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Canada: Jesse Kline: The case for breaking up the CBC

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For the first time in a long while, there appears to be broad support, on both sides of the political spectrum, for reforming the Canadian Broadcasting Corporation. In a long-overdue move, the Liberals have pledged to make the broadcaster “less reliant on private advertising.” But they will do it in a decidedly Liberal way: by increasing its funding, as if the scads of public money the CBC already gets isn’t enough. The CBC has strayed so far from its mandate that the only way to truly modernize it is to privatize most of its assets.

  Jesse Kline: The case for breaking up the CBC © Provided by National Post

Last year, the CBC received a whopping $1.4 billion from taxpayers (a far cry from the $1-million grant its predecessor was given when it was created in the 1930s, which works out to about $20 million today). But that still wasn’t enough: the Crown corporation also took in $253.5 million in advertising revenue.

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This dual reliance on public funding and private ad revenue has long given the CBC an unfair advantage against private-sector television stations, which are forced to compete for the same ad dollars but cannot rely on the state to pad their budgets. Since the CBC website has for years been a free online newspaper, all private news companies must compete while at a distinct disadvantage.

A common justification for the CBC is that it provides news and information in small markets that would be uneconomic for private media outlets to operate in. But its business model of public funding paired with ad dollars serves to make it uneconomic for would-be competitors to operate in smaller centres, thus providing further justification for the CBC’s own existence.

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Given that the CBC collects money from advertisers, subscription fees and the public treasury, it’s hard to imagine it would be looking for other sources of funds. And yet, last year, it was among the media outlets urging the federal government to move forward on Australian-style legislation to force social media companies to pay for their content.

But lest you think the CBC is some greedy behemoth, the broadcaster would like to remind you that it is providing a public service.

Any revenue it receives from social media companies, the CBC stated in its submission to Heritage Canada, “would be reinvested into Canadian content, including but not limited to, our digital properties.” Yet it’s hard to tell exactly what purpose it’s content or those “digital properties” are supposed to serve.

According to the Broadcasting Act , the CBC’s mandate, “as the national public broadcaster,” is to “provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains,” with the usual caveats that it must provide “distinctly Canadian,” multicultural content in both official languages.

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As part of that mandate, it offers a television network that attracts a mere five per cent of prime-time viewers, but saps money from 100 per cent of taxpayers. It has an equally unpopular 24-hour news channel that it actually expects people to pay extra for if they hope to watch it online.

It runs its own streaming service, which is exactly like Netflix, if it lacked the plethora of shows and movies that people actually want to watch, and inserted awkwardly placed ads into all its content (which the CBC will kindly do away with if you pony up a monthly fee, on top of your tax bill).

It also has radio stations that compete directly with private-sector offerings. And, of course, its news website more closely resembles a newspaper than a broadcaster. It even includes an opinion section, lest Canadians be worried the private sector was not providing enough sanitized left-wing commentary.

It is therefore reasonable to wonder whether even the corporation itself knows what its raison d’être is anymore. As reporter Anja Karadeglija reminded us in Tuesday’s National Post, Prime Minister Justin Trudeau’s mandate letter to Heritage Minister Pablo Rodriguez instructed him to “modernize CBC/Radio-Canada,” in part by, “Providing additional funding to make it less reliant on private advertising, with a goal of eliminating advertising during news and other public affairs shows.”

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CBC’s collection of advertising revenue has long been opposed not only by other broadcasters and news media companies, but also by those who believe that part of the rationale for a public broadcaster is providing news coverage without the need to appeal to advertisers. While they generally overlook the biases that being bounden to government largesse creates, there’s no doubt that the CBC cannot serve this purpose if it is also relying on private ad dollars to support its programming.

Yet the idea of providing the corporation with an additional $400 million over four years — as the Liberals promised in their 2021 election platform — should be anathema to most Canadians. After all, we’re living in an era in which our hospitals are constantly on the verge of collapse, many of our schools don’t have enough staff or safety equipment to stay open and the public treasury is more indebted than ever before.

Given this situation, it’s hard to make the case that what we should really be investing in as a nation is more sitcoms. To truly “modernize” the CBC, we need to figure out exactly what purpose we want it to serve, which can best be accomplished by breaking it up and selling off most of the pieces.

CBC Radio, for example, could be sold to private interests, or turned into a non-profit supported more by private donations than public funding, like National Public Radio in the United States.

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Local television stations could be sold with the caveat that whoever buys them needs to maintain local news coverage, with a provision that the government would resume control of the station if those conditions were not met. The same could hold true for Radio Canada’s French-language programming. This would help prevent market failures, while ensuring the corporation placed less of a burden on the public purse.

If Canadians believe there is a pressing need for government-funded news, then it first and foremost should not be allowed to receive money through advertising revenue. And if it is to be produced at the public’s expense, it should be treated as a public good and made available to all using a Creative Commons license.

As for CBC’s cultural programming, we should start seeing it for what it is: a massive arts subsidy with a built-in network to pick up any Canadian programming, regardless of whether there is a demand for such content. I personally don’t think tax dollars should go to the arts, but there’s no reason that a Canada without the CBC couldn’t maintain arts funding through other sources.

Breaking the CBC apart and privatizing much of it would give Canadians a better sense of what value they’re getting from its various pieces. It would give us an idea of what assets it has that could be run profitably, and do a better job of ensuring that Canadian content is able to compete based on merit, rather than some misguided sense of cultural nationalism. It would prevent the corporation from stifling private companies and private-sector job creation. And it would save taxpayers considerable sums of money. This would be a CBC fit for a modern, industrialized, market-driven country like Canada.

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