Canada Considers Scrapping Local TV Fund

The CRTC will hold April 2012 public hearings to weigh ending or modifying the $100 million a-year Local Programming Improvement Fund.

TORONTO – Canada’s TV watchdog is considering scrapping a $100 million annual tax on cable and satellite TV subscribers to subsidize local TV news operations.

The CRTC said it will hold public hearings in April 2012 to evaluate the Local Programming Improvement Fund (LPIF), which slaps a 1.5 per cent surcharge on the gross broadcast revenues of major cable and satellite TV operators.

The content carriers in turn pass the monthly charge onto their subscribers.

“This review will provide for determining whether the fund should be maintained, modified or cancelled,” the CRTC said in a statement.

The stakes are high for the upcoming consultation.

The industry fund pits over-the-air broadcasters, who use local news to drive advertising revenue and welcome the subsidy, against major content carriers that consider LPIF an unwanted hidden tax on their customers.

The two sides two years ago fought a high-profile battle over carriage fees, with cable giants telling consumers in ads to say no to a new "TV tax," while broadcasters waged their own media campaign to save local programming and news.

To complicate matters, major carriers like Shaw Media and BCE have since acquired major conventional TV station networks of their own as part of an industry consolidation.

A lot money is also up for grabs.

Since 2009, cable and satellite TV providers have doled out $300 million to around 75 local TV stations that air local programming, including news.

The CRTC also introduced the LPIF after twice turning down bids by broadcasters to receive retransmission fees from cable and satellite TV carriers for distribution of their local station signals.

The LPIF review also comes as spending on local programming by domestic broadcasters has stagnated and even declined, the CRTC reported, owing to fragmenting TV audiences and declining advertising revenues.

That’s the latest sign from the CRTC that domestic broadcasters are reducing investment in homegrown shows at the same time they spend progressively more each year on popular U.S. networks series to drive audience and ad revenue gains.

The regulator, in unveiling the review, said it will also consider ordering additional spending on local programming by domestic broadcasters to receive LPIF coin in the first place.

comments powered by Disqus