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CRTC Fees

CRTC Fees

Name of fee	Fee-setting authority	Reason for fee amendment	Effective date of planned change	Planned consultation and review process (Note 2 & 3)
Telecom-munications Fees (Note 1)	Telecommunications Act (Section 68) Telecommunications Fees Regulations, 1995	Part VII application to revise Telecommuni-cations Fee Regulations	Fiscal Year 2010–11	Full public consultation. See section "Explanation of Revenue" for further information. Telecom Decision CRTC 2009-681 and Telecom Notice of Consultation 2009-682
Broadcasting Licence Fees (Note 1)	Part I licence fee Broadcasting Act (Section 11) Broadcasting Licence Fee Regulations, 1997 Part II licence fee Broadcasting Act (Section 11) Broad-casting Licence Fee Regulations, 1997		-     Fiscal Year 2010–11	-     Broadcasting Notice of Consultation 2009-797 and 2009-797-1

Note 1The Broadcasting Licence Fee Regulations, 1997 and the Telecommunications Fees Regulations, 1995 can be found on the Department of Justice website at: http://laws.justice.gc.ca/

Note 2Public consultations occur with each change to the Telecommunications Fee Regulations or the Broadcasting Licence Fee Regulations.

Note 3The CRTC's dispute-resolution process regarding the assessment of broadcasting licence fees and telecommunications fees is summarized as follows:

The first point of contact for fee payers concerning issues related to fee assessment or collection is the Commission's Assistant Director, Financial Operations and Licence Fee Processing The second point of contact is the Director General, Finance and Administrative Services. Fee payers may raise their concerns either by telephone conversation, e-mail or letter. To date, the majority of fee payers' concerns have been resolved at the staff level.

Where an issue cannot be satisfactorily resolved at the staff level, fee payers should document the nature of their concern in writing and submit it to the CRTC's Secretary General for formal consideration. The CRTC will respond to all such letters.

Explanation of revenue

The CRTC collects fees under the authority of regulations in the Broadcasting Act and Telecommunications Act. For the fiscal year 2010–11:

• CRTC Part I broadcasting licence fees are estimated to be $35.8 million ($22.7 million respendable and $13.1 million in non-respendable revenue). The broadcasting non-respendable revenue also includes a "true-up" adjustment¹ of $6.4 million.
• CRTC telecommunications fees are estimated to be $27.6 million ($19.7 million respendable and $7.9 million in non-respendable revenue). The telecommunications non-respendable revenue also includes an estimated true-up adjustment of $1.6 million The actual amount of the true-up will be calculated at the completion of the 2009–10 fiscal year and reflected in the telecommunications billing for the fiscal year 2010–11.

Broadcasting licence fees

Section 11 of the Broadcasting Act gives the Commission the authority to make regulations regarding licence fees. These regulations apply to most licensees, who are required to pay their Part I and Part II licence fees to the Commission annually.

Part I licence fees

For 2009–10, the CRTC assessed $33.5 million in Part I fees, including true-up adjustments.

Part I licence fees are based on the broadcasting regulatory costs incurred each year by the Commission and other federal departments or agencies, and are equal to the aggregate of:

• the costs of the Commission's broadcasting activities
• the share of the costs of the Commission's administrative activities that is attributable to its broadcasting activities, and
• other costs included in the net cost of the Commission's program attributable to its broadcasting activities, excluding the costs of regulating the broadcasting spectrum.

The CRTC's estimated broadcasting regulatory costs are set out in its Expenditure Plan published in Part III of the Estimates of the Government of Canada (Part III, Report on Plans and Priorities).

There is an annual adjustment amount to the Part I fee that aligns estimated costs to actual expenditures. Any excess fees or shortfalls are credited or charged to the licensee in the following year's invoice.

Part II licence fees

On October 7, 2009, the Minister of Canadian Heritage announced a settlement between the Government of Canada and the members of the broadcasting industry regarding Part II broadcasting licence fees.

