Fraser Forum

Time to check the CBC's privilege

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News media is undergoing a rapid and beautiful process of creative destruction: digitalization means vastly lower costs, fewer barriers to entry, and a wider variety of competing options for consumers to enjoy. Amid this innovation and weeding out stands the too-big-to-fail albatross, the Canadian Broadcasting Corporation.

Already costing taxpayers $1.04 billion in 2015 and facing rising competition, the CBC's fiscal burden is set to jump by $75 million in 2016 and $150 million in 2017. Regarding the higher price tag of the state broadcaster, Finance Minister Bill Morneau has deflected by saying that “believing in innovation is also believing in the talent and in the creativity of Canadians.” Apologists further contend this is necessary to save the CBC from "extinction."

That begs the question: if the CBC is growing obsolete and people favour other sources, ones that do not cost the taxpayer, how is that a bad thing?

The truth is that the CBC has become a gravy train for elites, with the backing of government unions. These elites have managed to persuade people that they are desperate and hard done by, while the average salary at the broadcaster is $100,528 per year. That is well into the top 10 per cent of all Canadian earners and 23 per cent more than the average earnings of a private-sector TV employee, even before the CBC's luxurious benefits.

Not only are CBC employees overpaid, their performance has been questionable. Their advertising revenues have fallen 32 per cent in just the last year, and 12.2 per cent annually for the past five years. Those five years may have been difficult for the industry, but private broadcasters saw annual declines of just 1.7 per cent. On account of CBC's consistent decline, taxpayers provided 68.5 per cent of funding in 2015.

Heritage Minister Melanie Joly now says there will have to be a “five-year accountability plan” but CBC executives have shown an utter disregard for their legislative mandate, and have still been rewarded with more funding at the behest of Joly. Seemingly immune to accountability, CBC content has strayed beyond its mandate for "radio and television services" only. Yet, CBC employees are off making pet-project documentaries for neither radio nor television.

Without legislative approval, the CBC also produces newspaper-style written content, and this is where the false cry of protecting journalism shows itself for what it is: straight protectionism. As pointed out by Jackson Doughart of the Atlantic Institute for Market Studies in Halifax, the CBC floods and distorts the news market. Independent outlets thus face a significant impediment and competitive disadvantage, since they are not bankrolled by taxpayers and have to compete honestly for either advertisers or paid subscriptions.

While full privatization of the CBC would be ideal, legislators would do well to at least stop the bleeding. That would mean reining in the network to its limited mandate of radio and television, and not bowing to requests for more funding until that is realized.

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