News

Canada's broadcasters are scrambling to appeal a federal court ruling that may cost the industry more than $100-million a year if the decision is not overturned.

The challenge comes after the Federal Court of Appeal ruled last week that Ottawa has the right to charge television and radio broadcasters, along with cable and satellite distributors, fees for their licences that exceed the basic cost of regulating the industry.

TV and radio broadcasters were hoping for a refund of the fees they've paid over the past eight years after a Federal Court judge ruled in 2006 such charges were an illegal tax, since no service was being provided in return for the money.

The charges, known as Part II fees inside the industry, are collected in addition to the costs Ottawa bears to regulate the sector. The money flows directly into federal coffers.

The refund was expected to be worth between $800-million and $1-billion, spread throughout the industry, and was a major victory for the broadcasting industry two years ago.

However, that ruling was overturned by the Federal Court of Appeal in a unanimous decision after the Crown argued they are valid regulatory charges.

The ruling, written by Mr. Justice Michael Ryer and supported by two other judges, said the fees are justifiable by Ottawa because federal broadcast licences pave the way for the companies to make money in the TV and radio industries.

“The fact remains that in return for payment of the fees, the [broadcaster] acquires or maintains the right to engage in a highly regulated, highly sheltered industry with a significant potential for economic gain,” the decision said.

“No one is bound to acquire a licence; those who feel the fees are too high are free to go into some other line of business, or to sell their licence on such terms as the regulatory scheme permits.”

The Canadian Association of Broadcasters says it will seek to appeal the ruling to the Supreme Court of Canada, arguing that the fees are an illegal tax.

“We find the decision deserves to be appealed. We are very disappointed,” said Glenn O'Farrell, president of the industry group.

The Canadian Radio-television and Telecommunications Commission, which regulates the industry, had put collecting the fees on hold as the dispute played out, and will not likely resume until the next appeal is heard.

“The commission will not take any collection action until the issue is resolved in a final manner,” said Denis Carmel, spokesman for the CRTC.