ARCHIVED -  Decision CRTC 96-251

Decision

Ottawa, 21 June 1996

Decision CRTC 96-251

Baton Broadcasting Incorporated, on behalf of : CFCN Communications Inc.; Rogers Communications Inc.; BBS Ontario Incorporated; BBS Saskatchewan Incorporated; and Electrohome Limited

Calgary, and Lethbridge, Alberta; Prince Albert, Regina, Saskatoon, and Yorkton, Saskatchewan; and Kitchener, London, Oil Springs, Wiarton, Wingham and Wheatley, Ontario - 952573400 - 952575900 - 952576700 - 952577500 - 952580900 - 952581700 - 952579100 - 952578300 - 952583300 - 952582500 - 952631000 - 952632800 - 952633600 - 952586600 - 952587400 - 952585800 - 952584100 - 952589000 - 952588200 - 952590800 - 952593200 - 952594000 - 952595700 - 952592400 - 952699700

Transfer of control of CFCN Communications Inc.; licence renewals for television undertakings in Alberta; and inter-corporate transactions including transfer of assets of various television undertakings in Ontario - Approved

Following a Public Hearing held in Vancouver beginning on 25 March 1996, the Commission approves a set of applications from Baton Broadcasting Incorporated (BBI) on behalf of the companies noted above, requesting authority to effect a series of transactions to be implemented in three distinct transitional phases.

The first phase involves the transfer of effective control of CFCN Communications Inc. (CFCN), licensee of CFCN-TV Calgary and CFCN-TV-5 Lethbridge, and holder of a 14.28% voting interest in the CTV Television Network Ltd. (CTV) from Rogers Communications Inc. (RCI) to BBS Western Acquisition Corporation (BBS Western). This transaction will be followed by a corporate reorganisation whereby CFCN and BBS Western will amalgamate and continue as BBS Western.

The second phase involves the renewal of the licences then held by BBS Western for CFCN-TV Calgary and CFCN-TV-5 Lethbridge.

The third phase encompasses a number of transactions relating to a proposed Strategic Alliance Agreement (SAA) between BBI and Electrohome Limited (Electrohome). These two companies will create two new corporations (Eastco and Westco), which are to be owned equally by BBI and Electrohome. The new corporations will then acquire the assets of several television undertakings in Ontario and Saskatchewan. Under the SAA, a further corporate reorganisation will see effective control of BBS Western transferred from BBI to the newly-created Westco. BBS Western and Westco will then amalgamate and continue as Westco. As part of the SAA, BBI and Electrohome will also execute various supplemental agreements including a voting agreement related to Electrohome's 14.28% interest in CTV.

Details of this series of transactions, and the Commission's decisions with respect to its various aspects, are set out below.

PHASE ONE

The Commission approves the application for authority to transfer effective control of CFCN, licensee of CFCN-TV Calgary and CFCN-TV-5 Lethbridge, through the transfer of all of the issued and outstanding shares in the capital of CFCN from RCI to BBS Western.

The Commission notes that this transfer of effective control also affects the 14.28% voting interest in CTV currently held by RCI through CFCN. As a result of this transaction, this voting interest will be held by BBS Western, through CFCN.

In Decision CRTC 94-923 dated 19 December 1994, the Commission approved an application by RCI to acquire effective control of Maclean Hunter Limited (MHL). That approval, however, was subject to the condition that further applications be filed for authority to transfer effective control of CFCN-TV Calgary and CFCN-TV-5 Lethbridge to a third party, and that RCI divest itself of MHL's indirect shareholding in CTV. With respect to quantifiable benefits, the decision outlined that this included the sum of $7.5 million that Rogers proposed to contribute to the creation of an Alberta Television Production Fund. The Commission considered that responsibility for the formulation and implementation of a benefits package associated with the sale of these broadcasting undertakings should rest with whomever the Commission ultimately approved as their new owner. Approval of this application fulfils the condition set out in Decision CRTC 94-923.

The CFCN transaction will be followed by a corporate reorganisation, in which BBS Western and CFCN will amalgamate, and continue as BBS Western. In repayment of a $10 million loan from BBI, used by BBS Western to acquire the shares of CFCN from RCI, BBS Western will then transfer the CTV shares and debt securities that had been owned by CFCN to BBI.

The purchase price for the shares of CFCN is $75 million, subject to adjustments and, if required, an additional amount relating to interest on a $52 million promissory note made by CFCN in favour of BBI. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or the adequacy of the required financing.

Because the Commission does not solicit competing applications for authority to transfer effective control of broadcasting undertakings, 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. As a first test, the applicant must demonstrate that the proposed transfer will yield significant and unequivocal benefits to the community served by the broadcasting undertaking and to the Canadian broadcasting system as a whole, and that it is in the public interest.

