Broadcasting - Staff Letter addressed to Distribution List
Ottawa, 17 February 2023
BY EMAIL
Distribution List
Re: Clarification on the temporary condition of licence requiring payment of contributions to Musicaction and FACTOR
Context
On May 15, 2017, the Commission issued a series of decisions (the renewal decisions) to renew the licences for the television services of large private ownership groups. Specifically, Broadcasting Decisions CRTC 2017-143 to 2017-147 pertained to the licences renewals of French-language groups, and Broadcasting Decisions CRTC 2017-148 to 2017-151 pertained to the licences renewals of English-language groups.
On August 14, 2017, the Governor in Council issued Order PC 2017-1060 (the Order) in which it referred certain elements of those renewal decisions back to the Commission for reconsideration and hearing, stating that they derogate from the attainment of the objectives of the broadcasting policy for Canada set out in subsection 3(1) of the Broadcasting Act (the “Act”), and in particular paragraph 3(1)(s) of that Act.
Consistent with the Order, the Commission has therefore reviewed several aspects of the renewal decisions, including the way groups can contribute significantly to the creation and presentation of music programming. The Commission’s determinations are outlined in the following reconsideration decisions:
Reconsideration of licence renewals decisions regarding the licence renewals for the television services of large French-language private ownership groups, Broadcasting Decision CRTC 2018-334, Ottawa, 30 August 2018; and
Reconsideration of licence renewal decisions for the television services of large English-language private ownership groups, Broadcasting Decision CRTC 2018-335, Ottawa, 30 August 2018.
As set out in these reconsideration decisions, the Commission considered at the time that expenditure requirements were the most appropriate means to offset the effects of the loss of funding in the music programming sector and ensure continued support for its creators, while ensuring regulatory parity among the groups consistent with the elimination of genre protection. Accordingly, the Commission has imposed the following standard conditions of licence:
For French-language groups only (Appendix to Decision 2018-334):
“For the 2018-2019 broadcast year and until the end of the licence term, the licensee shall allocate in each broadcast year 0.17% of the previous broadcast year’s gross revenues of the undertaking to MUSICACTION. These expenditures can be counted by the licensee for the purpose of fulfilling its Canadian programming expenditure requirement, which includes expenditure on programs of national interest.”
For English-language groups only (Appendix to Decision 2018-335):
“For the 2018-2019 broadcast year and until the end of the licence term, the licensee shall, in each broadcast year, direct 0.17% of the previous broadcast year’s gross revenues of the undertaking to FACTOR. These expenditures can be counted by the licensee towards fulfilling its Canadian programming expenditure requirement.”
Commission staff would like to emphasize a few aspects of these conditions. In this regard, staff noted that in paragraphs 51 and 57 of Reconsideration Decisions 2018-334 and 2018-335, respectively, the Commission stated that, as the television sector was no longer the only one to offer music programming, “that sector should not be solely responsible for providing long-term support to the music industry.” Thus, the Commission considered “that an expenditure requirement imposed on television licensees should constitute a temporary measure, until the end of their current licence term, to allow the music industry to adapt” (paragraphs 52 and 58 of Decisions 2018-334 and 2018-335, respectively). (Emphasis added.)
In addition, in paragraphs 55 and 61 of the Reconsideration Decisions, the Commission stated that the condition of licence requiring groups to allocate 0.17% of their previous broadcast year’s gross revenues to Musicaction or FACTOR was applicable “from 1 September 2018 until 31 August 2022, the end of the licence term.” (Emphasis added.)
Furthermore, the Commission reiterated the temporary nature of this condition of licence, until 31 August 2022, in Regulatory relief for private Canadian broadcasters in the context of the COVID-19 pandemic, Broadcasting Decision CRTC 2021-274, Ottawa, 12 August 2021. In paragraph 135 of that decision, the Commission stated that: “requirements relating to expenditures to FACTOR and Musicaction were imposed on the large groups as a temporary measure until the end of their licence term in 2022.”
As a result, it is staff’s opinion that the Commission’s intention was always that this condition should be imposed on a temporary basis until 31 August 2022.
That said, the compliance of each large ownership group with its Musicaction or FACTOR contribution requirements will be reviewed in the context of the licence renewal. At that time, any licensee who has not made the required contributions may be found in non-compliance, and the Commission may require, as a condition of licence, payment of any shortfalls incurred between 1 September 2018 and 31 August 2022.
Please note that this letter and all related correspondence may be posted on the Commission’s website to be available for public examination.
Yours sincerely,
Original signed by
Scott Shortliffe
Executive Director- Broadcasting
c.c
Louise Chenail
Director General, Musicaction
lchenail@musicaction.ca
Amy Eligh
Chair, FACTOR
amy@amyeligh.com
Distribution List:
Bell Group
Jonathan Daniels
Vice President, Regulatory Law
bell.regulatory@bell.ca
Corus Group
Karen Gifford
Senior Director, Regulatory Compliance and Licensing
karen.gifford@corusent.com; corus.regulatory@corusent.com
TVA Group:
Frédérique Couette
Director, Regulatory Affairs, Broadcasting
frederique.couette@quebecor.com
MusiquePlus Group
Isabelle Legris
Vice-President and Executive Director
ilegris@remstarmedia.ca
Rogers Group
Susan Wheeler, Vice-President, Regulatory Affairs, Media
susan.wheeler@rci.rogers.com
- Date modified: