CRTC Approves Evanov Radio Group’s Acquisitions

The CRTC has approved the application by Evanov Radio Group Inc.  for authority to acquire, as a part of a corporate reorganization of Evanov Communications Inc., the assets of CHRF Montréal and CHSV-FM Hudson/Saint-Lazare from Dufferin Communication Inc., as well as the assets of CFMB Montréal from CFMB Limited. Upon surrender of the current licences issued to Dufferin and CFMB Limited for the undertakings, the Commission will issue new licences to ERG. The terms and conditions of licence for the undertakings are set out in the appendices to this decision. The Commission received a joint intervention supporting the application.

1. ERG is solely owned by ECI, which in turn is controlled by Mr. William V. Evanov.
2. ECI currently operates thirteen stations in Manitoba, Ontario and Quebec through its solely owned subsidiaries Dufferin and CFMB Limited. Dufferin is the licensee of CHRF and CHSV-FM, while CFMB Limited, the licensee of CFMB, is solely owned by Dufferin.
3. Following completion of the transaction, ERG will become the licensee of ECI’s three Quebec-based radio stations. The transaction will not affect the effective control of the three stations, which will continue to be exercised by Mr. Evanov.

CHRF Montréal

CHRF is currently in compliance with its regulatory obligations. Upon surrender of the current licence issued to Dufferin for the undertaking, the Commission will issue a new licence to ERG expiring 31 August 2022. The conditions of licence are set out in Appendix 1 to this decision.

For CFMB, the licensee failed to provide proof of eligibility for part of its required basic contribution to Canadian content development (CCD) under section 15 of the Radio Regulations, 1986 (the Regulations). More specifically, the licensee failed to provide proof of eligibility regarding a contribution to the CIBPA Foundation initiative in the 2024-2015 broadcast year, resulting in a $1,655 shortfall. The licensee indicated that the non-compliance occurred under the previous owner of the station.^Footnote1

For CHSV-FM, the licensee also failed to provide proof of eligibility for part of its required annual over-and-above contribution to CCD as set out in a condition of licence. More specifically, it failed to provide proof of eligibility for a contribution of $3,500 to the Production Abelin initiative in the 2024-2015 broadcast year.

In the absence of proofs of eligibility, such as a letter from a third party that received the funds or a printout or brochure of the event that explicitly links the claimed expenses to the initiative, the Commission cannot deem the two contributions identified above as eligible. The Commission also notes that it approved the transaction relating to CFMB in February 2015 and that the non-compliance occurred in the broadcast year ending 31 August 2015. Additionally, the Commission notes that ERG confirmed that the proposed new licensee would be responsible for assuming any outstanding regulatory obligations, including paying any shortfall amounts.

In light of the above, the Commission finds it appropriate to require ERG to meet the CCD shortfalls for the 2024-2015 broadcast year by contributing the required amounts ($1,655 for CFMB and $3,500 for CHSV-FM) to eligible CCD initiativeswithin 90 days of the publication of this decision. Conditions of licence to this effect are set out in Appendices 2 and 3 to this decision.

Further, to allow for an earlier review of the licensee’s compliance with its conditions of licence, the Commission considers it appropriate to issue the new licences for the two stations for a period equivalent to the remainder of the current licence terms. Accordingly, upon surrender of the current licences issued to Dufferin and CFMB Limited for the undertakings, the Commission will issue new licences to ERG for CFMB and CHSV-FM expiring 31 August 2021 and 31 August 2019 respectively.

The Commission directs ERG to fulfill the outstanding tangible benefits related to the change in effective control of CFMB Limited authorized by decision letter dated 16 February 2015 pursuant to section 11(4) of the Regulations. As set out in that decision, based on the value of the transaction, a tangible benefits package of $68,700 (6% of $1,145,000) is to be allocated as follows in payments spread out equally over a seven-year period:

• 3% ($4,907 per year) to Radio Starmaker Fund or Fonds Radiostar for a total of $34,350 over seven years;
• 1.5% ($2,454 per year) to FACTOR or MUSICACTION for a total of $17,175 over seven years;
• 1% ($1,636 per year) to any eligible CCD initiative as direct payment for performances by Canadian ethnic musical artists for a total of $11,450 over seven years;
• 0.5% ($818 per year) to the Community Radio Fund of Canada for a total of $5,725 over seven years.