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It's time for a national inquiry into the ad-hungry CBC
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It's time for a national inquiry into the ad-hungry CBC

Published by
June 8th, 2019

Editorial ask the question "Why should struggling private media companies have to compete for advertisers with a taxpayer-funded Crown corporation?"

A government’s job in a democracy, in theory, is to provide for the common good those things that the free market either cannot or cannot effectively deliver — national defence, foreign policy, certain large-scale infrastructure projects that span multiple jurisdictions. The Canadian government, however, seems oddly intent on operating Crown corporations that directly compete with the private sector.

The perennial example is Canada Post. The relevance of a Crown corporation established to deliver letters has clearly faded, so it has tried to reinvent itself as a parcel and package delivery outfit — with some success. But in the case of parcels, at least, the Crown corporation has healthy competition. Not so when it comes to another business Canada Post has been targeting: retail flyer delivery.

In a 2018 document obtained by the Chronicle Herald in Halifax, the company clearly outlined a discount strategy to “convert” retailers from flyer inserts with newspapers to postbox deliveries. A media relations statement from Canada Post claimed that “Even with any trial discounts, our prices are still higher than the competition.”

But John Hinds of News Media Canada, which represents 800 media outlets, said that price still doesn’t even the “playing field” between newspapers and Canada Post. “Their flyers go into lock boxes in any condo or any apartment in Canada. We have no access to those.” More to the point, why does Canada need a Crown corporation delivering flyers (or for that matter, packages) at all?

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The CBC’s aggressive plan to grow its share of commercial advertising revenue is an even more problematic example of a so-called public good competing with private enterprise. At a recent preview of CBC programming for media marketing and advertising agencies, the public broadcaster emphasized that all of its content — on TV, radio, podcasts or digital properties — is “ad friendly.”

Events like this, called upfronts, are standard in the broadcast industry. But the CBC itself is not standard. Unlike its competitors, it receives more than a billion dollars each year in taxpayer money to fund its news division as well as, among other things, the creation of original Canadian dramatic content. Why does it need advertising at all?

Why does the CBC need advertising at all?

It’s no mystery why CBC would want advertising, of course. More money is its own reward. The problem is, the CBC is not Canada’s only broadcaster or news outlet. And every dollar of advertising it secures is a dollar less available to Canada’s other media companies, which receive no comparable direct federal subsidy.

This is a real and growing problem given the migration of most advertising away from traditional outlets — TV, radio and print — to the internet. Even as their audience reach has grown, media companies around the world have seen their revenue contract significantly.

Canadian broadcasters and journalism companies have done their best to change and diversify their revenue sources, but the result has been massive financial losses, reduced staffs and less Canadian news and entertainment content. Their producers simply can’t afford it.

That private media companies should continue to compete with one another in this difficult environment is as it should be. But should they also have to compete for advertisers with a taxpayer-funded Crown corporation?

It’s ironic: The Trudeau government has of late become so alarmed by the precarious state of Canada’s print journalism industry that it has controversially proposed spending $600 million to assist newspapers. Meanwhile, it’s spending almost double that to directly subsidize a public broadcaster that unapologetically competes for the same digital ad dollars that could otherwise go to the very struggling companies Ottawa now sees fit to aid.

The time has come — it is, in fact, long past due — for a full examination of what the CBC is, what it should be, and how it should be funded. The Post’s Terence Corcoran recently proposed a national inquiry into the public broadcaster, and its future. That sounds like an excellent idea to us. Perhaps we should take a look at Canada Post while we’re at it.

© National Post

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