The Town of Olds has released the O-NET Financial Closure Report.
It shows that the Town sold Canada’s first community owned broadband network – O-NET a municipally controlled corporation – to TELUS Communications for $11 million dollars last November bringing to a close the timeline of Town involvement with it which had stretched from 2007 through 2024.
Brent Williams, Chief Administrative Officer for the Town of Olds, says the fact that the Town is recording a $7.8 million loss is not insignificant. However, it is important to note that the fibre that the loss represents is still in the ground – it is not controlled by O-NET or the Town anymore – but it is still gigabit infrastructure that doesn’t exist in the vast majority of rural Alberta. He says “outside of the positive impact that O-NET brought over the last decade plus with residents and businesses coming to Town partly due to O-NET. Someone like TELUS, they have the horsepower that the Town didn’t to use that gigabit infrastructure to attract and serve potential businesses that focus on the economy of the future. Buzz words right now of data centres, and server farms, and artificial intelligence. Those require the infrastructure that O-NET built and while we don’t have them right now, we are very hopeful that they are working with TELUS and private sector partnerships and will be able to attract those businesses because of that infrastructure. So the story is not over yet.”
Is there any good news? Williams says “having this off our plates even though there is obviously mixed feelings about the decision to sell and there’s going to be mixed feelings about the price we were able to get for it as well, but this is something that had to happen. We could not sustain pumping more dollars into O-NET. Going forward we see some light at the end of this tunnel where if you asked me at this time last year, it was a much more difficult picture to try to see a route to physical resilience or to recovery. So as tough as some of the numbers may be in this report, it is still largely positive based on where we could have been had we not disposed of the company.”
Williams discusses the sale price. He says “$11 million was the value of the company. As was noted on November 5th, the Olds Fibre Ltd. Board of Directors hired a mergers and acquisitions firm called Stage Left Partners who specializes in telecommunications transactions across the country. They shopped O-NET across the country to nearly a dozen potential buyers. The bidding process took place and TELUS was the highest bidder. Really it came in with valuations we had in the company dating back to 2021, in fact, in the $10 to $11 million range. So I’d say from that perspective we got as much as we could for the company. Even though we are not totally satisfied with the finished outcome, we also understand that we did as best as we were expected to do.”
Williams adds, the Town of Olds did focus a lot of attention on the provincial government to try and get some form of debt relief. He says “right now if we look even to our northern boundary with Red Deer County, further north to Sturgeon County, to our north west Clearwater County, and many, many more there is millions of dollars in federal and provincial grants going into rural broadband projects. O-NET was too early. We were up and running before those programs existed. So our pitch to the province was that taxpayers in Olds didn’t have the same amount of subsidy from the provincial and federal government, that O-NET was built largely on the backs largely of local tax dollars. So we would like them to consider – the province to consider – providing some form of debt relief. They disagreed, which is their right to do.” Williams says “there is many municipalities across Alberta, across Canada, spending millions of dollars right at this moment to build fibre optic infrastructure that is not gigabit quality like the O-NET fibre is.” He points out that the Town thought its argument was reasonable but the province decided otherwise, so this is where the Town is now and there is a plan to recover from it.
The plan includes the next steps of restructuring the remaining O-NET debt owed of $8.9 million with Alberta Treasury and Finance, a lump sum payment of $3.45 million this year, debt servicing this year and next, a second lump sum payment of $2.13 million in November of 2026 following the release of holdbacks by TELUS Communications, and debenture payments continuing until the loan maturity in 2031.
