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Broadcasting Procedural Letter addressed to Debra McLaughlin (South Fraser Broadcasting)

Ottawa, 9 December 2020

BY EMAIL

Debra McLaughlin
Consultant
South Fraser Broadcasting
101-15385 56 Ave
Surrey, BC V3S 0X9
debmclaughlin@mail.com

Re: Application 2019-0815-4 – Licence Renewal – CISF-FM Surrey, BC

Dear Debra McLaughlin,

This is in reference to the above-noted application by South Fraser Broadcasting Inc. to renew the broadcasting licence. In order to pursue the analysis of this application, please respond to the questions set out in this letter. The information requested herein should be received by the Commission no later than Tuesday 15 December 2020.

Instances of Apparent Non-Compliance

Please note that in evaluating instances of apparent non-compliance, the Commission considers factors such as the quantity, recurrence and seriousness of non-compliance. The Commission will impose measures according to the nature of the non-compliance, and also consider the circumstances, the arguments provided by the licensee, as well as the actions taken to rectify the situation Footnote1 .

Please note that upon receipt of your response to the questions set out in this letter regarding instances of apparent non-compliance, no further letter requesting additional information will be sent unless exceptional circumstances justify to do so.  At this point, your file will be considered complete and a public proceeding will follow based on the information received. Footnote2 Consequently, it is the licensee’s responsibility to provide a response that includes complete and accurate information, including any necessary supporting evidence, as this is your opportunity to comment in writing on the preliminary findings concerning CISF-FM’s instances of apparent non-compliance described below. 

Please repeat each question in your response.

New deadline

Please note that the intervention period for this proceeding will be re-opened for additional comments from all parties with respect to the new information only, as follows:

Interested persons have until 21 December 2020 to submit interventions. Comments must be limited to the new information.

South Fraser Broadcasting will have until 7 January 2021 to reply to any interventions.

It is important to note that in the absence of a response on your part by the specified deadline, the licensee will be in a situation of apparent non-compliance with section 9(4) of the Radio Regulations, 1986 (the Regulations) which requires licensees to respond to Commission requests for information relating to adherence to their regulatory obligations. 

A copy of this letter and all related correspondence will be added to the public record of the proceeding.

The Commission requires that your response or other documents be submitted electronically by using the secured service “My CRTC Account” (Partner Log In or GCKey) and filling the “Broadcasting Cover Page” or the “Broadcasting Online Form and Cover Page” located on this web page.   Also on this web page you will find information on the submission of applications to the Commission “Filing Broadcasting and Canadian Program Certification documents with the CRTC: Privacy and Security”.

Should you need further information concerning this application, please do not hesitate to contact me by e-mail at veronique.larose@crtc.gc.ca.

Sincerely,
Véronique Larose
Senior Radio Analyst
CRTC - Radio Policy & Application

Apparent shortfalls in Over-and-Above Canadian content development (CCD) contributions, as required by condition of licence

For Broadcast Year 2016-2017

  1. As noted in Broadcasting Decision CRTC 2014-412, the licensee of CISF-FM is subject to the following condition of licence:
    • In addition to the required basic annual contribution to Canadian content development (CCD), set out in section 15 of the Radio Regulations, 1986, as amended from time to time, the licensee shall, upon commencement of operations, make an annual contribution of $100,000 ($700,000 over seven consecutive broadcast years) to the promotion and development of Canadian content.
    • According to Commission records, the station began operations in May 2017, however the station contributed $0 in CCD contributions during the 2016-2017 broadcast year.
    • As set out in Broadcasting Information Bulletin CRTC 2009-251, the Commission requires a licensee, in its first year of operation, to make a pro-rated payment, related to its over-and-above CCD contribution requirements in an amount representing the number of months the station was in operation during the broadcast year. Based on the May 2017 commencement of operations, the licensee’s required minimum over and above CCD contribution for that broadcast year represented 4/12 of the total required amount for that year [i.e. ($100,000) x (4 ÷ 12) = $33,333]. 
    • It would therefore appear, therefore, that the licensee is in apparent non-compliance with the above-noted CCD condition of licence for the 2016-2017 broadcast year.
    • In light of the information above:
      1. Please explain the circumstances of this apparent non‐compliance.
      2. Please specify what measures have been or will be put in place to full future compliance with the licensee’s regulatory obligations for its over-and-above CCD contributions during the new licence term.
      3. Please specify the date by which the shortfall will be expended and supporting documents will be filed. You are reminded that the licensee will need to provide the Commission with the necessary proofs of payment Footnote3 and eligibility Footnote4 once the shortfall has been expended.
      4. Please comment on the possibility of a short-term renewal for CISF-FM, in accordance with Broadcasting Information Bulletin CRTC 2014-608, should the licensee be found in non-compliance with the above-noted condition of licence relating to CCD.
      5. Please comment on the possible imposition of a condition of licence relating to the shortfall(s).
      6. Please comment on whether additional CCD contributions would be an appropriate measure to address this apparent non-compliance and to compensate for the harm caused to the Canadian broadcasting system.
      7. In the event the Commission determines that additional CCD contributions would be appropriate, please comment on the possibility of the Commission requiring the licensee to pay, for the first broadcast year of the next licence term, additional annual CCD contributions equal to the potential shortfall, up to $33,333, to be allocated in the manner set out in section 15(5)(a) and (b) of the Regulations (i.e., min. 45% to FACTOR or Musicaction, min. 15% to the Community Radio Fund of Canada and max. 40% to discretionary initiatives), in order to compensate for the harm caused to the broadcasting system for the year the contribution was not fulfilled.

