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LEGISCANTM
ROBERT RABINOVITCH, PRESIDENT AND CEO of CBC SPEAKS
Standing Committee on Canadian Heritage, Meeting #10, February 17, 2000 Members Present Witnesses Canadian Broadcasting Corporation Robert Rabinovitch, President and CEO Summary Despite the fact that CBC's CEO had only recently taken on his position, members seemed to expect to receive an action plan outlining CBC's future direction. Instead they got a very brief summary outlining the CBC's current challenges and a few of the CEO's objectives. The members also seemed to be taken aback by the fact that Mr. Rabinovitch did not solicit any funds. Rather than applauding the fact that the CBC was trying to get its financial house in order through various initiatives such as renting out excess capacity, the members seemed concerned that these initiatives would detract from the CBC's primary role as a communication medium. Mr. Rabinovitch pointed out that the CBC has always been in the real estate business in some way and now it wants to more effectively manage its holdings and generate new revenues. Although all of the members agreed that the CBC should reflect Canadians from different regions, they had decidedly different opinions over the availability of programming in both national languages across the country. Several members expressed curiosity about the relationship between CBC and the CRTC. Mr. Rabinovitch downplayed any conflict, saying that he is in full agreement with most of the CRTC's recommendations. He did feel, however, that the CRTC was attempting to "micromanage" CBC. Summary of Remarks by Mr. Rabinovitch CBC's CEO emphasized that he was new on the job and was not appearing before the committee to ask for money. He wanted to have some time to get to know Canada's largest cultural institution and to look for ways to make the CBC more efficient before requesting additional government money. Mr. Rabinovitch began by describing the current environment in which CBC operates. Factors such as globalization, mergers, speciality services, new technology and the Internet are rapidly changing the way the media works. These changes are occurring at a time when revenues from government are declining. The CBC's 1998-99 appropriations declined from the 1994-1995 value of $951 million to $760 million. $250 million of this supports four radio networks. Of the remaining $500 million, $200 million goes to French Television and $300 million to English Television. Compare this to the BBC's $7.5 billion budget. The CBC is legally required to balance its books every year, even under conditions of rising costs and fixed funding. In the past this has been achieved by a series of one-time solutions. The CBC has not undertaken the structural changes need to stem the deficit. In an effort to balance its books, it has been forced to become more reliant on advertising revenue. Rabinovitch cited a report by McKinsey (1999) which examined broadcasting companies around the world and concluded that an increased reliance on advertising leads to more general and less distinctive programming. The CBC needs to become a true public broadcaster with fewer commercials, credible, independent journalism, high quality distinctive programming, and excellent children's programming. In the absence of increased government funding, the loss of advertising revenue can only be made up through internal reorganization. A reengineering task force has been created to examine possible cost saving measures. These include getting out of areas already served by other networks, redesigning English Television and re-examining transmission and distribution networks. Questions from MPs Many of the MPs were concerned about how cutbacks to the CBC would impact on the delivery of service to Canadians, particularly those in rural areas. There were also fears that cutbacks would force some Canadians to pay for service. Members were united in their view that the CBC should strive to protect regional programming, maintain its independence, and help to preserve Canada's cultural heritage. Mr. Rabinovitch emphasized that the CBC recognizes its important role in connecting Canadians from all over the country and that it will continue to deliver its programs to all of the people who receive them now at no further cost. The fact that CBC has a strong commitment to independent producers encourages regional programming by allowing it to pick the best programming from producers across the country. He hopes to strengthen his organization's independence by moving away from advertising revenues. The CBC has always been and will always be committed to maintaining Canada's Heritage. A recent example is its investment in programming that explores Canadian history. The MPs were not very receptive to the CBC's plan to sell and or rent out some of their excess space and transmission equipment. They expressed concern that private individuals should not profit from public property. They also believed that management of real-estate holdings could detract from the CBC's primary mandate. This issue was brought up in the previous committee meeting with the Heritage DM who also felt that renting out under-utilized facilities could be problematic. Mr. Rabinovitch is of the opinion that the CBC has always been in the real-estate business due to the benevolence of the federal government. He feels that it is inappropriate in this day and age for the CBC to control such a vast empire. Since it does, however, it should strive to effectively manage these holdings. The issue of English and French programming touched off a heated debate. Mr. de Savoye was concerned about the disparity in funding between French and English television. Given that both networks need to produce twenty-four hours of programming and transmit that content to their audiences, why does it matter that there are more English-speaking listeners? The