Speeches and Interviews

April 23, 1998

Empire Club of Canada, Toronto

Perrin Beatty

Like 30 million other Canadians, everyone in this room is a shareholder in the CBC. Every Canadian has the right to judge our return on investment, to assess the increase in shareholder value and to hold us to account.

How do you measure an organization like the CBC? The comprehensive audits by which public sector institutions are often assessed have three components:

• financial;
• compliance; and
• value for money.

The value for money aspect, specifically, focuses on whether resources are managed economically and efficiently and whether operations are carried out effectively.

The CBC can and should be judged on all those standards — financial and non-financial.

My report to you today as citizens and shareholders is quite simple. Three years ago, the CBC was in a state of chaos. But out of chaos has come progress, out of conflict has come direction, out of crisis has come discipline, out of hard times has come stability of funding and clarity of purpose.

Plenty of people were ready to throw in the towel on the CBC three years ago. They thought the financial imperatives could never be squared with our cultural aspirations.

There were those who claimed the CBC would die of inflated bureaucracy and others who thought it would die from massive cutbacks and a lack of vision. Both camps were completely wrong. You can't have a wake without a corpse and the CBC that today broadcasts record amounts of Canadian programming is alive and well.

It is true that the past 36 months since I came to the CBC have been turbulent.

A planned government cut to the Corporation's budget was both confirmed and deepened. Coupled with other cost increases and revenue impacts, it meant that the financial challenge to be met more than doubled to over $400 million per year.

New channels, open borders, copyright reform, industry convergence and audience fragmentation have dramatically altered our perspective and challenges. Unprecedented labour negotiations posed an ominous threat to our ability even to stay on air. Technology has unleashed a multi-channel and multimedia universe.

The CBC met the challenges head on.

We undertook a massive corporate turnaround. We slashed spending by the largest amount in our history. We reduced administrative and managerial personnel to the point of matching and bettering private sector benchmarks. We gave creative control to people who actually produce the programs and imposed financial accountability on everyone.

We simplified and streamlined the CBC from top to bottom. It is a very different Corporation from the way it was in the past.

All too often, when institutions are confronted with major challenges, services are cut, but the head office remains untouched. I felt it was important that we lead by example, starting at the top and at the centre before we touched our programs.

In the past 36 months, the CBC has cut its annual expenditures by more than $400 million, and we did it without closing any stations. In fact, we went back into Alberta where we had consolidated our supper-hour newscasts a few years before and re-established separate programs in Calgary and Edmonton.

While we didn't close any stations, here is what we did do:

• First, I reduced the number of Vice-Presidents by almost half and headquarters staff by about 60%. Throughout the CBC, we have eliminated more than 3,000 staff positions.

• We sold off the head office building and consolidated its staff into our existing production facilities in Ottawa, connecting head office with the reason for our existence.

• We reached new collective agreements that modernize our work practices.

• We reduced corporate management costs to the point where they are now just over one cent on the dollar. And what is the financial picture today? When we made our reductions, the government provided funding to meet some of our one-time downsizing costs and lent us a further 50 million dollars to cover the rest. We negotiated a 14-year repayment schedule.

Today, I am able to announce that the CBC has repaid that 50 million-dollar loan 12 years ahead of schedule. Additionally, we have deliberately managed our finances this past year in a way that will allow us to reinvest in programs and services for our audiences.

There is other good news, as well. On the first of this month, we began a five-year period for which the government has guaranteed stable funding. Taken together, these facts mean that we have now emerged successfully from a long dark tunnel that only a short time ago appeared to have no end.

Producing these results was not an easy academic exercise. It was a painful real-life experience. I am particularly grateful to the managers and staff of the CBC because they not only met every financial target set for them, but they did so while providing Canadians with substantially improved value for money. Thanks to the dedication of our employees and the commitment of our unions to seeing the Corporation survive, we have been able to reach new collective agreements with all our talent unions and seven of our eight traditional unions without having to endure a strike that could have caused us to go off the air. We have been working to reach agreement with the eighth on terms comparable to those agreed to by the other seven.

Our employees have surprised the critics and may even have surprised themselves. They have introduced new programs, new services and new technologies to serve Canadians better at the same time as facing up to the huge financial restructuring.

New programs?

Well, we have Canadianized English TV prime time. That has meant replacing 200 hours of American shows a year.

Francophone Newfoundlanders now have a supper-hour news program based in Atlantic Canada, instead of getting their supper-hour news from Montreal.

Radio One now provides listeners with the best in the world 24 hours a day.

New services?

We're opening a new radio station in Victoria, and new pocket bureaus in London, Trois-Rivières and Sherbrooke, and additional services in Kapuskasing, Hawkesbury and on the Arctic Circle in Cambridge Bay.

Alone or in partnership with others, we are applying for six new specialty channels that will allow us to serve TV audiences in new ways.

And just this Sunday, 20,000 people took part in our Open House as we moved our Radio One service here in Toronto to FM. CBC is now readily available to the 50% of the Toronto radio audience who never flip to the AM dial. Earlier this year, we did the same thing in Montreal for both English Radio and French Radio.

