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As announced in the 2012 federal budget, through its Deficit Reduction Action Plan (DRAP), the government has chosen to reduce CBC/Radio-Canada's appropriation by $115 million over three years.
This targeted reduction, combined with the unavoidable costs and investments required to continue to transform into a modern public broadcaster, means the Corporation actually faces financial pressures amounting to $200 million over the next three years.
CBC/Radio-Canada is determined to face this challenge head-on by implementing a three-year plan focused on the following:
2015: Everyone, Every way
2015: Everyone, Every way: CBC/Radio-Canada serves the second largest and one of the most diverse countries in the world. Our five-year strategy, 2015: Everyone, Every way, recognizes that the public broadcaster can't be all things to all people. But, in its scope, it stakes the claim that we can be something for, and mean something to, every Canadian. Whether it's connecting them to this country, to their communities, or to each other as individuals with their own realities and interests, CBC/Radio-Canada will be there — for everyone, every way.
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Increasing revenues
What You Should Know
As a starting point, CBC/Radio-Canada will look to increase its self-generated revenues by $50 million over three years, as a way to minimize the need for reductions.
CBC/Radio-Canada will increase its revenues by better leveraging existing television advertising by maximizing the return on its most popular shows. We'll also aggressively pursue digital advertising revenues.
We'll also look to our real estate portfolio to generate more revenues. In the short- to mid-term, much of the additional revenues will come from leasing significant square footage in the Canadian Broadcasting Centre in Toronto. The Corporation will also sell some of its buildings to become tenants in more efficient and less-costly premises.
By implementing this self-generated revenue diversification strategy, CBC/Radio-Canada will ensure more robust long-term funding for the public broadcaster.
Despite all of this, CBC/Radio-Canada will also need to add advertising and sponsorship to both CBC Radio 2 and Espace musique as a means of further increasing its revenues. The Corporation has already submitted an application to the CRTC for a change of its licenses.
“This decision strikes the balance between protecting the core values of CBC Radio as a whole while providing us with a much needed new source of revenue,” says Kirstine Stewart, Executive Vice-President, English Services. “It will not change the direction or strategy of CBC Radio 2 and our digital music service, CBC Music – they will remain deeply committed to supporting and showcasing the best in Canadian music across a broad range of genres.”
“We're very aware of the major change involved. That said, the decision is founded on the need for new revenue streams to absorb part of the cuts imposed on us,” says Louis Lalande, Executive Vice-President, French Services.
The decision to add advertising and sponsorship won't change the programming mandate of CBC Radio 2 and Espace musique. Both CBC Radio 2 and Espace musique remain deeply committed to supporting and showcasing the best in Canadian music across a broad range of genres, so that they can continue to be a point of discovery for Canadian music fans – with more multi-platform music content than any other broadcaster in Canada.
What this will mean
- Helps to preserve CBC Radio 2 and Espace musique
- Ensures we become more financially flexible
- Minimizes the need for further reductions
- Up to $50 million in revenues over three years
What it won't mean
- Ads on CBC Radio One or Première Chaîne
- Radio programming becoming more like the commercial broadcasters
- A reduction of the quality of our programs or a shift in our core values
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Transforming Radio Canada International (RCI)
What You Should Know
In line with plans to modernize the public broadcaster, as outlined in Strategy 2015, Radio Canada International (RCI) will undergo a transformation that amounts to phasing out its shortwave and satellite services so it can focus on webcasting. This will account for almost $10 million in annual savings for CBC/Radio-Canada by 2013-14. RCI's transformation is consistent with currently shifting media consumption behaviours, as well as strategies adopted by other public broadcasters.
BBC World has already reduced its shortwave services in a number of markets and adjusted its language sections accordingly. Voice of America, Deutsche Welle and RFI are also reviewing their offering and delivery methods. Switzerland's Swissinfo broadcasts on the web only.
