ARCHIVED - RPP 2006-2007
Canadian Radio-television and Telecommunications Commission

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SECTION III: Supplementary Information

CRTC Reorganization

On 15 December 2005, the Commission announced a structural reorganization (detailed in the following CRTC Organization Chart), which will enhance its ability to fulfill the objectives of the Broadcasting Act and the Telecommunications Act more effectively, and to discharge its regulatory responsibilities more efficiently. This reorganization will place it in a better position to respond to the realities with which the industries it regulates are grappling, as a result of massive and rapid technological change and the blurring of traditional boundaries and lines of business.

Broadcasting and Telecommunications policy and operations will now largely be grouped under a converged structure and leadership. A new integrated Industry Analysis, Economics and Technology section has been created as a resource for both broadcasting and telecommunications. This new section should permit improved understanding of the technological and business changes affecting the industries we regulate.

This new structure counts three units, one dedicated to each of broadcasting and telecommunications, and the newly integrated section that will undertake activities of a more converged analytical nature on the broader communications industries, markets and technologies.

The second major change will be a new section which will report to the Secretary General and will be responsible for the monitoring and process activities of the Commission.

It is expected that refinements of this structure will be needed over the next few months, as the Commission learns more about the requirements of the environment and the potential in the organization. These changes will not, however, be of the same magnitude and will be incremental in nature.

CRTC Organization Chart (As of 15 December 2005)

Prior to the reorganization, broadcasting and telecommunications were both headed by their respective Executive Director.

Both sectors will now be headed by an Associate Executive Director reporting to the Executive Director, Broadcasting and Telecommunications.

Table 1: CRTC Planned Spending and Full Time Equivalents

($ millions)	Forecast Spending 2005-2006	Planned Spending 2006-20071	Planned Spending 2007-2008	Planned Spending 2008-2009
Regulation and Supervision of the Canadian Broadcasting Industry	22.7	23.4	23.5	23.5
Regulation and Monitoring of the Canadian Telecommunications Industry	20.6	22.2	22.2	22.2
Budgetary Main Estimates (gross)	43.3	45.6	45.7	45.7
Less: Respendable Revenue	37.6	39.8	39.9	39.9
Total Main Estimates	5.7	5.8	5.8	5.8
Adjustments:
Governor General Special Warrant:
Operating budget carry forward	1.9	-	-	-
Collective agreements and other compensation adjustments Less: Respendable Revenue Net Amount	2.6 0.9 1.5	-	-	-
Employee Benefit Plan (EBP)	0.5	-	-	-
Total Planned Spending	9.6	5.8	5.8	5.8

 

Planned Spending	9.6	5.8	5.8	5.8
Less: Non-Respendable revenue	122.8	130.9	134.5	139.5
Plus: Cost of services received without charge	15.9	15.9	15.9	15.9
Net Cost of Program	(97.3)	(109.2)	(112.8)	(117.8)

 

Full Time Equivalents

402

433

433

433

Table 2: Resources by Program Activity

2006-2007
($ millions)	Budgetary						Non-Budgetary	Total Main Estimates	Adjustments (planned spending not in Main Estimates)	Total Planned Spending
Program Activity	Operating	Capital	Grants and Contributions	Gross	Revenue	Net	Loans, Investments and Advances
Regulation and Supervision of the Canadian Broadcasting Industry	23.4	-	-	23.4	20.4	3.0	-	3.0	-	3.0
Regulation and Monitoring of the Canadian Telecommunications Industry	22.2	-	-	22.2	19.4	2.8	-	2.8	-	2.8
Total	45.6	-	-	45.6	39.8	5.8	-	5.8	-	5.8

Table 3: Voted and Statutory Items

($ millions)
		2006-2007	2005-2006
Voted or Statutory Items	Truncated Vote or Statutory Wording	Current Main Estimates	Previous Main Estimates
45	CRTC Program Expenditures	-	-
(S)	Contributions to Employee Benefit Plans	5.8	5.7
	Total	5.8	5.7

Table 4: Services Received Without Charge

2006-2007
($ millions)	Regulation and Supervision of the Canadian Broadcasting Industry	Regulation and Monitoring of the Canadian Telecommuni-cations Industry	Total
Accommodation provided by Public Works and Government Services Canada (PWGSC)	1.5	1.4	2.9
Contributions covering employer’s share of employees’ insurance premiums and expenditures paid by TBS	1.5	1.5	3.0
Worker’s compensation coverage provided by Human Resources & Skills Development Canada (Note)	-	-	-
Regulation of Broadcasting Spectrum – Industry Canada (IC)	10.0	-	10.0
Total 2006-2007: Services received without charge	13.0	2.9	15.9

Note: Amount is less than $0.1M therefore no amount is reflected in the table.

Table 5: Sources of Respendable and Non-Respendable Revenue

Respendable Revenue

($ millions)	Forecast Revenue 2005-2006	Planned Revenue 2006-2007	Planned Revenue 2007-2008	Planned Revenue 2008-2009
Regulation and Supervision of the Canadian Broadcasting Industry Broadcasting Licence Fees – Part I	19.4	20.4	20.5	20.5
Plus: Adjustments – Collective Agreements	0.6
Regulation and Monitoring of the Canadian Telecommunications Industry Telecommunications Fees	18.2	19.4	19.4	19.4
Plus: Adjustments –Collective Agreements	0.3
Total Respendable Revenue	38.5	39.8	39.9	39.9

