Even the VanKleet station used to have music over-the-air, which is most likely deemed broadcasting by the CRTC, and thus requires a broadcast license. Which is why they've scaled back their over-the-air presence. In spite of the various exemptions for said license listed on the CRTC site, they can insist on you getting one at their discretion.
To get an RSS-123 license, you have to transmit information within a specified boundary. The field strength of your transmitter at the boundaries has to be 100uv/m or less. The information can be PSA's, community related, traffic, travel, shopping (as for a mall) etc. Music is supposed to be used only for interludes. You can transmit music for special events which also have a limited time period (as well as being contained within a restricted area).
I guess no one has lodged a specific complaint against that pirate station, which is generally why ISED will go after you.