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Decision
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Ottawa, 13 February 1987
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Decision CRTC 87-123
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APPLICATIONS FOR AUTHORITY TO TRANSFER OWNERSHIP AND EFFECTIVE CONTROL OF WESTERN APPROACHES LIMITED TO CANWEST PACIFIC TELEVISION INC., Vancouver, British Columbia - 853434900
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Related documents: CRTC Notice of Public Hearing 1986-43 and CRTC Public Notices 1986-73 and 1986-277 and CRTC Decisions 75-304, 79-191, 80-669 and 82-861
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Table of Contents
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PARTIES TO THE TRANSACTION
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BACKGROUND
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OWNERSHIP POLICY CONSIDERATIONS
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PROPOSED BENEFITS
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1. To the Communities Served
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a) Programming Commitments
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b) Capital Expenditures
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c) Local Participation
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2. To Western Canada and the Canadian Broadcasting System as a Whole
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COMMISSION EXPECTATIONS
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INTERVENTIONS
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CONCLUDING REMARKS
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At a Public Hearing held in Vancouver on 8 July 1986, the Commission considered an application for authority to transfer the ownership and effective control of Western Approaches Limited (Western), licensee of CKVU-TV Vancouver, to CanWest Pacific Television Inc. (CanWest Pacific), a subsidiary of CanWest Broadcasting Ltd. (CanWest Broadcasting).
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Following the hearing, the Commission allowed interveners of record until 20 August 1986 to file comments in respect of additional information that was placed on the public file during the public hearing.
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Subsequently, in Public Notice CRTC 1986-277 dated 1 October 1986, the Commission indicated that in view of the questionable validity of certain interventions, it was referring the matter to the RCMP for investigation and therefore suspending further consideration of the application pending the completion of that investigation. The Commission has now received an RCMP report regarding the investigation which indicates that the RCMP is satisfied that there is no evidence of any wrongdoing or knowledge of any wrongdoing on the part of Western or CanWest Pacific, who were parties to the application. Given some of the conclusions in the RCMP report, the Commission advises that, of the over 500 letters of support received, it has disregarded 35 in the course of its deliberations.
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In view of the above, the Commission has concluded its deliberations on this application and hereby issues its decision. For the reasons outlined in this decision, the Commission approves the proposed transaction.
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Pursuant to an agreement made 6 December 1985, 147250 Canada Ltd (DKL, the vendor), beneficially owned by Western's three founding shareholders, Messrs. Daryl I. Duke, Norman A. Klenman and Gordon C. Lyall, agreed to transfer its 63.47% interest in Western (89,197.99 common voting shares) to CanWest Pacific (the purchaser), subject to prior CRTC approval.
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The resulting share structure of CanWest Pacific would have DKL holding a 49.9% interest, with the balance of 50.1% being held by CanWest Broadcasting which is indirectly and ultimately owned and controlled by Mr. Israel Asper.
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PARTIES TO THE TRANSACTION
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Mr. Asper, a director of the licensee, is Chairman of CanWest Pacific and of CanWest Broadcasting, licensee of CKND Winnipeg and CKND-TV-2 Minnedosa and holds, indirectly, a 60.75% equity position in Global Ventures Western Ltd. (Global), which in turn holds 100% of Global Communications Limited, a Southern Ontario regional television licensee. By agreement, however, Mr. Asper is restricted to voting only 50% of the shares of Global and, as confirmed at Global's recent licence renewal hearing held in the fall of 1986, Mr. Asper may exercise negative control in Global. Furthermore, as he explained at this hearing: "There is a shareholder disagreement in Global at the moment and it is not inconceivable that [as] part of our resolution of that, we may dispose of our interest in Global or we may come to some other arrangement in Global."
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CanWest Broadcasting also holds 100% of SaskWest Television Inc. which was recently issued licences to provide third independent television service to Regina and Saskatoon, Saskatchewan.
