CFNY originally started operating in the 1960s, as an FM rebroadcast of an AM station, CHIN. The nearby Humber College provided a steady stream of young employees, who were encouraged to play their own selections in the evening. In the mid-1970s the owners decided to give the station a brand of its own, creating CFNY, or CFNY-FM, in 1977.
Things started changing when David Marsden joined as program director in 1978, and started a format that ignored the charts, and played any well-produced alternative music. The station started to sound like a "slick" version of a college radio station. At the time alternative was still very new, but it was also in 1978 that new wave and punk rock took off, and soon the station became known as one of the few commercial stations that played music worth listening too.
Fans started referring to it as the spirit of radio, which was used as their catchphrase for some time. Fans were loyal but few, and with a measly 850 watts of power, broadcast from a house in a northern Toronto suburb, the problems of attracting new listeners were many. In 1979 the original owners were involved in an unrelated court action and forced to sell the station. The new owners started the process of moving the antenna to downtown Toronto, first to the top of the Bank of Montreal building in October 1981, and later to the CN Tower in 1983.
It was also at this time that the Canadian (and worldwide) economy suffered from a recession, combined with high interest rates. The new owners were forced to sell the station to the media conglomerate, Selkirk Communications. At first Selkirk did not change the format, and completed the move to the CN Tower. By 1985 the station had reached new highs of popularity, capturing over 5.4% of the Toronto area listeners, and becoming internationally famous for its music mix, and was particularily well respected for introducing new acts which other stations wouldn't play because they were too small.
In 1988 the station turned its first profit. However, this was not enough for Selkirk, which demanded higher and higher ratings. Format changes started, and in the summer of 1989 they turned to an all top-40 format. At first there was a listener rebellion. Their phone-in show at noon was an all-request hour, and invariably the requests were for alternative songs. However the management soon put a stop to this, telling them to refuse such calls and only select requests from the top-40. Soon most of the staff resigned, or were fired.
Radio analyst reports suggested that 100,000 new listeners had been gained by the change. However this hid the fact that the market share dropped considerably, to 4.3%. Instead of returning to the old format, management instead decided to continually "tweak" the programming to create a new modern rock station.
In the mid-90s they apparently decided this was too much work, and purchased an EDGE franchise. By this point most of their original audience had left, and there was little outcry.