In particular, the Commission must be satisfied that the benefits, both those that can be quantified in monetary terms and others that may not easily be measured in terms of dollar value, are commensurate with the size of the transaction and take into account the responsibilities to be assumed, the characteristics and viability of the broadcasting undertakings in question, and the scale of the programming, management, financial and technical resources available to the purchaser.

The Commission has assessed the benefits package identified by the applicant as flowing from this transaction and, in general, is satisfied that it is significant and unequivocal, and that approval of this application is in the public interest.

Among the proposed tangible benefits, the Commission notes in particular the licensee's commitment to fulfil the $7.5 million benefit obligation as outlined in Decision CRTC 94-923, through a fund it will establish, to be known as the CFCN Production Fund. The fund will assist in the financing of television programs in under-represented categories, and funding will take three forms: equity investment, development advances and grants/special projects. Not less than 80% of the fund's annual equity and development allocations will be committed to projects involving programs in the underserved categories of programming, namely drama and children's programming. A maximum of 20% of the Fund's total annual allocations will be devoted to documentary, variety and music programming. The licensee confirmed that this $7.5 million expenditure would be spent over five years.

PHASE TWO

The Commission will renew the broadcasting licences held by BBS Western for the television programming undertakings CFCN-TV Calgary and CFCN-TV-5 Lethbridge, Alberta and their respective transmitters, from 1 September 1996 to 31 August 2002, subject to the conditions in effect under the current licences as well as to those conditions specified in the appendix to this decision and in the licences to be issued.

Local Reflection

On 24 March 1995, the Commission issued Public Notice CRTC 1995-48 in conjunction with the release of decisions renewing the licences of privately-owned, English-language television stations in British Columbia, Ontario and Quebec. In that public notice, the Commission reiterated the importance of the principle of local reflection and reminded television licensees that they have a special responsibility to serve the public within the particular geographic areas they are licensed to serve.

The Commission expects the licensee to adhere to its commitment to broadcast an average of 15 hours 30 minutes per week of original local news on CFCN-TV and 2 hours 30 minutes per week of original local news on CFCN-TV-5. In the area of local reflection, CFCN-TV's plans are tied to its news commitment through such short segments as "Consumer Watch", "LifeWatch" and "In Touch". These segments will lead to the production of occasional stand-alone prime-time specials. CFCN-TV-5 will continue with the production of programs such as "Elisha Live", a daily half-hour program.

Programming directed to children

The Commission notes the licensee's commitment, in respect of CFCN-TV, to broadcast an average of six hours per week of Canadian programming directed to children aged 2-11, and an average of 30 minutes per week of Canadian programming directed to youth aged 12-17.

Requirements and expectations for expenditures on Canadian programming

As announced in Public Notice CRTC 1995-48, the Commission has adopted a policy, according to which the licensees of most private English-language television stations earning over $10 million in total annual advertising revenues and network payments are being offered the option, at licence renewal time, of either adhering to a condition of licence on Canadian programming expenditures similar to the existing condition, or adhering to a new condition of licence requiring them to exhibit a specific number of hours of Canadian drama (category 7), music (category 8) and variety programming (category 9) during the evening broadcast period for each year of the new licence term. The options and the Commission's policy rationale are described more fully in that public notice.

As part of the application for the renewal of the broadcasting licence for CFCN-TV Calgary, the licensee proposed to continue with a condition of licence related to expenditures rather than exhibition. The licensee also proposed a new initiative, to be known as the "Canadian Program Production Stimulus". Under this initiative, the licensee committed to spend an additional $500,000 annually on Canadian programming activities. At the hearing, the licensee confirmed that the additional $500,000 per year for this initiative would be added to the base amount of the licensee's exisiting condition of licence, which, based on projected advertising revenue for the year ending 31 August 1996, would otherwise have required spending of $8,056,430 in the year ending 31 August 1997. The additional commitment results in a new base amount for that year of $8,556,430. A condition of licence related to the spending formula is set out in the appendix to this decision.

With respect to CFCN-TV-5 Lethbridge, in Public Notice CRTC 1989-27 dated 6 April 1989, the Commission stated that licensees of private, English-language television stations earning $10 million or less in total advertising revenues and network payments annually would be expected to adhere to their projected first-year expenditures for Canadian programming, at a minimum, and adjust such expenditures in subsequent years in accordance with the prescribed formula linked to the station's advertising revenues.

As stated in Public Notice CRTC 1995-48, the Commission shall continue to expect such licensees to expend on Canadian programming in accordance with the formula. The Commission will continue to apply this expectation in a seamless fashion moving from the current into the new licence term. All policies pertaining to the formula as set out in Public Notices CRTC 1989-27, 1992-28, 1992-89, 1993-93 and 1993-174 will continue to apply, with the clarification that licensees will not be permitted to credit any overexpenditure made in the previous licence term towards Canadian programming expenditures in any year or years of the upcoming licence term.

