Speaking notes for Hubert T. Lacroix, President and CEO, CBC/Radio-Canada before the Standing Committee on Official Languages

May 1, 2014, Ottawa

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Mr. Chairman, members of the committee, thank you for your interest in CBC/Radio-Canada. As the Chair mentioned, with me this morning is Patricia Pleszczynska, who is responsible for our Regional Services at Radio-Canada, and in particular, our services to francophone minority language communities, and Shelagh Kinch, who is responsible for CBC English Services in Quebec.

I would like to begin today by talking about three things: (i) the measures we announced on April 10 to balance our budget for this year, and what effect that will have on our services; (ii) our new conditions of license which reflect our commitment to minority language communities; and (iii) the choices we face in developing a new strategic plan, one that will ensure that the public broadcaster will remain strong and relevant to the Canadians who support it.

By now you have heard about the cuts we’ve had to make this year; of a total of $130 million, mostly due to market-related pressures and fixed cost increases. This will mean the elimination of 657 full time equivalent positions. We will also have to incur an additional one-time payment of $33.5 million to cover severance for these job losses. All of that is on top of the $390 million in financial pressures we’ve had to manage since 2009; first because of the 2008-2009 recession, then the Deficit Reduction Action Plan, the elimination of the local Program Improvement Fund (LPIF) by the CRTC, salary funding freezes by the Federal Government in five of the last six years including this year, and reductions in Canada Media Fund (CMF) funding.

You’ll find a detailed breakdown of the current job cuts by French and English Services and by region in your folders.

As you have heard, we will no longer compete for the broadcast rights to professional sports. Our amateur sports coverage will be reduced and future coverage will only be done on a break-even basis. These examples are tough choices that we needed to make in order to balance our budget for 2014-2015 while trying to protect our three strategy 2015 priorities: Canadian programming, service to the regions, and investment in digital. However, we couldn’t protect them completely. The numbers were simply too big and our margin for maneuvering too thin from the cuts we’ve had to make since 2009.

Let me give you an idea of what that means for our regional services.

We’ve had to cancel the rest of our regional expansion plans including a radio station planned for London Ontario. CBC’s ten minute late-night newscast in the north has been eliminated. CBC weekend TV news in Calgary and Edmonton is being consolidated into one regional newscast. CBC radio’s local afternoon show from Thunder Bay and Sudbury will now be a single regional program. On Espace musique, our daily regional morning program that currently broadcasts from 11 communities will be replaced by one single network program. And Quelle histoire, Radio-Canada’s daily network TV program from Ottawa-Gatineau, has been reduced from 90 to 36 episodes. A more detailed list of programs affected is in your folders.

These are all difficult cuts to make. Not only are we losing incredibly valuable talent, we are reducing the programming we provide to Canadians; in many cases we are replacing local programs with more regional ones. However our focus on the regions remains. We made the decision to protect our existing footprint: this means that we are not closing any stations or bureaus as we strongly believe that we should be delivering programming that originates and reflects the whole of our country. Let me explain.

Funding from the Local Program Improvement Fund was essential to helping us enhance our television services – particularly for francophone minority language communities. When the CRTC eliminated the LPIF, the logical decision would have been to cancel all regional programs supported by the fund. Instead, we took resources from elsewhere within our corporation in order to protect regional news, seven days a week, from all of our stations.

However, this came with a consequence. To keep our commitment to news, we cancelled all non-news programming in the regions; programs like Caméra boréale (out of Regina) which was produced by five young video journalists who told their travel stories throughout northern Canada to Francophones across the country. We also had to reduce the number of regional productions for the network show Tout le monde en parlait. LPIF funding from 2010 to 2013 supported the production of 20 shows from francophone communities outside of Quebec, such as La cloche de Batoche (Winnipeg), La sagouine (Moncton) and L’école de la résistance de Penetanguishene (Toronto). Unfortunately, with the new season which starts on May 6th, only one regional documentary, Le monstre de Pont-Rouge (Québec) will be aired on Tout le monde en parlait this year.

But, our commitment to the regions is also reflected in our new CRTC conditions of licence, conditions that we continue to meet. Radio-Canada’s seven regional stations serving francophone minority communities will offer at least five hours of local programming a week, on average over a year. In Montreal, CBC will offer Anglophones 14 hours of local television per week, including one hour of non-news programming.

Our conditions of licence require us to hold consultations with francophone minority communities in each of these regions: Atlantic Canada, Ontario, Western Canada and Northern Canada. In fact, Patricia has just returned from our western consultation, held Tuesday in Edmonton.

But, let’s be clear: the challenges we face are severe. All conventional television broadcasters are struggling with declining revenue as advertisers shift their money to live programs like professional sports, and increasingly to online. For CBC/Radio-Canada, our commitment to Canadian programming is much more expensive to produce and broadcast (particularly in prime time) then simulcasting American programs. Among the 18 most important international public broadcasters in the world, CBC/Radio-Canada now ranks 16th in terms of our level of per capita funding for public broadcasting (that’s third from the bottom). And, as i keep reminding everyone, we still don’t have access to a credit line to manage our cash flow.

The steps we announced earlier this month will balance our budget for this year but that’s not enough. We simply can’t be in a position where we have to keep cutting the public broadcaster every two years in order to balance yearly budgets.

We have already begun the work for our next strategic plan, the one that will take us to 2020. We’ll have more to say about that at the beginning of the summer, but I can tell you that we have to make some difficult choices about what kind of services Canadians will need from their public broadcaster, and what the best way is to deliver them. And we will need to do less.

In 2020, we need to be a smaller and more focused public media company, one that is more agile and can adjust as the media consumption habits of Canadians change. But we still need to live up to the spirit of the mandate that we were entrusted with, more than 75 years ago; to inform, enlighten, and entertain.

In many ways, I think you can see our future when you look to our recent coverage of the Olympic Winter Games. In Sochi, we reached over 33 million Canadians. More than 10 million Canadians – one in three – followed the Olympics on computers, tablets and phones; consuming about 14 million hours of video content offered live and on demand. Our French and English Services worked together to maximize our resources. We partnered with other broadcasters. We used the latest technology to deliver a unique personal experience to every Canadian, while simultaneously bringing Canadians together to celebrate their country. I believe that moments like this demonstrate the best of CBC/Radio-Canada. This is what we strive to give Canadians in the future.

Now I would be pleased to take your questions.

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