. We use e-mail inside the courses and teleconferencing, all to a fairly large extent.

In addition to that, all of the colleges in this province have made significant investments in the past year to enhance their career services capabilities to our public and to our students. We have done this by developing a very comprehensive multimedia career resource centres. Just by the title, you can imagine that they are based almost entirely on technology.

The ability for rural residents to pursue career searches and even just search for jobs from rural locations is integral to their success in either entering the job or market or re-entering the job market.

Many of the clients utilizing these services simply do not have the ability to travel to the larger centres to access the services. Further, these services we can only maintain these services as long as there is a sustained telecommunications infrastructure on which to base them.

I am going to turn now a little bit to the look of rural Saskatchewan and the social and economic health of rural Saskatchewan is beginning to improve. It is very encouraging. There are many factors contributing to the growth, everything from low interest rates and perhaps the elimination of the Crow rate has spurred a number of entrepreneurial activities and secondary processing.

As the secondary industries develop, they come to rely on a telecommunications system very heavily. We believe that that may be threatened by differential rate structures and widely variable basic telecommunications services. These services are needed to carry on daily business transactions and to remain competitive.

I am not going to try and define what I mean by basic education services, but certainly we need touch tone phones, access to the Internet at a certain rate, but some sort of comparable service in the rural and remote areas.

For a brief time in Saskatchewan we did have a variable rate structure between urban and rural Saskatchewan. The disparity to SaskTel's credit was corrected in a relatively short period of time, but during that time rural people simply did not have access to the Internet. They did not buy subscriptions.

That was really apparent to us as colleges because the minute the rate structure was corrected, we had a huge number of people asking for introductory courses on how to use the Internet.

What also happened during that time, many agencies, institutions and businesses engaged in what I heard referred to as gaming where they -- if they had a friend or another business with a telephone line that hadn't purchased an Internet connection, they bought their Internet connection on that phone number and used that from their home in rural Saskatchewan.

It doesn't really accomplish anything for anybody. It just allows a few people to play that sort of game and get the access.

We believe that funding for high cost service areas is a problem that should be shared by all Canadians. We believe it is a national problem, not a local one. It is the regional colleges' belief that all telecommunications providers should contribute equitably to the funding that will be required in high cost service areas.

If some such mechanism is not put in place, rural markets may be ignored to the point where even the existing infrastructure will deteriorate, much less be able to keep pace with global markets, opportunities and access to information.

Although technology alone is not and will not bring about economic development, it is an important component and catalyst. Just like technology, education and community development are all simply components of the economic and social development that we need to ensure in the rural areas.

Again, in rural Saskatchewan we need access through telecommunications comparable to urban areas. As we as colleges change and adapt to fulfil our goals to provide relevant training, access and maintain a sustainable system, we need a reliable and accessible telecommunications system which we believe is integral for colleges to contribute to the social and economic development of rural communities.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Probert.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you, Mr. Probert.

It sounds to me as if you and your students have access to a pretty sophisticated communications system for the delivery of services. Would that be fair?

MR. PROBERT: Yes, we do.

COMMISSIONER GRAUER: So I gather your principal concern is maintaining the affordability of that access to ensure that neither you nor your students are prevented from continuing to deliver and receive these services. Is that also fair?

MR. PROBERT: Yes, precisely. We are moving down that path where we come to rely on that system very much.

COMMISSIONER GRAUER: I can sympathize with that.

While you haven't mentioned any figures, we have heard some sort of fairly alarming numbers being thrown around here today. I don't know if you have heard them as well. It is a suggested increase of between five to ten times in the existing rate structure. Are those figures that you have heard?

MR. PROBERT: I haven't really heard any suggestions about that, but that is very alarming.

COMMISSIONER GRAUER: So you just are speaking in general then as a general concern about keeping your rates affordable. Is that the case?

MR. PROBERT: Yes. We believe that they should be the same as urban rates for comparable service.

COMMISSIONER GRAUER: Thank you very much for taking the time to make your presentation. We appreciate it.

MR. PROBERT: Thank you.

THE CHAIRPERSON: Thank you, Mr. Probert.

Madam Secretary.

THE SECRETARY: I would like to go to Saskatoon now. We have two presenters in Saskatoon. The first is Don Smith. Would you come forward, please.

PRESENTATION / PRÉSENTATION

MR. DON SMITH (Remote): Good evening. I understand I have 15 minutes. I have previously submitted this submission in writing.

Are you able to hear me?

THE CHAIRPERSON: Yes, Mr. Smith. Good evening. We hear you well and we also have your document.

MR. SMITH: Thank you.

I will stay fairly close to the document in that I am representing the Creighton School Division and this is their position as opposed to simply my own, approved by the Board of Education.

They have asked me to thank you for inviting us to submit the view. We believe that the topics you are holding hearings on are very important to the development of Saskatchewan and to our area.

This Saskatchewan school division, Creighton Division, operates one school with a K - 9 student enrolment of about 457 and places another 156 students in Flin Flon School Division in Flin Flon, Manitoba.

We are situated there by Flin Flon on the Manitoba border and serve the communities of Tyrell Lake, Denare Beach and Creighton with a total population of about 3,500. We are an extension of the Flin Flon mining area and so are integrated to a certain extent with that economy.

You have indicated that some of the topics you hope to hear our views are on numbers one, two and three, what should be the obligations of the telephone companies in providing telephone service to high cost areas?

Number two, if subsidies are required for high cost service areas, what services should be eligible for subsidies and how should the subsidies be funded, and what types of technology are acceptable for high cost or remote areas.

The Creighton School Division believes that the following question should be added to the discussion. We would call it number four. Two parts.

"What should be the role of government and government regulators to:

(a) ensure equitable access to service at reasonable cost to residents of outlying and sparsely populated areas?

(b) ensure that, in a relatively new province such as Saskatchewan --"

We are only about 93 years in history and we are still growing.

"-- in a relatively new province such as Saskatchewan, continued opportunities for economic development are developed in the outlying communities and hinterlands and not simply concentrated in Saskatoon and Regina, or worse yet, Winnipeg or Calgary?"

We will address items 4(a) and 4(b) first because they speak to the major question of deregulation of telephone and telecommunications services as we as residents of northern Saskatchewan may be affected.

We are well aware that behind this question of removal of subsidies to conform, that behind this question of removal of subsidies is the need to conform with the North American Free Trade Agreement. We are sensitive to that but we don't feel that is the whole answer when it comes to the development of a country or a region of a country.

