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Facing an uncertain future

CBC/Radio-Canada is at an important juncture.

In 2015, after years of deep and destablizing funding cuts, the government started to reverse these cuts. This commitment is ensuring the transformation of the public broadcaster into the digital public space.

It is ensuring we maintain our momentum on key initiatives like hiring new digital creators, and preserving existing programs like the one-hour Indigenous radio program, Unreserved.

It is allowing us to create new Canadian content including programming for Canada’s 150th anniversary and new digital content for ICI; high-profile dramas like the six-part Alias Grace; additional episodes for the popular maritime TV show Méchante Soirée; launch of Prochaine generation/ Next generation, lab for creation of journalism content by young millennials; and increased investment in Canadian feature films. Our new Breaking Barriers Film Fund is creating new opportunities for underrepresented Canadian creators.

And we are also enhancing our services with investments in digital services in select local markets with no current CBC service, starting in London, Ontario; reinvesting in regions where previous cuts went too deep to ensure that we tell local stories in a very multi-platform way; creating new radio programs to reduce the number of repeats on our schedules; increasing our international coverage with scaleable "pocket bureaus" beginning with Istanbul; and doubling our investment in the digitization of our archives including our Indigenous language archives, so that more Canadians can access them.

This reinvestment is an important sign of the government’s commitment to Canada’s cultural sector and to public broadcasting. And it has given us some much-needed breathing room. But it is not enough to secure our future.

Broken Business Model for Conventional Television

The business model and cultural policy framework in which CBC/Radio-Canada operates and carries out its public mandate is profoundly and irrevocably broken. Advertising revenues for conventional television are down as audiences become more fragmented, ad-free content becomes more available, and alternate content providers such as YouTube, Netflix, Amazon and, Apple TV/iTunes continue to make inroads.

In the meantime, the advertising revenue that once helped fund Canadian programs is going to new competitors; large, global technology platforms like Facebook and Google have established a dominant position.

Advertising Dollars are Shifting to Global Technology Companies from Content Creators

Fig. 1

Advertising revenues are shifting from Canadian media companies to global technology companies.

Last year, in Canada alone, advertising revenue for conventional television dropped three per cent – $55 million in one year. The year before it dropped $270 million.

In addition to the advertising challenge, the other primary source of self-generated funding for the public broadcaster, subscription revenue from our small number of specialty channels, is under pressure. The trend of cable cord cutting, coupled with policy and regulatory changes like, "Pick and Pay" mean that traditionally secure sources of funding are also under threat.

Canadians are turning to unregulated online streaming and OTT services, which have experienced significant growth in a short period. In just five years, Netflix has been adopted by nearly half of the Canadian population.

How Canadians Get TV is Changing

Fig. 2

Subscription TV revenues are down as Canadians shift to Netflix

Subscription revenues for Internet connectivity are also growing fast.

Subscription Revenues

Fig. 3

Subscription Revenue growth in Canada since 2001

But the problem is that none of these new revenue growth areas are supporting Canadian content creation.

The challenge for a public broadcaster like CBC/Radio-Canada is that it does not have other business interests or sources of revenue, like other Canadian vertically integrated broadcasting distribution companies, to mitigate the impact of these changes. We are uniquely damaged by this loss of revenue, and are the least well-positioned to respond.

The planned government reinvestment of $150 million per year will help contain our funding challenges for a period. But it will not solve the problems over the long-term. Inflation of just 1.5 per cent has an impact of $24 million dollars per year to the CBC/Radio-Canada budget, meaning the positive benefit of the new investment would be eroded and completely eliminated in under six years.

Canadian Content Funding is Declining

In addition to our revenue challenges as a broadcaster, CBC/Radio-Canada also faces declining financial support for the creation of Canadian content. In addition to our own self-generated commercial revenues, the funding for this content comes from three sources: the Canada Media Fund (CMF), the CBC/Radio-Canada government funding, and a system of production tax credits and other incentives. Currently, we invest almost $700 million each year in creating Canadian television content. And, unlike our private sector competitors in Canada, we air close to 90 per cent Canadian content in prime time (below).

Canadian Content in Prime Time (Regular Fall 2016 Schedules)

The CMF is co-funded by Heritage Canada and Canadian cable companies that contribute five per cent of their cable revenues. When cable revenue goes down, so does funding for Canadian content. This hurts the public broadcaster more than our competitors because of our prime time Canadian content commitment.

Continued revenue decline in all of these areas is eroding our ability to deliver on our mandate.

Dated Policy Framework

As Canadian broadcasters focus on operating successfully in this new and fiercely competitive business reality, they must do so under the constraints of a dated policy model that requires investment in, and broadcast of, Canadian content, something their online competitors – such as Netflix, Amazon, Apple TV/iTunes and YouTube – simply don’t face.

We now have two different realities in Canada: traditional broadcasters that are closely regulated, and that contribute to the Canadian content production industry, and new media entrants that operate without those restrictions and contribute nothing to the funding of the Canadian cultural sector.

Similarly, now that Canadians are shifting to mobile first to consume their news, the traditional approach of measuring the hours of local TV content programmed by Canadian broadcasters in exchange for a licence is problematic.