CEO responded that programming costs are not the same for the two languages. Copyright fees are higher for English language programs. Also, production tends to be more centralized in Quebec, with most of the programming concentrated in Montreal. For the English network, programming is spread out across the country. Mr. de Savoye was not satisfied with this response, and suggested that French programming has a great deal of catching up to do. He also felt that French programming is "…tinged with an Anglophone tint that we could do without." Mr. Rabinovitch responded that it isn't a matter of one culture dominating the other, but rather of developing two cultures simultaneously that will enrich one another. This did not move de Savoye. He responded that Rabinovitch could return to this committee in a few years and say the same thing about American culture enriching Canadian culture and there would be people in this room "…who would like to bite you." Mr. Limoges suggested that CBC has a responsibility to encourage the development of French talent outside of Quebec. Mr. Rabinovitch replied that he had already met with one of the VPs of the French network to discuss this, but that it was a matter of finances. If the CBC gets more money, it would be happy to develop French programming outside of Quebec, but Mr. Limoges needs to remember that the majority of French-speaking Canadians reside in Quebec. Before dropping the matter, Mr. Limoges exacted a promise that Mr. Rabinovitch would meet with a group of French language producers working outside of Quebec. In sharp contrast to these speakers, Cliff Breitkreuz from the Reform party felt that CBC was wasting money by broadcasting in both official languages in areas of the country with small populations speaking the minority language. He gave the example of being able to see a show on French CBC television and then flipping over to the English station only to see the same show with English subtitles. He also said that the CBC wastes money by sending multiple crews to events. He charged that the other networks are unable to compete against the CBC's large budget to broadcast big sporting events. He also suggested that the CBC would be better served by renting equipment instead of bringing its own to such events. The CEO responded that CBC is committed to providing bilingual service since the federal government provided funds in the 1970's specifically for that purpose. He seemed surprised by Mr. Breitkreuz's programming example because subtitles do not work for North American audiences and the CBC rarely employs them. He said that sending multiple crews to cover events has to do with the realities of running four very distinct networks in two languages. He believes in the future that costs can be controlled by employing bilingual crews who can handle broadcasts for both English and French networks. The VP of CBC also responded, rather heatedly, to Mr. Breitkreuz's remarks. He pointed out that Mr. Breitkreuz did not do his research when he suggested that other networks could not outbid the CBC for big events. In fact, CTV did just that for the upcoming Olympic games. He pointed out that it is generally cheaper for CBC to use its own equipment and vehicles rather than renting on site. As she did in the committee's last meeting with the Deputy Minister of Canadian Heritage, Wendy Lill expressed concern about the government's funding of CBC. She wanted to know if more cuts are being planned for the CBC, and if so what will be the "human toll" of these measures, and what will happen to the morale of CBC employees? Mr. Rabinovitch reiterated that his first move would not be to ask the government for more funding, but rather to restructure the CBC to make it more efficient, and to make use of some of its extensive infrastructure to procure new funds. He admitted that there would be more staff reductions. Although, he feels that that the restructuring plan is supported by CBC employees, he did express concern about the effects of employment cutbacks on the youngest staff. As a result of CBC's bumping system, those with the least seniority would be the most likely to lose their jobs. Several MPs were curious to know how Mr. Rabinovitch planned to implement the CRTC's recent decisions in light of his much-publicized disagreement with the board in January concerning regulations for private and public broadcasters. Mr. Muise, who had previously addressed the same question to the DM of Heritage, queried Mr. Rabinovitch about the notion of different playing fields for the private and public sectors. Rabinovitch responded that in reality, there are two playing fields, as defined by the Broadcasting Act, and that the CRTC is under no obligation to treat public and private broadcasters the same. Mr. Rabinovitch felt that this controversy was overblown by the press and that, in fact, he agreed with most of the recommendations of the CRTC. His main problem was that he believed that the CRTC was overstepping its boundaries and was trying to "micromanage" the CBC. He was also unhappy with the fact that the CRTC seemed to ignore CBC's fiscal realities. There was no discussion of advertising and of how it can pervert the agenda of a network. Overall, though he feels that the two organizations can and should work together, and that the CRTC could help to define CBC's direction and serve as an important source of information. The Chair, Mr. Lincoln, brought the meeting to a close by inviting Mr. Rabinovitch to present a more detailed action plan to the committee in the fall. Mr. Rabinovitch replied that the reengineering task force was not specifically asked to come up with a strategic plan, but rather to come up with solutions to individual problems on an ongoing basis. However, he would be happy to report back to the committee on his progress. Reported by Laura Telford
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