Accordingly, inasmuch as the licensee's advertising revenues and network payments in respect of CFCN-TV-5 in the broadcast year ending 31 August 1995 were less than $10 million, the Commission expects the licensee to expend, in the first year of the new licence term, at a minimum, the amount it was expected to expend in the 1995-1996 broadcast year, before consideration of any overexpenditures or underexpenditures from prior years, increased or decreased in accordance with the prescribed formula linked to the station's advertising revenues and network payments. In each subsequent year of the licence term, the Commission expects the licensee's Canadian programming expenditures to be adjusted in accordance with the Commission's prescribed formula.

The Commission notes that the licensee has elected to average the percentage increase in total advertising revenues and network payments over a period of three years. In accordance with the provisions contained in Public Notice CRTC 1995-48, the Commission expects the licensee to adhere to this same three-year averaging mechanism throughout the new licence term.

Program development

The Commission reminds the licensee of the Commission's expectations set out in Public Notice CRTC 1989-27 dated 6 April 1989 and entitled "Overview: Local Television for the 1990s" regarding the important role that local television stations play in program development. In this regard, the Commission notes the licensee's commitment to spend $100,000 per year on program development. The Commission also notes the licensee's commitment to contribute $7.5 million to the establishment of the "CFCN Production Fund", an initiative related to the benefits of the transfer of control of CFCN-TV which is discussed earlier in this decision. The Commission notes the licensee's proposal to expend these funds over a period of seven years. However in this instance, the Commission requires the licensee to implement the benefits package over the five-year licence period.

Service to the deaf and hard of hearing

CFCN-TV

Consistent with its policy approach for closed captioning announced in Public Notice CRTC 1995-48, the Commission requires the licensee, from 1 September 1998 to the end of the term of this licence, to caption all local news programming, including live segments, using either real-time captioning or another method capable of captioning live programming.

The Commission also requires the licensee to close caption not less than 90% of all programming during the broadcast day, by the end of the licence term.

CFCN-TV-5

Consistent with its policy approach for closed captioning announced in Public Notice CRTC 1995-48, the Commission encourages the licensee, by the end of the licence term, to caption all local news programming, including live segments, using either real-time captioning or another method capable of captioning live programming.

The Commission also encourages the licensee to close caption at least 90% of all programming during the broadcast day by the end of the licence term.

Employment equity

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled "Imple-mentation of an Employment Equity Policy", the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. In this regard, the Commission encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources at both of the stations noted above.

PHASE THREE

As part of the third phase of the various transactions considered at the 25 March public hearing, the Commission approves the applications by BBI, on behalf of BBS Saskatchewan and Electrohome, and on behalf of a company to be incorporated (Westco), for authority to acquire the assets of CIPA-TV and CKBI-TV Prince Albert, CKCK-TV Regina, CFQC-TV Saskatoon, and CKOS-TV and CICC-TV Yorkton and their respective transmitters from BBS Saskatchewan, and for broadcasting licences to continue the operation of these undertakings.

The Commission will issue licences to Westco, expiring 31 August 2002, upon surrender of the current licences. The licences will be subject to the same conditions as those in effect under the current licences, as well as to any other condition specified in the appendix to this decision and in the licences to be issued.

The Commission also approves the requests, submitted as a part of these applications, that authority be added to the licences of three of the Saskatchewan stations, for the operation of transmitters at Melfort, Saskatchewan as part of the licence for CIPA-TV Prince Albert; transmitters at Warmley, Wynyard and Humboldt, Saskatchewan as part of the licence for CICC-TV Yorkton; and transmitters at Warmley and Wynyard, Saskatchewan as part of the licence for CKOS-TV Yorkton. The Commission notes that the separate licences that are currently issued in respect of existing transmitters at these locations are no longer necessary and will be allowed to lapse, since local programming is no longer aired on these transmitters.

Local reflection

As stated above, on 24 March 1995, the Commission issued Public Notice CRTC 1995-48 in conjunction with the release of decisions renewing the licences of privately-owned, English-language television stations in British Columbia, Ontario and Quebec. In that public notice, the Commission reiterated the importance of the principle of local reflection and reminded television licensees that they have a special responsibility to serve the public within the particular geographic areas they are licensed to serve.

With respect to the six Saskatchewan undertakings, the Commission notes the existing licensee's statements that, due to budgetary constraints, no local news or other local programming will be produced by the CBC affiliates CKBI-TV Prince Albert and CKOS-TV Yorkton, although local news will be produced by the CTV affiliates CIPA-TV Prince Albert and CICC-TV Yorkton. In the renewal applications, the existing licensee made a commitment to broadcast a weekly average of 13 hours 15 minutes of original local news on each of the CTV affiliates. The Commission expects the new licensee to meet that commitment in each of the four Saskatchewan markets of Prince Albert, Regina, Saskatoon and Yorkton.

