The federal government has decided to give up some $450 million at stake in legal dispute with broadcasters and cable companies in Canada. Broadcasters, including Global Television and CTV, and cable and telephone companies, including Rogers Communications and Bell Canada, were about to present their case to the Supreme Court of Canada, claiming that a long standing licence fee, known in the industry as Part 2 License Fees, amounted to an illegal tax.

Both sides have now reached an out-of-court settlement that includes waiving Part II Licence Fees, not collected due to the ongoing legal dispute for the broadcast years 2006, 2007 and 2008. “The agreement represents a reasonable compromise for both sides. It resolves treatment of contested fees and reflects a fair fee regime going forward,” said Charlotte Bell, Chair of the CAB. “In addition, the Government’s recommendation that the CRTC launch a process to revise the Part II Licence Fee and introduce a capped regime going forward is a positive approach. The industry’s objective is to move forward to a Part II Licence Fee regime that is more predictable,” concluded Bell. The Part II Licence Fees are assessed under the CRTC’s Broadcasting Licence Fee Regulations, 1997 under section 11 of the Broadcasting Act. Since 1997/98, Part II Licence Fees totaling about $910 million were paid into the federal government’s Consolidated Revenue Fund by private broadcasters, cable and satellite companies. (Source: MediaCaster Magazine)