Hidden Tax Collection: CRTC LPIF
October 29, 2009
Rogers Cable has the following to say about the CRTC LPIF (Local Programming Improvement Fund):
New Fee on your Bill
Beginning September 1, 2009, customers will see a new line on their invoice called CRTC LPIF Fee, and a corresponding charge of 1.5% of their recurring TV monthly service fee. Rogers Cable does NOT benefit from the LPIF fees collected. These fees are directly remitted to the CRTC’s Local Programming Improvement Fund, for the use solely by broadcasters like CTV and Global serving markets with less than 1 million people.
The CRTC has the following to say about cable companies passing on the LPIF fee to customers:
Several cable and satellite companies want to increase their customers’ rates by 1.5%. Can the CRTC prevent this?
In Public Notice 2008-100 (paragraph 357), the CRTC indicated that in light of the performance2 level of the cable and satellite sector and the benefits accruing to broadcasting distribution undertakings (BDUs) as a result of other changes being made to the regulatory framework, the Commission saw no justification for BDUs to pass along any increased costs relating to the LPIF to their subscribers.
This is an example of a non-intuitive economic principle. You can not tax companies. You can only force companies to collect tax from customers on behalf of the government. Not only do you have hidden taxes but you also have hidden tax collection.
Actually, Rogers is making it a little less hidden but the principle still holds. Consumers always pay one way or another.
