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October 27, 2014
CAB Technical Update

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Television Sector > LPIF

The Local Programming Improvement Fund

FAQs
  1. What is the LPIF?
  2. Why was the LPIF created by the CRTC?
  3. Where do the funds come from?
  4. Will the BDUs’ costs associated with funding the LPIF be passed along to consumers?
  5. What television stations will receive funding?
  6. How is the funding allocated among markets and among stations?
  7. What are the eligibility criteria?
  8. What is considered local programming and local presence?
  9. What expenses are eligible for funding?
  10. How do I apply for funding?
  11. Who administers the LPIF?
  12. What is the governance structure of the LPIF?
  13. What is the frequency of funding distribution to eligible stations?
  14. When can eligible television stations expect to receive their first cheque?
  15. What are the obligations imposed on funding recipients?
  16. What oversight does the Commission maintain of the LPIF?
  17. Where can I get more information on the LPIF?

 

1. What is the LPIF?

The Local Programming Improvement Fund (LPIF) is, as its name suggests, a fund established to help finance the costs of local television programming by private and CBC/SRC-owned and operated television stations. Local programming is defined as programming produced by local stations with local personnel or programming produced by locally-based independent producers that reflects the particular needs and interests of the market’s residents. The CRTC projects that LPIF will total $102 million in the 2009-2010 broadcast year.

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2. Why was the LPIF created by the CRTC?

The LPIF was created by the CRTC to ensure that viewers in small markets (fewer than 1 million people) continue to receive a diversity of local programming including local news programming and to improve the quality and diversity of local programming that is broadcast in these markets.
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3. Where do the funds come from?

Pursuant to Public Notice CRTC 2008-100 and Broadcasting Regulatory Policy 2009-543 , licensed Class 1 broadcast distribution undertakings (BDUs) serving 20,000 customers or more are required to contribute a percentage of their revenues. Licensed BDUs include all licensed Class 1 BDUs serving 20,000 or more subscribers. Licensed BDUs with fewer than 20,000 subscribers as of August 31, 2009 are not required to contribute to the LPIF. Pursuant to Broadcasting Policies 2009-406 and 2009-543, licensed BDUs are required to contribute 1.5% of gross revenues based on their revenues for the 2008-2009 broadcast year.
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4. Will the BDUs’ costs associated with funding the LPIF be passed along to consumers?

In paragraph 357 of Public Notice 2008-100 the Commission noted the following: “[i]n light of the performance levels of the BDU sector and the benefits accruing to BDUs as a result of other changes being made to the regulatory framework, the Commission is of the view that there is no justification for BDUs to pass along any increased costs relating to the LPIF estimated to be on average approximately $0.50 per month – to their subscribers.”

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5. What television stations will receive funding?

Eligibility for LPIF support is determined by the CRTC. According to Public Notice CRTC 2008-100, funds in the LPIF are to be directed to local private and CBC/SRC owned and operated over-the-air local television stations operating in non-metropolitan markets (defined as television markets in which the population with knowledge of the official language of the station is less than one million). Minority language stations (i.e. a French language station operating in an English language market and vice versa), will receive funding from the envelope of funds made available to stations in majority language non-metropolitan markets.

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6. How is the funding allocated among markets and among stations?

One-third of the total funding will be allocated equally to stations across both Francophone and Anglophone markets, the amount of which will be determined by the number of stations eligible for funding. Two-thirds of funding will be allocated based on eligible stations’ historic spending on local programming (calculated by dividing the sum of the average three year historical spending multiplied by the individual station’s average three year local spending). 30% of this amount will be allocated to Francophone markets and 70% to Anglophone markets. The CRTC calculates the amount of funding to be allocated to all eligible stations.
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7. What are the eligibility criteria?

