By Ahmad Hathout
The CRTC is allowing telecoms no longer required to contribute to the National Contribution Fund (NCF) to pay outstanding amounts owed over three years.
In February, the regulator updated who pays into the fund that bankrolls telecom builds by increasing the company revenue threshold from $10 million to $25 million. That rule change hacked the number of contributors to the fund by 40 per cent and left unresolved the question of what to do about the amounts these telecoms set aside for collection that weren’t picked up.
At the behest of the CRTC, the fund’s overseer, the Canadian Telecommunications Contribution Consortium (CTCC), proposed that the telecoms no longer subject to the contribution regime be given 36 months to pay the outstanding amounts owed, in equal monthly payments, with no 12 per cent annual interest that was previously imposed.
The regulator on Wednesday accepted that proposal over that of the Independent Telecommunications Providers Association (ITPA), which proposed that the telecoms pay monthly amounts based on their average contribution payment over the past 12 months, with any remaining balance due in full by the end of the 36th month. The CRTC noted that the ITPA, which filed the application that led to the contribution threshold increase, said this proposal would benefit smaller telecoms by easing the financial burden and assist with cashflow management.
“The Commission finds that the ITPA’s proposal would result in a significant final payment in the 36th month,” the CRTC ruled, noting that the CTCC argued similarly. “The ITPA’s proposal may present challenges not only for former contributors but also for the CTCC and the Central Fund Administrator in meeting their objectives through less predictable scheduled payments.”
The CRTC also accepted the CTCC’s proposal to reduce from $10 million to $5 the prescribed NCF balance for the month after total claims are processed. The prescribed NCF balance is the amount of money held in reserve to ensure sufficient funds are available each month to make the required payments.
“The Commission considers that the proposed reduction in the Prescribed NCF Balance is appropriate because it would result in the NCF collecting less funding annually,” the CRTC reasoned. “This would further reduce regulatory and administrative burden by decreasing the amounts required contributors must pay.”
The changes take effect starting January 1, 2027.
