Canadian TV Regulator Sets New Spending Floor for Canadian Programming

TORONTO -- Seeking to “encourage the creation of high-quality Canadian television programs,” the Canadian Radio-TV and Telecommunications Commission (CRTC) is for the first time imposing spending requirements on the nation’s three largest private, English-language broadcasters.

As part of a series of rulings on the TV industry’s future last week, the CRTC said it will require that the three large private ownership groups -- CTVglobemedia, Canwest, and Rogers Communications -- spend at least 30 percent of their gross revenue on Canadian programming. The Commission said the idea is “establish a floor” comparable to the amount that the three major broadcasters spent on Canadian productions between 2007 and 2009. The spending rules will take effect next year, when the CRTC plans to hold license-renewal hearings for the stations owned by all three groups.

At the same time, the CRTC gave the big broadcasters some flexibility in meeting the requirements. The agency said the network ownership groups could shift up to 100 percent of their required Canadian programming expenditures for their specialty channels to other specialty services they own or their over-the-air stations. The networks could also shift up to 25 percent of their required expenditures for their conventional stations to their specialty channels. “This approach recognizes the challenges facing conventional broadcasters, while ensuring that each element of the broadcasting system contributes to the production and broadcast of Canadian programs,” the CRTC said in a report last week.

But the CRTC will require the big network groups to spend at least 5 percent of their gross revenue on “programs of national interest,” including domestic drama and comedy series, documentaries, and award shows promoting Canadian culture. In addition, the agency will require the networks to spend at least 75 percent of these funds on Canadian programming created by independent producers. “These programs are often expensive and challenging to produce, yet are the main vehicles for telling Canadian stories,” the CRTC said in its report. “They should be made available on multiple platforms to as many viewers as possible.”

Previously, the CRTC has set requirements for how much Canadian content should be aired by the TV networks during the broadcast year. Currently, the Commission requires that both English-language and French-language broadcasters devote 60 percent of their total air time to Canadian productions. Under the new rules, the agency will reduce that requirement to 55 percent. But, recognizing the pre-eminent role of prime-time programming, it will continue to require that 50 percent of all shows aired between 6 p.m. and midnight be Canadian productions.

The CRTC also spelled out some new guidelines for Canada’s upcoming DTV transition, slated for Aug. 31, 2011. In its ruling, the Commission maintained that deadline for major Canadian markets as well as provincial and territorial capital cities. So local stations in 30 “mandatory” markets around the country -- including Toronto, Montreal, Vancouver, and Ottawa -- will still have to switch over from analog to digital transmission in about 17 months.

But the CRTC exempted local stations in smaller and rural markets, serving about 17 percent of the nation’s homes, from meeting the August 2011 deadline. As long as those stations are not using channels 52 through 69, the agency said, they “will be allowed to continue broadcasting in analog for the present time.”

The CRTC also launched a new proceeding designed to “ensure an orderly transition for consumers” to the digital future. In that proceeding, the Commission is seeking input in several areas, including the number of Canadians that could potentially lose access to free, over-the-air TV; the size, type and manner of a potential subsidy program for over-the-air viewers; the provision of a free package of local and regional stations; possible measures to educate consumers about the transition; and the establishment of a trial market prior to the August 2011 transition.

Unlike the case in the U.S., the Conservative government here has repeatedly said it’s not interested in subsidizing consumer purchases of digital set-top boxes and other equipment. But the CRTC is urging the government to position the DTV transition as a key part of Canada’s digital economy strategy, set up a consumer subsidy program, and fund and direct a national consumer education and awareness campaign.