For broadcast year 2018-2019

According to Commission records, the licensee reported CCD contributions in the amount of $30,000 to the KPU Foundation for a Journalism scholarship during the 2018-2019 broadcast year to fulfill the above-noted annual $100,000 condition of licence.

However, the KPU foundation does not specify that only Canadians citizens and permanent residents can apply to this scholarship.As indicated in paragraph 110 of the Commercial Radio Policy 2006 (PN CRTC 2006-158), licensees should ensure that contributions are spent on Canadian resources only.

In order to confirm that this initiative is eligible and that the payment in the amount of $30,000 during the 2018-2019 broadcast year will also be eligible, please provide sufficient proofs that only Canadians citizens and permanent residents can apply to this scholarship. A sufficient proof would consist of a confirmation from the school stating who is eligible for the scholarship.

Without additional documentation to demonstrate how the initiative qualifies as eligible, this initiative may be deemed ineligible by the Commission.  

Please note that without sufficient proof of eligibility for the initiative in question, the licensee may be found in non-compliance with the above-noted condition of licence regarding CCD contributions for the 2018-2019 broadcast year.

In the event that the Commission deems that the proofs you file are insufficient, the licensee could also be in apparent non-compliance with subsection 9(2) of the Regulations relating to the filing of complete annual returns for the 2018-2019 broadcast year.

In light of the questions above, please answer the following questions:

  1. Please explain the circumstances of this apparent non‐compliance.
  2. Please specify what measures have been or will be put in place to ensure full compliance with the licensee’s regulatory obligations for CCD contributions during the new licence term.
  3. Please comment on the possible imposition of a condition of licence relating to the shortfall(s).
  4. Please comment on whether additional CCD contributions would be an appropriate measure to address this apparent non-compliance and to compensate for the harm caused to the Canadian broadcasting system.
  5. In the event the Commission determines that additional CCD contributions would be appropriate, please comment on the possibility of the Commission requiring the licensee to pay, for the first broadcast year of the next licence term, additional annual CCD contributions equal to the potential shortfall, up to $30,000, to be allocated in the manner set out in section 15(5)(a) and (b) of the Regulations (i.e., min. 45% to FACTOR or Musicaction, min. 15% to the Community Radio Fund of Canada and max. 40% to discretionary initiatives), in order to compensate for the harm caused to the broadcasting system for the year the contribution was not fulfilled.

For broadcast year 2019-2020

According to Commission records, the licensee reported CCD contributions in the amount of $20,000 to FACTOR during the 2019-2020 broadcast year to fulfill the above-noted condition of licence.

However, while FACTOR has submitted an invoice regarding the $20,000 contributions, the invoice shows that it was not paid.

More specifically the required proof of payment document was not provided.

In order to confirm that payment was in fact made to FACTOR in the amount of $20,000 during the 2019-2020 broadcast year, please provide sufficient proof of payment such as a legible copy of the cancelled cheque or receipt with the date of expenditure or a letter from the third party confirming that they received the funds for the initiative in question. Please consult Broadcasting Information Bulletin CRTC 2011-795 for additional details on supporting documentation for payments.

Please note that without sufficient proof of payment, the licensee may be found in non-compliance with the above-noted condition of licence regarding CCD contributions to FACTOR for the 2019-2020 broadcast year.

In the event that the Commission deems that the proofs you file are insufficient, the licensee could also be in apparent non-compliance with subsection 9(2) of the Regulations relating to the filing of complete annual returns for the 2019-2020 broadcast year.

  1. If you are unable to provide the necessary proofs of payment, please specify the date by which the shortfall will be expended. You are reminded that the licensee will need to provide the Commission with the necessary proofs of payment Footnote5 once the shortfall has been expended, as well as explain how the initiative qualifies as eligible Footnote6 .

