U.S. television programs, and particularly drama, comedy and entertainment programs, have always been vital components in the schedules of Canadian commercial broadcasters. This quality programming, popular with advertisers, has always provided healthy revenue margins, and has helped to subsidize the production of the expensive domestic programming required of Canadian broadcasters as a condition of license.

The first Canadian commercial television stations licensed in the 1950s were CBC affiliates. In 1960 the then Board of Broadcast Governors (BBG) granted licenses for commercial stations in each of the major markets to provide an alternative service to the CBC. They.began broadcasting in 1961, and all of them acquired Canadian rights to American programs. As a significant proportion of the Canadian population lived close to the US border, about 30% of Canadians could choose to watch Wagon Train, Bonanza or Gunsmoke either on a Canadian station or via a signal out of sources like Bellingham, Washington, Buffalo, N.Y., Fargo, North Dakota or Burlington, Vermont.

One way Canadian broadcasters in border markets dealt with this competitive situation was by broadcasting these shows in advance of the US broadcasts. But then came cable.

By the early 1970s, cable television (known as CATV, or Community Antenna Television) was beginning to proliferate across Canada, and with it came the diminution of the value of the exclusive right obtained by a Canadian station to an American program. Viewers in most markets could watch the same US programs on either a Canadian or a US channel. This prompted Canadian advertisers to buy more time on US stations seen in Canada, a revenue outflow which was only stemmed when the Canadian Government introduced legislation limiting the degree to which these purchases could be claimed as business expenses for tax purposes.

In 1972, in response to pressure from Canadian broadcasters, the Canadian Radio-Television Commission (CRTC), introduced regulations allowing television broadcasters to ask the larger cable system operators to delete incoming US program signals where a local broadcaster owned the Canadian rights to the identical program or program episode, and substitute the Canadian signal. Thus, a Canadian tuning in to watch an American program, on either the US or the Canadian channel, would see the Canadian version, with the Canadian commercials.

Later, as direct-to-home satellite systems were licensed in Canada, virtually all Canadians were able to have access to programming from all the US Networks, as well as many speciality channels. Before long, simultaneous substitution became a requirement on these satellite services also.

For Canadian television licensees, simultaneous substitution has helped preserve the "logic of license". It is, however, imperfect. Anyone living close to the US border, who has a good antenna, can pick up US signals with no substitution.

Secondly, and more importantly, with all Canadian broadcasters buying dozens of hours of US programming every year, it is inevitable that not every one of those programs can be scheduled in the identical time period as its US telecast. Prerelease offers some advantage, but significant numbers of viewers are still lost by the Canadian program rightsholders to American stations - and American advertisers.

To deal with this latter situation, proposals had surfaced by the turn of the century whereby cable and satellite operators might be required to provide what is described as non-simultaneous, or advanced, substitution. This would involve incoming US program signals being deleted where Canadian rights had been sold, and the substitution of a Canadian version of the identical program or program episode, with Canadian commercials, via a direct feed from the broadcaster to the cable or satellite head-end. This system would be invoked where the broadcaster making the request had already requested simultaneous substitution in that time period for another US program to which he owned the Canadian rights.

The logistics of such a scheme have thus far militated against the idea going much beyond the discussion stage. Unless the roadblocks can be lifted, Canada will remain the one country in the world where ownership of the "exclusive rights" to a US program for a Canadian station's market doesn't mean getting exclusivity.

At the time of writing (Fall 2001), this situation is only one among many aspects of the Canadian broadcasting system undergoing close scrutiny by the CRTC.