“From now on RCI will provide multilingual service broadcasting in English, French, Spanish, Arabic, and Mandarin that strives to help audiences discover and especially understand democratic and cultural life and values in Canada,” says Hubert T. Lacroix, President and CEO.
As well, RCI will provide national and international audiences with online content in five languages (French, English, Spanish, Arabic, and Mandarin) instead of seven. The Russian and Brazilian sections of RCI will be shut down. This allows us to concentrate our efforts on what are among Canada's largest communities of diverse origins.
Following this decision, CBC/Radio-Canada will be closing its shortwave transmission site in Sackville, New Brunswick.
What this will mean
- End of satellite and shortwave transmission
- End of the production of RCI news broadcasts
- Shutdown of Brazilian and Russian sections of RCI
- Almost $10 million in annual savings for CBC/Radio-Canada by 2013-14
What it won't mean
- Shutdown of RCI
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Accelerating the shutdown of analogue transmitters
What You Should Know
To minimize the need for reductions, CBC/Radio-Canada took a close look at the effect that the evolution of technology has had on the services it currently provides. As a result, the Corporation has decided to shut down its analogue over-the-air television broadcasting system sooner than anticipated. This represents almost $10 million in savings for CBC/Radio-Canada by 2013-14.
While the system is used by very few Canadians, the useful life of CBC/Radio-Canada's analogue network is approaching its end, and becoming increasingly expensive to maintain. Analogue over-the-air TV service will cease on July 31, 2012.
“We’ve always said that we wouldn’t be able to continue broadcasting analogue television signals forever given the obsolescence of analogue technology and its disappearance throughout the world,” Steven Guiton, Vice-President and Chief Regulatory Officer, says, adding that, “In Canada, only 1.7% of the population still receives our television signals via an analogue, over-the-air transmitter. Given our financial circumstances, we’re accelerating the decommissioning of our analogue over-the-air transmission network.”
Continuing to operate 620 transmitters to reach 1.7% of the population would not be an efficient use of our resources at the best of times; it is certainly not viable given the current circumstances.
Over 98% of Canadians won't be affected by this and will continue to receive their CBC and/or Radio-Canada television signal the same way they do today – via cable, satellite, or digital over-the-air.
By the numbers
Number of analogue transmitters slated for shutdown 620 Canadian TV watchers using CBC/Radio-Canada's analogue signals 1.7% Canadian TV watchers using over-the-air (digital + analogue) 5% Canadian TV watchers subscribed to cable or satellite 95% “Tuned-out” Canadians (i.e., “no TV”) 7% Number of CBC DTV transmitters that will continue operation 14 Number of Radio-Canada DTV transmitters that will continue operation 13
What this will mean
- CBC/Radio-Canada will shut down its 620 analogue transmitters across the country.
- You will no longer be able to receive an analogue television signal from CBC/Radio-Canada over the air starting July 31, 2012.
- This represents almost $10 million in annual savings for CBC/Radio-Canada by 2013-14.
What it won't mean
- A reduction in local programming
- A diminished commitment to our regional presence
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Reducing costs and doing things differently
What You Should Know
Over the last several years, there has been a continual focus on operating and production efficiencies. Year after year, CBC/Radio-Canada has managed to squeeze annual savings of tens of millions of dollars out of our assets. This work will continue. In fact, we aim to save approximately $100 million over the next three years.
“We continue to eliminate things that do not move us closer to achieving the goals we set out in Strategy 2015,” says Suzanne Morris, Vice-President and Chief Financial Officer. “We’ll also implement more streamlined work and production methods, reduce costs of production, consolidate activities where possible, and reduce our overall real estate footprint.”
Click on the buttons below for a more detailed look at the measures CBC/Radio-Canada will be implementing.
CBCRadio-CanadaCorporate Services
CBC
Measures that CBC will implement to reduce costs:
- Scale back the number of live music productions on the radio. In the future, we will record between 100–150 a year.
