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Decision Time

Issues and Challenges for the CBC

The CRTC hearings on the CBC’s license renewal will begin on November 19th. It is impossible to deny that things have changed in the world of communications in the 13years since the Corporation’s last license renewal. The broadcasting ecosystem has been turned upside down. “We could already sense it in 2000 during the last CBC renewal. The CBC had begun to mark its presence. But the last two years confirmed the magnitude of the phenomenon,” says Pierre Bélanger.

The Major Changes Since 1999

Digital

The rapid evolution of the digital world is one of the major changes that have defined the last decade. The CRTC has held public hearings on topics such as new media, value for signal, and vertical integration. We have seen an explosion in the number of specialised communications services in the last five years. The CBC has made major investments in digital platforms; the web is now very integrated with its radio and television programming. This graphic, from the CBC’s most recent quarterly report, denotes the integration – 82% of expenses went toward radio, television and Internet content. The CBC is resolutely focused on the future. The digital realm has also repeatedly been the focus of successive CRTC hearings on new media, value for signal, HDTV, and integration of broadcasting businesses.

Governance Models

According to Pierre Bélanger, change in the Corporation’s governance models is another one of the main transformations that has taken place. Integration of services is now fully established, with vice-presidents in the two principal centres of Montreal and Toronto responsible for radio, television and Internet content. Far from being a mere adjustment in organizational charts, this represents a major change in the operations of these services. Another major change over the last 13 years has been in new requirements for greater transparency on the part of the public broadcaster. Political pressures have made it necessary for the CBC to produce reports much more frequently and much more openly. Access to information reports, expense reports for executives, quarterly reports on revenues and expenses and official languages are requested by numerous agencies and liberally requested of the CBC. A desire for better contact with Canadians and for ongoing public discussion is in motion.

Funding

We can’t talk about the CBC without mentioning funding, Bélanger says. “I am continually dismayed with the incessant cuts to the CBC. We aren’t giving them the means to carry out their mandate.”

It is important to stress that at $1.134-billion (in nominal value), the total parliamentary appropriation to the CBC in 2010-2011 is only slightly higher than the amount from 1990-1991 ($1.078-billion). Even more importantly, one must note that if the amount from 1990-1991 had been adjusted according to cost of living indexes, the Corporation would have been given $1.649-billion last year in order to deliver its mandate. Despite slow growth from 1999-2010, the budget cuts made in the ‘90s were never offset, and those that are coming will only exacerbate the public broadcaster’s financial challenges.

Below is a summary of the financial situation that the CBC has faced over the last two years, and up to 2014:

  • Cuts of $115-million over 3 years (including $60-million awarded in 2001 as one-time funding);
  • Absorbing the costs of inflation up until 2013 – $41.3-million;
  • Changes to the Canada Media Fund – loss of $12.6-million;
  • Local Programming Improvement Fund (LPIF) – loss of $47.1-million.

“The CBC is a trendsetter, an innovator. In a laboratory, things don’t always work every time; there are errors, things that don’t work. If the CBC doesn’t take risks, who will? However we put the CBC in a very difficult position by giving it this huge mandate and responsibilities, but not giving it the means to pay the bills and by forcing it to generate a large part of its budget through commercial revenue,” continues Bélanger. The cuts force the CBC to envision committing the “mortal sin” of selling advertising on Radio2 and Espace Musique. The oasis created by the absence of advertising on these radio services, which had been its strongest distinguishing feature from private radio, has been abandoned. According to the request submitted to the CRTC, the French service could fetch $2.2-million, and Radio 2 could eventually generate $31-million in advertising revenue.

To survive the cumulative cuts and losses of revenue, the CBC has to do more and better than simply selling commercials on these two radio stations. It has to propel itself into the future, not only reinterpreting radio and television content, but reinventing the digital language. The CBC needs to look ahead and admit that things have changed. Again, the means must follow the responsibilities, and it is unclear where the required resources will come from.

What Will the CRTC do?

Pierre Bélanger says that: “The CRTC has its hands tied to a certain extent. They will look at the Broadcasting Act and use this as a framework. Having said that, the president of the Council, who we have seen in action during the Bell-Astral hearings, knows the portfolio and the government machine very well. I think he knows how far the Council can go without having its decision reversed by the government.”

CBC’s strategy, in this context, is to avoid being constricted by the old way of doing things and the traditional discourse. CBC-Radio-Canada is a public broadcasting service, but it is in operation in the 21st century. Pierre Bélanger is of the mindset that the CBC is on the right track with its five year plan. “The plan is forward-looking and reflects the changing habits of media consumption and all those who are part of the generation of digital natives. The CBC must be able to prove that it has the intelligence and creativity to invent digital media in the Canadian way. I think the survival and relevance of CBC services are closely linked to its ability to implement multi-platform strategies (including radio). This is why the CRTC should allow the CBC to invest freely in digital content.” This doesn’t mean that it should let go of the rest of its services, but really means that we shouldn’t prevent the CBC from innovating and inventing in a multi-platform environment.

Does the Broadcasting Act allow for such a technological change? Admittedly, to re-open the Act to take into account these new realities, including those of the CBC, would be like opening Pandora’s Box. “However, modernising the Act every 25 years isn’t exactly unwarranted.” Bélanger suggests that we could modernise only certain articles of the Act relating to methods of distribution and production.