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Western is a widely held company with over fifty shareholders. The primary shareholders are Messrs. Duke, Klenman and Lyall (63.47%) Allarcom Limited (9.0%, shares held in escrow) and CanWest Pacific (7.8%). CanWest Communications Corporation is also a minor shareholder with 1.1%. The balance of the shareholders each exercise less than 2.1% of the votes in the company.
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BACKGROUND
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On 18 July 1975 the Commission, after holding two hearings to consider four competing applications, issued a licence to Western to operate CKVU-TV as a locally-owned and independent third television service in Vancouver (Decision CRTC 75-304). Soon after it began operation, Western experienced financial difficulties which had an impact on its programming objective of providing Vancouver with an alternative local television service which would primarily reflect the views, interests and concerns of residents of the Vancouver area.
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These programming shortfalls were the subject of two 1978 public hearings, the second of which also considered CKVU-TV's licence renewal which was subsequently renewed for only eighteen months. (Decision CRTC 79-191)
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In 1979, Messrs. Duke, Klenman and Lyall, in order to gain controlling interest in the licensee company, arranged a bank loan, guaranteed by CanWest Broadcasting. Through this loan, they were able to purchase sufficient founders' shares to form a majority on the Board of Western. The programming commitments of the station were met and in Decision CRTC 80-669, the Commission renewed the licence of CKVU-TV until 30 September 1984. In that same decision, the Commission addressed the financial agreement between CanWest Broadcasting and DKL.
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In 1982 DKL made new financial arrangements with CanWest Broadcasting whereby the latter party became a direct lender of $7 million with provisions for the advance of additional funds. The Commission reviewed this transaction in May of 1982 and addressed it in detail in Decision CRTC 82-861. At the same time the Commission emphasized that it continued to consider that "serving the particular needs of Vancouver viewers is central to Western's broadcasting mandate".
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In a letter to the Commission dated 25 February 1986, in this regard, the applicant stated:
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CKVU has been engulfed in shareholder disputes since its founding in 1975 - which disputes led to acrimonious and disruptive litigation from several sources consistently from 1979 to present. Approval of this transaction will terminate all of this and allow CKVU, its board and management to focus strictly on developing its broadcasting undertaking. It is therefore in the public interest that this settlement arrangement involving many people, be approved so that peace and progress return to CKVU.
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The share-purchase agreement, which was the subject of scrutiny at the 8 July 1986 Public Hearing, resulted from CanWest Broadcasting exercising its rights in accordance with certain provisions stipulated in the 1982 agreement, requiring DKL to sell its shares.
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As noted at the hearing, the Commission considers it to be of utmost importance that CKVU-TV realize its potential as a dynamic force in the market and that it be, in every respect, the corporate citizen it was designed to be, both in the context of the Vancouver market and in the overall context of the Canadian broadcasting system.
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It is the Commission's opinion that putting an end to the expensive litigation would result in more harmonious management and permit more financial resources to be directed toward meeting the station's objectives and commitments.
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Ownership Policy Considerations
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As the Commission has stated in a number of recent decisions on applications for authority to transfer effective control of licensee companies, it is the sole responsibility of the applicant requesting such a transfer to demonstrate to the Commission that the application as filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature.
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The first test any applicant must meet is that the proposed transfer of ownership or control yield significant and unequivocal benefits to the communities served by the broadcasting undertakings, and to the Canadian broadcasting system as a whole, and that it be in the public interest. The Commission must also weigh the benefits relative to any other concerns relating to issues such as concentration and cross-media ownership.
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The Commission notes that neither of the latter two issues is germane to this application and it is satisfied that the proposed transaction does not present the characteristics of a concentration which would be of concern to the Commission.
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In the Commission's view, this transfer of control will not decrease the diversity of voices in the market place; on the contrary, implementation of the proposals for augmenting significantly co-productions with out-of-town undertakings should add to the diversity of the programming offered to this market.
