OTTAWA - The CRTC is ending the 5% limitation on the carry-over of Canadian programming over-expenditures and the obligation to use them in the subsequent broadcast year, but broadcasters currently subject to it will have to apply to have it removed.
The CRTC’s decision follows previous filings by both Rogers and Bell that argued the 5% cap limited their flexibility. Rogers submitted that the cap reduced its ability to operate its Citytv conventional television stations and that some of its Canadian programming expenditures (CPE) were already committed to large budget productions during the first broadcast year of the licence term.
Bell maintained the policy limited its ability to commission the best projects as they become available, and created difficulties in the program commissioning cycle.
As an example, Bell cited that due to the high cost of the rights to the Olympic Games and the fact that CPE requirements were based on the previous year’s revenues, overall CPE would significantly exceed the required CPE amount, even when including the 5% over-expenditure allowance. It further noted that the issue of a cap on CPE over-expenditures was not discussed at the public hearing for group-based licensing and that licensees therefore did not have the opportunity to comment on this issue.
In it calls for comments on its policy regarding Canadian programming expenditure over-expenditures for conventional television and specialty services, it says broadcasters all supported the removal of the 5% limit on the carry-over of over-expenditures and to use over-expenditures in the next broadcast year.
Broadcasters argued that they needed greater flexibility to be able to commit to high-end Canadian programming and expensive multi-year projects. They also noted that if the over-expenditure limit were removed, they would still meet their overall spending requirements over the course of the licence term.
Telus opposed the application by Bell, but not the application by Rogers, noting that Rogers was neither subject to nor benefited from the group-licensing policy. Telus made the case that Bell was effectively seeking to increase its spending on marquee sports programming at the expense of other Canadian programming. It stated that if the Commission saw any merit to the proposal, it should adopt a limit of 10% on over-expenditures.
The CRTC says the creative sector was divided on the issue with some, such as the Association québécoise de l’industrie du disque, du spectacle et de la vidéo, the Communications, Energy and Paperworkers Union of Canada (CEP)and the Union des artistes, the Société des auteurs de radio, télévision et cinéma, the Association des réalisateurs et réalisatrices du Québec and the Alliance québécoise des techniciens et de l’image et du son (jointly, UDA/SARTEC/ARRQ/AQTIS), submitting that the policy provided needed certainty and stability for creators of Canadian programming. They noted that the programming services at issue already benefited from considerable flexibility and that the policy did not limit how much broadcasters can spend, but only how much they can reduce their spending over the rest of the licence term.
In contrast, others in the creative sector, such as the Association des producteurs de films et de télévision du Québec, agreed with broadcasters that the policy represented a disincentive to overspend.
In its decision the Commission agreed with Rogers’ assessment and explained that the condition of licence relating to the 5% limit on the carry-over of CPE/PNI over-expenditures should be removed from the licence of its conventional Citytv stations as the rationale used by the Commission to impose it on other licensees does not apply to Rogers.
It has approved the applications by Bell and Rogers to remove the current 5% limit on the carry-over of CPE/PNI over-expenditures and that other licensees currently subject to this condition of licence may apply to have it removed.