Madam Speaker, I am pleased to speak today on part four of Bill C-17 which would grant borrowing authority to the CBC.
I wish to address the several flaws inherent with this notion. First, the government has committed itself to a management and funding review of the CBC. Without waiting for the completion of this same review the government has remodelled funding for the CBC on two occasions.
In the first instance this administration has reversed spending cuts announced by the previous Conservative government from $350 million to $250 million over four years. Meanwhile the government's budget includes a provision that a $25 million borrowing authority be awarded to the CBC in order to offer it more businesslike flexibility.
I am very sceptical when it comes to assuming that the ability to borrow $25 million would accomplish efficient management not realized with $1.1 billion in appropriations from the Canadian taxpayers.
It really does baffle all logic that the government would call for a funding review in one instance while at the same time tampering with existing funding formulas.
It is obvious to me that the provision to grant the corporation borrowing powers is premature based on the government's own announcement. From a practical standpoint it makes no sense whatsoever to allow the CBC to seek loans.
The CBC is not like a business in the private sector. There are no shareholders or customers in the normal sense to answer to. There is no compelling obligation to strive for efficiency because there is no bottom line. In short, there is no need to worry about turning a profit, nor is the concept of bankruptcy a constant preoccupation.
In this type of structure there is never a shortage of things on which to spend money. Permitting the CBC to borrow is more likely to enhance the national debt than corporate efficiency.
The budget document 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 really a decoy. How did the government arrive at this figure? What measures will keep it from climbing to $50 million or $100 million? Who will be ultimately responsible for the debts incurred by the corporation?
The general trend is that when one includes clauses like these in legislation, there is a tempting desire and requirement to use them. The law of wasteful spending requires that unaccountable financial entities will spend any and all funds directed toward them without adherence to efficiency.
While testifying as a witness before the Standing Committee on Canadian Heritage not long ago on April 12, CBC president Anthony Manera conceded that the corporation currently estimates a shortfall from all sources to be in the order of $180 million over the next four years. The CBC has a $45 million deficit on operating budget on revenues of about $1.4 billion.
It would be paramount that any business facing such a financial crisis first put its own house in order before assuming any further liabilities. Borrowing to reduce debt load is synonymous to using a Visa card to pay down a MasterCard. Even in a best case scenario, it would require shrewd investments and a commensurate amount of time and good luck for the CBC to realize economies of scale from its borrowing authority.
Allowing an indebted company to accumulate further debts at the public's expense is poor management and it is morally irresponsible. The rationale behind the new borrowing power is supposedly to allow the corporation to make investments in systems and equipment that will result in long term savings.
What are these investments? What are the risks involved? What is the projected return on investment? Who will be responsible if the investment fails? These questions demand answers before this request by the CBC can even be considered.
It has also been suggested that a levy be raised on private broadcasters or cable subscriber fees be initiated to fund the CBC to the detriment of their competitors and the public. The crown corporation cannot have one hand in taxpayers' pockets and another in the marketplace, giving it the best of both worlds when there is no incentive to be cost effective or competitive.
With respect to its mandate, the CBC is facing an abundance of difficulties. For example, the CBC English language television audience has been declining steadily since 1990-91. The viewership has declined to only a 13.3 per cent share of audience, which caused CRTC chairman Keith Spicer to remark to Mr. Manera at a recent licence renewal hearing: "You are going down the tubes here in ratings. You are going down to oblivion".
What of the U.S. programming during prime time and a litany of U.S. soap operas from one until six in the day? How does the CBC explain the decline in arts programming, in children's programming since 1987? All of this combined with technological breakthroughs cause us to question the need for the existence of the CBC.
Specialty channels and the electronic superhighway have become catch phrases of the 1990s. Is there a need for a public broadcaster when the public will have 500 channels to choose from offering a similar and cheaper product to the CBC? The CBC has jointly submitted a bid to operate one of these specialty channels under the name of Festival.
Since Parliament has not changed its mandate, is it even appropriate for the CBC to establish and operate new television networks? One must also examine whether the CBC is undermining its current obligations by engaging in another channel bid. This relates both to its legally required programming as well as its management of scarce resources.
In addition, it would be important to critically examine the program management and copycat production practices of the CBC. Canadians frequently criticize the Canadian style U.S. programs that find their way on to the air waves. Meanwhile the shifting around of "Prime Time News" from 10 p.m. to 9 p.m. only to have it return to its original time slot has diminished public confidence in the operation of the CBC.
In the futile task of persistently propping up the CBC, there are some serious questions to consider with the prospect of borrowing money. Here are four issues which really demand answers. First, how will the CBC generate profits on its revenue in order to repay any loans it has incurred?
Second, clause 19 of the bill states: "Notwithstanding the Financial Administration Act, part VII of that act does not apply to a debt incurred by the corporation". It is not clear after consulting the Financial Administration Act and the Broadcasting Act if the crown or the corporation would be ultimately responsible for the debts of the CBC.
Third, what guidelines has the government established to the exercising of this borrowing authority?
Fourth, why is the government allowing the CBC to borrow money in the first place? Would it not be more financially sound to privatize portions of its operations and realize substantial savings which then may be used to finance new cost effective ventures?
It is crystal clear that any attempt to revitalize the CBC using measures normally reserved for companies competing in the 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 should the CBC underbid its private counterparts for any services which it is given in addition to its heavy state sanctioned financing.
These factors along with the changing technological landscape bring into question the relevant role of the CBC. It is for the reasons outlined above that our caucus will not be supporting this borrowing authority.