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People leave the CBC building in Toronto on Wednesday, April 4, 2012.Nathan Denette

Canada's largest private radio broadcaster has come out swinging against the Canadian Broadcasting Corporation's move to start selling advertising on its CBC Radio 2 and Espace Musique stations.

Astral Media, which is in the process of being sold to telecom giant BCE Inc., said it will oppose the CBC's application to the Canadian Radio-television and Telecommunications Commission to change its licensing conditions to allow the two secondary CBC stations to begin airing commercials. It will likely get a chance to air its concerns at public hearings later this year.

"Astral is fiercely opposed to seeing the public broadcaster start selling advertising," the company said in an e-mailed statement late Wednesday, hours after CBC president Hubert Lacroix told staff in a memo of the CBC's proposed move to sell advertising, part of an effort to find $50-million in new revenues to offset the impact of federal budget cuts.

"CBC has to decide if it wants to continue being funded by Canadians and fulfill its mandate or if it wants to operate commercial radio stations."

The immediate reaction suggests CBC Radio – long appreciated by loyal, commercial-averse listeners and tolerated by profit-seeking enterprises – is about to follow its perennially criticized sister English TV operation into an era of controversy and debate over its mandate, loathed by private operators and critiqued by listeners over commercially driven decisions.

"If approved it would obviously change the dynamic in the marketplace, and take away part of the distinctiveness [Radio 2 and Espace Musique have]provided to Canadian listeners," said Pierre-Louis Smith, an industry consultant and former chief regulatory officer with the Canadian Association of Broadcasters.

"It would be one new player that would be chasing advertising dollars. I'm pretty sure it would be detrimental for for-profit broadcasters."

Kirstine Stewart, executive vice-president of English services at CBC, said that adding commercials to Radio 2 would help maintain the quality of Radio One as a news source for Canadians.

But industry representatives warned the move could distort Canada's thriving commercial radio business, which has enjoyed years of steady profitability and is soon to be dominated by three of Canada's largest telecommunications and cable firms.

"They can't have it both ways," said Carmela Laurignano, vice-president of Toronto-based Evanov Communications, which owns 14 radio stations, including Toronto's Z103.5 FM. "They're either a private or a public broadcaster. If they can get advertising revenues and receive taxpayer funds to do their programming, the competitive balance is not the same."

Furthermore, Mr. Smith raised the possibility that if CBC succeeds with its bid for advertising on CBC Radio 2 and Espace Musique, "I don't see any logic for the CBC to not ask the same status for Radio One."

Such a move would have a significant impact on commercial radio industry players.

That's because while Radio 2 and Espace Musique are niche stations with smaller audiences, CBC Radio One is one of the two top-rated stations in each of Toronto, Calgary, Vancouver and Ottawa, and in the top five in both English and French in Montreal.

"That would have a significant impact," Mr. Smith said.

With a report from Guy Dixon

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