In order to receive funding a station must broadcast a minimum level of local programming in the community it serves. In instances where local programming levels have been harmonized, English language stations in non-metropolitan markets will be required to broadcast seven hours of local programming per week and French language stations in non-metropolitan markets will be required to broadcast five hours per week. Where local programming levels have not been harmonized local television stations will be required to maintain their existing local programming levels if they wish to be eligible for funding.
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8. What is considered local programming and local presence?

As noted above, local programming is defined as programming produced by local stations with local personnel or programming produced by locally-based independent producers that reflects the particular needs and interests of the market’s residents. Due to the regional nature of some conventional stations, the Commission will allow a local station that has historically been or is currently permitted to count regional programming towards meeting its local programming commitments to continue to do so for the purposes of meeting the requirements related to accessing the LPIF. The Commission expressly encourages local stations to maintain a local presence. Local presence is defined as providing seven-day-a week original local news coverage distinct to the market employing full-time journalists on the ground in the market and operating a news bureau or news gathering office in the market.
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9. What expenses are eligible for funding?

Only expenses directly associated with the production of local programming will be considered eligible. Direct expenses are defined by the Commission in Circular No. 426 as expenses solely attributable to the acquisition or production of programming. This includes, salaries, benefits paid to staff who work exclusively in the programming department, non-staff talent fees, films, tapes, props, sets, program vehicle operating costs, and any other program-related materials and supplies. Expenses related to the provision of live closed captioning of local programming by independently-owned small market stations is also eligible.
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10. How do I apply for funding?

No application is required. The CRTC determines which stations are eligible for funding. The fund administrator informs all eligible stations (based on the CRTC’s determination) and automatically allocates funding to them.
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11. Who administers the LPIF?

In Broadcasting Policy CRTC 2009-406, the CRTC designated McCay, Duff & Company Management Ltd. as the LPIF fund administrator.
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12. What is the governance structure of the LPIF?

A not-for-profit corporation is in the process of being established to oversee the administration of the LPIF. The corporation will be governed by a Board of Directors comprised of representatives, beneficiaries of, and contributors to the LPIF. The role of the Board is to oversee the administration of the LPIF in the manner directed by the CRTC, as described in Broadcasting Regulatory Policy CRTC 2009-406. In addition, consistent with Public Notice CRTC 1999-29, all members of the Board are Canadian; not more than one-third of Board members represent BDUs; representatives of BDUs have the right to cast not more than one-third of votes in a directors’ meeting; and all decisions are made by majority vote. Pursuant to Public Notice 2008-100, the fund administrator is required to file a public annual report setting out data intended to allow the Commission to determine the LPIF’s success.
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13. What is the frequency of funding distribution to eligible stations?

Eligible stations will receive funding on a monthly basis. For further details on the calculation of the monthly installment, please refer to paragraphs 23-25 of Broadcasting Regulatory Policy 2009-543.
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14. When can eligible television stations expect to receive their first cheque?

Eligible stations can expect to receive their first cheques early in the 2009-2010 broadcast year.
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15. What are the obligations imposed on funding recipients?

Stations that receive LPIF funding will have to disclose funds received through the LPIF and the annual expenditures associated with LPIF funding to the Commission their annual returns. Annual reports must be filed with the Commission no later than November 30th of each year. These reports will be made available on the Commission’s website.

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16. What oversight does the Commission maintain of the LPIF?

A panel of three CRTC commissioners will review the disbursements of the LPIF as well as the annual reports filed by the LPIF administrator and funding recipients and will evaluate the success of the LPIF based on a set of pre-defined criteria as set out in Public Notice 2008-100. The Commission is further expected to conduct a review of the LPIF after its first year of operation and potentially after its third year of operation.
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17. Where can I get more information on the LPIF?

For more information about the LPIF interested persons may refer to: http://www.crtc.gc.ca/eng/archive/2008/pb2008-100.htm and http://www.crtc.gc.ca/eng/archive/2009/2009-406.htm
http://www.crtc.gc.ca/eng/archive/1997/C97-426.HTM
http://www.crtc.gc.ca/eng/archive/1999/PB99-29.htm or contact the CRTC directly.
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