Small-city television stations across the country are in for a fight for survival now that they know an annual subsidy provided by cable and satellite TV providers will be scrapped.
The Canadian Radio-television Telecommunications Commission (CRTC) announced Wednesday the Local Programming Improvement Fund, set up in 2008 to help stations outside of large metropolitan areas upgrade to digital television, will be phased out over the next two years.
Many Canadian cable and satellite TV services have been collecting the fund through a surcharge of 1.5 per cent of gross broadcasting revenue, a cost which has been passed on to their customers. Shaw Cable, which provides cable services to the Prince George area, did not add the surcharge to its customers' bills.
In 2010, 78 TV stations received money from the fund. That increased in 2011 to $106 million, shared by 80 stations. Ending the fund will cut $40 million annually from the CBC's budget. The public network is already feeling the pinch from a $115 reduction in its $1.1 billion budget, handed down in the federal budget in March.
The subsidy will drop to one percent of gross revenue on Sept. 1, 0.5 per cent on Sept. 1, 2013, and by Sept. 1, 2014 the fund will be phased out.
The CRTC decision will almost certainly create financial hardships on stations like CKPG, the only Prince George TV station, which is owned by the Jim Pattison Broadcasting Group. CKPG general manager Ken Kilcullen deferred all comment to Pattison Broadcast Group president Rick Arnish, who could not be reached for comment Thursday.
Peter Murdoch, media vice-president of the Communications, Energy and Paperworkers Union of Canada, in a post on the Broadcaster magazine website, said the CRTC's refusal to mandate local news broadcasts could lead to job losses and station closures.
"In ending the LPIF the CRTC ignored not only the fund's critical role in sustaining and strengthening local news across the country but also large broadcasters' threat to close more TV stations," Murdoch said.
Bell Canada and Shaw reported to the CRTC in April that 17 of their TV stations would be unprofitable without the fund.
