Shaw Communications tells CRTC to scrap LPIF subsidy

The cable company tells the regulator a revived Canadian TV ad market means local TV stations no longer need subscriber subsidy.

Cable giant Shaw Communications on Monday urged the CRTC to scrap the Local Programming Improvement Fund (LPIF), a $100 million subscriber tax that supports local TV news operations.

Calgary-based Shaw Communications, which earlier acquired the former CanWest Global Communications Corp. TV assets and rebranded them as Global TV, said the Canadian TV ad market has revived since 2008, allowing an end to the 1.5 per cent tax on the gross broadcast revenues of major cable and satellite TV operators.

In particular, the Global Television and CTV networks, which raised the alarm when their TV ad revenues collapsed in 2009 in the wake of the global market meltdown, have since been acquired by vertically-integrated carriers, with CTV going to phone giant BCE, which has rebranded as Bell Media.

“There’s been significant financial stability for the over-the-airs [conventional broadcasters]. We think all of these conditions have created an environment where, in 2008 it was a reasonable response to the situation, but today it’s no longer required,” Jean Brazeau, Shaw’s senior VP of regulatory affairs, told a CRTC hearing that is weighing whether to keep, modify or kill off the LPIF.

Much of the questions by CRTC commissioners Monday focused on what impact ending LPIF would have on small market TV stations, with the Shaw execs insisting they could survive without the subsidy.

But Leonard Katz, acting CRTC chair who presided over the one-day hearing, expressed skepticism that small market TV stations, which continue to post losses for major networks, could go cold turkey.

“I can see how the [2008] crisis has abated, but I can’t see how the over the air environment is solvent,” Katz told the Gatineau, Quebec hearing.