It wasn't always that way. Until the mid 1970s FM was mostly ad free and relegated to things like jazz, classical and album oriented rock (AOR,) which emerged in 1969. A lot of it was free form with DJs choosing the playlist. Some AOR stations had an "anything goes" mentality with occasional on air studio parties and musical guests. AOR became very popular, something that didn't go unnoticed by station owners. When FM radios hit critical mass, broadcasters started switching to top 40 pop, country and rock formats which had previously been on AM. It took a few years for AOR to disappear as the stations morphed into more formally regulated AOR formats with advertising and eventually changed formats to other top 40 genres. By the time Classic Rock was introduced, advertising free AOR was pretty much history. A new station would occasionally launch in AOR format to build an audience and obtain advertisers. As soon as that was accomplished, it would switch to top 40.
The CRTC had a large role in suppressing AOR, rock music and other alternate formats on FM radio in Canada. Their opinion was that FM should be reserved for formats they thought suitable for Canadians such as classical, jazz and religious broadcasts. When they were allowed to broadcast popular music, they were barred from broadcasting it on Sunday. The FM station here would carry church services Sunday morning and classical music the rest of the day. On other days it played top 40. Another CRTC opinion was that only stations in larger cities should be allowed to play alternate formats like AOR since other Canadians were not sophisticated enough to handle it. (Their opinion, not mine.) On one occasion, the CRTC licensed a second top 40 country station in Toronto and ignored applications that would have served minority groups. So much for diversity.
The CRTC has also used regulations like Cancon requirements to reduce diversity on Canadian radio. At one time the level was set at 5% for FM. That was gradually increased over the years. It currently rests at about 30% for some FM stations but I've seen figures as high as 50%. The big beneficiaries of this were popular Canadian groups who raked in huge sums from being played for the last 45 years on top 40 stations. It tended to forced smaller, less popular musical genres off the Canadian airwaves as they often have few Canadian musicians.
The local college station became quite popular when they switched to AOR. The for profit local stations, all top 40, became upset because they were losing listeners and filed a complaint with the CRTC. The college station was told to change formats and threatened with the loss of its licensed. Their call letters should have been changed to CRAP after that.
