Speeches and Interviews

October 28, 2003

Speaking Notes for Robert Rabinovitch to the Standing Committee on Canadian Heritage

Speaking Notes for Robert Rabinovitch, President and CEO, CBC/Radio-Canada to the Standing Committee on Canadian Heritage, Ottawa, Ontario.

Thank you, Mr. Chairman, for inviting us to speak with you today about the impact of the recent reallocation of $10 million from CBC's Parliamentary appropriations as part of the Government's $1 billion dollar exercise.

With me today, is Daniel Gourd, Executive Vice-President of French Television, whom you have also invited,

Harold Redekopp, Executive Vice-President of English Television, whose service faces similar challenges to French Television,

And, Johanne Charbonneau, CBC/Radio-Canada Vice-President and Chief Financial Officer.

All are prepared to answer your questions, particularly with respect to the impact of the cuts in their area of operations.

As this is my first appearance before the Committee since it began its important review of the Canadian Broadcasting System, I would like to take the opportunity to congratulate the Committee for its report: Our Cultural Sovereignty.

We agree with many, many of your recommendations.

We are heartened by the keen understanding of public broadcasting evidenced in the report and the recognition of the important role CBC/Radio-Canada plays in broadcasting and in the cultural development of Canada.

In this report you showed, that you understand that adequate, stable funding is necessary for CBC/Radio-Canada to be able to meet its mandate and assigned responsibilities. You also recommended that our funding be increased to be able to do this.

You also recognized that the unique circumstance of the television production environment in particular, especially the length of time it takes to bring a program idea to the screen, means that multi-year funding is a necessity.

We are here today because you have asked us about the impact of yet another cut to our funding.

Let me say from the outset that the simple answer to the question is that the impact of this reduction will inevitably be on our programming.

On programming across all of our services: Television, Radio, Specialty services and New Media.

This $10 million reduction was apportioned in the following manner:

• $3.5 million to English Television
• $3.0 million to French Television
• $ .5 million to French Radio
• $ .5 million to English Radio
• $2.5 million to Corporate Components of the Corporation

My colleagues and I are willing to share some information on how we are implementing these budget reductions. I would also add that at this time we have managed to limit the impact on the regions.

While the impact of these reductions is on our programming, this will not be immediately visible because we had some advance warning and were therefore able to plan. As well, we were able to limit the inevitable effects on our workforce.

But this reduction cannot be seen in isolation, and when seen in a broader context, it has a much more significant impact.

As you are well aware, in the 2003 budget the Canadian Television Fund was reduced by $50 million over two years.

With reduced funding to independent producers, broadcasters, including CBC/Radio-Canada, had to increase their own commitments to productions through enhanced licence fees and equity investments, or see many projects simply die.

For CBC/Radio-Canada, this means that approximately 100 hours of programming — original, Canadian programming — will not be produced and will not be seen.

The value of CBC's Pension Plan, like other employers' pension plans, is affected by changes in interest rates and the stock market. As a result, the contribution holiday that both the Corporation and its employees have enjoyed since January 2000 will come to an end in January 2004.

This means that the Corporation faces an additional $43 million per year expenditure that for the last several years has been going into enhancing our programming and our services.

I don't want to be misunderstood, we are not complaining or wishing to shirk our responsibilities in this regard, but an additional $10 million reduction to our appropriations in this context clearly has a compounding effect.

In addition, we must often contend with the unknown, and with unplanned events. This year, the war in Iraq, multiple provincial elections, natural catastrophes such as the forest fires in the West, the Eastern North America blackout, and Hurricane Juan have put a greater strain on our services than anticipated. But these are not the types of events we can ignore or give short shrift. As the nation's public broadcaster, we have an even more important role to inform in these times.

As our Chair Ms. Taylor noted, our appropriations in constant 2003 dollars are $319M lower now than in 1990. Yet, as you know we provide more services on more platforms.

The cost of doing business is also consistently on the rise. For example, according to the CTF, in 2001 it cost on average $990 000 to produce one hour of high quality Canadian drama. In 2003, the average cost of production has risen substantially to $1.1 million.

Nonetheless, we have been able to support our services in this environment. We have so far been able to limit the impact through internal efficiencies, especially in the areas of real estate and technology.

Over the past three years, we have generated proceeds of $15.3 million from the sale of real estate assets. We are also generating approximately $5 million per year through various leases.

We have restructured and re-negotiated maintenance budgets without reducing service and have started an energy conservation program, with combined annual savings of $4.2 million.

Moving forward, we anticipate additional savings. For example, a number of ongoing technology projects — once fully implemented in the next couple of years — will yield over $7 million in annualized savings.

In all, generated savings will help to offset some of the rising costs of doing business. We estimate that, beyond the funding received from government, CBC must absorb annually $12M in salary commitments, inflationary pressures such as increased rights fees, and so on. This is new money that we need to find every year.

It is within this total context of decreasing real appropriations, increasing costs of doing business, increasing commitments for pension plan payments that the additional cut of $10M is a bitter pill to swallow.

This lack of stability and predictability in our funding levels reduces our ability to create programming and to consistently increase our services and the value of these services to Canadians.

I believe that you, this Committee, have already deciphered the solution. In Chapter 6 of Our Cultural Sovereignty, your recommendation 6.1 states, and I am quoting:

"The Committee recommends that Parliament provide the CBC with increased and stable multi-year funding (3 to 5 years) so that it may adequately fulfill its mandate as expressed in the Broadcasting Act."

Mr. Chairman, I am not sure that I could have said it any better than that.