ARCHIVED -  Decision CRTC 89-691

Decision

Ottawa, 11 September 1989

Decision CRTC 89-691

La Radio de la Matapédia Ltée

Amqui, Quebec - 890447600

Following a Public Hearing in the National Capital Region on 27 June 1989, the Commission approves the application for authority to transfer effective control of Radio de la Matapédia Ltée, licensee of CFVM Amqui, through the transfer of the 51,428 Class A common voting shares held by Donald Breau, Gilbert Fiset, Adalbert Lévesque, François Didier and Claude Jacques (20% each) to Compagnie de Radiodiffusion Rimouski Ltéé (CRR).

CRR is indirectly controlled by Power Corporation of Canada (Power). The majority shareholder in Power is Mr. Paul Desmarais. CRR is the licensee of radio stations CFLP and CIKI-FM Rimouski and, as authorized in Decision CRTC 89-692 of today's date, of a rebroadcaster of CIKI-FM in Sainte-Marguerite-Marie. Power also holds indirect control of several radio stations in Ontario, and of CKSM Shawinigan and television station CHAU-TV Carleton, Quebec.

The purchase price of the shares is $674,478. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or adequacy of the required financing.

As stated in a number of decisions relating to applications for authority to transfer ownership or effective control of broadcasting undertakings and because the Commission does not solicit applications for such transfers, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature.

In assessing the intangible benefits of this application, the Commission has taken into consideration the human and financial resources at the purchaser's disposal which will enable it to improve the service provided by CFVM and to consolidate its operations in the region.

With regard to the benefits accruing from the present transaction that can be quantified in dollar terms, the Commission has accepted $150,000 of the expenditures that the purchaser had committed to allocate directly to CFVM.

With respect to Canadian talent, the purchaser plans to allocate $5,000 a year in direct expenditures for the "Le pouvoir de la chanson" contest. All of the Quebec radio stations operated by Power participate in this contest and the winner receives prize money as well as the opportunity to record an audio cassette and produce a video. In addition, the winning song will be broadcast on the stations operated by Power. Among the benefits cited by the purchaser, the Commission has also noted expenditures totalling $125,000 related to the installation of the new rebroadcaster of CIKI-FM at Sainte-Marguerite-Marie.

The Commission, however, has not taken into consideration expenditures of $100,000 over five years for the employment of an additional newswriter, which cost was to be shared between the newsrooms of Amqui and Rimouski, and who would be responsible for producing a regional newscast originating from CFLP with contributions from CFVM. The Commission does not consider this a benefit as this initiative will result in a reduction in the amount of local and regional news produced by CFVM. Nor has the Commission accepted expenditures of $23,000 for the computerization of CFVM's newsroom, capital expenditures of $25,000 for telephone, travel and maintenance expenses related to the news service or capital expenditures of $25,000 for linking CVFM to CFLP. Further, the Commission did not accept $7,500 in expenditures related to establishing a local advisory council composed of representatives from Matapédia or $9,000 for membership fees in broadcasting associations. The Commission is of the view that these expenditures are part of the normal costs of doing business.

The Commission notes that the proposal to broadcast 1 hour 50 minutes of local news per week represents a decrease from the level set out in CFVM's current Promise of Performance, which commits to 2 hours 22 minutes a week of local and regional news. It considers this to be an inadequate level of news programming given the resources available to the purchaser and expects that, at the time of the next licence renewal, the licensee will increase the amount of local news broadcast on CFVM to the former level.

With respect to local programming, the Commission notes that the new Promise of Performance proposes to decrease the amount of local programming broadcast from 115 hours 27 minutes to 52 hours 30 minutes per week. The Commission expects that, at the time of the next licence renewal, the licensee will ensure that the amount of local programming is commensurate with the needs of the community it serves.

The Conseil populaire des Communications de l'Est du Québec filed an intervention which, while not objecting to the transaction, asked the Commission to ensure that CFVM employs a sufficient number of journalists to ensure that the Matapédia Valley is adequately served and that the station offers local programming during peak listening hours.

An intervention was also filed by La Radio Communautaire du Comté opposing the transaction for the following reasons: loss of local control, decrease in the amount of local programming, fear that the station will become dependent on CFLP, and loss of employment resulting from the decrease in the station's local programming. In reply, the licensee pointed out that its application is intended to maintain local management and to ensure the presence of local programs during peak listening hours. The Commission acknowledges interventions in support of the application from the municipal corporations of the towns of Causapscal and Sayabec, from the town of Amqui, the AFEAS in Sayabec, the C.E.R.F. Vallée de la Matapédia, the Causapscal Chamber of Commerce and the Val d'Irène ski resort.

After reviewing the benefits accepted in respect of this application, the Commission has concluded that they are commensurate with the size of the transaction and the viability of the undertaking. The Commission is of the opinion that these outweigh any possible disadvantage that might result from an increase in concentration of ownership in the area. Accordingly, the Commission is satisfied that the proposed transfer will benefit the residents of Amqui and area and that approval of the application is in the public interest.

The Commission notes that the purchaser has also undertaken, upon approval of this application, to construct and operate, at a projected cost of $60,000 over five years, a local television recording studio at Amqui. The purpose of the studio is to permit residents of this community on occasion to record material for broadcat on CHAU-TV Carleton, Quebec.

The Commission expects the licensee to honour all of the commitments and to meet the expectations of the Commission as set out in this decision. The Commission intends to examine the manner in which the licensee has complied with these obligations when it considers the renewal of CFVM's licence, which expires 30 September 1991.

Fernand Bélisle
Secretary General