Development

     Preceded by the Wireless Telegraphy Act of 1905, the Radio­ telegraph Act of 1913 gave the Canadian government power to license the use of airwaves-considered public property just like other natural resources. During the 1920s, stations popped up everywhere, but radio broadcasting remained without strong direction from the federal government, which was only mandated to issue licenses and to manage the frequency spectrum allocated to Canada under the terms of international agreements. Canadian radio was soon threatened with being integrated into the U.S. broadcasting system, in spite of a 1923 amendment to the Radiotelegraph Act that gave only British citizens (this included Canadians) the right to obtain broadcasting licenses. Radio program content, however, remained nearly free of any constraints. This situation resulted in an abundant use of foreign (i.e., U.S.) programs, mostly in English-speaking Canada. Canadian content nevertheless became part of the debate over the future of Canadian broadcasting, and commercial stations' freedom became an issue of national debate.

Laws and Commissions

     The report of the 1929 Royal Commission on Radio Broadcasting, formed under the chairmanship of John Aird, directly supported the centralizing movement that characterized the formation of the Canadian state, and it recommended a government takeover of private radio. The Canadian Association of Broadcasters, which had been created in 1926 to foster and protect the interests of existing radio stations, strongly opposed this recommendation. Nevertheless, the Broadcasting Act in 1932 created the Canadian Radio Broadcasting Com­ mission (CRBC), which was empowered to decide upon the numbers and locations of radio stations in Canada. The CRBC was also mandated to establish a national radio service by creating a Canada-wide network. National private radio networks were forbidden, but private regional chain broadcasting was tolerated.

     The Broadcasting Act of 1936 replaced the CRBC with the Canadian Broadcasting Corporation (CBC) and mandated it to establish a national radio service and to control the broadcasting system as a whole. During the next two decades, the CBC was successful with the first assignment, but less so with the second: private stations grew and became financially secure, although they were forbidden to amalgamate into private networks. Always facing potential conflicts of interest, the CBC­ as both the national broadcaster and system regulator­ imposed little regulation on its affiliates (or on private independent stations).

     The Canadian broadcasting system took form as a compromise between nationalistic and commercial objectives. This mixed system of public and private ownership was to cease when the CBC would be capable of becoming the dominant actor in the national radio service, but this too was not an easy challenge to meet. Before long, installation and production costs exceeded the CBC's resources. In order to expand broadcasting coverage, the corporation issued many licenses to private interests.

     The main objectives of the Canadian system were in fact hardly realizable. This was already evident in reports of the Royal Commission on National Development in the Arts, let­ ters, and Sciences (led by Massey and released in 1951) and of the Royal Commission on Broadcasting (led by Fowler and released in 1957), which examined the problem of radio (and television) commercialization, a problem closely linked with the so-called Americanization of private radio's cultural content. Their reports also revealed that public broadcasting was overloaded with responsibilities, such as the promotion of national unity and Canadian identity.

     The Broadcasting Act of 1958 was a very liberal interpretation of the Fowler report; it placed the private sector-hence­ forth allowed to create its own networks-and the public sector on equal grounds in terms of legal recognition. To manage this major change in public policy, both sectors were to be refereed by an independent regulatory institution, the Board of Broadcast Governors (BBG), which was responsible for the application of the act. This decision demonstrates a substantial evolution of the Canadian broadcasting system: the 1932 act foresaw the nationalization of private undertakings, the 1936 act made them complementary to the national service, and the 1958 act gave commercial stations enough autonomy to compete openly with the CBC.

     To satisfy popular demand, notably for television coverage after 1952, private enterprises became inevitable. The creation of commercial networks, allowed by the 1958 act, was definitely authorized by the Broadcasting Act of 1968. Its concept of a single broadcasting system was a paradox, because the system in reality comprised two distinct components, with somehow different-if not contradictory-objectives.

     On a regular basis, the regulatory body, the government, or private stations (if not all three) have been blamed for the failure to provide Canadians with a truly Canadian system: the 1965 Advisory Committee on Broadcasting, the 1969 Special Senate Committee on the Mass Media, the 1979 Consultative Committee on the Implications of Telecommunications for Canadian Sovereignty, the 1982 Federal Cultural Policy Review Committee, and the 1986 Task Force on Broadcasting Policy all deplored in one way or another the inefficiency of Canadian content regulation, the lack of goodwill by private stations toward the spirit of the Canadian policy, and the abuse of broadcasting as a profit-making instrument. And they all agreed on the absolute necessity for Canada to preserve a distinctive broadcasting system. Since 1968 the foreign ownership of broadcasting undertakings, limited to 20 percent of voting shares, has continued to guarantee Canadian economic interests without necessarily supporting Canadian cultural content.