The Creighton School Division firmly believes that government and government regulators do bear a significant responsibility to ensure that students and other citizens in outlying and sparsely populated areas of our province have equitable access to service at reasonable cost and that there is a continued encouragement for economic development in those hinterland areas.

We do not believe that deregulation of the telecommunications services providers and reliance on market forces will serve the residents of northern Saskatchewan as well as we are presently being served.

Without the mandate from government providing the necessity for companies to provide such high cost services at affordable rates and without the corporate will to do so, our service will likely decrease and the cost of what is provided may rise to prohibitive levels.

In Saskatchewan, we are well able to remember the type of services and the locations at which they were available prior to the creation of the Crown utilities Sask Power and SaskTel. That is going back to the forties and fifties but there are number of us who can still remember that.

Private companies readily served the larger population centres, but service to rural and northern areas was not something they rushed to do. In fact, the citizens of Saskatchewan felt the need to create the Crown utilities to do exactly what those private companies would not do, that is provide electrical and telephone services to rural and northern residents at affordable rates.

In the past three years, our school division has witnessed the fine efforts of SaskTel to provide our Creighton residents with affordable local access to telecommunications, improved access to high speed data lines through installation of modern digital switching equipment and fibre optics lines and low school rates for high speed data line connections to our school and communities.

In northern Saskatchewan, our students are increasingly dependent on telecommunications to have access to educational resources, distance education options and contact with other schools through the Internet.

In this respect, Creighton School Division wishes to endorse and support the presentation made to you by our northern neighbour, the Northern Lights School Division No. 113.

As our communities seek to develop more business and industry that will afford our students increased opportunities for employment, they too are increasingly dependent on good telecommunications access.

The Creighton School Division believes that by their very nature and importance, telephone and telecommunications are properly viewed as a necessary public utility and nothing less.

Without equitable access to telecommunications services at prices comparable to the higher population, lower cost markets, it will be very difficult to provide our students with the educational opportunities to equip them to be competitive on the world stage in the 21st century.

We fear that deregulation of telecommunications services would once again expose northerners to the corporate bottom line that, put simply, maximizes profits by concentrating services in low cost, selected high density markets and by raising prices and decreasing services to the outlying and less lucrative markets.

For the federal government and the CRTC to permit complete deregulation Saskatchewan we believe would be a sad dereliction of your responsibilities. In this hearing, we affirm our full support for the position taken by the Government of Saskatchewan and we strongly support the present role of SaskTel.

Having now set out our concerns about the general question of deregulation and in particular how it may impact on telephone and telecommunications services and costs us to in a distant northern area, we will now address the first three questions raised in your public notice.

I just can't help digressing just for a minute. Having gone through the last three years, we put Internet high speed connections into our school. We watched and participated in Industry Canada's initiatives through the Community Access Program.

All of the big effort to get outlying areas, and in particular isolated northern areas to get on the Internet and get access to these resources that the federal government has done and we have kind of moved to that as a school system.

We are on it now and we are increasingly dependent, then along comes the CRTC suggesting that the subsidies should be done away with and the possible outcome, very possible outcome of that is extremely higher rates of access in terms of costing to our organization. We noted that with some irony and we are a little upset about it.

In regard to item No. 1 of the first three questions, what are the obligations of the telephone companies, the Creighton School Division believes that any companies allowed to compete for the provision of telephone or telecommunications services in Saskatchewan should be obligated and mandated to provide a full range of services to the whole province of Saskatchewan.

They should be required to treat the entire province as one market. They should not be allowed to cherry pick profitable services in restricted markets, leaving the rest of our citizens to their own devices.

For example, we have been recently treated to the numerous calls from companies competing on rates for long distance telephone services. Many of these companies do not have to assume the liability to provide and maintain local service access. Even if they were able to do so, we fear that northerners would get a smaller level of service at considerably higher prices.

In regard to the second question, item No, 2, subsidies would be required in the case of full deregulation or some other device such as the Government of Saskatchewan is suggesting, some kind of a fund which would help to pick up that cost.

However, we do not believe that this is the best direction to take, but we realize that there may be no choice in the matter. Rather, companies must be regulated to the extent that they are required to provide equitable service to the entire province. To some extent then, the lower cost segments of the market will necessarily subsidize the higher cost areas.

In other words, competition isn't the whole name of the game because if you allow companies to compete and dice up the market the way they want, I'm quite sure that some companies, and I won't mention any names, would be only too happy, for instance, to pick up the local account for Hudson's Bay Mining & Smelting Company, a large company in our region, because that's very economical, but I don't know how willing they would be to provide local services of Denare Beach, some ten miles away and out in the rock. It remains to be seen.

Subsidies to private companies paid by government do not always achieve the hoped for results, unless the companies are successfully held accountable for the service to be delivered as a condition of receiving subsidies. Some government subsidies combined with continued regulation may be a more helpful direction to take than the course of full deregulation.

As an educational institution in northern Saskatchewan which is funded largely by provincial government grants and to a lesser extent by local taxation, our school division recognizes that any decrease in telephone/telecommunications services or increases to local access costs does in fact result in a lowering of opportunities for our students or an increased subsidy from the provincial Department of Education that will be necessary to maintain their educational access to these services.

In other words, if you set up a situation where a class increased dramatically, either we won't be able to provide the same opportunities for the students in our school or the residents in our communities or we will have to pick up those costs from other sources.

In the school division situation, that means either through grants or local taxation to make up that difference if we are mandated to do it.

We worry that a move by the federal government to deregulate telephone and telecommunications services could have the effect of increasing the cost to our provincial government. What about the federal government's responsibility to foster the provision of equitable access to reasonably priced telecommunications services to all Canadians in all regions of our country?

We wonder if this is another potential example of downloading costs to those regions least able to bear the cost. In regard to the last item, what kind of technology would be acceptable for high cost or sparsely populated areas, we are aware that technology and telephone/telecommunications is changing rapidly and so are the costs of the technology.

Improvements come rapidly and cost of service can be decreased. As a northern school division, we strongly believe that the quality and quantity of the services that our students can access should be just as good and the prices just as affordable as for the students in the high population lower cost areas.

In other words, a student sitting in our school in Creighton should have the same opportunities as one sitting in Saskatoon or in Regina or Winnipeg, at a reasonably affordable level.

We don't want to get into the technology of providing that because there will be lots of different ways to do that. We feel that the question should not be what kind of technology should be acceptable. We feel the question should be what quality and range of services and what affordability of price is available.

That should be the high jump mark and not whether this technology is better than that technology because in effect -- provide a good range of services that is equitable to all of the citizens of Saskatchewan at a reasonable rate and then find the technology that achieves that.