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The financing of the proposed transaction is through a bank loan of $13 million to CanWest Broadcasting, the parent company of CanWest Pacific. Additional borrowing by Western ($4 million) will be used to redeem all remaining preferred shares and debentures held in Western by the original founding and investor shareholders. The CanWest Broadcasting loan of $13 million is part of a loan offer of up to $44 million, the balance of which will be utilized by its other broadcasting undertakings.
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The Commission has examined the financial elements of the transaction and is satisfied that there are no financial concerns with respect to the availability of the required funding.
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In addition to the significant non-quantifiable benefits outlined in this decision, the quantifiable total benefit package is in the range of $6 million relative to the purchase price, which is in excess of $16 million.
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PROPOSED BENEFITS
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In outlining the benefits, Mr. Asper emphasized the importance of the transaction to the licensee:
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This submission is the most important for us in our total corporate life to date ... you lift CanWest Broadcasting from the smaller leagues of Canadian television to the major leagues ... you put in place a new drive and a renewed demand for excellence at CKVU, that will see this station continue to grow and realize its full potential. [The addition of CKVU would allow the CanWest group of companies to talk] a little more authoritatively and assertively to Selkirk [Broadcasting Limited] and Global [Communications Limited] about doing things that will benefit our group of stations because they will provide us with access to their markets ... I think that it [CKVU-TV] would be part of a group that had a greater leverage on other stations in Canada to co-produce and exhibit CKVU produced product.
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1. Benefits to the Communities Served
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In his opening remarks at the hearing, Mr. Asper made the following commitment concerning CanWest Pacific's intentions vis-à-vis CKVU-TV:
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We will maintain and operate CKVU as the first class, the best Vancouver, locally-oriented TV station in Canada. We are going to make it the best. We will apply whatever financial and human resources are necessary to achieve this. We have those resources and we are going to make it happen.
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To this end, the purchaser made various commitments with respect to programming, capital expenditures and local participation.
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(a) Programming Commitments
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The current broadcasting licence of CKVU-TV is scheduled to expire this fall. During the hearing CKVU-TV undertook to fulfill all the commitments contained in the current promise of performance in addition to the many commitments which were made during the hearing and addressed in this decision.
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The purchaser has undertaken to increase by a minimum of $3.8 million annually, the budget for programming, over and above CKVU-TV's present five-year projected programming budget.
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CanWest Pacific has earmarked the larger share of this annual sum, amounting to $3.2 million, for the production of 12 one-hour specials per year. These specials, 4 dramas, 4 musical variety shows and 4 documentaries, will feature local talent, deal with local themes, and will be "scheduled in peak time ... and be highly promoted to maximize their exposure to Canadian audiences." The budget for the dramas will be $2 million, with $800,000 allocated for the musical varieties and $400,000 for the documentaries. Production will be handled by local independent producers, in co-operation with other independent television stations, or in concert with other types of partners such as Canadian and off-shore production and distribution companies.
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The $3.2 million which has been committed for these projects in each year may also be augmented with additional funding from outside sources such as Telefilm Canada's Broadcast Program Development Fund. Moreover, the Commission notes Mr. Brinton's commitment: "[Even] if we didn't get any help from anyone, that's the total amount."
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CanWest Pacific has also made the commitment to produce a pilot series of 13 half-hour musical programs and another 13 half-hour pilot series of children's programming. The musical series, budgeted at $78,000, will be similar to the series currently being produced by CKND-TV (the CanWest Broadcasting independent station in Winnipeg) which includes a "rotating content of all types of music, jazz, rock, country, classical and pop." The children's series will also follow CKND-TV's lead in that cate-gory. It is budgeted at $104,000. CanWest Pacific expects that these two series will lead to on-going co-productions and to program exchanges with its sister independent stations:
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We would like to be able to see a number of episodes produced here, of that kind of program, meshed with co-, tri- or quad-production partners elsewhere ... for reasons of upgrading the quality and upgrading the exposure of talent across the land [and] to marshall the resources of this industry, of the independent broadcasters who can remain independent but can effectively pool their dollars for good purpose in their own broadcasting and attract audience.
