ARCHIVED - Broadcasting - Commission Letter to E. McDonald, CFTPA
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Ottawa, 27 November 2001
Ms. Elizabeth McDonald
Dear Ms. McDonald:
Thank you for your letter of October 15, 2001 regarding the concern that some television broadcasters who hold multiple conventional and/or specialty television licences may be "double counting" certain Canadian programming expenditures. Your letter expressed concern about possible "double counting" if broadcasters license a program to their corporate holdings rather than to a particular broadcast undertaking.
As noted in Public Notice CRTC 1993-93, "The Reporting Of Canadian Programming Expenditures", "double counting" can occur when the cost of a program is counted by more than one licensee for the purpose of fulfilling Canadian programming expenditure requirements. This practice results in a lower level of real expenditures on Canadian programming than is reported by licensees. For example, "double counting" would occur if two or more licensees owned by a broadcaster holding multiple conventional and/or specialty television licences were to claim the same Canadian programming expenditure.
As you know, with regard to conventional television licensees earning $10 million annually or more in advertising revenues, conditions of licence requiring a specified level of expenditure on Canadian programming were eliminated effective September 1, 2000, pursuant to Public Notice CRTC 1999-97, "Building On Success - A Policy Framework For Canadian Television." At the same time, the Commission announced that expectations for minimum levels of spending on Canadian programs for conventional television stations earning less than $10 million annually in advertising revenues, would not be monitored as of 1 September 2000.
With regard to specialty television licensees, the Commission continues to impose conditions of licence requiring a specified level of expenditure on Canadian programming.
The Commission has an interest in ensuring that television licensees report their Canadian programming expenditures accurately. When the same Canadian program is carried by two or more licensees owned by a broadcaster holding multiple conventional and/or specialty television licences, the cost of that program may be charged to one licensee carrying the program or allocated among those licensees carrying the program, as long as the total amount claimed for the program by all licensees carrying that program does not exceed the cost of the program. The practice of "double counting" is contrary to generally accepted accounting principles.
The 1993 approach to double counting remains in effect for both conventional and specialty services. The Commission will continue to closely monitor Canadian programming expenditures and may question licensees with regard to their accounting practices at public hearings or in the context of its review of their annual financial reporting to the Commission. Finally, the Commission may investigate any specific instances that are brought to its attention where double counting may have occurred.
Date Modified: 2001-11-27
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