11/04/2013 09:48 EST | Updated 01/23/2014 06:58 EST

Here's How CBC Should Be Funded

Given basic agreement on the unfair competition and market interference issues, all that remains to be settled is how, exactly, our admittedly "important" public broadcaster should be funded. Here's how. Remove all advertising from CBC radio and television and hand the entire market in commercials over to the private broadcasters.

At the Conservative policy convention that ended Sunday in Calgary, delegates voted on two resolutions concerning the CBC, passing one of them.

The motion that passed (with a narrow 596-504 margin) describes the public broadcaster as "an important part of the broadcasting system in Canada," but it notes that it makes it difficult for private broadcasters to compete" in an ever-increasing fragmented and global market." It calls for the CBC to be restructured, with separate budgets for radio and television.

The Globe and Mail reports that the other motion "calling for the 'elimination of all public funding of the corporation which creates unfair competitive advantage with privately owned and operated networks and stations' did not pass."

I suppose we can be grateful that only one of the two motions met with delegates' approval, a hint that there exists a substantial body of support for the public broadcasting among Conservative rank-and-file. And perhaps we shouldn't be surprised, given the polling done last winter by Canadian Media Research Inc., comparing attitudes to the CBC among supporters of the various political parties. While Conservatives were not quite as committed as either Liberals or New Democrats, more than 80 per cent said that the CBC was either "very important" (27.8 per cent) or "important" (52.4 per cent) to them.

Nevertheless, supporters of public broadcasting have long feared that the Conservatives' anti-public sector agenda includes a plan to radically change the public broadcaster, turning it into a user-supported system like PBS south of the border. Instead of receiving an annual Parliamentary appropriation, the broadcaster would hold donor telethons, and seek finding from philanthropic foundations and individuals.

This option would appear to have been rejected by delegates (though it's not clear by how much), and a good thing, too. While a user-supported service may make some sense in the abstract, the fact is that Canada simply is not populous enough, nor well-enough endowed with foundations and philanthropists, to support a broadcast system that would provide anything like the level of service currently expected of the CBC. The real effect of implementing such a strategy would be to eliminate the CBC as a viable cultural institution.

The policy resolutions up for discussion in Calgary had in common the complaint that the CBC competes unfairly with private broadcasters for advertising revenue. That is certainly true. But the solution is not to eliminate the CBC, but to eliminate advertising on the CBC. The desire to get rid of advertising on the public broadcaster is not exclusive to Conservatives -- it's also wish number one for public broadcasting advocates from across the political spectrum. A true public broadcaster, they believe, should serve its constituency (i.e. the citizenry), not advertisers, and the two can't be done simultaneously. Not, at least, with any regularity.

Furthermore, because commercial media are designed to service advertisers first and foremost, they leave big gaps in areas of content that may be socially beneficial, even necessary, but unprofitable. For example, commercial broadcasters are notoriously risk-averse, as perhaps they should be given their fiduciary responsibility to corporate shareholders. They tend to go for the same formulas year after year. But public broadcasters, because they don't rely on advertisers for funding, can take risks and innovate -- and they do. The BBC is a good example: The Office, Absolutely Fabulous. Dr. Who, Top Gear, Monty Python, Planet Earth... and on and on into the hundreds of titles. They also typically provide a high quality benchmark in news and current affairs.

This innovation applies not just to programming, but to technical excellence as well, especially where immediate returns on investment are in the area of social service, rather than financial profit. The CBC's engineering innovation over the past 80 years has been enormously useful to private broadcasters, first in radio, then in television, and currently in on-line services.

As an historical legacy this has been a gigantic, unrecognized subsidy to the industry in Canada. A good public broadcaster ought to be, and usually is, the most dynamic element in any country's creative industry. The main purpose of a public broadcaster is to make things happen that otherwise would not; in doing so, it invigorates the entire sector, to everyone's benefit.

The wish to eliminate advertising on CBC services is not the only common ground between Tories and public broadcasting advocates.

Conservatives of a neo-liberal bent object on principle to government interference in markets, a.k.a. subsidies to private businesses. But the federal government currently subsidizes Canada's private broadcasters to the tune of about $800 million a year. The handouts come in many forms, including foreign ownership restrictions, tax incentives, production financing, and regulatory perks. The rationale is to keep the industry in Canadian hands and to encourage more Canadian content.

Many fans of public broadcasting share the objection to these subsidies. They see the basic business plan of private broadcasters as purchasing American programming at a huge discount, swapping American for Canadian commercials, and selling it to a Canadian audience. Why subsidize that? Subsidies should go to the public broadcaster, which is mandated to service Canada and Canadians with domestic content.

The standard response from private broadcasting's apologists is that without subsidies the private industry (Bell, Rogers, Shaw and a dwindling number of others) simply could not afford to produce Canadian content, even newscasts. I say, let's give it a try, and see. Isn't that what market capitalism's all about? If it turns the apologists are right, then we'll have cleared the dead wood from the market, and we'll still have a public broadcaster, doing its job, fixing the market failures.

So we appear to have a meeting of minds. Given basic agreement on the unfair competition and market interference issues, all that remains to be settled is how, exactly, our admittedly "important" public broadcaster should be funded.

Here's how.

Remove all advertising from CBC radio and television and hand the entire market in commercials over to the private broadcasters. In return, redirect some substantial portion of the subsidies flowing to the private industry. Give it to the CBC, to supplement its current appropriation, bringing it up to a level where it can carry out its mandate confidently and with renewed enthusiasm. I'd say double it, to about $2 billion. That would put Canada somewhere within shouting distance of the average public broadcasting subsidy of the OECD nations. (We are currently a shameful 22nd among the 26.)

This would effectively eliminate any justification for the hated CRTC regulations that burden private broadcasters with various public service obligations. My guess is that they will continue to air news and weather, and the occasional Canadian-produced drama, because it's in their financial interest to do so. And we will anyway have a healthy, dynamic, innovative CBC to fall back on.

Financially, the deal's a wash--no need for new taxes.

When CBC radio eliminated ads in 1975, the result was happiness among private broadcasters, and an explosion of creative excellence that earned to the network a large and fanatically loyal audience. I see no reason why the same could not be expected of an advertising-free CBC television.

Wade Rowland is author of Saving the CBC: Balancing Profit and Public Service, as well as a dozen other non-fiction books. He has held in senior positions at both CTV and CBC News and currently teaches in the Department of Communication Studies at York University. A version of this essay was published earlier this year in the National Post.