ARCHIVED -  Public Notice CRTC 1996-114

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Public Notice

Ottawa, 19 August 1996
Public Notice CRTC 1996-114
Implementation of the New Approach to Canadian Talent Development
a) Public Notice CRTC 1995-196
In Public Notice CRTC 1995-196, the Commission set out a new approach to contributions to Canadian talent development by commercial AM and FM radio stations.
In that notice, the licensee of each commercial radio station was given the opportunity to apply for relief from current direct cost commitments made as part of its last licence renewal, and to amend its licence by adding a condition of licence requiring it to make payments to eligible third parties involved in Canadian talent development at the level identified for it in the Canadian Asso-ciation of Broadcasters' (CAB) "Distribu-tion Guidelines For Canadian Talent Development" (the CAB Disribution Guidelines). Such eligible third parties include FACTOR, MusicAction, national and provincial music organizations, performing arts groups, schools and scholarship recipients.
The guidelines, which were developed by the CAB, set out a distribution schedule for Canadian talent development funds based on a market-by-market approach in which a common fee schedule is set for stations in similar-sized markets. The purpose of the CAB Distribution Guide-lines is to ensure that Canadian radio stations, considered together, allocate a minimum of $1.8 million each year to eligible third parties associated with Canadian talent development. The CAB plan, however, applies only to commitments for Canadian talent development made in the context of licence renewals.
In the case of licensees in the first term of their licences, including situations where stations have moved from the AM to the FM band, they will be required, for the duration of their first licence term, to adhere to existing Canadian talent development commitments. Licensees will also be required to adhere to those commitments proposed as benefits in applications for authority to transfer the ownership or control of radio stations.
b) Public Notice CRTC 1996-63
In Public Notice CRTC 1996-63, the Commission published a list of 402 applications received in response to Public Notice CRTC 1995-196 requesting authority to replace current commitments for Canadian talent development with new commitments outlined in that public notice which would become conditions of licence.
The public notice also indicated that, when considered together, these applications achieved the objective of ensuring that a minimum of $1.8 million is raised for third parties associated with Canadian talent development. Included among these applications were applications by certain major radio broadcasters which also pledged amounts over and above those set out in the CAB Distribution Guidelines in order to ensure that the minimum target of $1.8 million is met. The Commission indicated that these additional amounts would be applied as conditions of licence should the applications be approved.
Three stations proposed payments to third parties that would be different from those set out in the CAB Distribution Guidelines.
The Commission also indicated that it had received letters guaranteeing that, during the first year, over $1 million would be allocated specifically to FACTOR and MusicAction by stations participating in the CAB plan. The public notice stated that this would include $721,272 to FACTOR and $287,200 to MusicAction. After verification of the figures set out in the applications, however, it appears that the amounts are actually higher -- $770,800 has been pledged to FACTOR and $288,200 has been pledged to MusicAction for the first year.
A total of 23 interventions to these applications were received.
Sixteen interventions were received from the broadcasting industry expressing support for the new approach to Canadian talent development.
Three interventions expressed particular support for the application related to CJOJ-FM Belleville, Ontario.
Four interventions submitted by representatives of the music and recording industry either opposed the applications or expressed concern about various aspects of the new program for Canadian talent development and the process that was used to develop the new approach.
The Canadian Independent Record Production Association (CIRPA) considered that the proposal by certain major broadcasters to "top up" their contributions so that the $1.8 million dollar amount was achieved constituted a revision of the process announced in Public Notice CRTC 1995-196. CIRPA expressed concern that no public notice was issued to announce this change. CIRPA also raised a number of specific concerns about the new policy, including the lack of long-term assurance of funding for FACTOR and MusicAction. CIRPA opposed all applications and called for a full review of licensing policies and broadcaster finances that would be considered in the context of a public hearing.
L'Association québécoise de l'industrie du disque, du spectacle et de la vidéo (ADISQ) also called for a public hearing to explore the whole issue of Canadian talent development. ADISQ, as well as MusicAction, further asked that the Commission impose conditions of licence on applicants requiring that Canadian talent development from stations in Quebec be remitted to MusicAction.
ADISQ also considered that the applications, if approved, should be effective in the 1996-97 broadcast year commencing 1 September 1996 and not the 1995-96 broadcast year.
The Songwriters' Association of Canada, (Songwriters' Association) on the other hand, expressed concern that a high percentage of the money the program will raise has been allocated to FACTOR and MusicAction. It considered that the Songwriters' Association is solidly established, valuable and also worthy of support.
The Commission's Determination
The Commission notes that the current review of Canadian talent development began in November 1992. Opportunities for public comments were provided three times, first in response to Public Notice CRTC 1992-72; the second time in response to Public Notice CRTC 1995-61; and finally in response to the gazetting of applications in Public Notice CRTC 1996-63.
The Commission considers that adequate opportunities for public comment on this matter have been provided and has therefore issued decisions on the applications published in Public Notice CRTC 1996-63 (Decisions CRTC 96-418 to 96-435).
Given that the 1995-96 broadcast year is almost complete and contributions will have been made to comply with existing conditions of licence, the new program for Canadian talent development will begin in the 1996-97 broadcast year commencing 1 September 1996. The Commission has therefore denied the applications by licensees whose licences expire in August 1996 but will apply appropriate conditions of licences related to participation in the CAB plan for Canadian talent development at the time of their licence renewal.
Licence amendments gazetted in Public Notice CRTC 1996-63, for licences that do not expire in August 1996, have also generally been approved.
Additional Commitments for Canadian Talent Development Made By Major Broadcasters
As indicated earlier, certain broadcasters have made financial commitments over and above the levels established under the CAB Distribution Guidelines. These additional commitments have been made to ensure that the minimum target of $1.8 million for Canadian talent development is reached.
The Commission notes CIRPA's concern that allowing stations to make such additional commitments is a revision to the process set out in Public Notice CRTC 1995-196. Although the Commission agrees that these additional commitments were not originally contemplated under the CAB Distribution Guidelines, the Commission considers that the offer of this additional money is consistent with the policy's stated objective of ensuring that a minimum of $1.8 million in funding for third parties associated with Canadian talent development is provided.
Accordingly, the Commission has imposed, as conditions of licence, the commitments to additional funding to Canadian talent development that have been offered by certain broadcasters.
Funding for MusicAction
The policy set out in Public Notice CRTC 1995-196 indicated that stations would have the flexibility to choose the parti-cular third parties that would receive money for Canadian talent development. The Commission considers that it is generally important that stations have the flexibility to contribute not only to FACTOR and MusicAction but also to organizations that are involved with Canadian talent development such as the Songwriters' Association.
The Commission notes that a number of broadcasters have also submitted letters with their applications indicating that they will make payments specifically to FACTOR or MusicAction. The Commission considers that this provides some assurance to these organizations that they will continue to receive funding from broadcasters.
The Commission however has a particular concern about the situation of MusicAction. It notes that, while the total amount that has been pledged to FACTOR in the current applications is significantly higher than the amount that broadcasters are now providing in the context of licence renewals, the amount pledged to MusicAction is only slightly higher than that now being provided. Furthermore, there are fewer stations that are likely potential contributors to MusicAction than is the case for FACTOR. The Commission has therefore decided to impose conditions of licence requiring those stations that have made specific commitments to provide funding to MusicAction to provide this funding for the entire licence term, in order to ensure that funding for MusicAction is not reduced.
Allan J. Darling
Secretary General

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