CRTC to Implement CUSMA Broadcasting Commitments

Summary#

This is the federal Direction titled Direction to the Canadian Radio-television and Telecommunications Commission Respecting the Implementation of the Canada–United States–Mexico Agreement: SOR/2020-77. It tells the Canadian Radio-television and Telecommunications Commission (CRTC) to put into effect two broadcasting commitments Canada made in the Canada–United States–Mexico Agreement (CUSMA). The Direction was registered on April 7, 2020 and published in the Canada Gazette on April 29, 2020.

What it does#

• Directs the CRTC to implement, by appropriate means, the commitments in Annex 15‑D of CUSMA that relate to broadcasting.
• Specifically it covers two commitments:
  • Restore the ability to practice simultaneous substitution for the Super Bowl by rescinding the CRTC Order that had prohibited simultaneous substitution during that broadcast.
  • Allow U.S. home shopping television services (including versions modified for Canada) to access the Canadian market and to negotiate affiliation agreements with Canadian cable, satellite and Internet Protocol television (IPTV) distributors.
• The Direction relies on powers in the Broadcasting Act and refers to the Canada–United–States–Mexico Agreement Implementation Act for timing. It comes into force when section 152 of that Implementation Act comes into force, or on its registration date if registered after that day.

Who's affected#

• Canadian television broadcasters that use simultaneous substitution for advertising revenue (for example, broadcasters that had exclusive Super Bowl rights).
• Canadian viewers of the Super Bowl, since the ads they see may change depending on substitution rules.
• Canadian cable, satellite and IPTV distributors who will be able to negotiate with U.S. home shopping channels.
• U.S. home shopping services interested in the Canadian market (for example, earlier applicants such as QVC).
• Existing Canadian home shopping services (for example, Rogers’ Today’s Shopping Choice) that may face new competition.
• The CRTC, which must carry out the implementation and set any detailed rules. If it is unclear how the CRTC will implement the specifics, the Direction leaves those details to the CRTC’s own processes.

Why it matters#

• For viewers: it can change which commercials are seen during the Super Bowl broadcast in Canada. Some Canadians had said they preferred to see U.S. ads during the Super Bowl; others supported the previous CRTC approach.
• For broadcasters and advertisers: simultaneous substitution affects who gets advertising revenue when the same program airs on a Canadian and a U.S. channel at the same time. Restoring substitution for the Super Bowl can protect Canadian broadcasters’ advertising income when they hold Canadian rights.
• For retail and shopping TV: allowing U.S. home shopping channels into Canada could increase choice for shoppers and create competition for Canadian teleshopping services.
• For regulation: the Direction implements Canada’s international trade commitments while leaving the detailed rule-making to the independent CRTC, which will decide how to change broadcasting rules in practice.