Broadcasting - Commission Letter addressed to Bernard Tsui (Fairchild Broadcasting Limited)
Ottawa, 14 October 2021
Mr. Bernard Tsui
Fairchild Broadcasting Limited
Unit 2090 – 4151 Hazelbridge Way
Richmond, British Columbia V6X 4J7
Re: Audit of Fairchild Broadcasting Ltd.’s (Fairchild) Canadian content development contributions
Dear Mr. Tsui:
As part of its annual audit of Canadian content development (CCD) contributions, the Commission recently reviewed Fairchild’s contributions for the 2014-2015, 2015-2016, 2016-2017 and 2017-2018 broadcast years. During this audit, Commission staff identified issues with several expenditures claimed towards meeting Fairchild’s basic CCD requirements of several of their stations, specifically CHKG-FM, CHKT and CJVB.
This letter is to inform you that the Commission finds that certain expenditures made by Fairchild in the 2014-2015, 2015-2016, 2016-2017 and 2017-2018 broadcast years were in non-compliance with subsection 15(2) of Radio Regulations, 1986.
The Commission does not necessarily dispute the eligibility of any of the initiatives or CCD recipients below; rather, the non-compliance stems from the lack of payment to the Community Radio Fund of Canada (CRFC) and revenues generated during the Canadian Chinese Song-Writer’s Quest and retained by Fairchild without subtracting this amount from the claimed CCD expenditure. The Commission has been clear that all revenues generated and retained by a licensee as part of a sponsored CCD event must be deducted from the CCD expenses claimed.Footnote1
During the course of the compliance verification it was discovered that the licensee did not make any of the required payments to the CRFC. This results in a combined shortfall of $25,459 for the three stations.
In addition, the licensee generated significant revenues from the operation of the Canadian Chinese Song Writer’s Quest; the expenses of this event were claimed towards meeting the discretionary portion of the three station’s CCD obligations. The licensee confirmed that these revenues were not being deducted from the CCD expenditures being claimed towards meeting the basic CCD requirements. In addition to the 2016-2017 expenditures, staff reviewed expenditures claimed in the 2014-2015 (CHKT and CJVB only), 2015-2016 and 2017-2018 broadcast years.
The majority of the revenues earned were related to the sale of sponsorships by Fairchild. As part of the sponsorship, sponsors received a set amount of advertising time to be used at their discretion during the next year on Fairchild’s radio stations. Fairchild argued that this resulted in lost revenue for the stations and that this forgone revenue should be factored into the revenue earned as part of the event. The Commission rejects this argument and confirms that all revenue generated and retained by the licensee as part of a CCD event must be deducted from any expenses. The Commission confirms that only the remainder is eligible to be claimed as CCD.
The total resulting shortfall for this portion of the discretionary event is $113,401; specifically $76,942 for the Toronto station and $36,459 for the Vancouver stations.
The Commission notes that this results in a total shortfall of $138,860, of which $25,459 has already been paid by Fairchild to the CRFC. As a result of these findings, the Commission directs Fairchild to pay the remaining shortfall of $113,401 within 30 days of the date of the letter, as follows:
- $113,401 to the CRFC.
In addition, the Commission directs Fairchild to file proof of payment for the remaining shortfall amount of $113,401, with the Commission, within 60 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 Commission notes that failure to supply sufficient documentation to support the eligibility of Fairchild’s contributions for future broadcast years may result in the Commission finding those contributions ineligible and may affect the party’s compliance with regulatory obligations.
Lastly, the Commission notes that the determinations set out in this letter address only the 2014-2015, 2015-2016, 2016-2017 and 2017-2018 broadcast years and do not relate to any subsequent broadcast years.
Original signed by Lilia Trombetti for
- Date modified: