Canada says expects broadcaster CBC to cut costs

Wed Feb 25, 2009 4:34pm EST
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By Wojtek Dabrowski and Randall Palmer

TORONTO (Reuters) - The Canadian government said on Wednesday it expects the publicly owned Canadian Broadcasting Corp to clamp down on costs as the broadcaster faces a grim outlook and an advertising revenue shortfall of up to C$65 million ($52 million).

"We expect the kind of belt-tightening at the CBC as we see with other broadcasters," Deirdra McCracken, a spokeswoman for Heritage Minister James Moore, said on Wednesday.

"The CBC is already receiving over C$1 billion from taxpayers per year."

McCracken's comments came in response to questions about whether the Conservative government would be willing to give more money to the CBC, after chief executive Hubert Lacroix told staff in a memo that the broadcaster foresees an ad revenue shortfall of up to C$65 million for the fiscal year ending March 31.

"The situation is worse than anyone could have anticipated and is not expected to improve any time soon," Lacroix wrote in the memo sent earlier this week.

"The combination of a severe slump in our commercial revenues, coupled with rising costs of production, is a menacing test that will demand some tough choices on our part," he wrote. "Tough choices that will affect, in one way or another, jobs, services and programs in our corporation."

Despite the projected shortfall, Lacroix said CBC will likely break even for the current fiscal year, adding it is the budget for the year ahead that is the more pressing problem.

McCracken said that Moore, the minister responsible for the CBC, has met with network officials. She did not elaborate on the nature of those discussions.   Continued...