Mr. Speaker, before I get into the content of what I wish to discuss, I would like to touch for a moment on the remarks of the previous speaker, the hon. parliamentary secretary for finance.
He painted a very rosy picture about the future of the Canadian economy. I would like for the sake of balance to point out some of the other opinions on where the economy is heading in the next little while.
First, over the last week we have seen a very volatile stock market. The dollar continues to be extremely volatile. Interest rates have been hiked in the last little while.
When economists comment on this, most often they point out two factors that contribute to this volatility. The first is continued high deficit and debt figures and a lack of confidence in the ability of the government to get a handle on the deficit and debt. The second thing they point to is the situation in Quebec and the possibility of Quebec's separation.
I urge the government to do whatever it has to do to get the debt and deficit problem under control. Though the minister waxes eloquent about the intent to get the deficit and the debt under control, so far the government has not convinced the markets it is going to do this. That is why we continue to have all kinds of uncertainty. It certainly hurts business and the economy in general in this country when there is that lack of confidence.
I will be addressing this bill with respect to the request for borrowing authority for the CBC. The rationale behind that request would give the CBC the ability to invest in systems and equipment that would make it more efficient down the road.
This request begs many questions. The first and most important question is the timing of this request. Right now the government is embarking on a management and funding review of the CBC. This request for borrowing authority presumes the outcome of that review. It is assuming the review will find that the CBC is a good steward of money and that it is a good manager with a solid management team.
I would argue that the facts really do not bear that out. I would point to the fact that the CBC has lost several senior managers in recent weeks. That leaves it weakened in terms of having the expertise to use that money wisely.
The second is the argument that the CBC in spending the money it gets from the government, about $1.1 billion a year, uses it wisely. I would beg to differ that it does.
Over the last few years the CBC has actually seen its revenues drop. That reflects two things. It reflects the lack of confidence advertisers have in the CBC to generate viewers, and also the programming of the CBC obviously is left wanting.
We have the CRTC commissioner recently criticising the CBC, pointing out that its share of viewership has dropped to 13.3 per cent, despite the fact that it has a virtual monopoly on Canadian programming and is rewarded every year with the $1.1 billion subsidy.
The first thing that really must be addressed when the government brings this bill forward, at least with respect to the CBC, is the timing. Why are we doing this now when there is a funding review about to take place?
It may, and I would suggest it will, find that the CBC is very weak in terms of its management because of the loss of so much of the management team and also in how it has spent money in the past. The Fraser Institute recently suggested that on average a CBC station spends over twice what its private sector counterpart spends on administration and programming. That does not bode well for taxpayers if we are preparing to give the CBC the authority to borrow money.
The CBC has a $40 million deficit on its operating budget this year on revenues of $1.4 billion. Allowing an indebted company to accumulate further debts at the public's expense is poor management and morally irresponsible.
We were talking a minute ago about the tremendous debt and deficit problems that we have in this country. Now we are proposing to allow the CBC to go ahead and borrow more money. Who is going to pay for that debt if the CBC cannot meet its financial obligations? It will be the Canadian taxpayers as usual. We will be picking up the bill for the CBC spending.
The other thing that really concerns me about this is who is going to be directly accountable to Parliament for this borrowing authority. It is true that the money will have to be approved by the finance department before the CBC gets it. I am not convinced because the CBC is a crown corporation and does not really depend on profits to keep it disciplined, to keep its expenses in line and does not have a bottom line like a private sector company. We really do not have those market disciplines to make the management in CBC accountable for that $25 million.
The budget document also suggests that the public broadcaster may be allowed to borrow an amount greater than $25 million with parliamentary approval. In effect the ceiling of $25 million is a decoy. How did the government arrive at that figure? What measures will keep it from becoming $50 million or $100 million? Until we have this management and funding review completed how will we know whether the CBC is capable of managing even higher levels of indebtedness? How will we know that it can repay $50 million or $100 million? Again, the question has to be who will get it off the hook if it is unable to repay that $100 million. Naturally the CBC will come looking to Canadian taxpayers for a greater subsidy.
