The CRTC altered the national broadcast landscape earlier this month by awarding a southern Ontario TV licence to Calgary-based Craig Broadcast Systems.

The surprise decision, which bypassed heavily favored Torstar Corp.’s bid in preference of Craig’s ethnic-flavored station, Toronto One, moves the Western-based regional player into the centre of Canada’s largest TV market.

‘It’s an exciting day for our company,’ Drew Craig, president of Crag Broadcasting, said in a statement. ‘Craig is known for its niche programming in the local arena. Toronto One is all about reflecting the diversity of Greater Toronto.’

Toronto One will begin over-the-air broadcasts in the fall out of Toronto, with a rebroadcasting transmitter in Hamilton, ON.

In its submission, Craig promised to run 12 hours a week of ethnic programming in English and is committed to spend $15.4 million on independent productions over seven years. The money will go toward two funds, The New Voices Fund, focused on Toronto’s multicultural community, and The Priority Program Fund, which will give Ontario producers initial script and development dollars to make them eligible for CTF support.

In its decision, the CRTC cited the ethnic factors as a key. ‘[T]his would be the first time that a significant level of ethnic programming in English would be included in the programming of a non-ethnic, over-the-air television station.’

The CRTC also granted Rogers Broadcasting the right to apply for a separate licence for its CFMT ‘too’ bid, which will also lean on ethnic programming.

The entry to the Toronto market boosts Craig’s reach from 18% to 42% of English-speaking Canadians. While this is still far from the mid to high 90 percentiles of CTV and Global TV, the move creates a new power on the scene.

In it’s three-two majority decision granting Craig a licence, the committee cites a need to help build strong players if its ‘regulatory objectives with regard to Canadian content are to be met.’

‘We believe in strong players because they can produce more quality Canadian programming – the synergies are there,’ says Denis Carmel, spokesperson for the CRTC. ‘That was one of the factors that helped them win.’

The decision is clearly a blow to the aspirations of Torstar, which owns daily newspapers across southern Ontario, to create a broadcast platform for its media operations and develop a clearer convergence strategy.

Torstar’s Hometown Television proposed to create three stations with 85% Canadian content and spend $133 million on programming over the duration of the licence.

But the CRTC said it was skeptical that the proposal would be financially viable. It cited that the company had allotted $1.25 million for 130 hours of primetime documentaries, but that figure boils down to $9,615 per hour. ‘Such a cash investment is unlikely to purchase a competitive prime time product,’ the commission wrote in its decision.

In a dissenting opinion, vice-chair broadcasting Andree Wylie, who supported the Torstar bid, wrote: ‘I note that, at the hearing, seasoned independent producers agreed that attractive programming could be produced within the base budgets proposed by Torstar, when all elements were considered.’

‘As you might expect, we are very disappointed,’ says Robert S. Prichard, Torstar’s CEO. ‘We will carefully review the commission’s decision and consider our options.’

Another disappointed player is Jay Switzer, president CHUM Television, who has long been an outspoken opponent of any new operations in the southern Ontario market.

Switzer says that while Craig’s bid emphasized ethnic programming, that will only account for 20% overall. Meanwhile, a large chunk of Toronto One’s primetime slot will be made up of U.S. acquired content.

‘We think that with this decision the commission has really introduced new bidder for U.S. programming rights,’ he says. ‘We think that could escalate the cost of acquiring foreign programming, not just for us but for the entire industry.’

According to CHUM’s CRTC filings, it stands to lose up to $6.5 million a year due to Craig’s entry.