CIMA Releases Final Response to CRTC Consultation on Tangible Benefits

Some readers might remember that last December, CIMA submitted an intervention to a CRTC consultation on the Commission’s tangible benefit policy, which requires that financial contributions be made to Canadian Content Development (including the music industry) each time a broadcasting entity is acquired by another company.

Since then, CIMA has had an opportunity to read the comments of broadcasters, fellow media advocacy organizations, private citizens, and others. In response, we have drafted a response to several points raised by these stakeholders.

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Here’s what we said:

The Commission Should Maintain Its Current Tangible Benefit Policy

Some participants in the consultation argued that tangible benefits have outlived their usefulness, and should be phased out. CIMA responded by noting that tangible benefits are the largest source of funding for Canadian Content Development currently, and directly support a vast amount of independent music production. Canada’s independent music industry is important not only to Canada’s economy and culture, but the stated objectives of the Broadcasting Act, which the CRTC is charged with enforcing. The Broadcasting Act states that Canadian radio and television must contain a “significant contribution from the Canadian independent production sector.” As such, tangible benefits directly helps ensure that this pillar of broadcasting policy is fulfilled.

CIMA also noted that the Broadcasting Act states that private broadcasters should make contributions to the production of Canadian Content “to an extent consistent with the financial and other resources available to them.” Given that the Canadian radio industry has achieved healthy levels of revenue growth over the past several years, CIMA believes that it has the resources to continue supporting the tangible benefit policy.

 The Commission should not raise the proportion of benefits that radio broadcasters spend on a “discretionary” basis.

A number of participants in the broadcast proceedings argued that a certain proportion of funds should be taken from either Radio Starmaker or FACTOR and allocated to the envelope that radio broadcasters spend on a discretionary basis. CIMA advised the Commission against this course of action, noting frequent problems with the funds spent through this envelope. They are not as easily monitored, nor are they as transparently spent as funds spent through FACTOR or Radio Starmaker.

Many of the arguments in favour of increased spending on discretionary initiatives highlighted that they allow broadcasters to develop Canadian talent in their local communities. CIMA argued that local, provincial and national Music Industry Associations (MIAs) like MusicOntario and CIMA also have this impact, and would be more likely to spend this funding in accordance with the objectives of the Broadcasting Act.

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The Commission should implement greater transparency measures for tangible benefit spending.

Support for more detailed reporting and public transparency for tangible benefit spending was widely supported among participants in the consultation. In response to these calls, CIMA affirmed our support for transparency, particularly for initiatives funded by discretionary benefits

The Commission has the power to regulate online radio broadcasts.

In our original submission, CIMA argued that the Commission should begin counting the value of online radio when calculating the overall value of an ownership transaction. Several participants in this consultation pushed back against this proposal, arguing that “unlicensed” online services fall outside the Commission’s regulatory jurisdiction. CIMA responded by noting that this is only the case because the Commission chose to implement an exemption for all forms of “New Media,” which included online radio. Were it to issue a limited repeal of this exemption for online radio retransmission activities, online radio broadcasts would cease to be unlicensed and could count towards the overall value of an ownership transaction.

CIMA will continue to monitor the developments of this important consultation as they unfold, please stay tuned to our newsletter for updates.

Read our full response submission to the CRTC here.
Read our original submission here.