CBC/Radio Canada asks for $400M in increased government funding to go ad-free

CBC/Radio Canada has submitted a position paper to the federal government proposing the public broadcaster move to an ad-free model, similar to the one used to pay for the BBC in the United Kingdom, at a cost of about $400 million in additional funding.

“We are at a critical juncture in our evolution, continuing to operate under a business model and cultural policy framework that is profoundly broken,” said the CBC’s document, released on Monday afternoon. “At the same time, other nations are moving their cultural agendas forward successfully — and reaping the benefits of strong, stable, well-funded public broadcasters.”

The additional money CBC is asking for would be “replacement funding” if the media organization eliminates advertising: $253 million to replace ad revenue, plus $105 million to “produce and procure additional Canadian content” to fill the programming gaps in the absence of ads and $40 million to reflect savings in money that would otherwise be spent on selling ads.

That would equal an investment of $46 per Canadian every year — up from the current $34 per Canadian CBC currently receives.

Two-thirds of the ad revenue given up by the CBC, the proposal argues, “would migrate to other Canadian media, including private TV and digital, for a net gain to them of $158M.”

In addition, it says, “the economic upside of moving to an ad-free model would be a net total GDP gain of $488M, a total labour income impact of $355M and the creation of 7,200 new jobs.”

Ad revenue criticism

The proposal, titled A Creative Canada: Strengthening Canadian Culture in a Digital World, comes in the midst of calls from some private media outlets for the public broadcaster to stop selling digital ads on the website.

Critics have said that the CBC is taking ad revenue away from private media that are struggling financially.

But CBC/Radio Canada president Hubert Lacroix rejected that argument in a Nov. 21 letter to the parliamentary standing committee on Canadian heritage, saying that its digital advertising revenue only amounts to $25 million, “just 10 per cent” of its total ad sales of $253 million.

“It is difficult to believe, as some media have suggested, that if only CBC/Radio-Canada was prevented from earning $25 million, their problems would be solved,” Lacroix wrote.

CBC also came under fire last week from two federal Conservative leadership candidates. Kellie Leitch said the CBC “needs to be dismantled,” while rival Maxime Bernier said the public broadcaster’s mandate should be reformed and its funding cut. Bernier also said it should not be allowed to sell private advertising. 

Leitch reacted swiftly to Monday’s proposal on Twitter, inviting people to sign a “Bye-bye CBC” online petition. 

The Liberal government has already restored $150 million per year in CBC funding previously cut by Stephen Harper’s Conservatives.

However, the CBC/Radio Canada document said that wasn’t enough, claiming an inflation rate of 1.5 per cent per year would erode that investment and eliminate its benefit in six years.

The proposal suggests using a U.K. investment in the cultural industry called “Creative Britain,” which includes the BBC, as “an inspiration” for the new funding model.

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