Broadcasting Commission Letter Addressed to Kevin Goldstein (Bell Media Inc.)

Ottawa, 15 May 2017

BY EMAIL

Mr. Kevin Goldstein
Vice-President, Regulatory Affairs, Content and Distribution
Bell Media Inc.
299 Queen Street West
Toronto, Ontario   M5V 2Z5
kevin.goldstein@bellmedia.ca

Re: Audit of Bell Media Inc. (Bell Media) tangible benefit requirements

Dear Mr. Goldstein:

As you are aware, the Commission recently conducted an audit of Canadian Content Development (CCD) tangible benefit requirements imposed on Bell Media as a result of Broadcasting Decisions CRTC 2007-165, 2007-368, 2011-163 and 2013-310, for the broadcast year 2013-2014.  During this audit, Commission staff identified issues with several expenditures claimed towards meeting Bell Media’s CCD tangible benefit requirements.  You were notified of this apparent non-compliance by Commission staff letters dated 25 April 2016 and 5 August 2016 and responded by letters dated 24 May 2016 and 19 August 2016.

This letter is to inform you that the Commission finds that certain expenditures made by Bell Media in the 2013-2014 broadcast year were in non-compliance with the Commercial Radio Policy, 2006.

The Commission does not necessarily dispute the eligibility of any of the initiatives or CCD recipients below; rather, the non-compliance stems from the use of in-kind contributions, funding of non-Canadian artists with CCD monies, and a lack of supporting documentation.

Below is a breakdown of the ineligible expenditures by initiative:

Initiative Issue Amount
1. Aboriginal Voices Radio In-kind contributions are not eligible CCD expenditures. $97,398
2. Canada Music Week Funds directed towards a non-Canadian artist’s talent fee and travel expenses are not eligible CCD expenditures.
A lack of documentation to support the eligibility of the contribution, specifically regarding the distribution of tickets.
$498,893
Total $591,291

As a result of these findings, the Commission directs Bell Media to pay the total shortfall of $591,291 within 90 days of the date of the letter, as follows:

In addition, the Commission directs Bell Media to file proof of payment for the total tangible benefit shortfall ($591,921), with the Commission, within 120 days of the date of this letter.

Further information on CCD contributions and eligible initiatives can be found on the CRTC website: http://www.crtc.gc.ca/ENG/GENERAL/ccdparties.htm

The audit of Bell Media’s tangible benefits provided the Commission the opportunity to review the ongoing eligibility of various initiatives, including payments made to Media BemBem Inc. for the Canadian Country Spotlight (CCSL) program.  While payments to this recipient were approved by the Commission for the start-up phase of the program, given the amount of time that has elapsed, the Commission now considers this phase complete. It is the Commission’s decision that any ongoing contributions would be related to regular, ongoing programming for Bell and not eligible CCD expenditures, as per the above referenced CRTC website on CCD contributions and eligible i nitiatives.  As a result, contributions to Media BemBem Inc. for the CCSL program will only be eligible up to 31 August 2017, and any future payments to this program would not be considered eligible.

The Commission also notes that the proposal for Top Musique Quebec was initially for an application; however, CCD funds were ultimately used to develop a website which was not included in the original proposal.  While the Commission accepts this contribution since it meets the eligibility criteria for CCD contributions, in the future, any significant change to a previously accepted tangible benefit proposal must be highlighted to Commission staff in a timely manner.

The Commission reminds Bell Media that failure to supply sufficient documentation to support the eligibility of Bell Media’s contributions for future broadcast years may result in the Commission finding those contributions ineligible and may affect its compliance with regulatory obligations. 

Lastly, it should be noted that the determinations set out in this letter address only the 2013-2014 broadcast year and do not relate to any subsequent broadcast years. 
Yours sincerely,

Original signed by

Danielle May-Cuconato
Secretary General

c.c.: Duncan.mckie@factor.ca; lchenail@musicaction.ca; amely@crfc-fcrc.ca

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