Speaking notes for Hubert T. Lacroix, President and CEO, CBC/Radio-Canada, at the Board of Trade of Metropolitan Montreal’s Desjardins Business Luncheon

February 10, 2012

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Does anyone here remember seeing the movie Groundhog Day with Bill Murray and Andie MacDowell?

I mention it because this morning I felt like the Bill Murray character, repeating the same day over and over again.

I was standing in this very spot in March 2009, coincidentally right after we’d announced our reorganization plan for getting through the financial crisis then going on. I talked about a $171 million structural deficit exacerbated by the collapse of the financial markets and the almost overnight evaporation of a major part of our advertising revenues that followed. I also talked about abolishing certain departments, eliminating 800 permanent positions and reconfiguring our radio and television programming schedules at both the CBC and Radio-Canada in an effort to rebalance our budget.

Well, fast-forward three years and guess what? Here I am again before the Chamber of Commerce when we’re about to announce what we’ll do to deal with more substantial budgetary pressures imposed by the federal government in its deficit-reduction plan.

That said, it’s hard to be against the virtue or objective of the federal government to stabilize public finances. CBC/Radio-Canada has seriously and diligently taken part in the Deficit Reduction Action Plan ever since we were first asked to last May.

The questions on my mind now, with the budget a few weeks away, are very simple: What amount of money will be taken away and at what rate? Will we be able to meet the commitments laid out in our strategic plan? How many jobs will be affected by the cutbacks?

Like all of you, we are intently following the statements made by our federal ministers, reading the tea leaves if you will, and we have grasped that the cut will be closer to 10% than 5%. The government also seems inclined to shorten the three-year period originally considered for phasing in the cutbacks, at least according to media reports.

To us, 10% of our parliamentary appropriations amounts to a little over $100 million, but this figure will swell when the severance pay and costs incurred by implementing cutbacks on this scale are added. The additional cost will be high, and as a result will increase the cut we’ll have to absorb.

All this is starting to look oddly like the 2009-2010 figures, which is why I brought up Bill Murray inGroundhog Day.

I have no intention today of spending more time on our finances and certainly not of indulging in self-pity.

I assume that we will be treated fairly by the federal government and that our contribution will be in line with that of other institutions that are participating in this exercise. So when our budget is set, we’ll adjust and move on.

And that’s what I want to talk about this morning: the "moving on" part.

All of the decisions that we will be taking in the next weeks to cope with the upcoming cuts will be based on our strategic plan. We called it Everyone, Everyway (in French Partout, Pour tous) and launched it in February 2011. It was the result of a full year’s work, and is all about focusing on three thrusts: (i) becoming even more Canadian and differentiated in our prime time programming, (ii) being more regional than ever as we seek to deliver services to six of the seven million Canadians who are either unserved or underserved by our local services, and (iii) being more and more digital in the delivery of our services, all of this while being cost-effective and accountable.

Where we are going has never been clearer; getting there is our only focus. Full speed ahead!

We are committed to delivering you the strategic plan within our current budgets without asking for additional funding from the government. We will do that by shifting approximately 500 jobs from our traditional to our digital services, overhauling our production methods, bringing the CBC and Radio-Canada even closer together to make them even more efficient and expanding our partnerships and revenue sources.

In the last few months, I’ve had many opportunities to discuss the values of public broadcasting, the new strategic plan, our leading-edge role in expressing Canadian culture, our objective to advance democracy on a daily basis and our active presence in what I have called the “media ecosystem.”

In some circles, conversations about us start from this vantage point: CBC/Radio-Canada – which receives $1.1 billion from the government – competes against all of the other private sector organizations (CTV, Global and Quebecor). They supposedly have to struggle from a position of unfair economic disadvantage, claiming they receive no public support.

Sorry. This is a false premise.

All media organizations in the broadcasting ecosystem benefit significantly (i) from sources like the Canada Media Fund and the Local Programming Improvement Fund or (ii) through direct or indirect regulatory or fiscal advantages, which are specially designed and set up to help fulfill legislative objectives.

In fact, public subsidies and benefits – direct and indirect – that private broadcasters receive round out to about $900 million per year.

Quebecor itself, when we include its telecommunications activities, received advantages over the last three years that amount to nearly $500 million.

So that’s why I’ve been saying for months now, "There’s no such thing in this country as a private broadcaster." And I’m not saying that’s wrong. I am not against Quebecor having access to these amounts. I am simply stating a fact.

We have to recognize another rarely reported fact: if we want to protect our culture and identity, there is no sustainable purely free-market model that will support a significant home-grown broadcasting industry.

