CBC needs financial flexibility, not more money: Lacroix

The CBC is not begging Canadian taxpayers for more money, but asking for the same kind of flexibility in arranging its financing that private sector firms enjoy, CBC chief executive Hubert T. Lacroix said Thursday in a speech to the Empire Club of Canada.

Lacroix was reacting to comments from Finance Minister Jim Flaherty on Wednesday that CBC already gets "substantial financing" and should not expect more.

"As you will have read this morning, there are reports that the Prime Minister's Office has said there will be no extra money for CBC/Radio-Canada. And I actually agree with that in the current environment," Lacroix said.

He said the CBC does not want new money, but the flexibility to borrow against future years to weather the current recession.

He pointed out that CBC/Radio-Canada has no access to the capital markets or to commercial borrowing.

"Private broadcasters have the financial flexibility that comes from their sources of capital. In a cyclical downturn, they can effect some changes by smartly managing their balance sheets and lines of credit," he said.

"As a Crown corporation, CBC/Radio-Canada has no access to this type of borrowing so, when we lose a dollar of revenue, we must cut a dollar of expenditure or postpone the expenditure to next year in order to balance our budget."

Lacroix said he has asked for a meeting with the prime minister and has scheduled a meeting with the minister of heritage to discuss ways CBC could arrange its financing over the next two years to avoid substantial cuts.

"The government could authorize a line of credit that we would, of course, be required to repay on a timely basis," Lacroix said. "Or the government could agree to bring forward our appropriation so that we can, in effect, borrow money from our level of appropriation in future years ..."

The CBC gets $1 billion annually from government, but estimates advertising revenue next year will be $60 million or more below budget.

Cuts are looming at the public broadcaster that would hurt its ability to fulfil its mandate, Lacroix said.

Among the measures being considered at CBC to deal with the shortfall:

• Introducing more American programming into television schedules (currently 100 per cent Canadian from 8 p.m. to 11 p.m.)
• Downgrading or selling parts or the whole of TV or radio services.
• Increasing advertising on the air.
• Shrinking geographic coverage of the country by consolidating local stations, which would reverse the current investment CBC is making in building regional coverage.
• Selling off assets. 

Lacroix pointed out that CBC, unlike any private broadcaster, provides programming in English and French across five time zones and has services in eight aboriginal languages and eight international languages.

Investment in Canadian drama and comedy is up 38 per cent in the last eight years, he said.

"Are we the same as the private networks? No way. First, we're the home of Canadian content; no other network even comes close," Lacroix said.

"I sometimes hear some say that we should go back to the golden days of CBC Television — the '70s and '80s," he said. "The irony is that in those years, our prime-time television schedules, in both English and French, were riddled with Dallas, I Dream of Jeannie, Marcus Welby, M.D., Mork & Mindy and the like."

He dismissed the idea that by buying Jeopardy for its 7:30 p.m. time slot, CBC had hurt its ratings.

The show, which draws more than one million viewers, helps retain viewers for Canadian fare in prime time, he said, and the ad revenue it generates helps pay for Canadian programming.

"Other conventional broadcasters are facing stagnant or shrinking audiences, yet CBC Television's audience share in prime time has risen to 8.9 per cent this season — an increase of 1.5 points in just two years," Lacroix said.

The CBC gets about $34 from each Canadian taxpayer, he said, compared to $124 to support the public broadcaster in the U.K. and $77 in France. He said it's a modest investment, considering the huge mandate the CBC is required to fill.

Lacroix defended the diversity of platforms, including livestreaming and podcasting, that is delivering CBC to Canadians. He said he wants to maintain some key directions at CBC despite the economic downturn.

"We can't be all things to all people.  We simply don't have the resources, nor should we," he said.

"We must focus where we can be most effective: content company, Canadian programming, leader in new media, deeply rooted in the regions."