- Eliminate Drama programming from the Radio One schedule.
- As part of the Sports Strategy developped earlier this year, we will be narrowing the focus of sports genres. Sports Weekend to become a seasonal program, maintaining a focus on Winter amateur sports – more details to follow.
- Reduce cost of news programming, which will include: the cancellation of Connect on CBC News Network, Dispatches on CBC Radio.
- Further accelerate integration of news gathering and production – workflow efficiencies across the network and in regions; closure of International Bureaus in South America (Rio de Janeiro) and Africa (Nairobi); London and Washington Bureaus to be augmented.
- Optimize production technology by implementing more streamlined work and production methods.
- Our launch of News Now Vancouver is still on track for this fall, and is a priority given our commitment to broadening our coverage of regions outside of Toronto, along with our Local Service Extension Plan.
Radio-Canada
Measures that Radio-Canada will implement to reduce costs:
- On radio, Première Chaîne will cancel nighttime programming and Espace musique will cut its music production budget
- Optimize rights management
- Simplify financial and administrative processes
- Transform and reduce production costs
- Produce fewer episodes and revise in-house and external production budgets for certain television programs and series
- Lower RDI's production costs in regional centres and in Montreal
- Cut Espace musique's regional broadcast slots in half
- Close regional music libraries and repatriate collections to Radio-Canada's central music library in Montreal
- Reduce temporary funding for internet and digital services
- Optimize production resources and change how we operate by shifting to a tape-free environment, centralizing on-air presentation, and implementing digital control rooms at all locations across the country still using analogue technology
Corporate Services
Measures that Corporate Services will implement to reduce costs:
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Further reduce the footprint of the Corporation's real estate portfolio. Since 2000, we have reduced our real estate footprint by over 1 million square feet. We now need to go even further.
Our objective had been to reduce our footprint by a minimum of 400,000 square feet by 2015, but we'll now look to reducing it to over 800,000 square feet by 2017. This will help reduce CBC/Radio-Canada's operating expenses, which amount to an average of $15 per square foot.
More specifically, CBC/Radio-Canada will do the following:
- Re-evaluate our plans in Halifax. Originally the Corporation had planned to consolidate all of its Halifax-based operations in one of its current locations on Bell Road. This would have involved a big investment in our real estate infrastructure, including TV studio production and the costs and risks that go along with that. Unfortunately, this project is no longer feasible. Instead, we will sell both of our existing sites in Halifax and move into a new leased building. Our new space configuration will not include facilities for TV studio production.
- Reduce the size of La Maison Radio-Canada, in Montreal, by 400,000 square feet.
- Sell our building in Calgary as we reorganize our operations in less square footage.
- Move out of our current locations in Rimouski, Sydney, Cornerbrook, and Saint John, and into new spaces, thereby saving 60,000 square feet.
All of this means newer facilities that are more functional, more efficient and require no investment in maintenance and no capital budget tied up in infrastructure.
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Increase the employee-paid portion of the defined benefit pension plan from 34% to 40% over two years. In its budget, the federal government stated that it plans to increase employee contribution to 50% for the public service, while at the same time many other companies have moved to defined contribution plans.
While our people remain our top priority, the Corporation needs to face financial reality. This re-balancing of the contribution to a 40/60 ratio will save the Corporation approximately $5 million a year.
What this will mean
- Preserving the quality of our offering and our ability to keep pace with the current media environment
- Ensuring we are more focused on the objectives set out in Strategy 2015
- A move away from owning real estate, where possible
- $100 million in savings over three years, against our $200 million financial challenge
What it won't mean
- Doing the same things with fewer people
- A diminished commitment to the regions
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Pacing the 2015 roll-out
What You Should Know
While CBC/Radio-Canada's plan to meet its financial challenges head-on was specifically designed to protect our five-year strategy, 2015: Everyone, Every way, the Corporation will need to scale back its ambitions in a number of areas. This will help to generate $30 million in savings over three years against our $200 million challenge.