In the case of Prince Albert and Yorkton, any other local programming in those two cities will be limited to that broadcast on the CTV affiliates CIPA-TV and CICC-TV. Proposed local programming on the four CTV affiliates will include programs such as "Insight", "Kingo Bingo", "Farmgate", "Showcase", "Eye on Saskatchewan", "Poetree", "Indigenous Circle", "Song of the Living Waters", and other special programs from the categories of musical/variety and documentary.

Requirement for expenditures on Canadian programming

In its applications for the renewal of the licences for the six stations in Saskatchewan, the existing licensee proposed that operations for all six be consolidated for the purpose of determining any requirements with respect to expenditures on Canadian programming. In the previous licence term, the six stations were each subject to an expectation related to Canadian programming expenditures. This was consistent with the fact that the annual revenues of the individual stations were under $10 million, although as reported by the licensee, the combined total annual advertising revenue of the six stations is over $10 million.

As stated above, the Commission has adopted a policy, according to which the licensees of most private English-language television stations earning over $10 million in total annual advertising revenues and network payments are being offered the option, at licence renewal time, of either adhering to a condition of licence on Canadian programming expenditures similar to the existing condition, or adhering to a new condition of licence requiring them to exhibit a specific number of hours of Canadian drama (category 7), music (category 8) and variety programming (category 9) during the evening broadcast period for each year of the new licence term. The options and the Commission's policy rationale are described more fully in that public notice.

The licensee also advised the Commission that, should its request be approved, it would choose to adhere to a condition of licence that stipulates minimum requirements for expenditures on Canadian programming rather than for the exhibition of such programming in specific categories.

As part of its application, the existing licensee further requested that the base amount for spending in the year ending 31 August 1997 be set at $7,128,561. This figure is approximately 18% less than the projected amount of Canadian programming expenditures that would have been expected of the six combined stations when the advertising revenue growth formula is applied in a seamless fashion, as set out in Public Notice CRTC 1995-48.

In support of its request, the licensee cited several factors, such as lower than expected advertising revenues, (including that resulting from increased competition for advertising dollars and fragmentation of viewing audiences), uncertainty surrounding both the Saskatchewan and Canadian economies, and uncertainty in future fiscal and programming relationships with the CBC.

In considering this request, the Commission has examined the poor financial position of the stations and the licensee's concerns as set out above. The Commission is satisfied that the economies to be implemented by the licensee will not have a significant impact on the quality and balance of its programming, and therefore approves the licensee's request for the new base amount for Canadian programming expenditures for the combined six Saskatchewan stations. The relevant condition of licence is set out in the appendix to this decision.

Program development

As stated above in regard to CFCN-TV and CFCN-TV-5, the Commission reminds the licensee of the Commission's expectations set out in Public Notice CRTC 1989-27 dated 6 April 1989 and entitled "Overview: Local Television for the 1990s" regarding the important role that local television stations play in program development. In this regard, the Commission notes the licensee's commitment to continue to make, on behalf of the six Saskatchewan undertakings, an annual combined financial contribution to script and concept development of $50,000.

Service to the deaf and hard of hearing

CKCK-TV and CFQC-TV

Consistent with its policy approach for closed captioning announced in Public Notice CRTC 1995-48, the Commission expects the licensee, by the end of the licence term, to caption all local news programming, including live segments, using either real-time captioning or another method capable of captioning live programming.

The Commission also expects the licensee to close caption at least 90% of all programming during the broadcast day by the end of the licence term

CIPA-TV, CICC-TV, CKBI-TV and CKOS-TV

Consistent with its policy approach for closed captioning announced in Public Notice CRTC 1995-48, the Commission encourages the licensee, by the end of the licence term, to caption all local news programming, including live segments, using either real-time captioning or another method capable of captioning live programming.

The Commission also encourages the licensee to close caption at least 90% of all programming during the broadcast day by the end of the licence term.

Employment equity

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled "Imple-mentation of an Employment Equity Policy", the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. In this regard, the Commission encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources at all of the stations noted above.

In view of the approval granted herein, it would appear that no further action is required on the applications submitted by BBS Saskatchewan for the renewal of these licences which were also placed on the agenda of the public hearing begining on 25 March 1996.

The Commission also approves the application by BBI, on behalf of BBS Saskatchewan and Electrohome, on behalf of a company to be incorporated (Westco), and on behalf of BBS Western, for authority to transfer effective control of BBS Western, interim licensee of CFCN-TV and CFCN-TV-5, to Westco. This intra-corporate transaction will be followed by a corporate reorganisation, in which Westco and BBS Western will amalgamate and the resulting entity will continue as Westco. The licensee is reminded that CFCN-TV and CFCN-TV-5 will continue to be subject to the conditions of licence in effect under the current licences, which are set out in the appendix to this decision.

