Mr. Speaker, as I was saying, our government recognizes the contribution that the CBC, as the national public broadcaster, plays in Canadian society. Some remote, aboriginal, and official language minority communities are served by the CBC for radio and television coverage. As members know, the CBC reaches Canadians across distances and backgrounds from across our great country and reflects that diversity to each other.
Specifically, the CBC is mandated to inform, enlighten, and entertain Canadian audiences and offer distinctively Canadian programming that contributes to an exchange and flow of cultural expression. That programming is expected to reflect Canada and all its regions to national and regional audiences while serving the needs of all the regions.
The CBC must strive to produce that programming of equal quality in both English and French as well as reflect the different needs of each official language community and English and French linguistic minorities. Moreover, the CBC/Radio-Canada is mandated to reflect the multicultural and multinational nature of Canada while contributing to a shared consciousness and identity.
Our national public broadcaster indeed has a broad mandate to fulfill. The CBC must, each and every day, reach Canadians using 30 television, radio, and digital services in both official languages, in eight aboriginal languages and in five languages on its international service.
The Broadcasting Act guarantees the CBC a degree of independence and freedom as an arm's-length crown corporation. This guarantee is based on the significance and importance of journalistic freedom in our democracy.
This freedom and independence of the CBC is stated multiple times in the Broadcasting Act, “...The Corporation shall, in the pursuit of its objects and in the exercise of its powers, enjoy freedom of expression and journalistic, creative and programming independence”. Our government continues to work with the CBC in a manner that respects these independence principles and allows it to fulfill its national cultural mandate. Members may ask why this freedom and independence is so important. In the context of the recent announcements made by the CBC President and CEO about program and staff reductions at the corporation, it is important to understand by whom, why, and how those decisions were made.
Our opposition colleagues have been alluding to reduced parliamentary funding as the source of the CBC's current financial difficulties. I would like to put that to rest once and for all. The business decisions announced by the CBC reflect the realities of its business decisions. This brings me to how these concepts of freedom and independence translate for the CBC, particularly given its current situation. Now this is important, and I implore the opposition to pay close attention to what I am going to say.
When Parliament created the CBC, in order to ensure that its freedom and independence would remain paramount to government managerial oversight, it was designed as a crown corporation. A key feature of a crown corporation is that while they are public policy instruments, they also operate at arm's length from government. As an arm's-length corporation, the CBC is responsible for its own operational decisions. It is governed by a board of directors whose decisions regarding the strategic governance and stewardship of the CBC's resources are made at arm's length from government.
The CBC receives substantial funding to meet its mandate under the Broadcasting Act. It is up to the CBC to provide programming in French and English that Canadians want. The choices in programs and services are made independently from government involvement.
The implementation of the board's choices and decisions are managed by the president and chief executive officer of the CBC who is responsible for directing and supervising staff, as well as CBC's day-to-day operations. The board is accountable to Parliament and to Canadians through the Minister of Canadian Heritage and Official Languages for the good governance and management of its resources.
Each year, Parliament provides financial support to the CBC totalling more than $1 billion for the corporation to deliver on its mandate and its core services. It is an incredibly significant amount of federal funding. In fact, it is the most funding that we provide to any federal cultural or heritage crown corporation and, as the CBC has stated, it is enough money for the corporation to fulfill its mandate.
I would also like to remind the House that the CBC also has access to other funding sources. Our government contributes over $130 million to the Canada media fund to join the contributions of the private broadcasting industry in order to support Canadian television programming and associated digital media content. Given its dedication to Canadian content, the CBC also benefits from allocations of about $90 million from the Canada media fund for investments in Canadian content programming. Its allocations represent over one-third of the total funding this program provides to broadcasters.
The amount the CBC or any other broadcaster is allocated depends on the performance of the programs and their digital innovations. This is to ensure that Canadians receive value for the investments we make on their behalf.
Another reason for establishing the CBC as a crown corporation is that while being owned by the crown and pursuing cultural objectives, it has a certain flexibility, similar to that of a private business, to operate in a commercial environment. For instance, the CBC can generate revenue through its assets and services and retain and reinvest that revenue in its activities and programming. Revenues are key in the funding model Parliament designed for the CBC. Federal funding represents almost 65% of the CBC's total budget, while revenues account for the remaining 35%. Of that amount of revenues, about half comes from television advertising revenues, another 10% from subscription revenues to its specialty services, and the rest from other revenue sources.
Given its mandate to reach all Canadians, and with revenues making up a significant amount of available funds, it is imperative that the CBC deliver programming that Canadians want to watch. This is an important point, because the current financial difficulties that the CBC is facing are due to a number of business factors that have reduced revenues. According to its president, the CBC's declining viewership in key demographics and ad revenues are causing these challenges.
Since the economic downturn of 2008-09, the television advertising market has rebounded, but it never fully recovered to previous levels. This is amplified by the CBC television program schedule's difficulty in attracting the 25- to 54-year-old age group for advertisers, making it harder for the corporation to attain revenue targets.
The industry has also seen a major shift, with advertisers spending much more on online ads than on radio. The combination of those revenue losses is the main contributor behind the $130 million shortfall for the CBC, according to Monsieur Lacroix, the president and CEO. To address this shortfall, the CBC decided to implement a number of program and staff reductions so that its spending in 2014-15 and beyond will match its revenues.
Our government is committed to balanced budgets across federal institutions, and the CBC must do its part like everyone else. Budgets do not balance themselves.
The individual program, service, and staff reduction decisions have been taken and are being implemented by the CBC separately from our government. We cannot direct the CBC to retain a certain number of journalists for investigative programs nor can we tell the CBC to open new stations if the CBC does not believe it is the best use of its own resources, nor would my opposition colleagues want us to have this ability.
The CBC's mandate includes a number of key elements that its programming should reflect, such as regions, our English and French bilingualism, aboriginal peoples, and multiculturalism. However, the way in which the CBC delivers programs and services in response to its mandate is with a great degree of independence from government.
We have heard that the board approved budget reductions that are being carried out strategically to move away from business that it can no longer afford, to focus on regional services by letting go of some local programs, to consolidate its advertising strategy across media lines and platforms, and other measures. On May 1, 2014, at the Standing Committee on Official Languages, Mr. Lacroix reiterated that tough choices had to be made in order to balance its 2014-15 budget while maintaining priority investments in Canadian content, regions, and digital.
The reality is that the CBC/Radio-Canada is facing the same challenges as every other broadcaster: fragmentation of audiences, new content consumption methods, increased competition, and so on. All broadcasters are striving to adapt to this constantly changing new reality. Large groups are being formed, new strategies tested, and broadcasters are looking for new ways to keep audiences. CBC/Radio-Canada is no exception, and must produce programming that Canadians actually want to watch. Our government provides CBC with over $1 billion each year to ensure that the CBC fulfills its obligations as Canada's national broadcaster and fulfills its mandate.
Further, when the CBC/Radio-Canada's licences were renewed last year, the CRTC granted the corporation greater flexibility and allowed it to broadcast advertising on Radio 2 and Espace Musique as way of increasing its revenues.
Our government expects that the CBC will offer Canadians programming that interests them, programming that they want to see and hear, the kind of viewing that we are seeing today as we watch the Leader of the Opposition trying his best to explain why he used taxpayers' money for partisan political purposes.
I would like to summarize my address by stating that our government respects the CBC's decision-making autonomy with regard to its journalistic, programming, and service choices to operate within its budget. The CBC continues to receive over $1 billion in taxpayer funds.