1. - 1 - Lunch & Learn CRTC Reporting May 17, 2012

2. - 2 - CRTC Reporting Canadian Radio-television and Telecommunications Commission (CRTC) created by Parliament in 1968 under the Canadian Radio-television and Telecommunications Commission Act. reports to Parliament through the Minister of Canadian Heritage. is vested with the authority to regulate and supervise all aspects of the Canadian broadcasting system, as well as the telecommunications services providers and common carriers that come under federal jurisdiction. The CRTC’s powers in the area of broadcasting regulation derive from the Broadcasting Act, which states that: the Commission shall regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set out in subsection 3(1) (next few slides) and, in so doing, shall have regard to the regulatory policy set out in subsection (2). :Regulatory policy (2) The Canadian broadcasting system should be regulated and supervised in a flexible manner that: (a) is readily adaptable to the different characteristics of English and French language broadcasting and to the different conditions under which broadcasting undertakings that provide English or French language programming operate; (b) takes into account regional needs and concerns; (c) is readily adaptable to scientific and technological change; (d) facilitates the provision of broadcasting to Canadians; (e) facilitates the provision of Canadian programs to Canadians; (f) does not inhibit the development of information technologies and their application or the delivery of resultant services to Canadians; and (g) is sensitive to the administrative burden that, as a consequence of such regulation and supervision, may be imposed on persons carrying on broadcasting undertakings.

3. - 3 - CRTC Reporting Broadcasting Act (http://laws-lois.justice.gc.ca/eng/acts/B-9.01/) Broadcasting Policy for Canada (subsection 3(1)) says that: a) the Canadian broadcasting system shall be effectively owned and controlled by Canadians; (b) the Canadian broadcasting system, operating primarily in the English and French languages and comprising public, private and community elements, makes use of radio frequencies that are public property and provides, through its programming, a public service essential to the maintenance and enhancement of national identity and cultural sovereignty; (c) English and French language broadcasting, while sharing common aspects, operate under different conditions and may have different requirements; (d) the Canadian broadcasting system should: (iii) through its programming and the employment opportunities arising out of its operations, serve the needs and interests, and reflect the circumstances and aspirations, of Canadian men, women and children, including equal rights, the linguistic duality and multicultural and multiracial nature of Canadian society and the special place of aboriginal peoples within that society, and (iv) be readily adaptable to scientific and technological change; (e) each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming; (f) each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming, unless the nature of the service provided by the undertaking, such as specialized content or format or the use of languages other than French and English, renders that use impracticable, in which case the undertaking shall make the greatest practicable use of those resources; (g) the programming originated by broadcasting undertakings should be of high standard; (h) all persons who are licensed to carry on broadcasting undertakings have a responsibility for the programs they broadcast;

4. - 4 - CRTC Reporting Broadcasting Act (i) the programming provided by the Canadian broadcasting system should: (i) be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes, (ii) be drawn from local, regional, national and international sources, (iii) include educational and community programs, (iv) provide a reasonable opportunity for the public to be exposed to the expression of differing views on matters of public concern, and (v) include a significant contribution from the Canadian independent production sector; (j) educational programming, particularly where provided through the facilities of an independent educational authority, is an integral part of the Canadian broadcasting system; (k) a range of broadcasting services in English and in French shall be extended to all Canadians as resources become available; (l) the Canadian Broadcasting Corporation, as the national public broadcaster, should provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains; (m) the programming provided by the Corporation should: (i) be predominantly and distinctively Canadian, (ii) reflect Canada and its regions to national and regional audiences, while serving the special needs of those regions, (iii) actively contribute to the flow and exchange of cultural expression, (iv) be in English and in French, reflecting the different needs and circumstances of each official language community, including the particular needs and circumstances of English and French linguistic minorities, (v) strive to be of equivalent quality in English and in French, (vi) contribute to shared national consciousness and identity, (vii) be made available throughout Canada by the most appropriate and efficient means and as resources become available for the purpose, and (viii) reflect the multicultural and multiracial nature of Canada;