The choice of technology and how that is delivered to us is of less concern than the quality of the services delivered and the affordability of pricing. I gave you the example of wanting to have equity in our student opportunities.

Also, as another example, a new business established in Creighton should not be seriously disadvantaged by prohibitive communication costs. In other words, we are a developing province and why would it be that the free market would concentrate the best opportunities in the largest centres when we are wanting to develop our province and our communities?

The Creighton School Division congratulates SaskTel for doing what I have already mentioned for us. What they have done is provided us with reasonable service at equitable rates. We are getting the same kind of access to a large extent for our students right now in Creighton that they are in Saskatoon and Regina and at reasonable or comparable rates.

In fact, we just renewed a contract with SaskTel to lower those rates. I am aware of what the rates were in Manitoba, northern Manitoba, and we are doing pretty good.

I also hear stories about what is going on in the northern areas of other provinces and I think we are doing pretty good here too. I would worry about that and our school division is quite concerned about the fact that the CRTC would consider opening up competition without any degree of regulation on the service providers.

There has to be something to balance free market with the need for different regions of provinces, in particular to have some chance to grow and develop.

In conclusion, the Creighton School Division strenuously objects to any decisions which would result in poorer service and higher costs for our students and the citizens of northern Saskatchewan.

We are a developing area of the province and this area promises in the next hundred years to become more prosperous than we are now. Please do not allow international or other interests to impede the favourable development of northern Saskatchewan.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Smith.

Mr. Smith, is it your impression that the CRTC at the moment has anything to do with the decisions taken by SaskTel?

MR. SMITH: Well, I'm sure you do have something to do with it to the extent that you are the regulating body. I am also under the impression that you are holding hearings prior to making rulings on whether or not you will allow unsubsidized competition for local access rates in all areas of the province.

I read your little brochure here, through the questions. I guess our school division is concerned at what we are seeing.

THE CHAIRPERSON: At the moment the CRTC does not regulate SaskTel.

MR. SMITH: I didn't say that you did.

THE CHAIRPERSON: Or mandate any manner of providing service, but we were invited by the provincial government while we were doing this round of regional hearings to come to Prince Albert and listen to the views of Saskatchewan residents such as you about how you perceive the CRTC's process not to completely deregulate or remove subsidies, but to examine how and what type of subsidies can continue to flow to high cost low density areas.

There is no mandating by the CRTC at the moment of the manner in which service is provided in Saskatchewan by SaskTel. Also, I have asked this question before, complete deregulation in my view does not exist in any province of Canada. It is a question of rearranging the system. That's what we are looking at now.

As competition is available in some areas, not how do we remove the subsidies, but how do we manage to keep service affordable? I gather that that is your main concern as well. You seem thoroughly satisfied with the service provided. You just want it to remain affordable.

MR. SMITH: Our paper, the paper that I have submitted to you, speaks directly to those three questions, one of which you are referring to. What should be the obligations on the service providers or competitors. I think I have spoken in our paper directly to that.

We feel that whatever rulings you make in that area, there should be an obligation for them to provide a full range of service to the whole area and not just to favoured areas.

THE CHAIRPERSON: And you would see that as --

MR. SMITH: The cost should be affordable in the outlying areas.

THE CHAIRPERSON: And you would see that as a necessity for across Canada fund or subsidy system, not a provincial one.

MR. SMITH: Well, I can only speak here for our province because we are being asked to represent the views of our constituents in northern Saskatchewan. I am speaking about this province.

However, I realize that you are a national body and you probably are going to make rulings that affect other provinces. I really doubt that it may be that much different in some of the outlying northern areas in other provinces. They will probably have some of the same concerns.

THE CHAIRPERSON: Yes, most probably. We have already been to the north, in Whitehorse and Prince George and northern British Columbia. There are areas, of course, where there is no service available, never mind worrying about how affordable it would be.

It is a thorny issue to look at how to rearrange the system so that not only do people have affordable service, but that they have service at all, which is a difficulty in some areas.

MR. SMITH: Can I just add. You asked me about the role of SaskTel. I alluded in reading the report of the school division -- we alluded to our own experiences in the school division. It speaks to the need to provide some mandate for whichever companies are going to do it because I mentioned that we had just renewed a contract for high speed data services with SaskTel in which the rates came down.

THE CHAIRPERSON: Without --

MR. SMITH: We are aware that SaskTel was a company given a mandate to provide service at reasonable rates to outlying areas, so they made the commitment in infrastructure to put in fibre optic lines and digital switching equipment into an area like Creighton or Ile a la Crosse which I rather doubt other companies would have done given the prospect for profitability in the short term.

They did it two or three years ago. Because they made that commitment at that time, they are now in a position to offer those kinds of services to us which are as good and, in fact, in some areas better than some other areas that I can name simply because they were mandated to do that. It wasn't just a free market decision.

I think that's a bit of instruction, I think, as citizens sitting out there looking at what might happen or might not happen. That's the feeling of the people in our school division, that without some kind of mandate the service providers may not have the impetus to continue to maintain services in outlying areas.

THE CHAIRPERSON: So I understand you to say that you are satisfied with the service and you are even satisfied with the price, which was reduced quite recently, but you remain concerned about affordable service in the future.

MR. SMITH: We remain concerned about what might happen if the environment changes and other service providers enter who don't have that mandate.

THE CHAIRPERSON: Thank you very much, Mr. Smith.

MR. SMITH: Thank you very much for hearing me.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Still in Saskatoon, I would invite Peter Preeble to come forward.

MS FORANE: Margaret Forane in Saskatoon. Mr. Preeble has not arrived yet. We have just gone downstairs to check for him. He may have been detained in security.

THE SECRETARY: Thank you Maureen, we will come back to you. We will recall Mr. Preeble.

MS FORANE: Thank you.

THE SECRETARY: In Prince Albert, I would like to invite Ken Baker and Lorena Stiglitz to come forward, please.

THE CHAIRPERSON: Good evening Ms Stiglitz and Mr. Baker.

PRESENTATION / PRÉSENTATION

MS LORENA STIGLITZ: We live in the arm of Prince Albert, about 33 kilometres out of P.A. and have a St. Louis number. We are concerned about this CRTC and the telephone service not continuing being subsidized.

Also, we are rather confused about the rural telephone system and how and why it is set up as it is and where the cost is once a telephone has been installed in a rural home.

Also, where our questions come from are why are some places right now as far away as an hour, like Candle Lake or even a little closer, like Christopher Lake, Paddockwood and Meath Park areas, getting free calling into Prince Albert when other areas as Birth Hills, Shellbrook, St. Louis, have to pay for long distance calls into the city of Prince Albert.

