I welcome the opportunity to talk with you today about the financial pressures facing CBC/Radio-Canada, but, given the committee's motion, I would like to address the issue of bonuses first.
For the record, CBC/Radio-Canada does not award so-called bonuses. What we have, like every other Crown corporation, is at-risk or performance pay, which is a key part of the total compensation for our non-union staff of about 1,040 employees. We benchmark that compensation against the middle range of pay for similar positions across the government and the industry. This at-risk pay is held back until the end of the fiscal year, and it is calculated based on the individual's performance and the corporation's performance. These specific measurements are linked to our annual business plan, including targets like revenue, reach and engagement across all of our services. Our board of directors reviews and approves these targets at the beginning of the year, and we report quarterly on our progress in our public documents.
Government departments and Crowns all have performance pay. It helps us deliver on key objectives and stretch to meet ambitious goals.
Over the past year, on multiple occasions, members of parliamentary committees have asked other organizations about so-called bonuses. I will tell you what they told you: Incentive pay is a part of total compensation, and the administration of compensation, like other human resources matters, remains the responsibility of the organization and its board of directors, which operate at arm's-length from government. Those decisions will be made after the close of the fiscal year.
Let me now turn to the very serious structural challenges CBC/Radio-Canada faces.
Shortly after I became president and CEO in 2018, I alerted our employees and the government, including the Minister of Finance, about the compounding, annual structural deficit we face because of two factors outside of our control: inflation on goods and services, and declines in television subscription and advertising revenues.
In 2018 that structural deficit was $21 million per year. Today it is $36 million. What this means practically is that we start each year with cuts to our budget. Unlike the private sector, we cannot manage fluctuations through loans or bridge financing. We must balance our budget each and every year.
Over the three years of the pandemic, as revenues plummeted, most media companies had to lay off staff. We shifted resources to maintain services and to protect jobs. We benefited from $21 million in additional government funding for each of the past three years, but today our ability to shift resources and find savings is no longer sufficient to meet the growing deficit.
Like all media, we face rising costs of operations and production, and declines in revenue, especially in the Quebec market. In addition, we are facing an additional 3.3% cut to our parliamentary appropriations as part of the government’s cost-saving effort, along with the end to the $21-million funding.
Taken together, these factors contribute to a shortfall of $125 million for the next fiscal year. We alerted the government to our financial challenge last summer; we notified our employees in October, and in December we announced that if our financial situation doesn't improve, we will need to cut approximately 800 positions, along with $40 million in independent production spending.
We recognize the uncertainty and worry this creates for our employees and for Canadians who depend on our services. We will manage these cuts in a way that minimizes the effects on jobs and the services we provide, and if our financial picture improves, we will adjust.
However, as I have said many times, the public broadcaster faces chronic underfunding. Compared to other public broadcasters around the world, we serve the largest country across six time zones, in two official languages and eight indigenous languages, and yet at $33 per Canadian, a dime a day, CBC/Radio-Canada is one of the worst-funded public broadcasters in the world, with four times less funding than the U.K. and France, and eight times less funding than Germany. Until that situation changes, we must continue to manage with what we have and do our very best to stretch limited resources to meet our mandate.