New technologies?

The CBC is leading the industry in preparing for digital radio and TV. We have both the content and the expertise to benefit from these new technologies.

CBC Radio became the world's first public broadcaster to offer programs live on the Internet.

For its part, Newsworld launched the first Canadian news service with full motion video on the Internet. RDI provides a similar service for francophones here and around the world.

We are the only Canadian broadcaster with a major presence on the World Wide Web. We are already doing much more than simply distributing the spillover from our broadcast services. We are developing uniquely designed programming for the web. As an example, for the last several months, our French services have maintained an Infoculture site, which uses this new technology to bring cultural news and activities from across the country to francophones.

I can inform you today that we will launch a similar site in English in June, which will allow us to strengthen our partnership with Canada's cultural community. This will be Canada's most extensive online culture magazine, an up-to-date resource for arts and cultural news from across the country and around the world. It demonstrates how the Corporation is embracing new technology to serve Canadians in new and innovative ways.

All of these programming, service and technological improvements are buttressed by both subjective and objective tests of value for money.

Last month, the CBC won more than three times as many Geminis as our closest competitors. French television has also recorded continuing successes at the Gémeaux. We brought home an international Emmy from New York. And I leave tonight for Montreux, where we will receive an honourary Golden Rose recognizing the ongoing quality of CBC programs as the festival's leading first-prize winner from among all the broadcasters in the world.

Last season, despite the cuts and increased competition, ratings were up for both television and radio in both French and English. We intend to extend both the reach and the share of our services.

And what better value for money could there have been than opening a new radio station during this year's ice storm to meet the needs of those locked in darkness on Quebec's South Shore? While the ice storm lasted, French Radio used our new FM frequency in Montreal to put a temporary service into the Black Triangle.

I am not claiming perfection for the revitalized CBC, but I am claiming solid examples of genuine value when compared even to the big boys operating from New York and Los Angeles.

This February, our services broadcast over 600 hours of the Nagano Winter Olympics, compared to 135 hours broadcast by CBS - and we did so with fewer than one-third of the people. Our ratings were up over 20%. Theirs were down substantially. And, contrary to predictions, it didn't cost the taxpayers a cent. We covered all of our direct costs and generated several million dollars to put back into the operation.

Major dailies in Detroit, Buffalo, Seattle, Houston, Sacramento and New York all wrote that CBC came out with the gold medal for coverage.

The International Olympic Committee recognized the quality of our work in Atlanta and Nagano last month when it awarded us the rights for the next five Olympic Games.

That is quite some distance to have traveled for a corporation many believed to be on its last legs just a couple of years earlier.

The CBC is, quite simply, healthier, more efficient, more flexible and better received by the public. And the guarantee of five-year stable funding means that, for the first time in a decade and a half, we can plan based on our opportunities, and not on our limitations.

These are all significant steps forward. They meet the first two tests of any comprehensive audit: financial responsibility and value for money. That leaves the third measure of corporate accountability: compliance.

For the private sector, compliance means following laws and regulations. For the CBC, however, meeting the tests of public policy and wishes of the public are not just regulatory requirements. They are our raison d'être.

The CBC's mandate is not profit. Its mission is not a higher stock price. The CBC's role is to serve Canadians.

When we were one of only one or two services in each community, part of our mission was to make sure Canadians had access to American programs. In 1998, that role is not only unnecessary, it is irrelevant and financially irresponsible. Canadians do not subsidize the CBC in order to have it be a carbon copy of CTV or Global.

Seventy years ago this year, the Aird Royal Commission on Canada's broadcasting system found unanimity on one fundamental question — that Canadians want Canadian broadcasting.

These words underlie the purpose of the CBC now and as far into the future as we can imagine. To be resolutely Canadian. To provide a home for Canadian voices. To display Canadian images. To be a Canadian meeting place. To guarantee the flourishing of Canadian expression, Canadian diversity, Canadian content, Canadian culture and Canadian identity.

What identifies the CBC is its Canadian programs. Anyone can offer programming but only the CBC has Canadian programming as its mission and its mantra.

As a public broadcaster, we have special responsibilities. If private sector television stations were required to drop their American programming in prime time, they would go out of business. It can cost 10 times as much to produce a Canadian drama as to import an hour of American television. There is nothing inherently good or bad about that. It is, however, a large part of why the CBC exists.

If French-language radio stations with razor-thin profits had to finance serious radio journalism, they would also go out of business. That, too, is a real reason why the CBC exists.

The CBC can and must accept the challenges of broadcasting programming that others cannot put on. We can and must offer a broadcast schedule designed in Canada. We can and must ensure healthy, Canadian-based programs for Canadian children. We can and must celebrate the arts in Canada. We can and must put Canadians in touch with each other across the barriers of geography, culture and language.

Those are the touchstones that will keep the CBC relevant to Canadians. That is the basis on which we will work to earn our way with Canadians every day.