The Regulatory Body

     Control over broadcasting in Canada is carried out by a single authority: like the BBG before 1968, the Canadian Radio Television Commission (CRTC), which became the Canadian Radio-Television and Telecommunications Commission in 1976, exerts its power through the licensing process, because the license terms and conditions are, in principle, compulsory requirements assigned to each station or network. As an administrative tribunal, the CRTC must also regulate the whole radio industry according to the Broadcasting Act, which, after many unsuccessful attempts, was reformulated in 1991 without changing its structure and main orientations. Interestingly enough, the 1991 act states that "the Commission [CRTC] shall regulate and supervise all aspects of the Canadian broadcasting system set (by the act]," but also that "[t]he Canadian broadcasting system should be regulated and supervised in a flexible manner that ... facilitates the provision of Canadian programs to Canadians."

     Although the CRTC plays an important role, because it regulates every station by its licensing process, it has been preoccupied with deregulation since the mid-198os. In this context, the very essence of the rationale for government intervention­ a national cultural identity-is jeopardized. Many federal cultural institutions (including the CBC) have declined because of budget constraints and the relative failure of governmental involvement. Notwithstanding the recent conjuncture, the government is limited by commercial realities that render imports of foreign cultural products more profitable than the production of comparable domestic goods. Such a situation arises from the severe reaction brought about by most attempts to exert additional control. The CRTC, like many similar institutions, must manage the clash between national cultural objectives and pragmatic economic concerns.

Public Radio

     Public service radio belongs to the CBC. Canadian public radio is in reality government broadcasting with a specific agenda, as shown in some provisions of the Broadcasting Act, such as subsection 3(m)(vi), which states that the programming of the CBC should "contribute to shared national consciousness and identity." Since 1975 commercial advertising has almost completely vanished from CBC radio as a voluntary measure ratified by the CRTC. Therefore, the CBC can present a more original (some would say a better-quality) program, which does not have to compete with the private sector's program for the large and popular audience shares, an otherwise vital pre­ condition for generating revenues. Nevertheless, its relative marginal situation with the Canadian audience (and income tax payers) renders the CBC vulnerable to budget cuts in an era of governmental downsizing. The CBC possesses and operates its own stations, but to ensure its total coverage it also depends on private independent stations, which as affiliates broadcast a mix of national and local programs.

     Even more marginal than public radio, community radio is collective property and is mandated to serve a defined clientele: campus, native, and ethnic stations are among this group. Community radio is not profitable and is financed mainly by governmental subsidies.

Private Broadcasters

      In raw numbers, as well as in financial terms, the private independent stations together make up by far the most important group in the Canadian radio industry. Private radio is essentially a commercial undertaking whose mandate is to serve local markets. Private radio is more flexible than the CBC, but the broadcasting legislation nevertheless encourages private radio's participation in the main national objectives, such as the creation and presentation of Canadian programming. Nevertheless, the CRTC, as the regulatory body, must take into account the financial viability of private undertakings.

     Since the end of the 1980s, the radio industry has suffered from low profitability, an overall phenomenon especially obvious in the AM sector. A long-term decline in radio's share of advertising and increased competition among stations are the predominant factors here. In the mid-1980s, marketing expenditures shifted from media advertising to promotional activities on local markets, which made up 75 percent of the total advertising revenue base for radio stations; at the national level, among several factors responsible for the loss of advertising revenue is the overflow of U.S. advertising into Canada and the scant use of media advertising by emerging large retail stores of U.S. origin. At the same time, the net increase of new licenses significantly reduced the advertising revenue per station.

     Traditionally, the private stations complained about the so­-called unfair competition generated by direct federal involvement, but, unlike television, CBC radio has not impinged on the advertising market since the mid-1970s. As revenues can­ not increase, it has been suggested that expenses, such as the payment of license fees, might be reduced. This solution is hardly acceptable for the CRTC, which is a financially autonomous institution. The CRTC is nevertheless preoccupied with private stations' financial situation, particularly that of the AM radio: since 1986 AM stations have been free to advertise as much as they wish. Under previous regulations, AM stations were restricted to 250 minutes of commercial content per day and 1,500 minutes per week. Noting that such regulation did not increase advertisements to an unacceptable level in AM radio, the CRTC in I 993 removed the limit of 150 minutes of commercial message during the broadcast day imposed on FM licensees.

