© 1992 Karen Selick
 Hey, What are Friends For?
An edited version of this article first appeared in the April, 1992 issue of Canadian Lawyer.  If you wish to reproduce this article, click here for copyright info.

 Hey, What are Friends For?

Pierre Berton keeps sending me letters about the CBC.  I don't know why.  I've never responded favourably to any of them.  Usually I use the accompanying postage-paid envelope to tell Mr. Berton and his cohorts (who call themselves Friends of Canadian Broadcasting), rather tersely what I think of their project.  I figure a group like that shouldn't mind paying the postage, since they are probably also friends of that other great Canadian communications medium, Canada Post.

Mr. Berton and his friends (some 25,000 of them, he says) want me to send them money to help preserve the CBC.  Its budget has been slashed by the federal government for seven straight years.  Eleven stations have been cut, and more cuts are planned, he says.

Now, I have no objection to sending money to support a worthy cause.  I have even been known to send donations to certain non-profit radio and TV stations.

What irks me about these fundraising letters is that Mr. Berton and friends aren't proposing to hand over the money they raise to actually cover the CBC's operating expenses.  Heavens, no.  They're going to use it to lobby the federal government to spend more tax money on the CBC.

This is really a fabulous new twist on the fundraising methods previously used by the voluntary sector.  Who cares that the vast majority of people disagree with your cause and throw your mailing in the garbage?  As long as a small minority provide enough money for lobbying, you can use the might of the state to make those other curmudgeons fork over the money they refused to donate voluntarily.  That's democracy in action for you.

This group may like to call itself Friends of Canadian Broadcasting, but I prefer to think of them as Enemies of Canadian Taxpayers.    

Most of the 25,000 Friends--and perhaps even Pierre Berton himself--are probably unaware of a few interesting facts concerning the CBC.

Professor Stanley J. Liebowitz, formerly of the economics department of the University of Western Ontario, was hired by the federal government in 1981 to study the efficiency of the CBC.  He compared three groups of television stations: those wholly owned by the CBC, those privately owned but affiliated with the CBC, and those not associated at all with the CBC.

He found that the CBC-owned stations were charging much lower advertising rates per minute than the other two groups, even after adjusting for differences in audience size, audience distance and language.  

More importantly, he found that the CBC-owned stations had significantly higher operating costs than the other two groups, again after adjusting for different audience characteristics.  The costs of CBC-owned stations ranged from 30% to 233% higher than the costs of comparable privately owned stations.

As Dr. Liebowitz so politely put it, the CBC-owned stations "were behaving in a manner likely to lead to unnecessarily large grants from the taxpayer."  Like most other entities on this earth, they were taking the path of least resistance.  It's always easier to sit back and accept a subsidy than it is to worry about maximizing revenues or minimizing costs.

Dr. Liebowitz completed his study in 1981, and asked the government three times for permission to publish it.  Permission was never granted.  Finally, in 1985, it was published by the Fraser Institute.  

What a coincidence that this report was published seven years ago, and that the CBC's budget has been cut for the past seven years!  What a coincidence that the report pointed out enormous inefficiencies in CBC-owned stations, and that eleven stations have since been cut!  

Pierre Berton tells me that the CBC is "an electronic ribbon of steel" tying our country together--by which I assume he means that the CBC has some sort of nationalistic mission that couldn't or wouldn't be fulfilled by private television stations.

That's not consistent with Dr. Liebowitz's findings.  The privately-owned CBC affiliates were carrying the same CBC "missionary" programming, often in equally remote locations, as the CBC-owned stations, but were still making profits while the CBC was making losses. 

In other words, the CBC could accomplish its goals, at much lower cost to the taxpayers, simply by privatizing its wholly owned stations.

Friends of Canadian Broadcasting should also consider a name change to Friends of Canadian Xenophobes.  In addition to resurrecting those demonstrably wasteful subsidies to the CBC, they want to force private broadcasters and cable companies to increase Canadian content on the airwaves.  

What possible justification can there be for this kind of cultural authoritarianism?  Maybe this is another way of protecting the CBC--by ensuring that no-one will be permitted to watch what they want on the competition's stations either.

But, no, Mr. Berton suggests that the goals of the Friends are crucial to Canadian unity and perhaps even to the existence of the country itself.

Frankly, I doubt it.  But suppose for the sake of argument that he's right.  Is a country in which the state must impose a cultural dictatorship really a country worth saving?  Canadians didn't think so when the cultural dictator was named Goebbels.

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June 07, 2000