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Broadcasting - Commission Letter addressed to Philip Moy (Mainstream Broadcasting Corporation)

Ottawa, 11 July 2022

BY EMAIL

Philip Moy
CFO
Mainstream Broadcasting Corporation
150-13571 Commerce Parkway
Richmond (BC) V6V 2R2
adm@am1320.com

Re: Audit of Mainstream Broadcasting Corporation’s Canadian content development contributions

Background

As part of its processes to audit Canadian content development (CCD) contributions and tangible benefits payments made by radio stations, the Commission discovered that Mainstream Broadcasting Corporation (Mainstream) may not have made its required CCD contributions.

In particular, according to s.15 of the Radio Regulations, 1986,  (the Regulations) Mainstream’s CHMB station was required to make Basic CCD contributions for each of the 2014-2015 to 2018-2019 broadcast years (totaling $41,667). While Mainstream did report making $41,667 in discretionary CCD payments for the period in question, this amount should have included a $7,869 CCD payment to the Community Radio Fund of Canada (CRFC)Footnote1, which has apparently not been made.

In addition, in regard to its discretionary contributions, Mainstream did not provide supporting documents “that were easy to understand and audit”, as is required by Filing annual returns for radio programming undertakings, Broadcasting Information Bulletin 2011-795.

In a request for information, the licensee was asked to address the above-noted issues.

Mainstream’s response

In a response dated 15 November 2021, Mainstream admitted that it did not make any contribution to the CRFC for the period in question. Mainstream submitted that as an ethnic station, it believed that the Regulations permitted it to direct all the basic CCD to eligible initiatives that support ethnic content instead of contributing to FACTOR, Musicaction and the CRFC.

Mainstream also provided a more concise listing of basic CCD recipients for auditing purposes, which included payments to the Peter Savas – Greek Radio Program ($12,800), Luisa Mendes – Portuguese and Brazilian Program ($13,000), Paulette MacQuarrie – Ukranian program ($19,575) and to Peter Praegel – Scandinavian Program ($13,000). In each case, Mainstream provided evidence from the recipients confirming receipt of annual payments from Mainstream and affirmed that the contributions were used for Canadian artist talent fees relating to the production, promotion and recording of Canadian musical and spoken word programs associated with each of the represented ethnic groups.

Commission Analysis and Determinations

In its response, Mainstream provided evidence to demonstrate that the discretionary CCD contributions it made were used to provide support to Canadian artists, consistent with the Commercial Radio Policy 2006 and the Commission’s Guiding Principles for CCD Contributions and Eligible Initiatives website. Based on this evidence, the Commission is satisfied that the initiatives chosen by Mainstream qualify as discretionary CCD contributions.

However, with regard to the contribution to the CRFC, the Commission is of the view that Mainstream has misunderstood the Regulations. Section 15(5) of the Regulations states:

15(5) Except as otherwise provided under a condition of its licence, a licensee whose total revenues are more than $1,250,000 shall make

According to subsection 15(5), a licensee’s ability to redirect contributions to an eligible initiative that supports the creation of ethnic programs only applies to those contributions directed to FACTOR or MUSICACTION, as the ability to redirect such contributions only appears in paragraph 15(5)(b). In contrast, the obligation in paragraph 15(5)(a) that 15% of the contribution go to the CRFC is firm; it is not similarly subject to such flexibility.

Accordingly, the Commission finds that Mainstream’s CHMB radio station is in non-compliance with paragraph 15(5)(a) of the Regulations for each of the 2014-2015 to 2018-2019 broadcast years in relation to it not having made the required CCD contributions to the CRFC, totalling $7,869.

The Commission therefore directsMainstream to make a payment to the CRFC of $7,869 within 30 days of the date of the decision and to provide the Commission with proof of that payment within 60 days of the date of the decision.

The Commission also reminds the licensee of its obligations to fulfill the conditions of its licence for the remainder of the licence term.

Yours sincerely,

Original signed by

Claude Doucet
Secretary General

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