It’s much too easy and much too profitable to buy and air foreign programs instead of investing in the development of Canadian programs.

The issue of protecting the culture goes way beyond radio and television programs. We also have to actively support, for example, our homegrown music and film industries. Films like Monsieur Lazhar, Canada’s submission to the upcoming Oscars, as well as Incendies and Les invasions barbares – which won Canada the Oscar for best foreign-language film in 2004 – were all produced with the support of Radio-Canada, along with other funding sources.

I suggest that you shift the conversation and ask yourselves the following questions: What do the hundreds of millions of dollars invested in the Canadian media industry bring you? Businesses take and receive, that’s a fact, but what do they put back into the system?

And in our case the question should be: What does the $34 that each of you gives us every year bring you?

Let’s start with our television networks.

At the CBC, our objective is to stand out through quality, prime-time Canadian content. Now look at this slide: we broadcast 82% Canadian content between 7 p.m. and 10 p.m. That’s markedly higher than our private-sector competitors. The red stands for Canadian programming and the blue, CTV’s and Global’s foreign programming.

Now let’s look at Radio-Canada.

You can see on this slide that TVA and V invest a large part of their resources in sitcoms, reality shows, game shows and foreign programs during prime time. Our objective is to stand out through the diversity of our schedule, which is why we broadcast (i) more current affairs programs, especially in prime time, including Enquête, Découverte, La facture, La semaine verte and L’épicerie, (ii) original drama series such as Apparences, Trauma and Les rescapés, currently on our winter schedule, and (iii) the daily series 30 vies, a format never seen in prime time.

Your $34 also gets you local services. Our strategic plan commits us to improving them across the country. We want to get closer to you.

For the CBC, we have announced (i) new radio and Internet services in Kamloops (spring 2012) and in Kitchener-Waterloo and London (fall 2012) and new Internet services in Hamilton (spring 2012) as well as (ii) improved services with new afternoon or weekend programs on one or more of our platforms in Victoria, Edmonton, Calgary, Saskatoon, Ottawa, the Maritimes, and Newfoundland and Labrador.

This week, we also announced that, for the first time since the 1990s, CBC Montreal will have local television news on weekends (30 minutes on Saturdays and 10 minutes on Sundays) starting in May. This will bring our local programming in Montreal up to nine hours per week. We will also be adding local radio newscasts on weekend afternoons.

That’s excellent news for Montreal. I’m convinced that this initiative will be as successful here as at many of our French-language stations including ones in Sherbrooke, Trois-Rivières and Saguenay, where we added weekend newscasts at the same time as opening technologically cutting-edge multimedia production centres over the last two years.

We are also preparing to open a brand new multimedia centre in Rimouski in September that will serve all of eastern Quebec; the benefits include producing a regional edition of Le Téléjournal locally instead of in Quebec City.

On the digital side, I’m sure you’ve heard of Espace.mu, launched by Radio-Canada last June, a website that will considerably expand our online music offering, especially in French. Next Monday, CBC will also launch its music strategy. The strategy is based on increased cooperation between the CBC and Radio-Canada when it comes to music, which will heighten our impact in the industry and among Canadian music lovers.

Online we have introduced Rive-Nord/Rive-Sud, two hyperlocal websites that meet the needs of the two million people living on the outskirts of the Island of Montreal. And based on the census data released on Wednesday, my feeling is these two regions are not about to stop growing!

If you’re not familiar with the websites, I strongly encourage you to visit them. You’ll see that they’re a completely new way of producing news at Radio-Canada. They are very interactive – both have a strong presence on Facebook and Twitter – and very tuned in to the needs and expectations of North and South Shore residents. And more often than not, our stories are based on suggestions from the locals.

The beauty of it is that we’ve pushed technology use even further, allowing us to cover two large areas at a minimal cost. A fine example of innovation that makes me very proud!

That’s just a small part of the services you get for your $34.

The Positive Social and Economic Impact of the Public Broadcaster

Another conversation I often hear is about how the public broadcaster should be privatized. That’s a bad idea. Here’s why.

A recent study by Deloitte (that we published in June 2011) showed that, for every dollar we receive from Canadians, we generated value worth $3.70 to the Canadian economy. The study also concludes that under privatization, CBC’s contribution to the economy would be $1.3 billion less than it is now. Why? Because, according to the study, a privatized CBC would compete more heavily with other broadcasters for ad revenue, commission less home-grown content and spend more money on foreign programming.

Along with the financial impact, the industry would lose the stable and predictable investments we make in Canadian programming. For the 2010 broadcasting year, we invested $695 million in Canadian programming, a sum that approaches the investments of all private broadcasters put together.

