New NAFTA Deal Means Canadian TV Viewers Won't See American Super Bowl Ads

Super Bowl XLV at Cowboys Stadium - Getty - H 2018
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The new U.S.-Canada trade deal means homegrown ads can once again replace glitzy American spots on Canadian broadcasts of the annual championship game.

The new NAFTA deal between the U.S. and Canada has handed the National Football League a win in overturning an earlier Canadian regulatory order to force the local CTV network to air American Super Bowl telecast commercials.

"We thank the government of Canada for overturning an unfortunate decision by the regulator. It's a positive outcome for content creators, advertisers and the overall Canadian broadcasting industry," CTV-parent Bell Media said Monday in a statement after Canada and the U.S. agreed on a new North American Free Trade Agreement.

Bell Media, the local rights-holder for the NFL championship, earlier this year saw nearly 40 percent of its traditional TV audience bolt its CTV network to the rival Fox network to view buzzy U.S. Super Bowl ads. That followed the CRTC, the country's TV regulator, forcing the Fox game feed in Canada to air American commercials, rather than local Canadian ads as in years past.

While allowing Canadian NFL fans to see glitzy U.S. Super Bowl ads for the first time, rather than go online, the CRTC stopped CTV from maximizing its NFL championship game ad revenue by substituting flashy U.S. commercials on the Fox feed with homegrown ads, as part of a traditional simultaneous substitution business model.

Elsewhere on the TV dial, Canada's decades-long simultaneous substitution rules allow local broadcasters like CTV to still replace the U.S. feed for popular American shows like The Big Bang Theory and Modern Family and air local commercials to boost revenues.

But the NFL opposed the CRTC decision, as the lost ad revenue for the CTV from its Super Bowl telecasts threatened to reduce the value of its exclusive Canadian rights when they next come up for renewal. After Canada's Federal Court of Appeals ruled against the NFL and NFL Productions by upholding the CRTC ban on homegrown ads replacing glitzy American spots, the new NAFTA deal trumps the Canadian courts and the CRTC.

Now all programming on Canadian TV, including the local Super Bowl telecasts, must be treated equally. "With respect to simultaneous substitution of commercials during the retransmission in Canada of the program referenced in those measures, Canada may not accord the program treatment less favorable than the treatment accorded to other programs originating in the United States retransmitted in Canada," the United States-Mexico-Canada Agreement, which replaces the 25-year-old NAFTA deal, states.