Also as a part of this phase, the Commission approves the applications by BBI on behalf of BBS Ontario Incorporated (BBS Ontario) and Electrohome, and on behalf of a company to be incorporated (Eastco), for authority to acquire the assets of CKCO-TV Kitchener, CKCO-TV-3 Oil Springs, and CKCO-TV-2 Wiarton and its transmitter at Huntsville, from Electrohome; as well as the assets of CFPL-TV London, CKNX-TV Wingham and CHWI-TV Wheatley, Ontario and its Windsor transmitter, from BBS Ontario; and for broadcasting licences to continue the operation of these undertakings.

The Commission will issue licences to Eastco, expiring 31 August 2002, (the current expiry date), upon surrender of the current licences. The licences will be subject to the same conditions as those in effect under the current licences, as well as to any other condition specified in the appendix to this decision and in the licences to be issued.

The Commission notes that, as a result of these transfers of assets, the two shareholders, BBS Ontario and Electrohome, will each have negative control of the undertakings with neither of them individually effectively controlling the programming or management of any of the stations. In this regard, the Commission notes the applicant's statements at the hearing that:

 ... with your approval, Eastco and Westco would be the licensees, and neither Baton nor Electrohome have the ability to elect a majority of the Board. They each have an ability to nominate two Directors and, in that situation, the Chairman does not have a deciding vote. So there is no power on the Board level... to exercise effective control.

At the hearing, with respect to the Eastco transaction involving the London and Kitchener stations, the Commission raised the issue of Eastco's ownership of both CFPL-TV London and CKCO-TV Kitchener. The Commission's general policy is not to allow common ownership of two undertakings of the same class, in the same language and in the same market.

While Eastco acknowledged that the Grade B contours of the London and Kitchener undertakings do overlap to a significant degree, it reiterated its position that each undertaking would continue to distinctively serve its own market. In this regard, the Commission notes the licensee's statements at the hearing that

... there will be no change in terms of the diversity of voices at the local level. CKCO will remain a distinctively Kitchener station with the same dedication to its local audiences, particularly in news and public affairs programming, that it has always had, and through which it has won distinction as a station. CFPL, on the other hand, will continue to do what it does today, and that is to serve its market.

In addition, Eastco assured the Commission that it has no plans to share staff or facilities among the Eastco stations or between the Eastco and BBS Ontario stations. Furthermore, the applicant stated, with regard to the operation of CKCO-TV and CFPL-TV:

There  will be two very senior managers who will operate autonomously within each of those markets. The first is the Station Manager who is in charge of the overall programming in Kitchener, and his counterpart in London. The News Managers will have full authority to run the news services in their markets, and to assure those markets of strong local services.

The Commission, based on the record of this proceeding, is satisfied that approval of this transfer is in the public interest.

Nevertheless, the Commission is also of the view that following implementation of the transactions contained in the SAA, BBI will be in a position of substantial influence with respect to CKCO-TV's operations. Accordingly, the Commission will wish to monitor the extent of BBI's influence over the scheduling of programming of CKCO-TV, in view of certain provisions contained in the management and programming agreements between Electrohome and BBI, made in the context of the SAA. The Commission reminds the licensee that CKCO-TV is, by condition of licence, an affiliate of the CTV network, and that its programming should remain a mix of that supplied by the network, and locally-produced and acquired programming.

With respect to local news content on CKCO-TV, the Commission expects the licensee to adhere to the commitment made in the application, to broadcast a minimum weekly average of 16 hours 50 minutes of original local news.

With respect to the Wiarton undertaking, the Commission expects the licensee to continue to broadcast a weekly average of 3 hours 13 minutes of original local news for the Wiarton and Huntsville areas. Currently, this news coverage is inserted during the CKCO-TV daily newscasts at 6:00 p.m. and 11:30 p.m.

The Commission notes the current programming arrangements with respect to the Oil Springs undertaking which allow the inclusion of separate local news inserts in the CTV network program "Canada A.M.", as well as in CKCO-TV's daily newscasts at 6:00 p.m. and 11:30 p.m.

The Commission expects the licensee to fulfil its commitment to provide 4 hours 38 minutes weekly of original local news programming on the Oil Springs undertaking separate from that broadcast on CKCO-TV, and to continue to reflect the Sarnia, Chatham and Windsor areas also through the broadcast of interview, public affairs and sports review programs.

With respect to CFPL-TV, CKNX-TV and CHWI-TV, the Commission will expect the licensee to adhere to the commitments made in its application, to broadcast a minimum weekly average of 17 hours of original local news programming on CFPL-TV, 5 hours 40 minutes on CKNX-TV and 10 hours on CHWI-TV during the new licence term. The licensee is also encouraged to serve the community by providing local programs in a diverse range of categories.