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Additional programming commitments include the introduction of a weekly arts magazine program and a weekly business show. These initiatives will be produced in-house with a duration of at least 26 weeks and with a minimum budget of $25,000. Educational authorities will be offered free time for educational programming and the purchaser "will provide as much assistance as possible to the many important ethnic and native components in the [Vancouver] community with air time, promotion and production assistance."
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In total, CanWest Pacific's programming commitments will mean that CKVU-TV will broadcast 28.5 hours of local programming per week. This represents a weekly increase of 2.5 hours over CKVU-TV's current 26 hours of local programming. The twelve one-hour specials will represent a further increase over the proposed 28.5 hours of local programs.
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In the area of news programming, the purchaser has committed an annual operating budget of $275,000 for a new year-round news bureau in Victoria which will provide the Vancouver region with direct news reports from the provincial capital and a new weekly half-hour public affairs show originating in Victoria.
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Furthermore, CanWest Pacific has committed $150,000 per year in order to introduce 24-hour programming on CKVU-TV, a service which does not currently exist on any Canadian station in the Vancouver market.
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The Commission attaches great importance to these commitments and notes Mr. Asper's statement: "That is our total commitment ... and we would go ahead and do these programs if we weren't able to receive a nickel [from] it."
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b) Capital Expenditures
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The purchaser has committed a total of $2.2 million for capital expenditures. In order to improve CKVU-TV's production capacity for its planned increase in local programming, CanWest Pacific has committed $2 million to a 3-year capital improvement program designed to improve the station's mobile capacity and to effect overall plant improvements which would in turn translate into better programming for its audience. This sum will be added to CKVU-TV's existing capital budget and will be directed to projects "over and above the normal refurbishing, replacement and state of the art improvements that one does as a matter of course".
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The construction of the Victoria news bureau as well as a two-way microwave connection for the exchange of news items and the Victoria public affairs program, which are to be undertaken immediately, represent an expenditure of $200,000.
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CanWest Pacific also expressed its intention to extend the CKVU-TV signal to cover the whole of British Columbia, at an estimated annual cost of $1-1.2 million. Mr. Asper explained: "The commitment is to work with the local broadcasters, the Commission and the satellite people to, as expeditiously as is reasonably possible to extend this signal to wherever British Columbians live." Such a plan, once formulated, would require Commission approval. Accordingly, the extension of CKVU-TV's signal may be a matter to be addressed at CKVU-TV's next licence renewal.
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c) Local Participation
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During the hearing, in response to the concerns raised with respect to local ownership, CanWest Broadcasting acknowledged the importance of maintaining a significant level of local participation in the operation of CKVU-TV, as evidenced, in part, by these two statements from Mr. Asper:
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The commitment is that we intend to keep [CKVU-TV] locally-oriented, locally-owned and locally-managed and locally-autonomous.
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What we want is strong local input, local shareholders, local directors, local management and that is the undertaking we make to you now.
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Moreover, CanWest Pacific indicated that it would accept a condition of licence that up to 40% of its shareholders must be Vancouver residents or British Columbians. It also made a commitment that at least 40% of CKVU-TV's Board of Directors would be composed of local residents.
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In view of the Commission's expressed emphasis on the continuing mandate of the licensee to provide a Vancouver-oriented television service and to maintain local ownership, the Commission fully expects CanWest Pacific to fulfill its undertaking to form a locally-representative Board of Directors and a shareholder group comprised of 40% of Vancouver or British Columbia residents. The Commission will review this undertaking at CKVU-TV's licence renewal hearing and may, at that time, impose a condition of licence regarding these commitments.
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In terms of local management, CanWest Pacific assured the Commission that local resident day-to-day authority over CKVU-TV would be maintained. The only planned change in senior management will be the addition of Mr. Donald Brinton as President and Chief Executive Officer. Mr. Brinton, a former Chairman of the Canadian Association of Broadcasters (CAB), will become a full-time resident of Vancouver and will bring to CKVU-TV not only his financial and management expertise, but also his recognized commitment to local community involvement and participation. Mr. Brinton stated at the hearing:
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We think that CKVU's potential is great. It's going to have another good successful decade and with our help and our leadership, I think it can be tremendous ... I think that I can bring certain benefits to the further development of CKVU, and I'm anxiously looking forward to that.