Then there are eight homes in our neighbourhood that are in the arm of Prince Albert on the north side of the river and west of St. Louis still within 40 kilometres of P.A. where we have to pay long distance because we are on the St. Louis exchange.

What we want to know is how could we get into being part of a local calling into Prince Albert and what would happen with the subsidizing or not being subsidized? Does that make a difference when you are local calling into Prince Albert? How would that system be?

We feel if SaskTel were to provide better services and reasonable rates and help the public understand where things are coming from and how they are set up, perhaps the long distance carriers would be more SaskTel rather than going elsewhere. Maybe then there would be more cash flow in with SaskTel system and perhaps first looking at SaskTel and the system before coming to the public for more money would be a good idea.

THE CHAIRPERSON: Thank you, Ms Stiglitz.

As I indicated to the former presenter, currently the CRTC does not regulate SaskTel, so we are unable to answer your questions.

A representative of SaskTel is here, more than one. Perhaps you can pose questions to them or they will be making a reply at the end of this evening's session.

I understand the type of service you are talking about because it is present as well in other telephone companies, but each telephone company has its own system. SaskTel is not one that we regulate, so I am not aware of how they do it.

Perhaps they will help you in understanding better why you are not getting this extended service. I would ask you to either wait for their response or speak to the,m about this particular issue.

We are here, however, to hear views of Saskatchewan residents at the invitation of the Saskatchewan government on the need to continue finding a way to provide affordable service to high cost low density areas, rural areas where service can become more costly as the environment changes.

I suspect you would also have those concerns. I don't know if you have anything to add on that particular process that we are following here.

MS STIGLITZ: No, I don't think so. I just didn't know if it was SaskTel or the CRTC making decisions as to how the system is run.

THE CHAIRPERSON: Not in the particulars that you are mentioning. We do not regulate SaskTel at the moment.

MS STIGLITZ: That's an issue I will have to take up with them.

THE CHAIRPERSON: It is provincially regulated.

MS STIGLITZ: Okay. Thank you for your time.

THE CHAIRPERSON: Nevertheless, we are pleased to hear from you and you may want to follow up on your question. We will try to make sure that representatives of SaskTel give you some response if you stay to the end. It won't be much longer.

MS STIGLITZ: Okay. Thanks.

THE CHAIRPERSON: Nice to hear from you anyway. Good evening.

Madam Secretary.

THE SECRETARY: Thank you, Madam Chair.

Our next presenter is Don Flanagan. I would invite him to come forward, please.

PRESENTATION / PRÉSENTATION

MR. DONALD FLANAGAN: Thank you, Madam Chairman. We are kind of a late entry into this. We appreciate the opportunity to go on the public record speaking to this issue and we will submit a more detailed submission. I understand we have some time to do that.

I will basically go through our presentation tonight and add a few points. I am speaking on behalf of the Carlton Trail Regional Economic Development Authority situated in Humboldt, Saskatchewan.

The issues behind the Telecom Public Notice CRTC 97-42: Service to high cost serving areas, impacts greatly on our organization and the region with which we serve.

It is important for you to first understand what our organization does and how service to high cost areas affect the social and economic development within our region. From there, we will offer our comments, ideas and positions on the topic at hand. We appreciate your consideration.

To begin with, it is crucial to perceive what role our organization plays in the growth and support of our region. Carlton Trail Regional Economic Development Authority is an incorporated, non-profit organization whose mission is to promote and assist in the economic and social development of a region of central Saskatchewan.

Within its boundaries are 15 towns and villages and ten rural municipalities that make up a geographic area of approximately 4,400 square miles. A good portion of this area is sparsely populated. By that I mean that we have communities that, if you look at a map, we have towns like Annaheim with a population of roughly 150, but we have an employer there that employs 300.

We have St. Brieux in our area which employs 800 to 1,200 people with a population of a little over 400. We have "Anglefeld" with a population of under 400 and more employees in it than people. Just looking at a map doesn't quite tell the whole story in our region.

Ownership of the Carlton Trail REDA belongs to the 23,000 citizens of the member communities and rural municipalities and the Board of Directors is made up of the 25 mayors and reeves of the area, so we have a fairly good understanding of our region.

We should also mention that the region served by the REDA is not an area of declining population like many rural areas, but is a region full of promise and growth substantiated by long term development.

The issues relevant to the REDA are like any other expanding area in which we are faced with semi-skilled labour shortages, housing shortages and a desire to increase health care and recreational facilities to ensure that people will want to stay within the region.

The REDA rakes a lead role in efforts to address issues within the region that affect economic development and business growth. Part of our task is to provide an employable workforce for our region's employers. Our training strategy has three components by necessity: recruitment. We bring in people from around the world now. Our last classroom looked like the United Nations. Anyway, we find it very hard to find enough people. Recruitment, training and housing.

We are also cognizant of the needs for expansion in health care, school systems and recreational facilities.

Carlton Trail REDA is also prominent in the expansion of the hog industry. It already represents approximately 25 per cent of the hog industry within the province and a number of the large producers are resident in our area.

There is an added potential for eight large barns to be built by Saskatchewan Wheat Pool through its subsidiary, Heartland Livestock, over the new few years. Research and development, project coordination and facilitation are also functions of the REDA.

Finally, technology is crucial to the survival of our region. Carlton Trail REDA supports further development of technology in the region. Through REDA and the federal government's Community Access initiative, 14 of our communities now have public access to the Internet.

In the past three years, REDA has completed three SchoolNet projects in partnership with Industry Canada, allowing schools to have access to a wealth of information about our region via the Internet.

As previously indicated, Carlton Trail Regional Economic Development Authority recognizes the importance of technology and telecommunications in our region. Global communication supports social and economic development. It is crucial to the attainment of information, goods and services, particularly in high cost serving areas where it is necessary to handle issues from a distance.

Technology is utilized for further economic development in many ways, as indicated in the Government of Saskatchewan's submission to the CRTC.

There is the need to have access to centralized databases for informational purposes. Our region has an increasing demand for the Internet and e-mail. An urgency has arisen to expand and diversify many of the industries in our region and distance education is becoming more popular.

In the post-Crow era, our economy is changing from an agricultural base to a diversified manufacturing base which is entering the global market. There is also a significant increase in intensive livestock operations leading to value added initiatives.

In short, technology is a medium for improved economic and social growth, business, education and health and quality affordable access is of the utmost importance to our region.

Technology is always changing and will advance quickly in the near future. Our region needs to stay current in order to continue to develop and thrive. Areas such as health care, distance education, business and communications and other personal matters will see two trends happen.

