Evidence of meeting #161 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cbc.
A recording is available from Parliament.
Liberal
President and Chief Executive Officer, Canadian Broadcasting Corporation
Sure thing.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Are you able to tell me how many jobs were lost after the Conservatives made the decision to cut the budget in 2012? You talked about, as the head of an organization, having to make hard decisions if you're faced with a budget cut. I've been through it, on a much smaller scale, of course, but you go line by line, division by division and what have you.
Are you able to tell us how many jobs were cut or what that cut in funding did to you?
President and Chief Executive Officer, Canadian Broadcasting Corporation
I believe it's on the public record. It was in the range of a thousand people.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
A thousand people were cut. Obviously that had a major impact on the delivering of news or programming.
President and Chief Executive Officer, Canadian Broadcasting Corporation
Again, to the quote that your colleague across the way mentioned, I think what we did was to try to privilege local service at the time. Again, I wasn't there so I'm just trying to be generalist here. I think we tried to privilege the boots-on-the-ground journalists whom we have. That's the core of what we do. The beating heart of CBC-Radio Canada is the boots on the ground. In programming we may be spending on independent producers or others, who are also impacted by cuts, by the way. It's not just our own workforce; it's the whole industry. There would have been cuts in those areas as well.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Would the cuts to the news division also affect the programming division?
President and Chief Executive Officer, Canadian Broadcasting Corporation
As I just said, yes, it was across. And by the way, it would have gone to corporate; it would have gone through overhead; it was throughout the corporation. I'm assuming, again; I wasn't there
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Mr. Scheer also called the organization bloated. One of his advisers promised to go for the jugular when dealing with the media. It's pretty clear to me that some people on the other side don't trust the work and the ability to fulfill the mandate independently.
Do you feel Canadians have lost trust and confidence in the CBC?
President and Chief Executive Officer, Canadian Broadcasting Corporation
I think I said earlier that we are the most trusted brand in the country, and that's done by third party research firms. It's not a figure that we come up with. There's the Edelman report that reports on trust.
Again, just to remind you, I would say that we experience an ongoing decline in our top line revenue that has nothing to do with cuts. It has to do with not being indexed for inflation, as well as forces in the media industry today, which have to do with the commercial realities of declining ad revenue for conventional television and decline in subscription revenue for specialty. I really think it's important to look at this holistically and to say, yes, there are pressures on the industry and it's not just one part of our world that we struggle with.
Liberal
The Chair Liberal Julie Dabrusin
I appreciate your taking the time to speak with us today. It was very helpful and informative, so thank you very much.
President and Chief Executive Officer, Canadian Broadcasting Corporation
Thank you.
Liberal
The Chair Liberal Julie Dabrusin
We're going to suspend briefly to give us time to move to our next panel.
Liberal
The Chair Liberal Julie Dabrusin
We are starting the second block of this committee. We are with Friends of Canadian Broadcasting. We have with us Daniel Bernhard, executive director, and Jim Thompson, communications adviser.
Thank you so much for being with us. Please start.
Daniel Bernhard Executive Director, Friends of Canadian Broadcasting
Thank you very much.
My name is Daniel Bernhard. I am the executive director of the Friends of Canadian Broadcasting and, as Ms. Dabrusin said, I'm joined by my colleague Jim Thompson today.
Friends is the citizens' voice for Canadian journalism and storytelling, in which public broadcasting play such an important part. We enjoy the support of hundreds of thousands of Canadians who are also our sole source of financing. Friends is 100% non-partisan and, for the record, we are not affiliated with any corporation or broadcaster, including the CBC.
Friends of Canadian broadcasting are working on protecting and defending our cultural richness and the healthy democracy to which it contributes. CBC's strength, journalistic audacity and our common history are at the heart of our identity.
Today's discussion requires some context. This week I attended a meeting of the International Grand Committee on Big Data, Privacy and Democracy, which basically highlighted the extent to which tech companies, predominantly Google and Facebook, are designed to supplant democracy and to erode individual autonomy itself.
These companies sell one thing: our personal, private data. They acquire it by spying on us, often without our consent. They use this data to profile us and then sell access to those profiles to advertisers. We generate more data with each passing second, so these companies spend billions of dollars to keep us online longer.
Facebook's number one incentive, therefore, is to publish content that retains our attention. They don't actually care what it is—hate, misinformation, even a mass murder in Christchurch, New Zealand—so long as we click, like, and share it.
Facebook understands that human beings have evolved to take a particular notice of threats. As danah boyd, a researcher at Microsoft, put it, we are biologically programmed to be attentive to things that stimulate; content that is gross, violent or sexual; and gossip that is humiliating, embarrassing or offensive.
Facebook is Canada's number one source of news, and so I'd like to ask a question. Who among you thinks that it's a good idea for us to get most of our information from a company whose business model depends on publishing the largest possible amount of content that is gross, violent, sexual, humiliating, embarrassing or offensive? Who thinks that this is healthy for our society?
Facebook has a mandate to shock, spy and profit. CBC has a mandate to inform, enlighten and entertain. That mandate is more than simply appropriate for the digital age; in this era of unbridled surveillance capitalism, public service media are more imperative than ever before.