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CanWest Pacific's program expenditure commitments have already been noted. As a result of these programming proposals, it expects to require additional staff, including seven new full-time employees at the outset. It is also the purchaser's intention to use a majority of local technical and performing talent in the production of its new programs.
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Finally, the Commission considers that the purchase by CanWest Pacific of the controlling shares in CKVU-TV will lend a measure of stability to an important segment of the local Vancouver broadcasting industry by providing an opportunity to bring to an end the internal disputes and extensive litigation which has plagued the station almost since its inception. The Commission notes Mr. Asper's comment that "this agreement when entered into was designed to cease litigation", and expects that the creative energies at CKVU-TV will now be directed, as they should be, to serving the programming needs of the people of Vancouver.
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2. Benefits to Western Canada and the Canadian Broadcasting System as a Whole
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Having established the above-mentioned benefits which will accrue to residents of Vancouver and the Province of British Columbia, the Commission examined the wider-ranging benefits enumerated by the applicant.
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In addressing CanWest Broadcasting's widespread interests in the Canadian broadcasting industry which include 63.8% ownership of CKND-TV Winnipeg and CKND-TV-2 Minnedosa, and indirect 100% ownership of SaskWest Inc., licensee of the new independent television stations CFRE-TV Regina and CFSK-TV Saskatoon which are scheduled to be on air in September 1987, the purchaser stated at the hearing:
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This application, if approved, will ensure more cooperative ventures for quality Canadian first class production, through a consolidation of independent television strength and talent in Western Canada. It widens the broadcasting production and business expertise, and brings extra financial resources of the CanWest group to CKVU for future strength and development, and all of that is clearly in the public interest.
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With respect to Mr. Asper's indirect 60.75% ownership of Global, which wholly owns Global Communications Ltd., licensee of CIII-TV Toronto and its seven rebroadcasters located in southern Ontario, Mr. Brinton outlined the inherent programming advantages accruing to CKVU-TV and to Global: "The Global Television Network of Ontario has agreed to purchase and schedule at least four of our dramas a year, and subject to quality, perhaps more."
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The applicant envisages, at the outset, co-productions and program exchanges with its sister independent stations in the areas of music series and children's programs. Mr. Brinton stated: "On much of our proposed programming we point out that we can participate not only in arranging co-productions of various kinds, but in ensuring co-scheduling with our associates in the independent fraternity". These arrangements will later be expanded to include drama productions. In this regard, the Commission acknowledges the numerous awards CKND-TV has received related to its excellence in drama programming and its continuing community service.
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The Commission considers that such co-operative arrangements among independent stations will create unprecedented opportunities for the creation, production, co-production and distribution of drama and other entertainment programming. In responding to questioning, Mr. Asper agreed: "It's a lot easier to ensure it happens when you have significant financial interests in other broadcasters, or where you're not having to have arms length or protracted negotiations over each step of the way..."
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With respect to program acquisition, Mr. Asper explained that, currently, CKND-TV purchases its programs with Global, CFAC-TV Calgary (Selkirk Broadcasting Limited) and CITV-TV Edmonton (Allarcom Limited): "We often don't buy together, the partners change but one thing we've always said ... from the day when we entered this industry, there must be profound co-operation by all the independents in this country with each other to make the independents viable, we intend to lead in that area."
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The Commission further notes that this coalition will give Western Canada a strong, dominant voice in the event of the development of any future third national network and, regardless of such development, as a consequence of the acquisition of this significant major market station, the CanWest group of companies will assume a leadership role in Canadian broadcasting. To quote Mr. Asper: "It allows us to deal effectively, because we can speak for more than one station in negotiations with Central and Eastern Canadian broadcasters."