First, there will be more of a reliance on technology in these areas. In other words, the need for technological services growing. Second, technology will continue to change, making itself a more useful and deliverable entity for these purposes.

Therefore, it is essential that our communities evolve with the advances in technology. As technology improves, there is a need for us to be part of the latest developments in order to stay current in a global economy.

Before comments and positions are stated, the terms high cost service areas and basic services need to be defined. The Government of Saskatchewan states in its submission, and I quote:

"Assuming the use of the lowest technology available at a given time, a high cost service area is defined as an area in which revenue streams, based on tariffs which are reasonably similar to other areas of the country, cannot recover the long run incremental costs of operation, including an appropriate mark-up."

According to the Government of Saskatchewan, basic local service is, and I quote again:

"Single line service in those areas where the price required to recover long run incremental costs, including an appropriate mark-up, would be substantively higher than in urban areas...all Canadian residents should have comparable access to the following basic services:

-- Dual tone multi-frequency (Touchtone) access to the Public Switched Telephone Network (PSTN)

-- Unlimited local calling within defined free calling zones

-- Equal access via the Public Switched Telephone Network to long distance calling networks, where feasible;

-- 911 access in locations where service is available

-- one digit access to basic operator services

-- access to directory assistance service

-- message relay service

-- access to repair service

-- capacity to perform data communications at a minimum 9,600 baud rate, subject to unusual circumstances, providing access to information sources and Internet service providers."

We agree with that position.

Carlton Trail REDA supports most of the suggestions the Government of Saskatchewan has made in its submission to the CRTC regarding the Telecom Public Notice CRTC 97-42.

The REDA agrees with and upholds the following four points made by the provincial government. Firstly, the Government of Saskatchewan suggests the use of a national universal service fund; a system in which national contribution rates include several telecommunications service such as local, long distance, wireless, Internet and data services.

The funds from these services should contribute to subsidization in what would be defined as high cost service areas.

Secondly, there is a subsidy for high cost local and high cost toll and Internet access in high cost service areas.

Thirdly, residential and small business services in high cost serving areas should be eligible for subsidies. Lastly, a high cost serving area should be defined as any rural or remote area where the cost of providing services exceeds the highest urban rate.

In addition to the aforementioned Government of Saskatchewan positions, REDA believes that a more competitive based approach is needed in ensuring quality, affordable service to every region in Canada.

The universal service fund, consisting of revenue tax on all telecommunications services, should be collected and distributed by a third party. This third party would be separate from the carriers, therefore competitively neutral and market based.

The subsidy is paid to the carriers or local service providers only after meeting certain requirements and only after they agree to serve everyone within that exchange area.

THE CHAIRPERSON: Excuse me, Mr. Flanagan. I'm sorry to interrupt you, but we have a court reporter who is trying to take transcript. Could you slow down just a tad.

Thank you very much. He has been transcribing since nine this morning.

MR. FLANAGAN: Sorry.

I will start here if that's okay. The carriers' requirements or conditions must be met before accessing the subsidy and would include the availability of basic services and functions to the area to be served by the carrier; the cost in rural areas should be no higher than the highest urban rate and the quality of service standards must meet at least minimum requirements.

If the service provider does not meet the minimum requirements, there needs to be a process in place where other service providers could bid and would have the opportunity to receive the subsidy and serve that area.

The carrier of last resort would be obligated to serve until it is taken over by another carrier. This method would ensure all regions of Canada would have quality, affordable telecommunications services.

In conclusion, we would hope that the Commission recognizes the need for all Canadians to benefit from the current and potential advancements in telecommunications technology. Market forces alone will not support attaining this objective.

It seems reasonable to conclude that a subsidy system needs to be established based on all major players who generate revenue in the evolving telecommunications sector. Minimum standards need to be set out to identify the basic services that every Canadian should have access to.

With that, thank you.

THE CHAIRPERSON: Thank you, Mr. Flanagan.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you.

I gather from your presentation that in your regional economic development area you have a fairly extensive array of services available and really don't have any issues to raise with respect to lack of available service.

MR. FLANAGAN: No. I think, just to give you a bit of background, when Industry Canada came out with the Community Access Program, it was before SaskTel offered the same rate to everybody in the province, so we like a lot of other organizations scurried around trying to set up server systems and all kinds of things.

Life became a lot easier when SaskTel made the rate affordable to everybody. That was an important step. Public access is still an important part of our communities.

Our concern, it's not quite part of your question, but I just want to say this. We are a very vibrant area, but if you look at us geographically, we would end up probably -- we were concerned if we would have a number of areas that would be high cost areas. In fact, back again when we were trying to set up the servers, the dial exchanges really are very complex. I think SaskTel knows they need to be revised a bit.

Having said that, we have these areas that don't have much population and lots of jobs and so the minimum standards of those organizations and businesses need access to the latest technology, but it wouldn't be there based on population.

COMMISSIONER GRAUER: So your principal concern is maintaining the affordability of the services you now have and being able to remain reasonably current as new services become available.

MR. FLANAGAN: Exactly. Yes.

COMMISSIONER GRAUER: Thank you very much. I appreciate you being here today.

THE CHAIRPERSON: Thank you.

Madam Secretary.

THE SECRETARY: I would like to go back to Saskatoon now and ask Peter Preeble to make his presentation.

MS McLEOD: Hi. It's Maureen again. I apologize. We have not been able to track Mr. Preeble down.

THE SECRETARY: Maureen, do you know for sure that he is going to come?

MS McLEOD: We spoke with him twice during the day and we anticipated the arrival, but we just tried to reach him again and have been unsuccessful.

THE CHAIRPERSON: I believe this is the last presenter. After doing roll call to ensure that is the case, we intend to take a 15 minute break before we hear a reply by SaskTel.

If upon return from the break, Mr. Preeble is there, we will go back and hear him before we hear the reply. Does that sound reasonable?

MS McLEOD: Fine. Thank you very much. We will continue to try to track him down.

THE CHAIRPERSON: Thank you.

Madam Secretary.

THE SECRETARY: Thank you, Madam Chairman.

I will ask Regina if anyone is there who wants to present that hasn't presented yet.

MR. KIDD: No. We are fine here. Thank you.

THE SECRETARY: Thank you.

In Yorkton, Eva Quigley. Do you have anyone there who wants to present that hasn't?

MS QUIGLEY: No, I don't. Thank you.

THE SECRETARY: Thank you.

Then we will come back to Prince Albert. I will ask if there is anyone in the room who wants to present that hasn't.

I would appreciate if I could have the names of people who want to make a presentation.