5. - 5 - CRTC Reporting Broadcasting Act (n) where any conflict arises between the objectives of the Corporation set out in paragraphs (l) and (m) and the interests of any other broadcasting undertaking of the Canadian broadcasting system, it shall be resolved in the public interest, and where the public interest would be equally served by resolving the conflict in favour of either, it shall be resolved in favour of the objectives set out in paragraphs (l) and (m); (o) programming that reflects the aboriginal cultures of Canada should be provided within the Canadian broadcasting system as resources become available for the purpose; (p) programming accessible by disabled persons should be provided within the Canadian broadcasting system as resources become available for the purpose; (q) without limiting any obligation of a broadcasting undertaking to provide the programming contemplated by paragraph (i), alternative television programming services in English and in French should be provided where necessary to ensure that the full range of programming contemplated by that paragraph is made available through the Canadian broadcasting system; (r) the programming provided by alternative television programming services should: (i) be innovative and be complementary to the programming provided for mass audiences, (ii) cater to tastes and interests not adequately provided for by the programming provided for mass audiences, and include programming devoted to culture and the arts, (iii) reflect Canada’s regions and multicultural nature, (iv) as far as possible, be acquired rather than produced by those services, and (v) be made available throughout Canada by the most cost-efficient means; (s) 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; and

6. - 6 - CRTC Reporting Broadcasting Act (t) distribution undertakings: (i) should give priority to the carriage of Canadian programming services and, in particular, to the carriage of local Canadian stations, (ii) should provide efficient delivery of programming at affordable rates, using the most effective technologies available at reasonable cost, (iii) should, where programming services are supplied to them by broadcasting undertakings pursuant to contractual arrangements, provide reasonable terms for the carriage, packaging and retailing of those programming services, and (iv) may, where the Commission considers it appropriate, originate programming, including local programming, on such terms as are conducive to the achievement of the objectives of the broadcasting policy set out in this subsection, and in particular provide access for underserved linguistic and cultural minority communities. Further declaration (2) It is further declared that the Canadian broadcasting system constitutes a single system and that the objectives of the broadcasting policy set out in subsection (1) can best be achieved by providing for the regulation and supervision of the Canadian broadcasting system by a single independent public authority.

7. - 7 - CRTC Reporting CRTC Licence Renewals Broadcasters must renew their licences, for each TV and radio station, as well as for Specialty channels, on a regular basis. In the past, the licence terms were for seven years; however, the most recent licence renewals have been for five years. CBC/Radio-Canada’s licences were last renewed in 2000; for multiple reasons, the CRTC has granted ‘administrative renewals’ since 2007. A licence renewal hearing was scheduled for CBC/Radio-Canada, to be held on September 12, 2011. We submitted the documentation required, including financial forecasts for five years, on May 19, 2011 and the submission was made public shortly thereafter, inviting comments from the public. The hearing was then suspended until June 2012, partly due to a request by the Quebec English-language Production Committee (QEPC), and supported by other groups, for the same data that had been available for the licence renewals for private English-language television broadcasters, held in April 2011. This included ‘Independent Production Reports’ that CBC/Radio-Canada did not have to file. On December 15 th, 2011, CBC/Radio-Canada submitted ‘Independent Production Reports’ to the CRTC for the broadcast years that ended on August 31, 2009, 2010 and 2011. We expect that this report, which is prepared by the Network programming areas and Regulatory Affairs, will have to submitted by November 30 th each year from now on. On January 31, 2012, CBC requested that the existing timetable for its licence renewal process be postponed from the June 2012 date, stating that it would not have sufficient time to reflect on and operationalize its plans, given that its budget was expected to be announced late in March 2012, and that cuts in our funding were expected as a results of DRAP. The CRTC approved the request. Now that the federal budget was announced in March 2012, we expect the CRTC to propose a new date for a revised licence renewal submission to the CRTC.