And what about Montreal? While we know that CBC/Radio-Canada’s regional and local activities have an impact on local economies and independent production across the country, the Deloitte study found that this is especially true for Montreal. They estimate that the contribution of CBC/Radio-Canada to independent production in Montreal is $52.4 million annually, primarily through the creation of over 1,500 full-time jobs.

In a city that relies increasingly on culture and creativity for its economic development, you’ll have to admit that we are a serious asset.

Transparency and Accountability

Here’s another way things have changed since last time we spoke. Quebecor has intensified its coverage of the public broadcaster.

In his editorial last Tuesday, André Pratte of La Presse wrote that Quebecor media were at war, focusing their bile on two targets, one of them clearly being us. Mr. Pratte referred to the attacks against us and the fact that Quebecor has turned what used to be fair competition into extreme fighting. “To Quebecor, no blow is too low, no matter the effect on the truth and the reputation of the people targeted,” he wrote.

The award for “attack of the week” definitely goes to the fuss surrounding Hard, a Web-based comedy-drama series from France that verges on caricature. It was broadcast on Canal + and was a hit in Europe. The series is available on TOU.TV.

Sun Media and some of their on-air personalities focused their attention on our Francophone culture and led the charge, taken up by Le Journal de Montréal, that we were broadcasting pornography. Of course we are not!

Since then, their newspapers and TV programs have been fuelling the so-called controversy.

On Wednesday, even Luc Lavoie, head of development at Sun News, wrote in Le Journal de Montréal: “Is it really the mandate of a corporation like Radio-Canada to enrich foreign producers and distributors by using public money to buy a series like this?” Yes, we enriched foreign producers and distributors to the tune of less than $15,000 for all three seasons of Hard. Anyone familiar with the industry would have been able to weigh our investment in the series and put it in perspective.

I could spend a lot of time citing similar examples, but this gives you an idea of the level of interest surrounding our activities and the tone it takes.

You’re allowed to express opinions against our strategy, programming or mandate, or make negative comments about our existence, the services we provide or the cost of the services. That’s not my point. We respect a diversity of voices. In fact, we encourage it.

Personally, I’ve never been afraid to enter into an intelligent debate on the issues of public broadcasting or on our mandate. But the debate has to be fact-based. Every time Quebecor attacks our brand or our people without basing them on facts or if their attacks are inappropriate, I will stand up, loudly defend the interests of the public broadcaster and re-establish the facts.

And when Luc Lavoie writes that Radio-Canada is the television arm of La Presse, when Sun Media personalities take pleasure in insulting us on the air, when Journal de Montréal columnists use their platforms to start rumours and give us advice on how to run our organization, I just smile, understanding they are running out of content.

And as a backdrop there are the letters from Pierre Karl accusing me of not advertising in Le Journal de Montréal or Sun Media newspapers.

I’ll close the tangent on Quebecor, which has already gone on much too long, by quoting Mr. Pratte: “How far will this company go to achieve its ends?”

Many studies and surveys tell us that Canadians appreciate CBC/Radio-Canada. The most recent example is the Ipsos Reid poll released last week about Canada’s most influential brands in which we took sixth place; we were the only media brand in the top 10. What pleases me the most is the criteria Canadians used to choose their brand rankings: (i) a leading edge, (ii) trustworthiness, (iii) relevance, (iv) presence, (v) corporate citizenship and (vi) engagement with Canadians. What a vote of confidence by Canadians in their public broadcaster.

At this point I’d like to leave you with a few ideas to mull over:

  1. There is no purely market-based economic model capable of supporting a broadcasting industry in Canada. The same is true in Quebec.
  2. If we want to sustain a television outlet for Canadian voices, then Canada needs to subsidize the Canadian broadcasting sector. That’s a choice we make as a society. That’s the current model.
  3. This model works best when everyone involved helps achieve the model’s objectives in proportion to the advantages they draw from it.
  4. There are no public broadcasters or private broadcasters. There are only a wide variety of businesses with hybrid funding models. We all benefit from the current model. We all have responsibilities.
  5. That’s a good thing. To ensure the survival of our culture and identity as Canadian citizens, we need a diversity of models and choices in our media. We need CBC/Radio-Canada as much as we need Quebecor.

With all this in mind, our commitment is to create public spaces where you can better understand the world, your country, your province, your city, your community and your neighbours along with securely and confidently expressing your opinions and sharing your experiences.

In my opinion, that’s the best way for CBC/Radio-Canada to keep proving our worth to you.

Thank you for listening.

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