THE CHAIRPERSON: If you would introduce yourself, please.

PRESENTATION / PRÉSENTATION

MR. JOHN GONDEK: My name is John Gondek. I am a farmer east of Prince Albert and I am here to represent the rural farmers around the Prince Albert area.

We first got our phone in 1972. We did not have a phone until then. We had to pay for hooking the phone up. We paid a substantial amount to have the phone hooked up. Then we were on a party line where we had to share the phone with four other people. If you think about it, 1972 is an awful late time to come with a phone. We suffered without communication for quite a while.

I presently am paying $60 a month just for the service. I have one phone and one fax. I run a livestock and a grain farm and I need the services. If you take that $60 and multiply it, like you were saying, by up to ten, then the phone goes out. Thee is no way that I can afford a phone and there's probably no way any of my neighbours could afford that phone.

First of all, when I heard about this, about the rates going up, my MLA blamed the CRTC. He says they're sticking their nose into places that shouldn't be, so I was all upset with you people. Now I find out tonight it's not that case at all. I see that the government is trying to offload the responsibility on to you and probably this being another tax grab, wanting us to pay more.

I as a farmer -- my dad came from Poland, started farming. He grubbed my grandpa on my mother's side, came from Poland, and they opened the land. There was no cities here to begin with. The rural people, the forestry people, the trappers, our native people, that's who opened this country up.

Now you want to come back and say we are rural people so we have to pay more because the city people are subsidizing us. Who subsidizes the city people? We are getting less for our grain now than we did in 1975. Would you like to have a wage 1975 and come to these meetings? I think not.

What I am getting at is if these phone rates go up, even a little bit, it's totally unfair. We have done our share. We don't need to pay any more. I hope you can find it in your hearts or your minds to understand that we just can't afford any more.

We have had everything taken away from us. We have had the Crow rate taken away. We have had the GRIP taken away. We have got everything taken away. It's to the point where I would just absolutely like to quit and move to another country. I am getting fed up with what's going on here.

They say free trade is bringing all this, we have to deregulate because of free trade. What is the States doing? What is the European Economic Community doing? They're subsidizing the hell out of their farmers and we're getting nothing. We are following the rules. Everybody else is breaking them.

I am totally upset as you can probably tell by my voice. All I hope is that you will find it and understand that we cannot afford another cent. If you want to treat us like second class citizens then I pity you people because pretty soon you guys will be starving.

That's all I have to say.

--- Applause / Applaudissements

THE CHAIRPERSON: We thank you for your presentation, Mr. Gondek. It's quite clear what your position is.

MR. GONDEK: Pardon me?

THE CHAIRPERSON: I said it is quite clear what your position is.

Thank you.

Madam Secretary.

THE SECRETARY: I would like to invite Bernard Dease to make his presentation.

PRESENTATION / PRÉSENTATION

MR. BERNARD DEASE: Thank you, Madam Chairman.

I as well as the preceding speaker am a farmer running a livestock and a grain operation and I have to have a second job to maintain the agricultural part of it.

I represent the Archerwill area and the rural people of Archerwill as well as the town. This extends all the way to Green Water Provincial Park which a lot of you may be familiar with. It's a very sparsely populated area.

Our long distance bills are very high because of the limited area of our local district. We have a very, very small district. Every time we want something, it's long distance.

We pay a mileage charge. I'm not sure if anybody here is even aware of that. SaskTel charges us a mileage charge every month to have a phone at the farm besides all the other charges. That varies according to the distance that you are from the little automated computer room in town.

By the amount of long distance calls that we make in comparison to local calls, we feel we are actually subsidizing other larger districts. In our sparsely populated agricultural community, the telephone as it now exists is the very lifeline of our services and our businesses. Thus it becomes a very essential tool in one's everyday challenge of operating a farm or business.

Therefore, we feel that any increase in local rates would be totally unfair and to these outlying regions it would be in turn an additional financial burden to these people.

The rate should remain the same. To repeat it again, we are sick and tired of paying and paying and paying and receiving nothing. It is continually being harder to sustain a lifestyle. The young people are leaving. There is no future for the young people to start agriculture in Saskatchewan.

Therefore, we have people further away and people like SaskTel tell us that we are being subsidized. It's not right.

What really scared us and why I am here tonight is we were told, and this was through the news media, that the CRTC was going to raise our rates eight to ten times of what it is now. Our local rate now is from $23 to $30 a month. You can figure what that would be. Now tonight I'm glad I came here because we find out that the CRTC wasn't the bad guy here.

To further add to my comment here, we would like the subsidy to remain the same, wherever it comes from. It should stay in place. It should not be raised.

Just for informational purposes and for any of those who would like to see it, this is the people that we can call from my home without calling long distance. It's all on that page. There's a few on the back.

Now, when you get your Saskatoon telephone book and it's two and a half to three inches thick, then they tell us that we are being subsidized? I don't think so.

Also, to add to that, we had a little bit of a discussion period at home and we wanted to be moved into the Tisdale area where we could at least have a local call for machinery parts and to do some business and most of the people do their doctoring in Tisdale.

SaskTel opted to put us into Rose Valley. We have nobody in Rose Valley. There's no business in Rose Valley to phone. That's the kind of service we get.

With that, I thank you.

THE CHAIRPERSON: Thank you, Mr. Dease.

Commissioner Grauer.

COMMISSIONER GRAUER: I just have one question. You too made yourself quite clear. What is it you pay for your monthly service for one phone?

MR. DEASE: Twenty three dollars and a few cents.

COMMISSIONER GRAUER: Thank you.

THE CHAIRPERSON: I don't know if you were here earlier when this type of particular question was raised. You may want to take the opportunity to raise it with the SaskTel representatives who are here tonight or they may wish to address this issue in reply.

I make the same comment to you. If you stay to the end, you perhaps can speak to SaskTel representatives about your particular question.

Thank you very much, Mr. Dease.

Madam Secretary.

THE SECRETARY: I would like to go back to Saskatoon now, please, and ask if Peter Preeble has arrived.

MS McLEOD: Hi, it's Maureen again. No, he has not arrived.

THE CHAIRPERSON: We will follow the procedure as suggested earlier and after the break we will try again in case he shows up. We will hear him if he is there when we come back.

Thank you.

Madam Secretary.

THE SECRETARY: Those are all the presenters, Madam Chair.

THE CHAIRPERSON: Thank you very much.

We will now take a 15 minute break and then hear from Mr. Preeble if he is available and then from SaskTel.

Thank you very much.

By my watch, about 8:15. Thank you.