Let me give you an example of our ability to bring Canadians together. Today we are announcing Remembering Canada at War; a slate of special programming that pays tribute to Canada's war veterans. Between May 9 and June 15, CBC Television will run a series of 11 outstanding documentaries, news specials and drama. It will include, among others, VE-Day Remembered, D-Day Plus Fifty, Forgotten Warriors, No Price Too High, and Dieppe. Our goal is to help audiences better understand the extraordinary contributions made by Canadians at a critical period in the world's history.

No other broadcaster could or would broadcast such a series to a national audience of this size. But no other broadcaster has either our resources or our responsibilities.

The CBC has always been at its worst when it tried to copy somebody else. It has always been at its best when breaking the mold by pioneering with téléromans or As It Happens, the live double-ender interview, La Petite Vie or This Hour Has 22 Minutes. To secure our future, we need to play by our own rules, not Hollywood's.

To be identifiably and innovatively Canadian is at the heart of the ongoing move to Canadianize CBC English television throughout the entire day every day. That will mean replacing almost one thousand hours of programming a year. It will not be easy but we will do so with extraordinary enthusiasm.

We are going Canadian because it is what we do best. It is what people search us out for. It is what makes us distinct. And it is what Canadians want and the country needs.

Sometimes people like to point nostalgically to the past as the Golden Age of Canadian broadcasting. I believe that the best years of Canadian broadcasting are not behind us: we are living in them right now.

When we were packing up our old head office in Ottawa, we found a milk glass that the CBC distributed during Canada's centennial year. Printed on the glass is the schedule for our English Television network. The highlights are such shows as The Beverly Hillbillies, Ed Sullivan, Get Smart, Red Skelton, Green Acres, Bob Hope Theatre, The Man from Uncle, Rat Patrol, Hogan's Heroes, and Bonanza. No doubt they were all great shows, but they were shows reflecting someone else's culture and values, not ours.

I am saving this glass, and I will use it to drink a toast when we complete full Canadianization of our English TV schedule. That is when we will finally have done our part to accomplish Aird's vision from seven decades ago.

The Canadian broadcasting system is built on two complementary pillars, one private, the other public. If either were lost, the whole structure would be weakened.

To serve Canadians better, the CBC will use every opportunity to build partnerships with the private sector. We have already entered into production agreements with Global, Netstar and WIC. And we have forged creative new agreements with TVA, Atlantis, Bell, Power Broadcasting, ExpressVu and Rogers Wave@Home, to name just a few.

Today, we broadcast more programs produced by independent producers than ever before. There may have been a time when we were so large or dominant that we could afford to go it alone, but that time is long since past. The way I look at it, every dollar we can save by sharing infrastructure or leverage out of new partnerships is one more dollar we can devote to Canadian programming. Our job is not to own transmitters or to fall in love with technology. Our mission is to connect Canadian eyes and ears with Canadian content.

There is no better example than the recently announced undertaking of the first ever television history of our nation: A People's History of Canada/Une histoire populaire du Canada.

This sweeping series will be produced simultaneously in French and English for audiences in both official languages, providing one of the first occasions when Canadians from every background will see a common interpretation of our history. It will be broadcast over two years beginning as the new millennium dawns, and will cover the entire sweep of our national saga from the arrival of the first inhabitants more than 12,000 years ago up until the end of this century.

This is the CBC's millennium project. It is a completely Canadian project. It will draw upon the CBC's best creative minds and upon leading experts from outside the CBC. We will find the money to pay for it, not by turning to government for special funding, but by developing partnerships with the private sector. We would welcome the chance to build those partnerships with many of you in this room.

This epic history project is a stellar example of why Canadians support the CBC and an example of the CBC's unique role in forging bonds of identity.

Looking ahead, we know that we face a number of crucial decisions about the CBC's future:

• As the range of choices available for every hour of viewing and listening grows exponentially, the competition for audiences will become even more intense. We need to ensure that the CBC is able to connect with Canadians.

• Changes in technology present a hundred new ways to serve our audiences, but they can be both expensive and risky. We must decide whether and when to introduce technologies like high-definition television.

• At present, the economics of distributing our signals makes it cost effective to maintain our terrestrial distribution system. But the economics may change in the future, making it worthwhile for us to redirect resources from distribution into programming.

• To protect our brands and to use our content on both old and new media, we need to own more of our programming. Otherwise, we risk losing the assets we need to strengthen our identity and build partnerships with others.

• We are proud of our progress in reflecting the changing face of Canada, but I believe we must do more to serve young people and Canada's many cultural communities.

All of these are important issues, and there are scores of others to be faced as well. We are currently engaged in an intensive exercise to determine new strategic directions for the CBC. What is important is that we have gone from being a corporation that many people were writing off just three years ago to one that is stronger and better positioned for future challenges and opportunities than we have been for a long, long time.

We will demonstrate sound stewardship of financial resources, value for money and compliance with public needs. Through economy, efficiency and effectiveness, we will maximize the benefits of your investment in Canadian culture, Canadian content, Canadian programming, Canadian creativity.

The CBC owes that to you as shareholders. We owe that to you as taxpayers. We owe that to you as citizens.