Finally, and also following the 25 March public hearing, the Commission approves the application by BBI for authority to implement a voting agreement which results in Electrohome delegating control of its 14.28% voting interest in CTV to BBI.

The Commission notes that, following this series of transactions, BBI will have control of 42.9% of the total voting interest in CTV and will nominate three of the seven shareholder-nominated CTV board members. The Commission notes that BBI will consequently have a significantly stronger voice in CTV matters. In this regard, the Commission places considerable importance on the commitments made by BBI and Electrohome, at the 25 March 1996 public hearing.

The Commission has considered the numerous interventions submitted in support of the various applications discussed above.

A copy of this decision is to be appended to the licence of each of the affected undertakings.

 Allan J. Darling
 Secretary General

APPENDIX/ANNEXE

Conditions of licence for the combined operations of CIPA-TV Prince Albert, CKBI-TV Prince Albert, CKCK-TV Regina, CFQC-TV Saskatoon, CKOS-TV Yorkton and CICC-TV Yorkton and their respective transmitters:

1. The licensee shall, for CIPA-TV, CKBI-TV, CKCK-TV, CFQC-TV, CKOS-TV and CICC-TV combined, expend on Canadian programming, at a minimum,

(i)  In the year ending 31 August 1997, the amount of $7,128,561; and;

(ii)  In each subsequent year of the licence term an amount calculated in accordance with the following formula: the amount of the previous year's expenditures (before consideration of any overexpenditures or underexpenditures from prior years), increased (or decreased) by the year-over-year percentage change in the total of the station's annual advertising revenues and network payments, as reported in the relevant Annual Return for the years ending 31 August, averaged over the three previous years;

(iii)  In any year of the licence term, excluding the final year, the licensee may expend an amount on Canadian programming that is up to five percent (5%) less than the minimum required expenditure for that year as set out or calculated in accordance with paragraphs (i) and/or (ii) above; in such case, the licensee shall expend in the next year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underexpenditure;

(iv)  In any year of the licence term, excluding the final year, where the licensee expends an amount on Canadian programming that is greater than the minimum required expenditure for that year, as set out or calculated in accordance with paragraphs (i) and/or (ii) above, the licensee may deduct:

a)  from the minimum required expenditure for the next year of the licence term an amount not exceeding the amount of the previous year's overexpenditures; and

b)  from the minimum required expenditure for any subsequent year of the licence term, an amount not exceeding the difference between the overexpenditure and any amount deducted under a) above;

(v)  Notwithstanding paragraphs (iii) and (iv) above, during the licence term, the licensee shall expend on Canadian programming at a minimum the total of the minimum required expenditures as set out in or calculated in accordance with paragraphs (i) and/or (ii) above.

For the purpose of the above condition, "expend on Canadian programming" shall have the same meaning as that set out in Public Notices CRTC 1993-93 and 1993-174 dated 22 June and 10 December 1993, respectively.

For the purpose of the above condition, the licensee is not permitted to credit any overexpenditure made in the previous licence term towards Canadian programming expenditures in any year or years of this licence term.

2.  In addition to the 12 minutes of advertising material permitted by subsection 11(1) of the Television Broadcasting Regulations, 1987, the licensee may broadcast infomercials as defined in Public Notice CRTC 1994-139 and in accordance with the criteria contained in that public notice, as amended.

3.  The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) "Sex-Role Portrayal Code for Television and Radio Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

4.  The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's "Voluntary Code Regarding Violence in Television Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

5.  The licensee shall adhere to the provisions of the CAB's "Broadcast Code for Advertising to Children", as amended from time to time and accepted by the Commission.

Condition of licence for CIPA-TV Prince Albert, CKCK-TV Regina, CFQC-TV Saskatoon and CICC-TV Yorkton and their respective transmitters:

1.  The licensee shall operate these broadcasting undertakings as part of the network operated by CTV Television Network Ltd.

Condition of licence for CKBI-TV Prince Albert and CKOS-TV Yorkton and their respective transmitters:

1.  The licensee shall operate these broadcasting undertakings as affiliates of the English-language television network operated by the Canadian Broadcasting Corporation

 Conditions of licence for CKCK-TV and its transmitters:

1.  The licensee shall allow Swift Current Telecasting Co. Ltd., the licensee of CJFB-TV to delete "local commercials" carried on CKMC-TV Swift Current and to substitute therefore any other commercials, including national, regional or chain operation advertisements. "Local Commercials" is to be defined as "any commercial that is a non-advertising-agency account".