The issue before us is not, therefore, the suitability of CBC's mandate but rather whether the corporation is equipped to fulfill it. At present it clearly is not. As Ms. Tait said before, at $34, CBC's per capita budget remains among the lowest in the developed world. I'll just add that adjusted for inflation, CBC's current budget is lower than it was at the bottom of the Chrétien cuts when the budget was cut by $400 million in the 1990s.
Of course, to make matters worse, the Government of Canada is actively subsidizing the very forces of misinformation that CBC exists to counteract, essentially diluting its beneficial effects. As the members of this committee know well, a loophole in the Income Tax Act subsidizes the price of ads sold by companies like Google and Facebook by exempting their products from long-standing penalties. This loophole cost taxpayers $1.6 billion in 2018. In 2017 this committee very sensibly called on the government to close this golden loophole. The reason for the government's inaction remains a mystery to me.
This is a matter of priorities. We just have to look at where we are spending our money to understand what our true priorities are. The value of exemptions and subsidies Canada grants Facebook, Google and Netflix represents 250% of what it has invested in the Canadian Broadcasting Corporation.
Canada must catch up to other countries by imposing its laws, its rules and its taxes on Facebook and other digital giants whose business interests harm the public interest.
We must also substantially increase CBC's budget—and quickly. Even more importantly, we must ensure that CBC becomes ever less dependent on the two sources of revenue that most constrain its ability to deliver on its noble mandate: government and advertisers.
Ultimately, the key is independence, and independence begins at the very top. We strongly recommend legislative changes to ensure that CBC's board members have no partisan affiliation and that the government has no say whatsoever in their selection and appointment.
New legislation must also grant the board complete and exclusive authority to hire and fire the corporation's CEO.
When it comes to funding, the simplest approach to increasing CBC's funding is already provided for in existing law: prohibit the deductibility of foreign digital advertising expenses. In 2018, this would have generated up to $1.6 billion, enough to increase CBC's parliamentary appropriation by 145% without costing the government a dime. This approach would alleviate pressure on public finances, and it would also serve to address very reasonable concerns about our public broadcaster's independence.
In addition, a surtax on targeted advertising is very necessary. If your company pollutes democracy, you should be responsible for cleaning it up. A 5% surtax on targeted advertising supposedly generated about $385 billion in 2018, which is enough to cover all of CBC/Radio-Canada's advertising revenues. Asking Netflix to collect sales tax would generate an additional $130 billion. Once Disney, CBS and other foreign corporations come here, to Canada, that figure will increase considerably.
On the eve of the general election, we know that public opinion research shows that voters support these proposals overwhelmingly. For some parties, reviewing the CBC's mandate appears to be code for eliminating whole services, or even killing it completely, but I can assure you that such policies would be very, very unpopular with the voters who you are now working to court. I'd be happy to discuss the results of our latest Nanos poll with you, if you'd like.
The world is currently embroiled in an existential struggle for democracy in which information and cultural industries are the ultimate prize. CBC doesn't need a new mandate; it needs a new commitment to fund it properly, sustainably and responsibly. To be ready for those funds, it needs to be financially and administratively independent of both political and business concerns.
Thank you for your attention. We look forward to your questions.
Liberal
Liberal
Gordie Hogg Liberal South Surrey—White Rock, BC
Thank you very much for that presentation. I love your phraseology about how, if your business pollutes democracy, it should pay.
You made reference to a Nanos poll. Are there some anecdotes or some highlights on that on which you can provide us comments?
Executive Director, Friends of Canadian Broadcasting
Sure. I'll turn it over to Jim Thompson.
If you'd like to see the full results of the poll, you can see them there on friends.ca, but Jim will have some more specific information for you.
Liberal
Gordie Hogg Liberal South Surrey—White Rock, BC
Maybe just give us a couple of highlights, because I don't want to have too much of my time taken away.
Thank you.
Jim Thompson Communications Advisor, Friends of Canadian Broadcasting
Sure. I give just a couple of highlights.
If you asked your constituents, about eight in 10 would advise you to increase or maintain CBC funding. That's 79%. CBC is the institution that is most trusted by Canadians to protect Canadian culture and identity on television. Seventy-seven per cent of Canadians hold CBC in that kind of regard, and 84% agree that, with the decline of traditional media, it is as important or more important to have a strong and independent CBC. In the last 10 years, 250 publications and media outlets have closed across Canada, mostly in small- and medium-sized communities. Those are some of the highlights.
I'll just finish up by saying that social media's influence on our democracy is seen as very negative. Sixty per cent say that Canadian democracy is weaker today than it was five years ago because of the influence of social media.
Liberal
Gordie Hogg Liberal South Surrey—White Rock, BC
Thank you.
Certainly you talked about being 100% non-partisan, about wanting to have a healthy democracy and working towards a healthy democracy. It seems that for half a century, our democracies, our governments, were becoming more liberalized, our economies becoming more universal, and in the past seven to 10 years there seems to be a reversal of that.
Do you see the equivalent happening in some of the things you referred to in online media and the influence it's having?
Executive Director, Friends of Canadian Broadcasting
I think it's important for us to be precise when we use terms like “liberalize” and “deliberalize”. We're not talking about becoming more like the Liberal Party or less. I know that's not your sense.
Liberal
Gordie Hogg Liberal South Surrey—White Rock, BC
No, I had no intent of making a political reference.