News Release

FREDERICTON (GNB) – The auditor general’s latest report tabled today in the legislative assembly highlights various areas of concern related to funding for improved internet access in rural areas. The auditees were the Regional Development Corporation and Opportunities NB.

The provincial government has spent over $39 million on funding for rural internet since 2003. The audit found that although modern high-speed internet is an essential service, 36 per cent of rural New Brunswick households did not have access in 2019. The purpose of the funding was to provide fast, reliable and affordable internet access to rural New Brunswickers.

Of significant concern to the auditor general’s office is that, while the recent Opportunities NB funding of $8.2 million did contribute to infrastructure upgrades, it remains unclear whether this investment by the government has adequately addressed the connectivity issues in rural areas as intended.

“We were unable to conclude if funding for rural internet is achieving intended outcomes because key information we required was unavailable,” said acting auditor general Janice Leahy.

The government did not carry out a needs assessment independent of the funding recipient to determine the expectations for the outcomes of the funding provided. Further, the report stated that the Regional Development Corporation and Opportunities NB did not verify the completeness and accuracy of the proposal documents submitted. As well, Opportunities NB paid $5.1 million for costs ineligible under the contract and, overall, had questionable claims evaluation practices.

“Although the Regional Development Corporation announced completion of Phase 1 of the two-phase project, it did so without verifying outcomes,” said Leahy.

At the time, no outside expertise was hired to review the work completed by the service provider, Xplornet Communications Inc., despite Opportunities NB not having the expertise to do the review.

“We found there were unmet Phase 1 contract deliverables at the time of our work,” said Leahy.

The audit also found there was no oversight governance structure in place to manage funding for rural internet and no provincial government agency was assigned as accountable or responsible for the funding outcomes.

As well, the audit found that the government relied on Xplornet to assess the needs for rural internet access, design the technical solution and define its outcomes. Opportunities NB and the Regional Development Corporation, unlike their counterparts in other provinces, did not pursue a competitive process for selecting Xplornet.

“In our view, this reduced the competitiveness and transparency of the selection process for funding recipients, as other eligible service providers did not have an equal opportunity to participate in funding for rural internet,” said Leahy.

The acting auditor general made 13 recommendations for the Regional Development Corporation, Opportunities NB and the Executive Council Office to address issues identified in relation to oversight and accountability of government programs, contracting processes and evaluation of claims.

The full report is available online.