2.  The licensee shall not solicit advertising in Swift Current.

Conditions of licence for CFCN-TV Calgary and its transmitters:

1.  The licensee shall expend on Canadian programming, at a minimum,

(i)  In the year ending 31 August 1997, the minimum required level of expenditures in the year ending 31 August 1996 (before consideration of any overexpenditures or underexpenditures from prior years), increased (or decreased) by the year-over-year percentage change in the total of the station's annual advertising revenues and network payments, as reported in the relevant Annual Return for the years ending 31 August, averaged over the three previous years, plus $500,000 in respect of the "Canadian Program Production Stimulus" initiative;

(ii)  In each subsequent year of the licence term an amount calculated in accordance with the following formula: the amount of the previous year's expenditures (before consideration of any overexpenditures or underexpenditures from prior years), increased (or decreased) by the year-over-year percentage change in the total of the station's annual advertising revenues and network payments, as reported in the relevant Annual Return for the years ending 31 August, averaged over the three previous years;

(iii)  In any year of the licence term, excluding the final year, the licensee may expend an amount on Canadian programming that is up to five percent (5%) less than the minimum required expenditure for that year as set out or calculated in accordance with paragraphs (i) and/or (ii) above; in such case, the licensee shall expend in the next year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underexpenditure;

(iv)  In any year of the licence term, excluding the final year, where the licensee expends an amount on Canadian programming that is greater than the minimum required expenditure for that year, as set out or calculated in accordance with paragraphs (i) and/or (ii) above, the licensee may deduct:

a)  from the minimum required expenditure for the next year of the licence term an amount not exceeding the amount of the previous year's overexpenditures; and

b)  from the minimum required expenditure for any subsequent year of the licence term, an amount not exceeding the difference between the overexpenditure and any amount deducted under a) above;

(v)  Notwithstanding paragraphs (iii) and (iv) above, during the licence term, the licensee shall expend on Canadian programming at a minimum the total of the minimum required expenditures as set out in or calculated in accordance with paragraphs (i) and/or (ii) above.

For the purpose of the above condition, "expend on Canadian programming" shall have the same meaning as that set out in Public Notices CRTC 1993-93 and 1993-174 dated 22 June and 10 December 1993, respectively.

For the purpose of the above condition, the licensee is not permitted to credit any overexpenditure made in the previous licence term towards Canadian programming expenditures in any year or years of this licence term.

Conditions of Licence for CFCN-TV Calgary and CFCN-TV-5 Lethbridge and their respective transmitters:

1.  The licensee shall operate these broadcasting undertakings as part of the network operated by CTV Television Network Ltd.

2.  In addition to the 12 minutes of advertising material permitted by subsection 11(1) of the Television Broadcasting Regulations, 1987, the licensee may broadcast infomercials as defined in Public Notice CRTC 1994-139 and in accordance with the criteria contained in that public notice, as amended.

3.  The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) "Sex-Role Portrayal Code for Television and Radio Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

4.  The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's "Voluntary Code Regarding Violence in Television Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

5.  The licensee shall adhere to the provisions of the CAB's "Broadcast Code for Advertising to Children", as amended from time to time and accepted by the Commission.

Conditions of licence for the combined operations of CFPL-TV London, CKNX-TV Wingham and CHWI-TV Wheatley and their respective transmitters:

1.  The licensee is authorized to broadcast a maximum of 6.5% of the commercial availabilities on CHWI-TV separately from those broadcast on CFPL-TV London, for each hour of original, station-produced programming broadcast exclusively on CHWI-TV each week.

2.  The licensee shall, for CFPL-TV, CKNX-TV and CHWI-TV combined, expend on Canadian programming, at a minimum,

(i)  In the year ending 31 August 1997, the minimum required level of expenditures in the year ending 31 August 1996 (before consideration of any overexpenditures or underexpenditures from prior years), increased (or decreased) by the year-over-year percentage change in the total of the station's annual advertising revenues and network payments, as reported in the relevant Annual Return for the years ending 31 August, averaged over the three previous years;

(ii)  In each subsequent year of the licence term an amount calculated in accordance with the following formula: the amount of the previous year's expenditures (before consideration of any overexpenditures or underexpenditures from prior years), increased (or decreased) by the year-over-year percentage change in the total of the station's annual advertising revenues and network payments, as reported in the relevant Annual Return for the years ending 31 August, averaged over the three previous years;

(iii)  In any year of the licence term, excluding the final year, the licensee may expend an amount on Canadian programming that is up to five percent (5%) less than the minimum required expenditure for that year as set out or calculated in accordance with paragraphs (i) and/or (ii) above; in such case, the licensee shall expend in the next year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underexpenditure;

(iv)  In any year of the licence term, excluding the final year, where the licensee expends an amount on Canadian programming that is greater than the minimum required expenditure for that year, as set out or calculated in accordance with paragraphs (i) and/or (ii) above, the licensee may deduct:

a)  from the minimum required expenditure for the next year of the licence term an amount not exceeding the amount of the previous year's overexpenditures; and

b)  from the minimum required expenditure for any subsequent year of the licence term, an amount not exceeding the difference between the overexpenditure and any amount deducted under a) above;

(v)  Notwithstanding paragraphs (iii) and (iv) above, during the licence term, the licensee shall expend on Canadian programming at a minimum the total of the minimum required expenditures as set out in or calculated in accordance with paragraphs (i) and/or (ii) above.

