Government returns CAD450m in taxes to broadcasters, cablecos, telcos

Canada’s federal government yesterday reached an out-of-court settlement with TV broadcasters, cablecos and telcos by altering licensing fees and agreeing to return CAD450 million (USD426 million) in taxes backdated for the last three years, reports Canwest News (Canada.com). In 1997 Ottawa began collecting the annual revenue-based fees (‘Part 2 fees’) from the companies, including Global Television, CTV, Rogers Communications and Bell Canada, to offset the cost of managing Canada’s airwaves. However, as communications industry turnover grew, the government’s takings rose in turn from CAD10 million to around CAD115 million per year. The companies had originally sued for the return of more than CAD800 million. The formula used to calculate Part 2 fees will now be revised and capped at a combined CAD100 million a year. According to the report, cable and telephony companies will benefit more from the changes than those focused on broadcasting, as they paid around two-thirds of all fees collected over the past few years.