Non- Respendable Revenue

($ millions)	Forecast Revenue 2005-2006	Planned Revenue 2006-2007	Planned Revenue 2007-2008	Planned Revenue 2008-2009
Regulation and Supervision of the Canadian Broadcasting Industry Broadcasting Licence Fees – Part I Broadcasting Licence Fees – Part II2	5.1 112.1	6.6 117.1	6.3 122.1	6.3 127.1
	117.2	123.7	128.4	133.4
Regulation and Monitoring of the Canadian Telecommunications Industry Telecommunications Fees	5.6	7.2	6.1	6.1
Total Non-Respendable Revenue	122.8	130.9	134.5	139.5

 

Total Respendable and Non-Respendable Revenue3

161.3

170.7

174.4

179.4

Table 6: CRTC Fees

Name of Fee	Fee Type	Fee Setting Authority	Reason for Fee Amendment	Effective date of planned change to take effect	Planned Consultation & Review Process
Telecommunications Fees	Regulatory Service(R)	Telecommunications Act (Section 68) Telecommunications Fee Regulations, 1995	-	-	See section “Explanation of Revenue” for additional information. Broadcasting and Telecommunications Full public consultations occur with each change to the telecommunications fee regulations or the broadcasting licence fee regulations. The CRTC dispute management process pertaining to fees is in place and can be found in Annex B of the Departmental Performance Report 2005, on the CRTC web site at: http://www.crtc.gc.ca/eng/BACKGRND/dpr2005/dpr2005.htm
Broadcasting Licence Fees	Regulatory Service (R)   Right and Privilege (R&P)	Part I licence fee Broadcasting Act (Section 11) Broadcasting Licence Fee Regulations, 1997 Part II licence fee Broadcasting Act (Section 11) Broadcasting Licence Fee Regulations, 1997	-	-

Note:
The Broadcasting Licence Fee Regulations, 1997 and the Telecommunications Fees Regulations, 1995 can be found on the CRTC web site at:

http://www.crtc.gc.ca/eng/LEGAL/LICENCE.HTM  (i.e. broadcasting) and
http://www.crtc.gc.ca/eng/LEGAL/TFEES.HTM  (i.e. telecommunications)

Explanation of Revenue

The CRTC collects fees under the authority of the Broadcasting Act and Telecommunications Act and the regulations made pursuant to these acts, namely the Broadcasting Licence Fee Regulations, 1997 and the Telecommunications Fee Regulations, 1995. The CRTC recovers all of the costs incurred for the regulation of the broadcasting and telecommunication industry. For fiscal year 2006-2007:

• CRTC Part I broadcasting licence fees are estimated at $27.0 million ($20.4 million respendable⁴ and $6.6 million in non-respendable⁵ revenue). The broadcasting non-respendable revenue also includes a "true-up" adjustment⁶ of $0.3 million; and
• CRTC telecommunications fees are estimated at $26.6 million ($19.4 million respendable and $7.2 million in non-respendable revenue). The telecommunications non-respendable revenue also includes a "true-up" adjustment of $1.1 million.

Broadcasting Licence Fees

Section 11 of the Broadcasting Act empowers the Commission to make regulations respecting licence fees. The Broadcasting Licence Fee Regulations, 1997 apply to all licensees other than those classes of undertakings specifically exempted under section 2 of the regulations. Every licensee subject to the regulations is required to pay a Part I and a Part II licence fee to the Commission annually. For 2005–2006, the CRTC estimates a total of $137.2 million in revenue from broadcasting undertakings ($25.1 million in Part I fees – including "true-up" and adjustments - and $112.1 million in Part II fees).

The Part I fee is based on the broadcasting regulatory costs incurred each year by the Commission and other federal departments or agencies, excluding spectrum management costs, and is equal to the aggregate of:

• the costs of the Commission’s broadcasting activity;
• the share of the costs of the Commission’s administrative activities that is attributable to its broadcasting activity; and
• the other costs included in the net cost of the Commission’s program attributable to its broadcasting activities, excluding the costs of regulating the broadcasting spectrum.

The estimated total broadcasting regulatory costs of the Commission are set out in the Commission’s Expenditure Plan published in Part III of the Estimates of the Government of Canada (i.e. Part III Report on Plans and Priorities). There is an annual adjustment ("true-up") amount to the Part I fee to adjust estimated costs to actual expenditures. Any excess fees or shortfalls are credited or charged to the licensee in a following year’s invoice.

The Part II fee is calculated at 1.365% of a licensee’s gross revenue derived from broadcasting activities in excess of an applicable exemption limit. The CRTC collects the Part II fees on behalf of the government, with all revenues collected being deposited to the Government of Canada’s Consolidated Revenue Fund. The rationale for assessing this fee is three-fold:

• to earn a fair return for the Canadian public for access to, or exploitation of, a publicly owned or controlled resource (i.e. broadcasters’use of the broadcasting spectrum);
• to recover Industry Canada costs associated with the management of the broadcasting spectrum; and
• to represent the privilege of holding a broadcasting licence for commercial benefit.

Telecommunications Fees

Section 68 of the Telecommunications Act sets out the authority for making the Telecommunications Fees Regulations. Each company that files tariffs must pay fees based on its operating revenue, as a percentage of the revenue of all the carriers that file tariffs. For 2005–2006, the CRTC assessed $24.1 million in telecommunications fees including "true-up" and adjustments.

The annual fees the CRTC collects is equal to the aggregate of:

• the cost of the Commission’s telecommunications activity;
• the share of the costs of the administrative activities that is attributable to its telecommunications activity; and
• the other costs included in the net cost of the Commission’s program attributable to its telecommunications activity.

The estimated total telecommunications regulatory costs of the Commission are set out in the Commission’s Expenditure Plan published in Part III of the Estimates of the Government of Canada (i.e. Part III - Report on Plans and Priorities). There is an annual adjustment ("true-up") amount to the telecommunications fees to adjust estimated costs to actual expenditures. Any excess fees or shortfalls are credited or charged to the carriers in a following year’s invoice.

 

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