How the CBC Spends its Public Funding

Canadians largely ignore them and their funding bleeds their competition dry. So there's that.

What follows is an older version of my article that was recently published on The Hub (and on the Macdonald-Laurier Institute site).

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If we want to intelligently assess the value CBC delivers to Canadians in exchange for their tax-funded investment, we'll need to understand two things:

1. How CBC spends the money we give them

2. What impact their product has on Canadians

The answer to question #2 depends on which Canadians we’re discussing. Your average young family from suburban Toronto is probably only vaguely aware there is a CBC. But Canadian broadcasters? They know all about the corporation, but just wish it would lift its crushing hobnailed boots from their faces.

Stick around and I’ll explain.

For the purposes of this discussion I'm not interested in the possibility that there's been reckless or negligent corruption or waste, so I won't address the recent controversy over paying out millions of dollars in executive benefits. Instead, I want to know how the CBC is designed to operate. This will allow us to judge the corporation on its own terms.

CBC's Financial Structure

We'll begin with the basics. According to the CBC's 2023-24 projections in their most recent corporate plan strategy, the company will receive $1.17 billion from Parliament; $292 million from advertising; and $209 million from subscriber fees, financing, and other income. Company filings note that revenue from both advertising and legacy subscription pools are dropping. Advertising is trending downwards because of ongoing changes in industry ad models, and the decline in subscriptions can be blamed on competition from "cord-cutting" internet services. The Financing and other income category includes revenue from rent and lease-generating use of CBC's many real estate assets.

The projected combined television, radio, and digital services spending is $1.68 billion. For important context, 2022-23 data from the 2022-2023 annual report break that down to $996 million for English services, and $816 million for French services. 2022-23 also saw $60 million in costs for transmission, distribution, and collection. Corporate management and finance costs came to around $33 million. Overall, the company reported a net loss of $125 million in 2022-23.

The corporation estimates that their English-language digital platforms attract 17.4 million unique visitors each month and that the average visitor engages with content for 28 minutes a month. In terms of market relevance, those are pretty good numbers. But, among Canadian internet users, cbc.ca still ranked only 43rd for total web destinations (which include sites like google.com and amazon.ca). French-language Radio-Canada's numbers were 5.2 million unique visitors who each hung around for 50 minutes a month.

Monthly engagement with digital English-language news and regional services was 20 minutes. Although we're given no visitor numbers, the report does admit that "interest in news was lower than expected."

CBC content production

All that's not very helpful for understanding what's actually going on inside CBC. We need to get a feel for how the corporation divides its spending between programming categories and what’s driving the revenue.

The CRTC provides annual financial filings for all Canadian broadcasters, including the CBC. I could describe what’s happening by throwing columns and rows of dollar figures at you. In fact, should you be so disposed, you can view the spreadsheet here. But it turns out that my colorful graph will do a much better job:

As you can see for yourself, CBC spends a large chunk of its money producing news for all three video platforms (CBC and Radio-Canada conventional TV and the cable/VOD platforms they refer to as “discretionary TV”). The two conventional networks also invest significant funds in drama and comedy production.

The chart doesn’t cover CBC radio, so I’ll fill you in. English-language production costs $143 million (roughly the equivalent of the costs of English TV drama/comedy) while the bill for French-language radio production came in at $94 million (more or less equal to discretionary TV news production).

CBC Content Consumption

Who’s watching? The CBC itself reported that viewers of CBC English television represented only 5.1 percent of the total Canadian audience, and only 2.0 percent tuned in to CBC news. By “total Canadian audience”, I mean all Canadians viewing all available TV programming at a given time. So when the CBC tells us that their News Network got a 2.0 percent “share”, they don’t mean that they attracted 2.0 percent of all Canadians. Rather, they got 2.0 percent of whoever happened to be watching any TV network – which could easily come to just a half of one percent of all Canadians. After all, how many people still watch TV?

According to CRTC data, between the 2014–15 and 2022–23 seasons, English language CBC TV weekly viewing hours dropped from 35 million to 20 million. Specifically, news viewing fell by 52 percent, sports by 66 percent, and drama and comedy by 51 percent.

CBC Radio One and CBC Music only managed to attract 14.3 percent of the Canadian market. What does that actually mean? I’ve seen estimates suggesting that between 15 and 25 percent of all Canadians listen to radio during the popular daily commute slots. So at its peak, CBC radio’s share of that audience is possibly no higher than 3.5 percent of all Canadians.

A recent survey found that only 41 percent of Canadians agreed the CBC “is important and should continue doing what it’s doing.” The remaining 59 percent were split between thinking the CBC requires “a lot of changes” and was “no longer useful.” Those numbers remained largely consistent across all age groups.

It seems that while some Canadian's might support the CBC in principle, for the most part, they're not actually consuming a lot of content.

CBC Revenue sources

CBC’s primary income is from government funding through parliamentary allocations. Here’s what those look like:

Advertising (or, “time sales” as they refer to it) is another major revenue source. That channel brought in more than $200 million in 2023:

But here’s the thing: the broadcast industry in Canada is currently engaged in a bitter struggle for existence. Every single dollar from that shrinking pool of advertising revenue is desperately needed. And most broadcasters are – perhaps misguidedly – fighting for more government funding. So why should the CBC, with its billion dollar subsidies, be allowed to also compete for limited ad revenue?

Or, to put it differently, what vital and unique services does the CBC provide that might justify their special treatment?

It’s possible that CBC does target rural and underserved audiences missed by the commercial networks. But those are clearly not what’s consuming the vast majority of the corporation’s budget. Perhaps people are watching CBC’s “big tent” drama and comedy productions, but are those measurably better or more important than what’s coming from the private sector? And we’ve already seen how, for all intents and purposes, no one’s watching their TV news or listening to their radio broadcasts.

Perhaps there’s an argument to be made for maintaining or even increasing funding for CBC. But I haven’t yet seen anyone convincingly articulate it.