--- Recessed at 20:00 / Suspension à 20:00

--- Resumed at 20:15 / Reprise à 20:15

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Thank you, Madam Chair.

One preliminary matter. I want to explain why I didn't call on Swift Current the last time around. It is because I have been informed that they have shut down. There is no one there. It is a construction zone and they have gone home.

I would like to call Fred Wawro, please.

THE CHAIRPERSON: Good evening, Mr. Wawro.

PRESENTATION / PRÉSENTATION

MR. FRED WAWRO: Good evening.

I represent RM of 461. I farm east of P.A. the same as John Gondek. We work pretty well in the same boat.

My parents come here the same as his did. His dad and my dad were good buddies. They both grubbed the land and cleared the land for next to nothing and like he said about the services we are getting, it's not right. They are just socking it to us from every end.

Do you know what Saskatchewan is built of? Would you answer that question? Saskatchewan is agriculture. As far as today, agriculture is nothing to the people. Nothing. They don't even know that we exist, but we happen to feed this province and we are working hard.

I am 66 years old and I have been farming for 53 years. I have no pension plan. I have nothing. I'm tired and I should quit. How many people today at my age that have worked for the government or whoever it is, they have a pension plan. They're retired and they got something to live off of.

My younger brother is five and a half years younger than me. He has been retired for over five years. He never took up farming. He was a smart guy. He is retired. I am five and a half years older than him, I can't afford it.

Do I have to farm until I am 90 years old to feed these people for selling grain? I can show you right here, I picked up a cheque at UGG, oats for $1.36 a bushel, $1.36 a bushel. Barley at $2 a bushel, wheat at $2.90 a bushel.

It's not right. Nobody knows the farmer. The only thing they know is when they're hungry. In our area, we have -- the farmers are in my age bracket, 60, 65 years, over 65. How long do you think they are going to farm?

There's maybe three young farmers east of P.A. to the Forks. Maybe three or four young farmers that are trying to farm. A young farmer cannot exist today. He can't start it and yet everybody is socking it to us. They want more. They want more.

Just like John said, we were in the GRIP. When I sign a contract at the bank or whatever, I got to pay it back. When we signed a GRIP with the Saskatchewan government, we were supposed to be in it. He scrapped it. A lot of people fought over it. A lot of people fought over it.

It doesn't do us any good. You can't do nothing against the Saskatchewan government, you can't do anything against the federal government. They do what they want and all they want is this. Just like John said, he's my neighbour, we are in the same boat.

We can't work 18 hours a day. This spring I worked 18 hours a day for a month to put my crop in. I put it in. We got the wind and the drought. Everybody was worried in P.A., what's going to happen. P.A., if it isn't for the farmer, P.A. is finished. All they got is the pulp mill and penitentiary.

If the farmer doesn't come to Prince Albert, Prince Albert is a ghost town and it will be if they don't recognize the farmer.

Now they want to raise the telephone rates. They want to raise this. We can't afford it. Now they're talking about power. The guys are going to go on strike. Well, they raised the power for us a good many times. If they go on strike, they are going to raise it more. Who pays for it? The farmer.

Saskatchewan is built out of agriculture. We haven't got a million people in this province. We haven't got a million. They say they are trying to get to that million but they can't do it because the people come and they go. They only stay for so long. It's only the stupid farmer that sticks it out and he works and he works to feed the country.

What do we get? They come and have these meetings. I'm not any wiser now than when I come here. The federal government is in it and the provincial government is in it. Who is doing this? Is it SaskTel or is it federal or CTR or whatever it is?

I went to Steep Creek. I come from Steep Creek. I started in Steep Creek school and I graduated in Steep Creek high. I have a grade eight education, but I raised four kids. They're all on their own.

We had a good life and I fed them and they were never hungry. Today the kids are all on their own. There are just the two of us. I still have to work. Is that right? To pay these bills.

So thanks a lot.

--- Applause / Applaudissements

THE CHAIRPERSON: Thank you, Mr. Wawro.

Madam Secretary.

THE SECRETARY: I would like to go back to Saskatoon now and see if Mr. Peter Preeble is there.

MS McLEOD: I'm sorry, I'm afraid he's not showing up this evening. We have not been able to reach him, so I assume we will have to go ahead.

Thanks for asking though.

THE SECRETARY: Thank you, Maureen.

That represents the end of presentations. We will now hear SaskTel in reply.

REPLY/RÉPLIQUE

MR. JOHN MELDRUM: Thank you, Madam Chairman.

My name is John Meldrum, Vice-President and Corporate Counsel on Regulatory Affairs at SaskTel. I have with me Candice Molnar who is the Director of Regulatory Affairs.

Just a few points of clarification, explanation and comment.

The first area would be with respect to the presentations made by the gentleman from the arm of Lakeland. The unserved area that I understand Mr. Roy was referring to are areas of the province that are not currently served by either SaskTel Mobility or by Cantel in terms of cellular service.

The permanent communities he referred to do have regular land line service. That would be digital individual line service at our regular rural rates.

SaskTel Mobility does serve about 90 per cent of the Saskatchewan population with cellular service, but less than half the geography. I think, as you have heard today, this is a far flung province with a lot of geography and not a lot of people.

We do have the second most extensive coverage area of any cellular company in Canada as we have worked very hard to extend cellular service to many of the more rural and remote areas of this province. Unfortunately, though, there are areas of the province that are sparsely populated and have mostly seasonal economies. It's difficult to justify the investment in a cellular tower and the infrastructure to make it work.

SaskTel Mobility will continue to review the area in question for cellular service each year in terms of where to spend the capital that the business can sustain. Unfortunately, there are a number of competing priorities for capital investment in wireless services and many remote areas will continue to be without cellular service for the immediate future.

I think what is of interest to the CRTC is that the lack of cellular service in those areas is a microcosm of the same competitive forces that will eventually threaten the continuation of universal affordable land line service to rural and remote areas of Canada.

The second area I would like to talk to you about concerns local rates. There has been a lot of people's recollection of what they think they are paying for local service. I would just like to put on the record exactly where we are at.

The monthly rates for dial tone are contained in the appendix to the Government of Saskatchewan's submission. The confusion seems to be a number of our customers don't differentiate dial tone from the telephone set that they rent, the enhanced services that they get, whether they be call display, whether they be name display, and that's what can result in what appears to be a local bill of $50 or $60 a month.

I will give to the Commission, if you like, a copy of our rate card which sets forth sort all of our major rates in what we think is an understandable fashion.

In terms of La Ronge, three was some discussion about what people thought they were paying in La Ronge for dial tone. The residential rate is $16.65 per month for service in La Ronge and the business rate is $23.15.

