Thursday, June 16, 2011

Country would lose money to privatize the CEEB

From the Globe and Mail:

A privatized CBC that would commission less Canadian content, spend more money on foreign programming and compete more heavily with existing broadcasters for ad revenue would generate only $1.16-billion in overall economic activity. Meanwhile, the economic impact of redirecting the CBC’s grant back into general revenues would be $1.8-billion, assuming the money was used according to the government’s current spending profile. But other private broadcasters and media would take a $500-million hit to their economic impact as they faced a new commercial competitor. So Deloitte’s final measure is that privatization would leave the Canadian economy with a loss of about $1.3-billion – or, in the language of the report, the CBC’s net value added is $1.3-billion.
Now, I'm sure that Deloitte did the evaluation based on established methods, and I have no doubt that they had no political motivation.  I question the CBC's motivation for requesting this study, but they are acting in their self-interest, if not mine.

Here's the thing though - Deloitte is assuming that the CBC would continue on exactly as it is currently operating, and that the industry would suffer if the CBC had to compete for all those dollars with everyone else.  Deloitte also assumes that the government wouldn't do something with that additional $1.1 Billion like doing a big fat corporate tax cut that will create jobs and additional economic activity.

Rbairos has it correct:

Lets think this through:

The government takes a 1.1 billion of your tax dollars to generate 1.3 billion in economic activity.  I wonder what economic activity *we the private sector* could generate with A BILLION dollars annually?  Since when has the government *EVER* outperformed the market in anything?
I'd like to see what their study would say about how the economy does with an extra billion dollars in the hands of people who invest and grow.

1 comment:

  1. I,m willing to give it a GO.Cancel CBC,don,t privatize it.Just get rid of it,auction it off to the highest bidder.Instant savings in money of 1.1 billion.
    Instant gratification in TV watching 50% at least.We would not have to listen to Mansbridge or the other crap for brains reporters,so our blood pressure would go down.So the nation would become healthy again..Its a win win win situation.Just get rid of CBC.No more life support.