The Broadcasting Act is from 1991. It does not reflect today’s realities, as is plainly obvious from the fact that half the sector is currently regulated and the other half is not. The Broadcasting Act needs to be updated to allow for a new governance framework for broadcasters so we can evolve in a timely way to the changes and disruptions that are occurring routinely in our sector. We need to frame the expectations and commitments of participants in the ecosystem in relation to the country’s cultural policy objectives. Then we need to connect the funding to those commitments and expectations to make the ecosystem viable.

We also need the flexibility and rights to invest in and distribute great Canadian content globally. The Canadian financing rules (CMF and other funds) further widen the gulf between Canadian broadcasters and foreign digital distributors like Netflix.  The existing rules often set a limit on the rights which Canadian broadcasters can obtain even though the Canadian broadcaster is frequently the driving force behind the creation of a production and the only significant non-government financier.  These limits include a requirement to take rights in Canada only and a term fixed at six to seven years. Such limits make unattainable any meaningful involvement in foreign sales activity or in building a library of Canadian content to compete with a foreign digital distributor like Netflix.

Competition for Quality Content is Intensifying

At the same time as our policy and funding mechanisms are breaking down, and financial support for the creation of Canadian content is declining, the competition for quality content around the globe is ever fiercer. Netflix and Amazon are no longer simply distributors sharing content. They are now major investors in programming worldwide.

The recently announced proposed acquisition of Time Warner by AT&T speaks to the value of original content. These large global companies no longer want to merely distribute content. They want to create it. They want to own it.

For example, Netflix spent about U.S. $100 million (C $130 million) to create two seasons of the critically acclaimed program House of Cards. To put that into perspective, this investment represents close to the entire annual budget for each of CBC and Radio-Canada’s non-news programming.

We are exploring opportunities to partner with these large global companies, to invest in quality and to bring Canadian stories to a global audience. A good example of this is our upcoming six- hour screen adaptation of Margaret Atwood's Alias Grace, written and produced by Canadian Sarah Polley and co-commissioned by CBC and Netflix.

The cover promo for Sarah Polley's adaptation of Alias Grace. A mini-series airing on CBC Television in Canada and streaming on Netflix globally

Alias Grace

Netflix invested about U.S. $100 million to create the critically acclaimed program House of Cards = entire annual non-news programming budget for CBC television

But these kinds of partnerships are a small part of the solution to the quality challenge. Global companies do not have an interest in Canadian culture, no reason to privilege Canadian creators among the vast global ocean of content and no particular motivation beyond commercial gain. CBC/Radio-Canada's sole intention is to create, share and champion Canadian content, creators and artists. Our ability to create distinct, compelling Canadian programming will require our own substantial investment in our programming and in programming we create with independent producers going forward. For Canadian culture to thrive, it has to be good enough to stand with the best of the world.

Our focus is not only on the high end of the content business. In French Canada, in particular, the strong interest in French-language Canadian content requires many genres to respond to demand, which challenges us to find cost effective ways of delivering different types of local programming. This provides opportunities to bring stories to screens that resonate with specific communities and allows us to nurture emerging talent. It’s important for developing tomorrow’s creative leaders, especially for francophone and minority communities.

In the face of all of these challenges – broken business model, out of date policy framework, declining support for Canadian content, and increased global competition for content and audiences – we need a new approach to supporting culture in Canada. This new approach must include:

  • a cohesive, sustained and meaningful cultural investment strategy;
  • greater support for public broadcasting to anchor a strong and vibrant cultural economy in Canada; and
  • a consistent approach requiring new media entrants and conventional media to contribute to Canadian content.

We know this strategy can work. Britain has done much of this over the last 25 years, with remarkable results.

Six-part miniseries from Sarah Polley in partnership with Netflix

Alias Grace

Alias Grace

A screen adaptation of screen adaptation of Margaret Atwood’s Alias Grace.The six-hour miniseries is inspired by the true story of Grace Marks who was convicted of murdering Nancy Montgomery and Thomas Kinnear. Alias Grace is written and produced by Sarah Polley (Take This Waltz, Away from Her) and directed by Mary Harron (American Psycho, I Shot Andy Warhol).

Broadcasting in Canada on CBC and globally on Netflix

Inventing next-generation journalism!

Next Generation

In September 2016, we launched a new project called Next Generation – an experimental space, created and managed by millennials, to develop new ways of enriching and sharing news and current affairs content.

Next Generation complements our other initiatives aimed at promoting a culture of innovation at CBC/Radio-Canada: the Idea Accelerator and RC Lab

This team of creators will be tasked with developing storytelling that resonates with millennials, providing them with experiences and interaction. Content will focus on the topics that matter to them, in the format and style they prefer.

More about Next Generation

Canada’s largest French-language web TV entertainment site



Canada’s leading French-language on-demand web television site, featuring content from leading national and international producers and broadcasters. ICI offers a wide selection of TV series, variety shows, documentaries and newsmagazines – wherever and whenever viewers want them. Available via subscription (free of charge to Telus and Rogers customers), the Extra experience gives users access to an even richer and more diverse selection of content, all in HD quality.

This fall, ICI keeps its momentum going, with three new original productions and three returning favourites