“Clearly, in light of this reduction, we won't be able to move as far or as fast on certain elements of our 2015 plan as we might have liked,” says Hubert T. Lacroix, President and CEO.
More specifically, CBC/Radio-Canada will sell bold, one of CBC's specialty digital TV channels, as its licence conditions no longer fit the Corporation's strategy nor complement the other programming streams. As well, CBC will cancel the planned launch of a kids digital TV channel and Radio-Canada we will no longer pursue a digital sports TV channel.
Click on the buttons below for a more detailed look at the measures CBC/Radio-Canada will implement to achieve $30 million in savings over the next three years.
CBC
Measures that CBC will implement to reduce costs:
- Increase repeats – 6 fewer original Canadian primetime series, 175 fewer original hours.
- Delay the launch of four local radio service expansions in: Waterloo region, London, Saskatoon, and Kamloops – by a few months.
- Eliminate the Cross Cultural fund, which pays for programming like Love, Hate and Propaganda, a joint CBC/Radio-Canada documentary series. CBC will continue to do some in-house documentaries, but will be relying on the independent community for a larger proportion of documentary programming than we have historically.
- Not expanding into a dedicated digital channel for kids programming as quickly as planned.
- Reduce the number and/or budget of signature events that bring Canadians together — programs, events and initiatives of cultural consequence, such as CBC's John A: Birth of a Country and Radio-Canada's La semaine des correspondants à Radio-Canada.
- Implement radio programming reductions.
Radio-Canada
Measures that Radio-Canada will implement to reduce costs:
- With the exception of projects already announced, such as the one in Rimouski, Radio-Canada will no longer be expanding its local service.
- End the sports digital TV channel project and redirect sports strategy towards information, stories and airing results.
- Eliminate the Cross Cultural fund, which pays for programming like Love, Hate and Propaganda, a joint CBC/Radio-Canada documentary series.
- Reduce the number and/or budget of signature events that bring Canadians together — programs, events and cultural initiatives of cultural consequence, such as CBC's John A: Birth of a Country and Radio-Canada's La semaine des correspondants à Radio-Canada.
What this will mean
- Scaling back our ambitions in some areas of Strategy 2015
- $30 million in savings over three years against our $200 million challenge
What it won't mean
- Turning away from the goals set out in Strategy 2015
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CBC/Radio-Canada's finances by the numbers
Before the DRAP reductions, CBC/Radio-Canada's base operating budget for 2012-2013, including the $60 million in special program funding that it has received since 2000-2001, was set at $1.027 billion.
Through its Deficit Reduction Action Plan (DRAP), the government has chosen to reduce CBC/Radio-Canada's appropriation by $115 million over the next three years. This reduction includes the elimination of the $60 million the Corporation has been receiving since 2001 to invest in Canadian programming.
CBC/Radio-Canada's challenges don't end with the reduction to its appropriations. The plan that will be implemented over the next three years must also take into consideration other financial pressures such as investments required to pursue its five-year strategy, 2015: Everyone, Every way, and unavoidable costs that CBC/Radio-Canada is facing.
SolutionsMagnitude of financial challenge (in $millions)
Reduction in parliamentary appropriations (Deficit Reduction Action Plan) 115 Investments required to pursue 2015 strategy 55 Unavoidable new costs, such as taxes, rent, rights increases
(net of revenue increases and redirections)30 200 Meeting the financial challenge head-on (in $millions)
CBC Radio-Canada Corporate Services Total Reducing spending Transformation of RCI 10 10 Accelerating the shutdown of analogue transmitters 10 10 Pacing the 2015 roll-out 18 12 30 Reducing costs and doing things differently 40 40 20 100 Total 58 52 40 150 Increasing revenue 28 12 10 50 Total 86 64 50 200 Full-time equivalents
3 years 256 243 151 650 2012 215 153 105 473
