Summary of the evaluation of the Universal Broadband Fund

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• Overview
• Findings
• Recommendations

Overview

Universal Broadband Fund (UBF)

The $3.225 billion UBF was launched on November 9, 2020. The UBF is a key part of Canada's Connectivity Strategy, which was released in 2019 to connect all Canadians to Internet speeds of at least 50/10 megabits per second (Mbps).

The UBF provides non-repayable contributions directly to applicants with approved projects. These projects target areas where there is currently no business case for the private sector to expand or upgrade broadband infrastructure on its own.

The UBF builds on other broadband programs delivered by ISED such as its predecessor Connect to Innovate (CTI), which primarily supported "backbone" infrastructure to connect institutions like schools and hospitals, as well as other federal investments to affordable, reliable, high-speed Internet.

The UBF has three funding streams:

• Core stream: The core stream supported projects that extended or enhanced household access to high-speed Internet services in areas with speeds of less than 50/10 Mbps
• Rapid Response Stream (RSS): The RRS allocated funding of up to $5 million to projects that could be completed quickly and have a big impact on rural and remote areas where Internet service speeds have not yet reached 50/10 Mbps
• Mobile stream: Up to $50 million was set aside to fund mobile projects to extend 4G long-term evolution (LTE) coverage or better mobile services to unserved areas that primarily benefit Indigenous peoples

Findings

Relevance

The evaluation found that there was a need for the UBF, as rural, remote, and Indigenous communities have lacked adequate broadband access, with service levels far below the 50/10 Mbps standard, and connecting these communities was not economically viable for ISPs. Low-quality connectivity severely limits economic opportunities and access to education and healthcare.

More than 60% of surveyed recipients (63%) indicated they would not have proceeded with their project without UBF funding.

Surveyed recipients and interviewees also noted that if the projects had still gone forward without UBF funding, they would have been subject to delays, and some would have sought other federal, provincial/territorial (P/T), and/or private sector funding.

Figure 1: Impact on broadband project implementation in the absence of UBF funding

Performance

A majority of recipients surveyed (64%) found that the UBF facilitated effective partnership activities. Medium and large ISPs were slightly more likely (77%) to perceive that the UBF facilitated effective partnership activities.

Figure 2: Effectiveness of UBF's facilitation of partnership activities

Challenges with the scoping of underserved households

Companies were responsible for proposing geographic areas in their projects, which led to overlap. There were also some challenges coordinating coverage areas with other broadband programs, leading to perceived complexity and duplication in mapping of eligible underserved households. As a result, there was a need to re-scope some projects. It was also noted that ISED's data on underserved households was not accurate, and the application process did not include time to validate the data using ground truthing and field validation.

While the UBF experienced initial challenges processing the large volume of applications and ISPs also experienced implementation challenges, there has been significant progress in reaching underserved households.

Project implementation challenges

• Permitting
• Climate-related events
• Financial constraints
• Geographical constraints
• Resource and supply constraints
• Access to fiber transport networks
• Delays in final Contribution Agreements
• Organizational readiness
• Partner readiness

The UBF had a target of reaching 800K households, which are mostly situated in rural, remote and Indigenous communities, by March 31, 2027. As of July 2024, UBF projects reached 33% of households targeted, including 22% of Indigenous households targeted.

Figure 3: Total number of households targeted and reached

Figure 4: Number of Indigenous households targeted and reached

Figure 5: Percent of Canadian households with access to 50-10 Mbps service

At the launch of the UBF program in January 2021, there were 1.54M households in Canada without 50/10 Mbps service.

As of December 31, 2023, the combined impact of UBF, CTI and other federal and P/T programs had reduced this gap to 847K households, and 95.8% of Canadian households had access to 50-10 Mbps Internet speeds.

Claims and reporting processes

63% were satisfied with the reimbursement process for claims. However, the evaluation identified issues with the length/frequency of the claims process (monthly versus quarterly). It could take upwards of 6-12 months for claims reimbursement. This was particularly challenging for small ISPs.

75% were satisfied with the monitoring and reporting processes. However, some recipients noted issues with the program's level of administrative burden. While there were information sharing agreements with the provinces, some interviewees felt parallel bilateral agreements with the provinces was challenging due to the additional administrative burden; coordination challenges; and misalignment in areas such as risk, business processes, due diligence, and reporting.

Efficiency

Administrative costs were within expected levels, but the UBF's program expenditures were significantly less than planned, in part due to the length of time required to assess proposals and negotiate agreements as well as various external factors that delayed ISP implementation of their infrastructure.

Figure 6: Connectivity cost per household

For every dollar of UBF funding there was $1.34 in non-federal funding leveraged

Figure 7: Funding leveraged by stream

Recommendations

1. ISED's Connected Canada Branch should explore, for both current and future broadband programming, approaches to reduce geographic overlap between project proposals and explore approaches to enhance validation processes to ensure underserved areas in the recipients' project proposals are accurate.
2. ISED's Connected Canada Branch should explore, for both current and future broadband programming, approaches to reduce the complexity of the reporting processes and further streamline bilateral contribution agreements to improve alignment.