Canada's public broadcaster does not have the capital it needs to roll out high definition television in Canada or to expand radio coverage to underserved markets, CBC representatives told a parliamentary heritage committee on Tuesday.

CBC president and CEO Robert Rabinovitch told the House of Commons committee the CBC's capital budget is down 30 per cent due to cuts made to its federal allocation.

The CBC needs a new contract with Canadians, preferably with a 10-year mandate and a firm funding commitment to give Canadians the improvements they want, including HD TV and more regional radio, he said.

Rabinovitch, along with CBC's executive vice-president of English services Richard Stursberg and executive vice-president of French services Sylvain Lafrance, presented during the final hearing before the heritage committee makes its recommendations on a new mandate for the broadcaster.

"The problem with the digital service is that we just don't have the money," Rabinovitch said.

The CBC's French service, Radio-Canada, has transformed its new studios to high-definition and the CBC is preparing for an Olympic broadcast next year that will be 100 per cent HD, he said.

"But it's expensive," he said, adding that the CBC also faces looming capital costs from aging equipment, including the broadcast towers it uses for over-the-air TV.

He estimated it would cost $100 million to $150 million to make a full transition to high definition service.

Expanding regional radio will cost an additional $25 million in capital and $25 million annually in operating costs, he said.

The underserved radio markets are not in remote areas, but rapidly growing communities such as Guelph and Hamilton in Ontario and others in southern Alberta, where currently there is no regional radio programming from the CBC.

New technologies attract younger audience

At the same time, the public broadcaster is striving to reach new listeners and viewers by integrating its existing services with new technologies, such as podcasts, cellphones and live streaming.

"The public broadcaster must serve Canadian viewers in ways they want to be served," he said.

Already radio, which traditionally appeals to an older demographic, is attracting more 18-to-35-year-old listeners because they can download programs such as Quirks & Quarks and Ideas onto an iPod, he said.

Ultimately, CBC would become a "content provider" distributing its programming through many different types of technologies, Rabinovitch said.

"We have a vision and we hope you will give us the tools to help us do it," he said.

A contract reviewed on a regular cycle would provide direction on what Canadians could expect from their national public broadcaster in return for a clear commitment from government on funding, Rabinovitch said.

The current Conservative government is reviewing all its operations, including Crown corporations, with a view to cutting expenses by five per cent over the next four years.

VP grilled over Tim Hortons comments

The CRTC's recommendation that more ads be allowed on TV would probably not make up any funding shortfall at the CBC, Rabinovitch said.

If there are further cuts in the CBC's funding allocation, that could lead to cutbacks in programming, he said.

Stursberg was questioned by committee members about his recent comment that CBC must become the Tim Hortons of broadcasters, rather that the Starbucks.

"The purpose of the metaphor is to capture what the CBC is trying to do," he told the committee.

"In the English service, the biggest challenge is failing to produce entertainment programming that Canadians will watch. We're the only country in the industrialized world that prefers programs from a foreign country," Stursberg said.

CBC programming should not be for an elite audience, but have wide appeal, he said.  "Hortons is ... the service that has broader public appeal."

Stursberg renewed his plea for fee-for-carriage for the CBC — in which cable and satellite firms that carry the CBC signal would have to pay for it.

CBC has already boosted its revenues from sources other than advertising, and all that money has gone into programming, Stursberg said.

But the current system of year-to-year budgets leaves the broadcaster little room to take risks, he said. A long-term mandate would give the network more latitude to experiment with programming, he said.

Rabinovitch completes his term as CBC president on Dec. 31.