8. - 8 - CRTC Submissions due Nov 30th – on a Broadcast year basis Each year, CBC/ Radio-Canada calculates the operating results for the broadcast year that started in September of the prior year and ended on August 31 st, for the main services and for the specialty services, and submits the results using the templates provided by the CRTC: for each radio licence (ER 50; FR 32): a portion of the operating results for the main services for each television licence (ETV 16; FTV 13): a portion of the operating results for the main services for each specialty service: the operating results relating to each service We also prepare and submit: ‘Aggregate’ reports for the four main services: ETV, ER, FTV, and FR. New media reports (started with broadcast year that ended August 31, 2010): revenues and expenses related to New Media operations; and the list of our New Media Broadcasting undertakings (websites) that provide audio and/or audio-visual programs to end-users. Audited or reviewed financial statements for each of the Specialty services. Since broadcast year 2010, some CBC/ Radio-Canada TV stations (ETV 8; FTV 12) have been eligible to receive some funding from the ‘Local Programming Improvement Fund’, created by the CRTC in 2008. The money for the Fund comes from a percentage of cable and satellite companies’ gross broadcasting revenues (1% originally; increased to 1.5% in 2011) and is distributed among eligible broadcasters through the following formula: One third is divided evenly among all eligible stations in anglophone and francophone markets; the remaining two thirds is divided so that 70% goes to anglophone markets and 30 % to francophone markets, with these amounts allocated on the basis of average spending on local programming over three years by each eligible station. CBC/ Radio-Canada must submit financial reports of the LPIF revenues received and the LPIF eligible expenses for each eligible station, accompanied by LPIF qualitative reports prepared by the Networks / Regulatory Affairs, and the audit opinions from Deloitte for each LPIF station. In mid April 2012, CRTC held a public consultation to review the LPIF. The review will determine whether the Fund should be maintained, modified or cancelled. CBC/Radio-Canada participated in the hearing. CRTC Reporting

9. - 9 - CRTC Forms The Commission, in various regulations, decisions, orders and notices, introduced requirements on the Canadian broadcasting and telecommunications industries to help fulfill its mandates under the Broadcasting Act. Some of these requirements involve the filing of data to the Commission on a regular basis. To reduce the regulatory burden on the industry, the Commission introduced its web-based Data Collection System (DCS) in January 2004. DCS employs a secure, encrypted connection between the entity submitting data and the Commission thereby improving the accuracy and timeliness of the data submitted. Statistics Canada also collects information from broadcasting and telecommunications services industries to produce national and regional estimates of activity for these industries. These estimates become an integral part of our national and provincial economic accounts. In order to avoid duplication, minimize response burden, make more efficient use of resources and promote coherence of the Canadian statistical system, the Commission and Statistics Canada have agreed to integrate the requirements of both organizations for industry and market statistics into this data collection. As a result, Statistics Canada will no longer conduct separate Annual Survey of Telecommunications and Annual Survey of Internet Service Providers. For each radio and television licence, for each Specialty Service, and for each Aggregate report, there are four or five CRTC forms to be entered in to the Data Collection System on the CRTC website. The following slides show sample forms for radio and television licences. The Specialty Service forms and Aggregate forms are similar in nature. CRTC Reporting

10. - 10 - Radio – Sample Form 1110

11. - 11 - Radio – Sample Forms 1120 and 1340

12. - 12 - Radio – Sample Form 1130

13. - 13 - TV – Sample Form 1210

14. - 14 - TV – Sample Form 1230

15. - 15 - TV – Sample Form 1240

16. - 16 - TV – Sample Form 1340

17. - 17 - CRTC Reporting – Annual process ComponentAction CorporateCorporate calculates the average FTEs, by component and by cost centre, using the standard hierarchy as at August 31 st. We also calculate the impact of class 6 labor transfers from the Ottawa Production centre to each main service. NetworksNetworks calculate the impact of class 6 labor transfers from their ‘plants’ to their programs to arrive at the FTEs by licence. NetworksNetworks provide the revenues, expenses, and FTEs by station, for each component and specialty service, at the network level, on a broadcast year basis. The revenues and expenses are essentially the budgetary revenues and expenses, plus non-budgetary Annual leave and TOIL. CorporateWe calculate the revenues, expenses, and FTEs for each corporate component (see list on the following slide), on a budgetary basis, plus non-budgetary Annual leave and TOIL, on a broadcast year basis. CorporateFor non-budgetary adjustments affecting the broadcast year results, we use the reconciliations prepared by the Corporate Reporting group, between budgetary results and financial statement results. We must use the fiscal year end reconciliation items (April to March), subtract the August year-to-date reconciliation items from the prior year, and add the August year-to-date reconciliation items from the current year. CorporateWe allocate the corporate revenues and expenses, budgetary and non-budgetary, to the components based on historical percentages (58% English Services; 42% French Services). Those results are then allocated between each service using percentages (ES=ETV 80%; R1 19%; R2 1%) (FS=SRC 82%; PC 15%; EM 3%). Those results are then prorated among stations using the total network costs per station. CorporateWe consolidate the network results and the corporate allocations, by station, and balance the overall net results to the Financial statement results for the broadcast year.

