Opening Remarks from Hubert T. Lacroix, President and CEO, at the Standing Senate Committee on Transport and Communications

February 17, 2015, Ottawa

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Remarks to the Standing Senate Committee on Transportation and Communications

Chairman, senators, thank you for another opportunity to meet with you for your study on CBC/Radio-Canada.

With me today are Heather Conway and Louis Lalande, the heads of our English and French Services.

I met with you almost a year ago. At that time, I outlined some of the changes transforming the broadcast environment, particularly the growth of digital content. I told you how CBC/Radio-Canada was responding, with the kind of partnerships, collaboration, and innovation that we showed in our successful presentation of the Sochi Winter Olympics.

Since then, you’ve met with our ombudsmen, our heads of news, and with our managers and staff in eight locations across the country. We’ve shared with you independent audience research, including an environmental scan, which outlines our performance, our industry, and how it’s changing.

Yet in reviewing the committee’s discussions, I keep hearing the same misconceptions about us. One example: after 14 months of hearings, some still insist that CBC Television is “a failure.” As proof, some keep repeating that only “2 per cent of the people in the province of Alberta watch CBC.” Both of those statements are wrong.

According to Numeris BBM, the company responsible for viewing measurements in Canada, the prime-time audience share for CBC Television in Alberta is 8%. CBC Television’s national prime-time share is 8.2%. That compares to 12.3% for CTV and 7.8% for Global, and I will remind you that their schedules are filled with American programs. CBC’s schedule is overwhelmingly Canadian. All of the other broadcasters have shares of less than 4%.

If our numbers make CBC Television a “failure,” then every broadcaster is a failure.

Let me explain what an 8.2 audience share represents. It’s the 1.9 million Canadians who watched the first episode of The Book of Negroes; the 1.6 million enjoying Schitt’s Creek; the roughly one million Canadians tuning in each week to This Hour Has 22 Minutes, Rick Mercer Report, Murdoch Mysteries, Dragon’s Den, and Heartland. It's an average of 862,000 Canadians who watch The National on CBC News Network and our main channel every night. That’s millions of Canadians who enjoy the Canadian programs we offer on CBC Television.

Are ratings important? Of course they are. We can’t be a public broadcaster without a public. Ratings are also important as we depend on advertising revenue for anywhere between 20 and 25% of our budget. Yes, in our funding model, ad revenues are critical to the services we provide to Canadians.

But our mandate is much more than a focus on ratings. It’s about being relevant to citizens. That is why audience reach – that is, the number of people who actually use one of our services – is as important as audience ratings. Well, CBC/Radio-Canada’s reach is 87%: 87% of Canadians watch or listen to something from their public broadcaster every month.

I can appreciate that the rapid changes to the broadcasting industry can be difficult to keep track of. As you consider your report, I’d like to focus your attention on the four big challenges facing the public broadcaster:

  • First, how to continue to invest in Canadian programs and services, in the current environment?
  • Second, how to continue to reach Canadians with quality Canadian programming, when an almost unlimited number of global choices are available to them;
  • Third, how to serve those Canadians who are quickly shifting to digital platforms, without leaving behind those who still rely on our traditional services;
  • And fourth, how to ensure that we do all of that today, while still remaining financially stable enough to avoid having to cut people and services every year just to balance our budgets.

Those are the challenges we face.

And here’s what we’ve been doing about it.

In June, we launched our strategic plan which will lead us towards 2020. Our focus is on putting what resources we have into prime-time television programs, successful radio programs, and in the development of content for digital and mobile platforms. This shift requires a substantial investment. Since our government appropriation is shrinking and is not adjusted to inflation, and ad revenues are moving to digital platforms, we have had to cut services and let go talented people to find the dollars necessary to execute this transformation.

Our goal is that, by 2020, we will have doubled our digital reach so that 18 million Canadians, one out of two, will use CBC/Radio-Canada’s digital services each month. And that, in our surveys, three out of four Canadians will answer that CBC or Radio-Canada is very important to them personally.

Many Canadians would like us to do more; more local news; more Canadian programs on radio, television, and the Internet; but additional services are simply not possible with our current financial situation.

I’ve been talking about a broken revenue model for months. And I’m not alone. The heads of CTV and Rogers have been saying this too because it’s affecting all conventional television broadcasters. It is putting at risk the continued existence of Canadian programming, particularly local programming, both news and non-news.

We are focused on doing what we have to do to meet these challenges. We have been quick to adapt, and we have made enormous strides in maximizing our resources and streamlining our operations. Few public broadcasters in the world, if any, provide more services for less money than CBC/Radio-Canada.

We have proven that with targeted investment, we can be industry leaders in areas like digital news. So we continue to shift resources and find efficiencies, but the fact is that our current situation is simply not sustainable over the longer term.

And it isn't just about us. The media universe is at a crossroads. It is increasingly dominated by giant, global, digital players – Google, Facebook, Amazon, Apple and Netflix. This period of dramatic change will offer great opportunity for communities with the presence of mind to seize the chance.

Some countries are already taking steps to invest in the production of their national content – the European Union, the UK and China, for instance. Others, like the UK from which you have just returned, will spend the next two years planning and debating how to ensure that their public broadcaster plays a commanding role not just in Britain but in the world.

What will Canada do? If I have one wish for what this committee's report might contain, it is that you challenge CBC/Radio-Canada to be everything it can be for this country in the digital age.

If Canada wants the tools to play in this league, it will have to decide to build them. There is no one outside of the United States who thinks the market on its own will provide that opportunity. But with the right support, with a public/private approach that has served Canadians for the last 80 years, there is no one we can't beat. We are as creative, as efficient and as ambitious as any in the world.

So challenge us. Don't shrink us to mediocrity, challenge us to be great. Give us the basic tools to compete in the world and we will shine.

Thank you for your time.

About CBC/Radio-Canada

CBC/Radio-Canada is Canada's national public broadcaster and one of its largest cultural institutions. The Corporation is a leader in reaching Canadians on new platforms and delivers a comprehensive range of radio, television, internet, and satellite-based services. Deeply rooted in the regions, CBC/Radio-Canada is the only domestic broadcaster to offer diverse regional and cultural perspectives in English, French and eight Aboriginal languages.

A space for us all is CBC/Radio-Canada’s strategy to transform the public broadcaster, and ensure that it continues to fulfill its mandate for Canadians, now and for future generations. Through to 2020, the Corporation will increase its investment in prime-time television programming and continue to create radio programs of the highest quality, while promoting the development of digital and mobile platforms and content.

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