Opening Remarks from Rémi Racine, Chairman of the Board, Standing Senate Committee on Transport and Communications

December 10, 2014, Ottawa

Chairman, senators, on behalf of the board of directors of CBC/Radio-Canada I welcome the opportunity to meet with you today, for your study of “The challenges faced by CBC/Radio-Canada in the context of a changing broadcasting and communications landscape”.

The members of the Corporation’s board of directors are appointed by order in council, as set out in the Broadcasting Act. Our work is supported by five board committees; on English and French language broadcasting; on human resources and governance; on infrastructure; on strategic planning, and; an audit committee. The board meets regularly about 8 times a year. The minutes of its meetings are posted on the Corporation’s website.

It is the board’s responsibility to oversee the business of the Corporation. The board approves CBC/Radio-Canada’s corporate plan, and annual report, its financial statements, as well as its strategic and business plans. The board does not participate in programming decisions or the day-to-day operation of the public broadcaster.

Earlier this year the board approved the Corporation’s new 5-year strategic plan; A Space for Us All. It is the Corporation’s response to the challenges in the changing broadcasting landscape that this committee has been asked to study. And that plan calls for nothing short of a transformation. I think it’s important to point out that the strategic committee of the board followed every step in the development of this plan with regular meetings with the Corporation’s senior management.

The board supports this plan because, frankly, Canadians habits are changing; they are now consuming programming all day, on every device they own. CBC/Radio-Canada needs to make changes in how it creates and delivers programming in order to remain relevant and present in the lives of Canadians. It means shifting more focus to digital content while not ignoring traditional services on radio and television. It means providing new kinds of services in more efficient ways.

In many ways technology has helped us to become more efficient. Automation and technology means fewer people are necessary to produce radio and television programs. By 2020, there will be 1500 fewer employees at the Corporation. There will be less in-house production and more programs by Canadian independent producers. The Corporation will have a smaller real estate footprint as it focuses its efforts and resources on the content people use rather than on infrastructure. The Corporation is also modernizing the way it provides local services by tailoring its service – TV, radio, and online - based on where the audience in each community is going for their information, and finding ways to engage with them all day long. These changes have already begun. The Corporation will be announcing further details of its local news strategy tomorrow.

What the Corporation is doing will make CBC/Radio-Canada more flexible, and more adaptable. But the challenge the industry is facing is bigger. It is the conventional broadcasting model in Canada that needs fixing.

As the CRTC heard during its recent “Talk TV” hearings, conventional television revenues are shrinking. The current broadcasting system can no longer sustain the creation and distribution of the Canadian content Canadians expect. This is not simply a CBC/Radio-Canada problem but a Canada problem.

The fragmentation of Canadian audiences has never been so great. Conventional English television’s share of total advertising in Canada has dropped by 25% just since 1990. Private broadcasters are tied to a model that forces them to simulcast American programming on Canadian channels during prime time, when most people are watching television.

The public broadcaster has a public mandate; to contribute to the cultural fabric of Canada through the creation of programs that reflect and promote Canadian talent; to reflect and serve the needs of all Canadians in both official languages; to inform, enlighten and entertain. But it is more and more difficult to do that when every year the Corporation is able to do less. We continue to gain efficiencies, but at some point, it becomes more and more difficult to find savings. That means trimming elsewhere; fewer Canadian programs, fewer episodes, more repeats.

The Corporation has proposed some solutions which this committee should consider.

First, conventional broadcasters should get paid by cable and satellite providers for the content providers are currently taking for free and reselling to Canadians. Some have tried to claim that in the case of CBC/Radio-Canada, this would be “double-dipping” because of its parliamentary appropriation. It is not. The appropriation has never covered the cost of all of our services. Think of VIA Rail. Like us, VIA Rail receives an appropriation yet no one expects to ride the train for free. Currently only specialty channels are paid for their content, conventional broadcasters are not. With the shift in advertising to digital, that inbalance is not sustainable.

Second, Canadian programs won’t exist without funding. Audiences are simply not large enough in Canada to cover the cost of making quality programs. The Canada Media Fund has been crucial to the continued existence of high priority Canadian drama. The same is true for news. As you have heard, local news remains a huge priority for Canadians. But the loss of the local programming improvement fund has meant fewer resources for the local news Canadians want. The creation of a local news fund for all conventional broadcasters could address that.

Government-wide restraint, together with a broken advertising model, poses a particular challenge for CBC/Radio-Canada. It continues to do what is necessary to balance its budget, as it must, but it will produce fewer Canadian programs. It is time for a frank discussion with Canadians about public funding levels for public broadcasting. And Canada has the highest need for public broadcasting given its size, complexity and proximity to the United States.

Yes, it receives a billion dollars a year in parliamentary appropriation. CBC/Radio-Canada, with its funding, and with the commercial revenue it generates, provides services to Canadians that no one else will; essential services to Canada’s north and to remote regions; commercial-free national radio services; a television schedule that is overwhelmingly Canadian – particularly in prime time, and which includes nation-building programming. And what we hear from Canadians is that they want more from public broadcasting.

To be clear, I believe the Corporation has developed a strong plan to ensure it can navigate in a changing global media landscape. If Canadians want more, then investing in public broadcasting needs to be a priority.

Thank you for your time. I would be pleased to take your questions.

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