18. - 18 - CRTC Reporting – Corporate Allocation

19. - 19 - Salary Information (Full-Time Equivalents FTEs) For each radio, TV, or specialty service licence, the CRTC asks for the following Salary and Benefits information: ‘Total Remuneration’ for each expense bucket, ie. Programming and Production, Technical, Sales and Promotion, and Administration and General, as well as the ‘Average Number of Employees’. For the broadcast year ending August 31, 2011, we adopted the following methodology to calculate the ‘Average number of employees’, using Excel and Access: Obtained payroll information for all 26 pay periods paid during the broadcast year. Assigned the ‘budget cost centre’ from SAP to the employees charged to projects or WBSs, in order to get to the average FTEs based on the cost centre hierarchy for that broadcast year. For full-time employees, determined an FTE by the number of pay periods they were part of, for example, a full-time person who has worked all year long would show up in 26 pays; therefore, by dividing the number of pays for that person by 26, we get 1 FTE. For part-time employees, determined an FTE by the number of hours worked in a pay period divided by the normal number of hours; the answer for each pay period is then divided by 26 pays. Consequently, if a person only worked 20 hours of one pay period in one year, they would represent.53 (20/37.5) of an FTE for that pay period, and.021 for the whole year. Corporate calculates the impact of class 6 transfers, from Ottawa Production Centre and the Mobile Division, to assign FTEs to the proper component. Networks calculate the impact of class 6 transfers to assign FTEs from ‘plant’ type cost centres to the proper station, based on the programs worked on. FTEs in network support services cost centres (Finance & Admin, Communications, etc…) are allocated to stations in the same proportions as were used to allocate the costs. CRTC Reporting

20. - 20 - Upcoming CRTC issues Review of the LPIF February 15 th, 2012Regulatory Affairs sent CBC/ Radio-Canada’s submission in response to the CRTC’s Broadcast Notice of Consultation 2011-788 Review of the Local Programming Improvement Fund. The networks were involved in preparing the submission. April 16 th, 2012CBC/ Radio-Canada appeared at the consultation hearing for the ‘Review of the Local Programming Improvement Fund’. April 25 th, 2012Regulatory Affairs sent a response to CRTC, relating to the questions that were brought up during the consultation hearing, including some financial information that was requested. Next stepsWe will deal with the CRTC decisions that will come out of the review. Advertising and sponsorshipon Radio 2 and Espace Musique April 4 th, 2012Part of the DRAP measures that were announced by the President during the town hall on April 4 th, 2012 involved the addition of advertising and sponsorship on Radio 2 and Espace Musique stations. A submission was made to CRTC on April 20 th, 2012, including financial estimates of the impact over the next three years, seeking a change to our existing licences to allow advertising on those stations. Next stepsWe will deal with the CRTC decisions that will come out after their review of our submission. CRTC Reporting

21. - 21 - CRTC Reporting ProjectStatus Licence RenewalNow that the federal budget was announced in March 2012, and we have a three year plan to deal with DRAP, we expect the CRTC to propose a new date for the hearing to renew our licences. We will have to prepare a revised licence renewal submission to the CRTC once a date is announced. System Improvements OngoingNathalie Forgette’s group is working on a project to provide COPB details, by cost element 5 and 6, in order to help us with the CRTC exercise. We hope to test the data and have the information available before the broadcast year ends on August 31, 2012. Future projectsAutomate the CRTC reporting process further, through assessments or special GL, etc… Other important deadlines July – Aug 2012Hold LPIF planning meetings with Deloitte/ networks for broadcast year 2011-2012. Sep – Nov 2012Work on the annual CRTC submission for the broadcast year 2011-2012.