In light of the questions above, please answer the following questions:

  1. Please explain the circumstances of this apparent non‐compliance.
  2. Please specify what measures have been or will be put in place to ensure full compliance with the licensee’s regulatory obligations for CCD contributions during the new licence term.
  3. Please comment on the possible imposition of a condition of licence relating to the shortfall(s).
  4. Please comment on whether additional CCD contributions would be an appropriate measure to address this apparent non-compliance and to compensate for the harm caused to the Canadian broadcasting system.
  5. In the event the Commission determines that additional CCD contributions would be appropriate, please comment on the possibility of the Commission requiring the licensee to pay, for the first broadcast year of the next licence term, additional annual CCD contributions equal to the potential shortfall, up to $20,000, to be allocated in the manner set out in section 15(5)(a) and (b) of the Regulations (i.e., min. 45% to FACTOR or Musicaction, min. 15% to the Community Radio Fund of Canada and max. 40% to discretionary initiatives), in order to compensate for the harm caused to the broadcasting system for the year the contribution was not fulfilled.

Annual returns

Pursuant to subsection 9(2) of the Radio Regulations, 1986, (the Regulations), licensees are required to file, no later than 30 November of each year, their annual return and their financial statements for the broadcast year ending the previous 31 August.  Failure to file these returns, in whole or in part, by the required date of 30 November of each year, may result in apparent non-compliance.

According to Commission records, the financial statements for the 2019-2020 broadcast year is missing.

Therefore, it appears that, the licensee of CISF-FM may be in non‐compliance with subsection 9(2) of the Regulations, relating to the filing of annual returns for the 2019-2020 broadcast year.

In light of the information above:

  1. Please explain the circumstances of this apparent non‐compliance.
  2. Please specify what measures have been or will be put in place to ensure full compliance with subsection 9(2) of the Regulations during the new licence term.
  3. Please specify the date by which the missing financial statements will be filed with the Commission.
  4. Please comment on the possibility of a short-term renewal for CISF-FM, in accordance with Broadcasting Information Bulletin CRTC 2014-608, should the licensee be found in non-compliance with subsections 9(2) of the Regulations.

Over-and-Above condition of licence to carry forward into the next licence term

  1. As noted in Broadcasting Decision CRTC 2014-412, the licensee of CISF-FM is subject to the following condition of licence:

    In addition to the required basic annual contribution to Canadian content development (CCD), set out in section 15 of the Radio Regulations, 1986, as amended from time to time, the licensee shall, upon commencement of operations, make an annual contribution of $100,000 ($700,000 over seven consecutive broadcast years) to the promotion and development of Canadian content.

    Of this amount, the licensee shall allocate no less than 20% per broadcast year to FACTOR. The remaining amounts of this additional CCD contribution shall be allocated to parties and initiatives fulfilling the definition of eligible initiatives set out in paragraph 108 of Commercial Radio Policy 2006, Broadcasting Public Notice CRTC 2006-158, 15 December 2006.

    • Given that the station will have operated through its first 4 consecutive broadcast years upon the expiration of the current licence on 31 August 2020, the licensee would be required to contribute the remaining contributions for Years 5 to 7 throughout the next licence term. 
    • As set out in Broadcasting Information Bulletin CRTC 2009-251, the Commission generally requires a licensee, in its first year of operation, to make a pro-rated payment, related to its over-and-above CCD contribution requirements in an amount representing the number of months the station was in operation during the broadcast year. 
    • Given that CISF-FM operated for a 4 month period in broadcast year 2016-2017, the licensee’s required minimum contribution for that broadcast year represents 4/12 of the total required amount for that year [i.e. ($100,000) x (4 ÷ 12) = $33,333].  The licensee will therefore be required to contribute an amount representing the remaining 8 months of its first incomplete year of operation (i.e. $66,667) in the 2022-2023 broadcast year, representing the seventh full broadcast year.
    • In light of the above:
      1. Please confirm your understanding that the licensee would be required to make a contribution to CCD of $100,000 by 31 August 2021, in order to fulfil the above-noted condition of licence requiring over-and-above CCD contributions of $700,000.
      2. Please confirm your understanding that the licensee would be required to make a contribution to CCD of $100,000 by 31 August 2022, in order to fulfil the above-noted condition of licence requiring over-and-above CCD contributions of $700,000.
      3. Please confirm your understanding that the licensee would be required to make a contribution to CCD of $166,667 (i.e. $100,000 + pro-rated amount of $66,667) by 31 August 2023, in order to fulfil the above-noted condition of licence requiring over-and-above CCD contributions of $700,000.
      4. Please comment on the possible imposition of a condition of licence relating to requirements set out in a) to c) above.

 

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