Canadian Content Regulation

     Canadian nationalists have long been preoccupied with preserving and enhancing the country's political, economic, and cultural sovereignty. Since the 19 30s, the challenge has been presented as the protection of Canadian mass media against the powerful U.S. system by means of a cultural boundary. Therefore, the federal government's intervention has been aimed at creating cultural identity as a mean of national defense and national unity.

     Encouraging Canadian content is undoubtedly the ultimate objective of the broadcasting system. Surprisingly, the first regulation imposing foreign import quotas on AM stations was not introduced until the 1970s. The situation was then critical. For example, in 1968, Canadian musical selections accounted for between 4 and 7 percent of all music played. The 1970 regulation imposed a 30 percent minimum of Canadian content. In 1986, new regulations were introduced covering both AM and FM radio, although different requirements applied. For example, in spite of common objectives pertaining to political broadcasts, AM radio had to respect the 30 percent Canadian content rule, whereas, for the rising FM sector, requirements varied from 10 percent for the "easy listening" format to 30 percent for "country" stations. Subjected to a daily limit on commercial advertising (150 minutes), FM radio on the other hand benefited from an incentive to encourage Canadian content, because the CRTC's radio regulation stated that commercial messages broadcast during Canadian feature segments would not be considered as commercial messages. Since 1991 every popular FM station must program a minimum of 30 percent of Canadian selections scheduled in a reasonable manner throughout each broadcast day. In 1998 this radio regulation was redefined: every commercial station, AM or FM, must devote at least 35 percent of its musical content to Canadian selections, especially between 6:oo A.M. and 6:oo P.M. from Monday to Friday. Any musical selection that meets two of the following conditions is deemed to be "Canadian": the music or lyrics are performed by a Canadian, the music is composed by a Canadian, the lyrics are written by a Canadian, or the musical selection is a live performance recorded or broadcast in Canada.

     This regulation aims to expose Canadian audiences to Canadian musical performers and thus to strengthen the Canadian music industry. Cultural and industrial objectives are closely interrelated. In addition, stations licensed to operate in the French language, either on the AM or FM bands, must devote at least 65 percent of their weekly vocal selections (at least 55 percent from Monday to Friday between 6:oo A.M. and 6:oo P.M.) to musical selections in French. This regulation aims to preserve language diversity, particularly in metropolitan markets such as Montreal, where English language stations are over-represented. Furthermore, French language popular music broadcasters are encouraged to strive for a Canadian content level of 50 percent. Conversely, English language stations are invited to promote and financially assist Canadian talent.

A Canadian Culture?

      Throughout the history of Canadian radio, U.S. influence has been considered a major threat. On the one hand, economic imperialism jeopardized the emerging Canadian radio system as major American networks could have easily overwhelmed stations north of the border before the Broadcasting Act of 1932 (and its subsequent versions) put an end to this movement. On the other hand, cultural imperialism-a more subtle form of influence-is probably as strong as ever today, notwithstanding the Canadian content regulation and the incentives to Canadian talent development.

     Has radio in fact succeeded in nurturing Canadian culture? If the Canadianization of radio broadcasting has been a success in terms of ownership, because only Canadian citizens or corporations (in which at least four-fifths of owners or controlling persons are Canadians) are issued licenses, it has been less so in terms of Canadian content. The approximately 30 per­ cent quota hardly meets the spirit and the letter of the act. Although Canadian content quotas provide only a minimum limit, very few stations broadcast more Canadian music than the imposed minimum. It should be stressed that CBC targets of 50 percent Canadian content for popular music and 20 percent for classical music are sometimes attained, but these outstanding results must be tempered by considering the CBC audience share, which includes only about one-tenth of the listening population.

     Furthermore, subsection 3 (s) of the Broadcasting Act remains ambiguous, as it states that "private networks and programming undertakings should, to an extent consistent with the financial and other resources available to them, (i) contribute significantly to the creation and presentation of Canadian programming, and (ii) be responsive to the evolving demands of the public." Yet it still has to be demonstrated that Canadians prefer Canadian cultural products. The case of prime-time television and the success of private radio in terms of audience share are obvious enough to suggest that many Canadian consumers (or listeners) are not reluctant to buy (or listen to) foreign products. In this sense, their role in whether or not the creation of a distinct Canadian society remains an objective to be pursued is still far from over. Market globalization and new technologies such as audio digital transmission might very well revolutionize the entire radio environment early in the 21st century. Canadian nationalists can still fear for the country's cultural sovereignty, because there is little reason to believe that the permeability of Canada's southern boundary will not increase.