FAQ – Licence Fee Return (LFR)
- How is Less: Exemption level value calculated?
- Who should attest to the LFR form?
- How is a broadcasting return year defined?
- What do we do if there has been a sale or an acquisition of assets during the broadcasting year?
- What do we do for a new undertaking?
- What do we do for an undertaking that has ceased operations?
- What if we have applied for licence revocation for a broadcasting distribution undertaking (BDU)?
- Where is the CRTC’s list of exempted small cable undertakings available?
- What is the secondary recipient rule?
- What do we do to fix a mistake on a LFR form once it has been ‘submitted’?
- How are revenues reported in the LFR form used?
- Where can I get additional information about the LFR form?
How is Less: Exemption level value calculated?
The exemption levels are as defined in Section 1 of the Broadcasting Licence Fee Regulations, 1997.
Who should attest to the LFR form?
The LFR is to be completed and reviewed before it can be submitted. The owner or a senior officer must certify that the revenue information contained in the form is true, accurate, and complete (i.e. gross revenue derived during a return year from the licensed activity of the licensee).
How is a broadcasting return year defined?
The broadcasting return year is defined as September 1st to August 31st.
What do we do if there has been a sale or an acquisition of assets during the broadcasting year?
In keeping with Section 11 of the Broadcasting Regulatory Policy CRTC 2010-476 parties must take into account the sale and acquisition of broadcasting assets when filing their LFR. The buyer (new licensee) should report the revenue for the broadcasting licence for the full return year. The new licensee is assessed fees based on the financial performance of the undertaking for the previous 12 months. As a result of a sale or acquisition of assets, the new licensee is eligible for one exemption and is responsible for the payment of licence fees.
As defined in Section 1 of the Broadcasting Licence Fee Regulations, 1997 the gross fee revenue derived during a return year can include the estimated annual revenue, based on the trends of the market in which the undertaking is licensed to operate, the previous financial performance of the undertaking, and, where applicable, the licensee’s business plan for the first 12 months of operations, where the licensee has not filed a LFR covering 12 months of the most recently complete return year.
What do we do for a new undertaking?
The licensee must report the revenue from the start date of operations to August 31st.
What do we do for an undertaking that has ceased operations?
If the undertaking has ceased operations and a CRTC decision has been rendered, a LFR does not need to be filed. We ask that you notify Finance of this change by sending an e‑mail to Finance@ctrc.gc.ca.
What if our broadcasting distribution undertaking (BDU) is eligible for an exemption and have applied for a revocation of licence?
Over the past several years, the Commission has conducted public processes to consider the eligibility for exemption from licensing requirements for certain classes of broadcasting distribution undertakings (BDUs). For example, Broadcasting Order 2009-544 sets out the exemption order for terrestrial broadcasting distribution undertakings serving less than 20,000 subscribers in which BDUs may apply to the Commission for a revocation of their broadcasting licence. If the BDU’s application is approved by the Commission (e.g. Broadcasting Decision CRTC 2010-87), there is a revocation of its broadcasting licence. Once the licence has been revoked, these undertakings are not required to file any LFR forms after the date of revocation, nor will they be required to pay new licence fees after this date. (Note: Any outstanding CRTC fees and accrued interest as of the date of revocation remain debts owed to the Crown). Such undertakings must however, comply with conditions of exemption, and in the case of the BDUs exempted under Broadcasting Order 2009-544, they must comply with certain information provisions and reporting requirements.
As a result of BDU licence revocations, there is an impact on the revenues subject to fees of pay and speciality television and satellite relay distribution undertakings (SRDU) that receive affiliation payments from the exempted BDUs. Before the revocation, the exempted BDUs, paid fees on the entire amount of subscription revenues received, even though part of these revenues was paid to pay and speciality television undertakings and SRDU (secondary recipients). After the BDU licence revocation, the pay and speciality television and SRDU usually become the first licensed recipients of the ‘fee revenue’. As a result, they have to report the affiliation payment received from the exempted BDUs and pay licence fees on them.
Where is the CRTC’s list of exempted small cable undertakings available?
The list of CRTC exempted cable undertakings are available by selecting a hyperlink included with the form instructions. Click the hyperlink to refer to the XML list.
What is the secondary recipient rule?
The rule, commonly referred to as the ‘secondary recipient rule’, prevents the same revenue from being assessed fees twice. A licensee, the first recipient, will be assessed fees on ‘fee revenue’ even though some of the revenue upon which fees are assessed is paid out to another licensed recipient. The licensee that has received a payment from another licensee is not assessed a fee on that revenue unless it was received from the CBC for the sale of air time.
This rule usually operates between the broadcasting distribution systems (e.g. cable undertakings), and the pay and specialty televisions as well as SRDUs. Whichever licensee receives revenue first is assessed fees on that basis, despite contractual arrangements that may oblige it to pay out a portion of those revenues to another licensee.
What do we do to fix a mistake on a LFR form once it has been ‘submitted’?
If a mistake is identified on the LFR form only after it has been ‘submitted’, you must send an e‑mail describing your error to Finance@crtc.gc.ca. Finance will contact you within a few days with the proper measures to follow.
How are revenues reported in the LFR form used?
The revenues reported in the LFR form for the previous broadcasting reporting year are used to calculate the Part I Broadcasting Licence Fees that will become due and payable on or about April 1, and the Part II licence fees that will become due and payable on or before December 1. Licence fee invoices are sent out under separate cover to applicable licensees.
Where can I get additional information about the LFR form?
Information about the LFR is contained within the Broadcasting Licence Fee Regulations, 1997 (as amended by SOR/2010-157 dated July 7, 2010) and can be found on the Department of Justice web site. Additional information can also be obtained by sending an e-mail to Finance@crtc.gc.ca.
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