Hubert Lacroix, President and CEO of CBC/Radio-Canada, speaks at the Economic Club of Canada on the new challenges CBC faces regarding the company's finances in Toronto on Thursday, June 7, 2012.Nathan Denette/The Canadian Press
The Canadian Broadcasting Corporation said Thursday it would cut $28.4-million from its spending plans by 2014 due to the national broadcast regulator's decision to cut a programming fund that was created during the recession to help pay for local programming.
In a note to staff, chief executive officer Hubert Lacroix said the Canadian Radio-television and Telecommunications Commission decision to kill the Local Programming Improvement Fund would mean fewer expansions in smaller markets.
Last year, the public broadcaster received $47-million from the fund, which was financed by the country's cable and satellite companies. The CBC expressed surprise when the CRTC pulled the plug. The broadcaster was also told this year that it would lose about $115-million of its $1.1-billion in Federal funding.
"That money was instrumental in allowing us to enhance our service," Mr. Lacroix wrote in a letter submitted to the CRTC ahead of the broadcaster's licence renewal hearings next month.
"It funded the addition of weekend news in most of our markets in both French and English, it allowed us to add late night local news at CBC, extend by 30 minutes our supper-hour news shows in several markets, and enhance our coverage of local events, sports, weather. These things will be protected. But that means that other priorities will be affected by this drop in funding."
The biggest cut, at $8-million, comes to the broadcaster's "large scale productions" budget, which produces documentaries with a Canadian bent. The broadcaster also said it would shelve plans to open four radio stations in smaller markets, to save $6.1-million.
The rest of the savings would come from reduced regional contributions to non-news programming, reductions to network schedules to reduce production costs, and cut to communications and promotions budgets.
"We knew that the CRTC was reviewing the Fund," Mr. Lacroix wrote. "So we had already conservatively put in place plans for a reduction in our current three-year financial projections … We are all focused on continuing to offer Canadians the best content and experiences they can find anywhere. It's what Canadians expect of us, and it's what you deliver. We achieve that, despite everything, mostly because of your talent and dedication. Thank you for that."
The CRTC introduced the fund in 2008 to help local stations that were struggling to make the transition to digital television while also grappling with the onset of of the recession. The CRTC said that transition is "more or less" complete and ad revenues have returned to pre-recession levels.
Since September 2009, most cable and satellite companies that were supposed to contribute to the fund have passed on an extra fee of 1.5 per cent to their customers through monthly bills. That fee will be phased out starting in September, when the contribution requirement will be cut to 1 per cent, dropping another half a percentage point in 2013 and 2014.