The members of the broadcasting industry agreed to discontinue their court action against the Government of Canada over the legitimacy of Part II licence fees. In return, the government will not seek to recover the approximately $450 million the industry owes in unpaid fees. Specifically, in Order-in-Council 2009-1715, dated October 7, 2009, the government agreed to the remission of the broadcasters' debt for the:

• licence fees payable under paragraph 3(b) of the Broadcasting Licence Fee Regulations, 1997, for the return years 2006, 2007 and 2008 (i.e. fees due and payable on November 30, 2007, 2008 and 2009)
• costs awarded to Her Majesty in right of Canada against those appellants by the Federal Court of Appeal in its decision of April 28, 2008, and
• any accrued interest in relation to the fees or costs.

Under this settlement, the government recommended that the CRTC develop a new fee regime for the broadcasting year that began on September 1, 2009. It also suggested that Part II licence fees should be capped at $100 million per year, adjusted annually according to changes in the Consumer Price Index. The CRTC is acting on this recommendation. A public process (Broadcasting Notice of Consultation 2009-797 and 2009-797-1) was launched to amend the fee regulations expeditiously and in accordance with applicable law. The Part II licence fees are regulatory charges imposed for a broadcaster's privilege to hold a licence. These fees recover part of the Government of Canada's substantial annual investment in the Canadian broadcasting system.
 
The Commission anticipates that revised broadcasting licence fee regulations will be in place for the 2010–11 fiscal year.

Telecommunications fees

Section 68 of the Telecommunications Act grants the CRTC authority to create the Telecommunications Fees Regulations.

Each telecommunications company that files tariffs must pay fees based on its operating revenue. For 2009–10, the CRTC assessed $31 million in telecommunications fees, including true-up adjustments.

The CRTC's annual telecommunications fees are equal to the aggregate of:

• the cost of the Commission's telecommunications activities
• the share of the costs of the administrative activities that are attributable to the Commission's telecommunications activities, and
• other costs attributable to the Commission's telecommunications activities.

The CRTC's estimated telecommunications regulatory costs are set out in its Expenditure Plan, published in Part III of the Estimates of the Government of Canada (Part III, Report on Plans and Priorities).

There is an annual adjustment amount to the telecommunications fees that aligns estimated costs to actual expenditures. Any excess fees or shortfalls are credited or charged to the carriers in the following year's invoice.

Revision of the Telecommunications Fees Regulations, 1995

On May 26, 2006, Aliant Telecom Inc. and Bell Canada filed an application pursuant to Part VII of the CRTC Telecommunications Rules of Procedure. They requested that the Commission revise the current regulations for telecommunications fees and, in particular, the basis on which telecommunications fees are determined and levied.

In Telecom Decision CRTC 2006-71, the Commission indicated it would revise the fees paid by telecommunications service providers. Under the amended regulations, service providers with annual revenues of less than $10 million will be exempted from paying fees.

The Commission had initiated inter-departmental deliberations and began the process of drafting changes to the fees regulations. During the deliberations, the Commission received conflicting legal opinions with respect to the application of the User Fees Act to the proposed changes to the Fee Regulations. As a result, the Commission reopened the proceeding and initiated a reference to the Federal Court of Appeal. Further details can be found in Telecom Public Notice CRTC 2008-13, dated October 15, 2008 http://www.crtc.gc.ca/eng/archive/2008/pt2008-13.htm.

On July 2, 2009, the Federal Court of Appeal ruled that proposed amendments to or replacement of the Telecommunications Fees Regulations, 1995 are not subject to requirements of the User Fees Act. Given this outcome, the Commission can reach a final determination without any further process.

The Commission is proceeding with the proposed changes to the Telecommunications Fees Regulations. In Telecom Notice of Consultation 2009-682, the Commission requested comments from interested parties on the text of the new Telecommunications Fees Regulations, 2010. It is anticipated that new regulations will be in place for the 2010–11 fiscal year.

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Notes:

[1] The "true-up" adjustment represents the difference between the estimated costs initially billed in a previous fiscal year and the actual costs incurred.

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