OTTAWA – The Canadian Association of Broadcasters is taking its fight against Part II fees to the next level, and on Friday filed a leave for appeal with the Supreme Court of Canada, seeking to overturn a lower court ruling that earlier this year upheld the CRTC’s right to collect the controversial payments.

In its filing, the private broadcasters’ group contends that the Federal Court of Appeal issued a confusing ruling when its judges overturned a December 2006 decision that Part II fees were an illegal tax. The confusion arises, says CAB, because the judges made ‘three separate judgments taking different approaches to the issue.’

At issue, according to CAB, are questions such as whether the CRTC can charge a fee for a privilege, and what distinguishes a fee from a tax if it is purportedly applied for a privilege.

One judge ruled that there is no need for a link between the fee and the regulatory regime if it is levied in return for a benefit or a privilege. Another said the government could charge whatever it wants, while the third judge took a ‘soft linkage’ approach.

The three approaches are also ‘diametrically opposed’ to what the government has stated in its User Fees Act, which requires the fee to reflect the value of the privilege, says CAB.

The Part II fees are 1.3% of a broadcaster’s gross revenues, and amount to $679.6 million from 1997/98 to 2004/05, which CAB wants to be paid back.

The private broadcasters’ organization has long argued that Part II fees are an illegal tax since they go directly into the government’s all-purpose coffers and are not allocated for any specific purpose. Broadcasters pay separate Part I licence fees to cover the cost of regulating the broadcasting system.

The government says the Part II fees are levied in exchange for the privilege of holding a broadcasting licence and using broadcasting spectrum.