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Indeed, the present decision will strengthen the position of independent stations in Canada, particularly those in the West. It will, to a reasonable degree, contribute to balancing the natural dominant position of the Toronto market stations, provided this Western coalition maintains its independent character.
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With respect to the CanWest group's and CKVU-TV's association with Global, Mr. Asper stated:
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Our relationship to Global is a non-operating relationship ... Global has no connection to this application either legally or commercially, other than as I described as being a supplier of programming to all independents who will acquire their programming both foreign and local ... we are passionate believers in the independent system ... I can't predict what the needs of the future will be but I state again that we have no plan for enlarging the relationship with Global. We're quite satisfied with it as the provider of a great many services to us and we hope to provide [to] them ... we don't manage Global and we don't control it.
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The Commission is satisfied that the Western coalition of independent stations, given their specific local, i.e. Western, orientation and the fact that Mr. Asper does not effectively control Global, will not create a de facto third national network. The Commission will want to be constantly reassured of this, however, in the interests of the Vancouver audience and of the other Western markets served by the CanWest groups of companies.
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COMMISSION EXPECTATIONS
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The Commission notes that the licence of CKVU-TV expires on 30 September 1987 and it expects the commitments proposed by the applicant to be well-advanced at the time of the licence renewal hearing.
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The Commission notes in this regard Mr. Brinton's pledge:
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We hope by the licence renewal time of CKVU that we can then come forward with the kind of more specific proposals for co-operative production, co-productions, and then be very specific for an on-going time with regards to such shows as the musical series and other artistic components.
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The Commission intends to examine closely the proposals put forth at that time and will follow with interest the implementation of the commitments to assume a leadership role in relation to not only those independent stations who have associations with CanWest Broadcasting, but also those operated by other broadcasting companies. The Commission will be particularly interested in reviewing the measures which the CanWest group of companies will implement towards the realization of its important role in Western Canada.
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In this respect the Commission notes Mr. Asper's statement:
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We at CanWest [Broadcasting] wish and need to broaden our base of operations in order to ensure that we can continue to produce quality Canadian productions with budgetary contributions from other broadcasters, with ample distribution and this will not only benefit CKVU, but it will benefit the broadcasting community, the independent producers of Canada, and the public.
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In light of the history of CKVU-TV, the Commission will wish to be advised of any significant changes which take place in the management of the licensee company and reminds the licensee of the regulatory requirements related to ownership of licensed broadcasting undertakings.
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In accordance with its mandate, CKVU-TV will be expected to continue to maintain its focus on the Vancouver market and it notes Mr. Asper's statement in this regard:
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The commitment is that we intend to keep this locally oriented, locally owned, and locally managed and locally autonomous. It is not to be linked, as it never has been linked, to anything else. This is a stand-alone television station....
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The Commission will follow with great interest CanWest Pacific's plans for "strong local input, local shareholders, local directors, local management."
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INTERVENTIONS
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In response to the application, the Commission considered a large volume of interventions including nine appearing interventions and over five hundred letters of support. In addition to the expressions both of support and of concern about the proposed change in ownership, a number of issues were raised by interveners, some of which are addressed below.
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CKPG Television Limited and Inland Broadcasters requested that the Commission carefully examine CKVU-TV's plans to extend its signal throughout British Columbia. The Commission notes that any such proposal would require a specific application and Commission authorization and considers that any related concerns should more appropriately be addressed at that time.
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Some interveners stressed the importance of community involvement which they noted should be an essential ingredient of CanWest Pacific's philosophy with regard to the operation of CKVU-TV.
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Ms. Helen Cardinal, appearing on behalf of Margo Kane, a Vancouver producer, director and actress, acknowledged Mr. Asper's commitment to provide access and support to native and ethnic groups in the Vancouver area, noting Mr. Asper's membership on the Advisory Board of the Indian Business Development Group in Winnipeg and his role as founder of the Canadian Council for Native Business.
