A new fund should be created to act as an incentive for TV broadcasters to produce more than a basic threshold of local news programming, the CBC told the CRTC Friday.

The Local News Incentive Fund (LNIF) would provide "incentive funding" to broadcasters who spend money to produce local news programs above and beyond a required minimum level, CBC said in its presentation to the broadcast regulator.

The CBC's proposal calls for the initiative to be funded by broadcasting revenues from cable and satellite companies.

The money would be raised by redirecting contributions that cable and satellite companies currently make to support local programming.

The proposed contribution level would be one per cent of broadcast revenues for cable companies and 0.4 per cent for satellite companies.

The CBC estimates that such a formula would raise $68 million, with the fund administered by the Canadian Media Fund or a similar body. It would fund news, analysis and information programming.

The fund could be accessed by all over-the-air TV stations serving small markets (less than 300,000 people) and by all private independent over-the-air TV stations serving medium-sized markets (between 300,000 and one million).

Competing proposals for a new fund

About 65 stations would be in this initial group, the CBC says.

The CRTC itself has proposed a new fund to support local news and information programming.

Rogers has proposed a slightly different model, a Local News and Information Fund, valued at about $33 million. Each distributor would be required to reallocate 0.5 per cent of its current contribution to the LNIF.

Under the Rogers plan, stations would be allocated money in proportion to their share of local ad revenues.

But smaller community channels and some small cable operators such as Eastlink have expressed concern about any change in the regulatory framework, fearing they would be left out as larger cable operators grab a lion's share of the funding for their own community channels.

Economic model for local TV 'broken'

The CRTC has been holding public hearings in Gatineau, Que., this week about the future viability of local TV programming. The federal broadcast regulator has identified many challenges faced by local television operations as viewers migrate in greater numbers to online services.

"As you have heard from many witnesses this week, the economic model for local television is broken," Heather Conway, CBC's executive vice-president, English Services, told the CRTC in her opening remarks. "But CBC/Radio-Canada must continue to find ways to meet our audiences' needs and mandate.

"As we strengthen our digital platforms, we are also enhancing our local content, providing Canadians with more local news more often," Conway said.

Digital and local coverage are both key to the future of the public broadcaster, she said.

In 2008, the CRTC created a local programming improvement fund to help television broadcasters in non-metropolitan markets maintain and improve local programming. It was funded by cable and satellite firms. But the CRTC did away with the fund in 2014.

The CBC had been drawing about $40 million annually from the $100-million fund.