That rate on January 1, 1999, will go to $18.65 and it is part of the rate rebalancing efforts that have been on going across Canada in terms of lowering the subsidy that long distance pays and at the same time increasing local rates.

Now, I believe Rongenet talked about what they were paying for their service. They would be paying the multi-line access rates which in rate group one, which is where they are, are between $37 and $42, depending on how many lines you take.

In terms of the other areas of the north, La Loche, Pinehouse, Uranium City, Stony Rapids, there was a lot of discussion about what those locations were paying. They are paying the same rate as La Ronge, $16.65 today going to $18.65 of January 1, 1999.

There has also been a fair bit of discussion about farm rates and what people are paying. There is a mileage charge still at SaskTel but those rates are capped, at the moment not being any more than, depending upon which rate group you are in, for residential service it is either no more than $21.15 or the high is $23.25 for residential serviced. Farms in Saskatchewan are provided service at residential rates unless they are incorporated.

In the case of Prince Albert farmers, they would be paying a Prince Albert rate which is the $23.25. No, it would be the $22.30 rate that they are paying today which incidentally is less than the rate charged in Alberta in Medicine Hat and Calgary, just to give perspective in terms of what people get for their rates.

There was some discussion about unserved areas by some of the presenters today. Those are areas that do not have regular land line telephone service. There were two that were specifically mentioned that we got some information from head office on.

One is Garson Lake. Yes, it does not have regular land line service. There are 20 homes in Garson Lake. If ten people commit to service, they will get service for $400 plus the standard service charges of $62.

I think the other location that they mentioned was Descharme. There are 15 homes in Descharme and they do not have regular land line service.

Unserved areas in the north that do have some alternative services. We have a service called Northern Radio Telephone Service. It is a radio service that can access the public switched telephone network through an operator and it is provided by SaskTel. As well, we do still have general mobile telephone service for many of the areas in the north.

The service is being shut down in southern Saskatchewan, but it is being maintained in the north because of some of these areas where service is not available in terms of land line.

Some of the concerns we have heard today go to the question of what is basic service. To Mr. Roy, cellular is basic and should work wherever he goes in the province.

For the National Farmers Union and the Eden REDA as well as some of the last presentations raised, the issue of the size of the exchange obviously goes to the issue of what is basic service. How far can they call for free? If you only get to call another 200 people for your $23 a month, affordable long distance is pretty important to those folks.

The size of the exchange is part of the equation of what is basic service. SaskTel is in the process of eliminating one third of rural telephone exchanges through amalgamation. In addition, we have announced that this fall there will be a long distance calling plan which will provide virtually unlimited calling to a person's top called exchange within 40 miles for about $5 per month.

While amalgamation and the calling plan is not a perfect solution to the issues that you have heard today in terms of exchange boundaries, it does go a long way and both amalgamation and the long distance calling plans will continue to evolve to try to provide a better level of service to our customers in rural Saskatchewan.

As well, Internet is considered part of basic service by most presenters today. The main reason is that in Saskatchewan SaskTel provides toll free access to all rural areas of the province served by land lines. Whether it is La Loche, Val Marie or Kamsack, access to Internet does not incur long distance charges for SaskTel Internet customers.

The last thing that we had heard in terms of what is basic service is that one line for many rural customers today simply does not cut it in terms of their business, in terms of their livelihood. They require more than one line and I think that's something to keep in mind as we look at the question of what is basic service.

The Saskatchewan challenge is a little different. For those areas of Canada without service, the challenges are clear and they are now. It is how to incent capital investment.

For Saskatchewan, I think you heard today that the level of service generally meets our customers' needs. The investment in digital switching, individual line service, state of the art communications, has been made. For Saskatchewan, therefore, the challenge is different than unserved or underserved areas.

The investment has been made, but it still has to be paid for. It has to maintained. It has to be refreshed on an ongoing basis and it eventually has to be replaced.

It's those ongoing costs plus the subsidy for toll free Internet and the subsidy for non-economic toll routes that give us the estimate of the $112 million annual subsidy to the high cost areas, areas that are contained on page 22 of the Government of Saskatchewan's submission.

It is SaskTel's view that the high cost subsidy system needs to work unserved areas, underserved areas and high cost served areas such as Saskatchewan. All three areas face the same economic fundamentals, except in the case of a high cost served area, the issue is to maintain and pay for what we have.

I don't believe you heard today the same issues here as in B.C. and the Yukon, but in the absence of an ongoing subsidy mechanism that works over the long term, high cost areas will in Saskatchewan evolve to the point where people are without service or the level of basic service falls below the ideal view of what basic service should be.

There has been some discussion about local rates potentially increasing by five to ten times. For the record, SaskTel do not endorse raising local rates by this amount, nor does the Government of Saskatchewan. Nor do we understand the CRTC to endorse increases of such amounts in Saskatchewan or any other areas of Canada, as you have indicate, Madam Chairman.

The estimated possible increase, though, is the amount local services would rise if the current estimated annual subsidy of $112 million was withdrawn. This is the amount of the subsidy that the stakeholders in Saskatchewan, that would be the Government of Saskatchewan, SaskTel, the province's telecommunications users and the CRTC as the overseer of telecommunications policy in Canada, have to deal with with respect to the high cost service areas and how to continue to fund that subsidy.

Lastly, I would like to thank you for coming to Prince Albert to hold a regional hearing. Of historical note, I understand this is only the second CRTC telecommunications hearing in Saskatchewan, the first being in I think 1988.

SaskTel looks forward to the next one. Maybe the year 2008 would be just fine by us.

THE CHAIRPERSON: Thank you, Mr. Meldrum.

I believe this is the end of this evening's session. I would like to thank not only all presenters for taking the opportunity to bring us their views during this evening's session, but also to thank those who took the trouble of coming to appear at our hearing, even if they did not make a presentation.

It has been a fruitful day and evening, if probably a tiring one for the court reporter, but all presenters should rest assured that their views will form part of the record when we wrestle with the issues that have been discussed.

Before leaving, I thank the staff for their assistance, my colleague for her participation, and the court reporter whose handwriting is probably distorted forever now.

I thank also SaskTel for being here all day, for their audio/video links and hopefully we will have a pleasant rest of the evening in Prince Albert.

I don't know if Commissioner Grauer has anything.

COMMISSIONER GRAUER: No.

THE CHAIRPERSON: Thank you.

--- Applause / Applaudissements

--- Whereupon the hearing concluded at 20:35 /

L'audience se termine à 20:35

Date modified:

1998-06-02