The rationale behind this new borrowing power is supposed to allow the corporation to make investments in systems and equipment that will result in long term savings. What we have here in effect is a perpetuation of waste and inefficiency since the new Liberal government has given the CBC a $100 million reprieve on cuts announced by the previous Conservative administration and a further deferral of $150 million over five years. In effect, the government is to a degree reversing that. Until this review is undertaken it seems entirely premature.
The CBC has not demonstrated it can be financially responsible. While private broadcasters will send one camera crew to do the job, we can almost always count on the CBC sending three. It is a standing joke among private broadcasters how much money, how many reporters, how many camera crews, how many technicians the CBC has to devote to a single news conference in order to get the story that private broadcasters could get with one camera crew.
One of our concerns is that this crown corporation really has the best of both worlds. It has its feet in both the private sector and the public sector. It has its feet in the public sector purse to the tune of $1.1 billion. It also competes in the private sector with private sector broadcasters. Because of its huge subsidy and now a request for $25 million in borrowing authority it will also have the ability to further undercut advertising rates in the markets in which it competes with private sector broadcasters.
This is a concern to private sector broadcasters. They have raised this before and this issue is not going away. At a time when many private sector broadcasters are suffering-many of them are operating in the red-how can we not only give our support to this idea but why are we not going the other way and saying it is time to give private broadcasters a break by reining in the CBC a bit?
Perhaps we should be giving some consideration to making the CBC a little like public broadcasting in the United States where they depend a lot more on contributions from viewers. Many Canadian viewers send their contributions down to PBS in the United States. If I am not mistaken and memory serves me correctly, the majority of funds for those border stations comes
from Canadian viewers. That should set off alarm bells everywhere.
We have to ask ourselves in light of the decline in viewership for the CBC and in light of this request for more money why in the world is this happening. Why are we allowing this debate to even happen when we see all this money going south of the border? Should we not be trying to repatriate this money? Should the CBC be more dependent on viewer support than it already is?
With the CBC's tacit application for a new arts channel, the festival channel, will some of this money end up supporting this new application? The festival channel really is in competition again with the private sector. We have a very strong private sector application for an arts channel but it seems the CBC feels it has to justify its existence by applying for that new arts channel as well.
I have to wonder if this $25 million going to the CBC will end up in some way, shape or form being shuffled over toward the festival channel to help that channel get off the ground. The CBC has no mandate to be involved in this arts channel. Nonetheless it has found a very sneaky way to go in the back door to push for an arts channel to fall under the CBC purview. We have to ask ourselves whether the intent of the department is to shuffle some of that $25 million into the newly proposed festival channel.
We also have to ask what guidelines has the government established to the exercising of this borrowing authority. This has not been made clear. The government has basically said it will decide when the CBC comes to it whether the CBC's application for funds has merit. We are talking about a government that wants politicians and government to be more accountable.
We need to know before we approve this what kind of measures will be put in place to ensure this money is not wasted, that this money does get a return on investment because that is what they say will happen. We have to make sure it does not go into a festival channel to compete against private sector broadcasters. It is not at all clear that will not happen.
Those are the types of questions this government has to answer before we can go ahead and give any kind of support for allowing the CBC to have borrowing authority.
This really represents the opening of a Pandora's box. We wonder whether there will be an increase now among crown corporations coming forward to ask for borrowing authority. I would argue that is a very scary prospect.
Too often these different crown corporations do not have the private sector to compete with and keep them in line and they do not have a bottom line to address. Often they do not have to worry about what the shareholders will say and therefore very often can spend money very unwisely with impunity. That is a scary prospect when we have a $45 billion or $46 billion deficit this year entering into a new year when we may have a deficit in excess of $40 billion.
I will conclude by saying it is crystal clear that any attempt to revitalize the CBC using measures normally reserved for companies competing in a private marketplace undermines its integrity as a public broadcaster.
Any special measures designed to raise capital for the CBC such as loans, subscriber fees or licence fees would be an unfair advantage if the CBC underbids its private counterparts for any services which it offers given its heavy state sanctioned financing.
For that reason I urge the members of this House to oppose this bill.