A great article at Digital Home Canada explains and disects the ruling.
The reason according to CRTC:
Satellite radio is not allowed into Canada because it has the potential to put Canadian commercial radio stations out of business. Canadian commercial radio stations derive their revenue from advertising sales and if their audiences decline because of satellite radio then they risk going out of business as advertising revenues fall.It amazes me the short-sightedness that goes into this ruling. It's legal in Canada to download music (assuming it's for your own use) and we can always tune into radio stations anywhere in the world through the internet. For the 1 in 3 Canadians who don't live in populated areas, sometimes that's the only option they have.
The CRTC under the guise of Canadian cultural protection has outlawed satellite radio to protect the interests of commercial radio operators.
Allowing Canadians to subscribe to satellite services will not cause the economy to collapse, the world to crumble. It just makes no sense to me.
Meanwhile, the little Sirius symbol on my car's MP3 player just sits there, mocking me.