For the purpose of the above condition, "expend on Canadian programming" shall have the same meaning as that set out in Public Notices CRTC 1993-93 and 1993-174 dated 22 June and 10 December 1993, respectively.

For the purpose of the above condition, the licensee is not permitted to credit any overexpenditure made in the previous licence term towards Canadian programming expenditures in any year or years of this licence term.

2.  In addition to the 12 minutes of advertising material permitted by subsection 11(1) of the Television Broadcasting Regulations, 1987, the licensee may broadcast infomercials as defined in Public Notice CRTC 1994-139 and in accordance with the criteria contained in that public notice, as amended.

3.  The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) "Sex-Role Portrayal Code for Television and Radio Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

4.  The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's "Voluntary Code Regarding Violence in Television Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

5.  The licensee shall adhere to the provisions of the CAB's "Broadcast Code for Advertising to Children", as amended from time to time and accepted by the Commission.

Conditions of licence for CKCO-TV Kitchener, CKCO-TV-3 Oil Springs and CKCO-TV-2 Wiarton and its transmitter :

1.  The licensee shall operate these broadcasting undertakings as part of the network operated by CTV Television Network Ltd.

2.  In addition to the 12 minutes of advertising material permitted by subsection 11(1) of the Television Broadcasting Regulations, 1987, the licensee may broadcast infomercials as defined in Public Notice CRTC 1994-139 and in accordance with the criteria contained in that public notice, as amended.

3.  The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) "Sex-Role Portrayal Code for Television and Radio Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

4.  The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's "Voluntary Code Regarding Violence in Television Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

5.  The licensee shall adhere to the provisions of the CAB's "Broadcast Code for Advertising to Children", as amended from time to time and accepted by the Commission.

Condition of licence for CKCO-TV Kitchener:

1.  The licensee shall expend on Canadian programming, at a minimum,

(i)  In the year ending 31 August 1997, the minimum required level of expenditures in the year ending 31 August 1996 (before consideration of any overexpenditures or underexpenditures from prior years), increased (or decreased) by the year-over-year percentage change in the total of the station's annual advertising revenues and network payments, as reported in the relevant Annual Return for the years ending 31 August, averaged over the three previous years;

(ii)  In each subsequent year of the licence term an amount calculated in accordance with the following formula: the amount of the previous year's expenditures (before consideration of any overexpenditures or underexpenditures from prior years), increased (or decreased) by the year-over-year percentage change in the total of the station's annual advertising revenues and network payments, as reported in the relevant Annual Return for the years ending 31 August, averaged over the three previous years;

(iii)  In any year of the licence term, excluding the final year, the licensee may expend an amount on Canadian programming that is up to five percent (5%) less than the minimum required expenditure for that year as set out or calculated in accordance with paragraphs (i) and/or (ii) above; in such case, the licensee shall expend in the next year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underexpenditure;

(iv)  In any year of the licence term, excluding the final year, where the licensee expends an amount on Canadian programming that is greater than the minimum required expenditure for that year, as set out or calculated in accordance with paragraphs (i) and/or (ii) above, the licensee may deduct:

a)  from the minimum required expenditure for the next year of the licence term an amount not exceeding the amount of the previous year's overexpenditures; and

b)  from the minimum required expenditure for any subsequent year of the licence term, an amount not exceeding the difference between the overexpenditure and any amount deducted under a) above;

(v)  Notwithstanding paragraphs (iii) and (iv) above, during the licence term, the licensee shall expend on Canadian programming at a minimum the total of the minimum required expenditures as set out in or calculated in accordance with paragraphs (i) and/or (ii) above.

For the purpose of the above condition, "expend on Canadian programming" shall have the same meaning as that set out in Public Notices CRTC 1993-93 and 1993-174 dated 22 June and 10 December 1993, respectively.

For the purpose of the above condition, the licensee is not permitted to credit any overexpenditure made in the previous licence term towards Canadian programming expenditures in any year or years of this licence term.

Condition of licence for CKCO-TV-3 Oil Springs:

1.  The licensee is authorized to broadcast a maximum of 6.5% of the commercial availabilities on CKCO-TV-3 separately from those broadcast on CKCO-TV Kitchener, for each hour of original, station-produced programming broadcast exclusively on CKCO-TV-3 each week.