In issuing the new Broadcasting Fees Regulations (the “Fees Regulations”) on March 21, 2024, the Canadian Radio-television and Telecommunications Commission (the “CRTC”) has taken another step in fulfilling its new mandates under the Broadcasting Act (the “Act”), which was amended in April 2023 following the enactment of Bill C-11, the Online Streaming Act.
The Broadcasting Licence Fee Regulations, 1997, which will be replaced by the Fees Regulations, imposed two types of fees on “licensed” broadcasting undertakings: Part I fees, which allowed the CRTC to recover its costs; and Part II fees, which were collected by the CRTC and remitted to the Government of Canada. Broadcasting undertakings that were exempt from the requirement to hold a broadcasting licence, including online undertakings (i.e., online streaming services that transmit programs over the Internet), were not required to pay these fees.
Like its previous version, the Act continues to empower the CRTC to make regulations, with Treasury Board approval, regarding the annual fees that broadcasting undertakings are required to pay.
However, the CRTC's authority under the Act to establish broadcasting fees has changed in two important ways. First, the CRTC no longer has the authority to collect Part II fees. Now, the only broadcasting fees that the CRTC is authorized to impose are fees that recover the costs it incurs to regulate the broadcasting industry. Second, the Act expanded the pool of potential broadcasting feepayers to include all broadcasting undertakings, including online undertakings.
As a result of those amendments to the Act, the new Fees Regulations contain the three key changes from the previous regulations:
- references to Part II fees have been removed;
- both licensed broadcasting undertakings and online undertakings are subject to the new fee requirements; and
- broadcasting fees are required to be paid by broadcasting
ownership groups and individual broadcasting undertakings based on
annual revenues (referred to as “fee revenue”), which
are subject to the following “exemption levels”:
- A broadcasting ownership group calculates its “fee revenue” by aggregating the total annual broadcasting revenues in Canada of each of its individual broadcasting undertakings that earn annual revenues of more than $2 million, and the group further benefits from an additional $25 million exemption.
- An individual broadcasting undertaking that does not operate as part of an ownership group benefits from a $25 million exemption.
The new Fees Regulations come into force on April 1, 2024, the beginning of the CRTC's fiscal year, and will apply to the new group of feepayers starting in the 2024-2025 fiscal year.
This is the third regulatory measure adopted by the CRTC since the Act was amended on April 27, 2023 that imposes obligations on online undertakings. On September, 29, 2023, the CRTC established the Online Undertakings Registration Regulations requiring a person who carries on an online undertaking to register with the CRTC. On that same day, Broadcasting Order 2023-332 was issued setting out conditions of service for online undertakings, which included requirements relating to information gathering, undue preference/disadvantage, making content available over the Internet, and filing financial information.
Looking ahead, the next step is for the CRTC to begin to implement a modernized contribution framework that will establish the required financial contributions for online undertakings to support Canadian and Indigenous audio and video content. The CRTC began the process to impose an initial base contribution requirement on online undertakings in May 2023 when it issued Broadcasting Notice of Consultation CRTC 2023-138. The CRTC's decision to establish an initial base contribution for online streaming services is expected to be announced later this spring.
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