Those of you who watch Canadian television may have recently been bombarded by ads that call for you to “Stop TV Tax”. It has been a successful campaign, utilizing one of the most instinctively dreaded words – taxes.

Regrettably, the “Stop the TV Tax” campaign is really nothing about taxes. Ridiculous as it may sound, the money accrued under this ‘TV Tax’, if approved, goes to the pockets of the same corporate giants who are leading this Anti-TV-Tax campaign – Rogers, Bell, Cogeco, and the cable companies. It does not go to the government, as taxes are normally defined. This intentional misnomer has been key to the campaign’s success. And perhaps, the most hypocritical and misleading form of campaign advertising. It may as well be called the “Save-a-Kitten” campaign.

The Issue

The dilemma stems from a legacy infrastructure in how Canadian networks are broadcasted to the public without compensation, which is given to our American counterpart. Standing on the opposite corner of the ring is a campaign termed “Local TV Matters”, led by an alliance of Canadian broadcasters – CBC, CTV, Global and the likes.

The illustration summarizes the problematic infrastructure:

1. Viewers pay cable companies to receive a certain package of selected television networks.
2. Cable companies pay broadcasters such as Fox, CNN, NBC a “fee-for-carriage” to get their signals for distribution to Canadian viewers.
3. However, cable companies don’t pay Canadian broadcasters such as CBC, CTV, and Global this same “fee-for-carriage”. The CRTC (Canadian Radio-television Telecommunications Commission) mandated that Canadian broadcasters to provide their signals to cable companies free of charge, whether it is desired from either parties.

Why are Canadian Broadcasters Not Paid?

How much Canadian broadcasters get paid

It just seems fair that if the cable companies pay American networks that they should pay the Canadian counterpart. The unfortunate got-cha here is that these Canadian networks are already broadcasted free-of-charge by air-waves. For those of you old enough to remember antennas on the back of your television, you can get these channels for free, albeit not with the best quality. Yet, who the hell use antennas nowadays?

Why Now?

This legacy infrastructure has been in place for a while and Canadian broadcasters survived solely on advertising revenues. Facing the global economic downturn and an emergence of online media, many of these networks are struggling. The change in infrastructure may be the last step to balance out the playing field between the Canadian and American broadcasters, before Canadian networks collapse.

Now What?

The CRTC will launch a hearing in November to discuss a change in this legacy infrastructure, which may impose cable companies to pay Canadian broadcasters together with American networks. The additional expenses could put a dent in their profit margin. Of course, the cable companies would simply funnel the burden to their customers, by increasing the cost of cable subscriptions. This is what they are referring to ‘TV Tax’. So no matter what the outcome, the cable companies have very little to lose financially. They are simply leading this campaign to save the stress of restructuring and to alleviate potential customer wrath when they up the price if this legislation is approved. At which point, they can tell the public – “Well, you voted for it.”

The leaders of the “Stop the TV Tax” campaign can easily fulfill its mandate by simply not charging customers the overhead expense (the TV Tax). On that note, the dreaded $10/month figure prominently bull-horned by the campaigners is just a estimate from the cable companies of how much they would have to increase your subscription fee, and not an actual value being debated on the table.

What is Fair

Fairness depends on perspective of cause-and-effect. Do Canadian viewers subscribe to cable so that they can catch the Rick Mercer Report, CTV news and other Canadian programming, or are they watching these shows because they are on cable and Canadians actually would not value them if they were gone?

In another words, are the broadcasters doing the cable companies a favor by providing quality programming or are the cable companies benefiting the broadcasters by giving it mass exposure?

In a society that boasts the ability of a free market, why not let the invisible hands resolve the issue? Revoke the mandate on free-of-charge carrier. Let Canadians (and subsequently cable companies) decide whether they want to pay for Canadian channels.

If cable companies do not feel like it should carry CBC, lets not force them. If the demand for these Canadian networks and their programming exists, the invisible hand would spawn new cable companies that would invest in these opportunities.

What You Should Do

The “Stop TV Tax” and “Save Local TV” campaigns urge the public to put pressure on the government to protect their self-interests when the CRTC establishes new policies and a new framework for local television at the upcoming hearing. This issue of negotiating a fair value between cable companies and local broadcasters is but only one of various issues on the table.

Regardless of your stance, the resolution could change the face of Canadian television and I hope Canadians could understand this issue before jumping on either band-wagons based merely on ridiculous campaign slogans like “Stop the TV Tax” that confuses the issue more than clarifying it.

Result of bandwagoning

Educate Yourself:

Stop TV Tax Campaign
Local TV Matters Campaign
CRTC Hearing

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