OTTAWA – CBC/Radio-Canada’s $1.77 billion worth of expenditures in 2010 led directly to $3.7 billion gross value added to the Canadian economy according to a new report by Deloitte and Touche LLP, commissioned by the CBC/RC, released today.
The report is similar to one the accounting and research firm created for the BBC last year and compares the existing CBC/Radio-Canada to a “counterfactual”, or hypothetical, version of the Corp. which would exist as a commercially-funded entity only.
“We find that CBC/Radio-Canada has a substantial positive impact on the Canadian economy, supporting jobs and businesses across the country. We estimate that, in 2010, CBC/Radio-Canada’s expenditure of $1.7 billion in Canada generated $3.7 billion gross value added, a measure of overall contribution to the Canadian economy,” reads the Deloitte report.
“CBC/Radio-Canada’s net value added (NVA), the net contribution to the economy in 2010 is estimated to be $1.3 billion. In the context of the parliamentary appropriation this means that the direct government funding of $1.1 billion not only contributed to the gross value added (GVA) for CBC/Radio-Canada of $3.7 billion, but also created additional value of $1.3 billion to the Canadian economy compared to an alternative use of the funding and a media sector in which CBC is only supported by commercial revenue streams.”
The value added to the economy of the nation comes not only from its own employees but also the hundreds of millions worth of independent production the CBC/Radio-Canada commissions as well as its activities across many Canadian regional centres where few other private broadcasters have facilities.
“CBC/Radio Canada’s commissioning of independent productions in 2010 lead to $1,123 million in independent TV production GVA and NVA of $492 million for the sector, of which $245 million is additional to the NVA estimate above,” adds the report.
The “counterfactual CBC the report uses as a comparison would likely contribute far differently (and far less in dollar terms) because its pursuit would be of ratings and cost-savings, leading to more cheaply purchased foreign programming and far less Canadian content production, as well as less journalism and fewer regional centres, says the report. It would also pull more cash away from other private Canadian broadcasters.
In the 2010 broadcast year, ended August 31, 2010, upon which the report is based, CBC TV’s English prime time (and TV contributes 71% of the GVA, says the report) is over 80% Canadian content – well ahead of the private broadcasters. Radio was 99% Cancon. As for spending, 93% of CBC/Radio-Canada’s programming budget is spent on Canadian content ($241 million on drama, comedy, analysis and interpretation), “significantly more (43%) than all the other conventional broadcasters combined,” according to the report.
A completely commercially funded (meaning no Parliamentary appropriation) would drop many of those expensive obligations.
“We assume a notable shift in content towards imported programs in the counterfactual. The counterfactual CBC/Radio-Canada is also likely to have a significantly different program mix in TV and radio, focused on more profitable program types,” the report reads. “Spend on journalistic activities and original news and information programming are likely to be among the areas that are most affected.”
The report also takes into account that there would still be value added to the economy if the government were to spend the CBC’s $1.1 billion in taxpayer money on other things like defence or health care, but the GVA resulting from that diversion of funds would be nowhere near the same as the CBC’s current $3.7 billion GVA. In fact, the report says the impact would be less than half.
“The GVA that we estimate would be generated from the alternative use of government funding is $1.79 billion,” says the report.
– Greg O’Brien