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Ms. Dorothy Holme, who represented British Columbia from 1977 to 1980 on the Canadian Advisory Council on the Status of Women, commended CanWest Broadcasting on its excellent track record in working towards the elimination of sex-role stereotyping. In particular, Ms. Holme made reference to a meeting held with twenty women's groups where Mr. Asper sought their views on the future operations of CKVU-TV. The Commission notes Mr. Asper's commitments to "raise the presence, profile and role of women in the operations of Western Approaches", and will follow closely Mr. Asper's more general commitment to "continue the communication process that we began for the last few months, and indeed, in a much more organized way..."
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The Commission reminds the licensee that it is expected to adhere to the CAB's voluntary guidelines on sex-role stereotyping and that a condition of licence to this effect may be imposed at CKVU-TV's next licence renewal.
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The CKVU-TV Employees Association, represented by its President, Mr. Charles Shewfelt, and the Confederation of Canadian Unions, represented by its Executive Assistant, Sue Vahenka, appeared primarily to express their concerns about the 1985 cancellation of "The Vancouver Show" and the resultant cut in production staff. They indicated that the licensee should be required to reinstate the program or provide an equivalent program that would provide community access during prime time.
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The Commission considers that this issue should more appropriately be reviewed in the context of CKVU-TV's forthcoming licence renewal hearing.
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Two appearing interveners, James Pryor and Dr. Walter Hardwick, who have been members of CKVU-TV's Board of Directors for several years, opposed the application on the basis of CKVU-TV's good past performance. They also expressed concern about the possibility of CKVU-TV losing the valuable services of Messrs. Duke and Lyall. In responding to the interventions, Mr. Asper stated: "I wrote to Mr. Duke to this effect, once we knew what they were doing, to sit down and try to work out a production relationship between them and CKVU-TV, regardless of whether they kept their stock".
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CONCLUDING REMARKS
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In rendering its decision on this application, the Commission has assessed the many benefits which will flow from this transaction. As noted earlier, CanWest Broadcasting will add significant financial resources and expertise to CKVU-TV's operations. The extra $3.8 million annual programming commitment will be expended in the production of twelve drama, variety and documentary specials per year in addition to new arts and business programs. These will increase co-production possibilities and provide new opportunities for Canada's talented performers and artists.
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The introduction of a fully-equipped Victoria news bureau which will be operated at a cost of $275,000 per year will result in improved coverage of provincial affairs. The local programming commitments will raise local production above 28.5 hours each week and the proposed 24-hour programming on CKVU-TV, for which $150,000 each year has been committed, will introduce an extended service to the market.
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The capital expenditure budget will be increased by $2.2 million to be expended over three years, of which $200,000 will be expended immediately for the construction of the Victoria news bureau and a two-way microwave link. Plant improvements and mobile capacities will be enhanced as a result of this commitment.
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The Commission is encouraged by the opportunity for the formation of a strong Western broadcasting coalition, which approval of this transaction entails. It considers that the increased co-production, distribution and purchasing opportunities resulting from this transaction will have a positive effect with respect to programming viewed by Western Canadians and, through arrangements with Global and other independent stations, by Canadians elsewhere in the country.
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As stated earlier, the Commission considers the licensee's commitments to maintain strong local management and local ownership to be of utmost importance. Furthermore, an end to the prolonged litigation among the shareholders, will allow the owners and management of CKVU-TV to focus on realising the station's full potential both in the market it was designed to serve and as a dominant Western voice in the Canadian broadcasting system.
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The Commission reminds the licensee that all of the commitments referred to in this decision, including any extension of service plans, will be reviewed at the public hearing to consider the renewal of CKVU-TV's licence. Some of these commitments may, at that time, become conditions of licence.
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After careful consideration of all of the advantages and commitments outlined earlier in this decision, particularly those noted above, the Commission is satisfied that this transaction will yield clear and unequivocal benefits to CKVU-TV, to the residents of Vancouver, to Western Canada, to idependent television stations particularly those in the West, and to the Canadian broadcasting system as a whole. It considers, therefore, that approval of this transaction is in the public interest.
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Fernand Bélisle
Secretary General
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