CBC could be facing a cut of up to five per cent, or $56 million, from its parliamentary appropriation in the 2010-2011 fiscal year.

That reduction would come on top of a funding shortfall this year of $171 million as a result of a decline in ad revenue.

The federal government has set a target of reallocating expenses by five per cent under its strategic review of government departments and Crown corporations.

The strategic review program, begun in 2007, requires all departments and Crown corporations to look at their spending once every four years, according to a spokesman for the Treasury Board.

CBC president Hubert Lacroix told CBC employees on Friday that CBC/Radio-Canada has been asked to participate in the spending review for 2010-11.

Lacroix is to chair a steering committee that will look at CBC expenditures and try to determine which are lowest priority in relation to the CBC's mandate.

The review, to be conducted over the next few weeks, will result in recommendations to the federal government for its 2010-11 budget.

"The strategic review process helps inform the annual budget planning process, and in this context, results will not be known until the government's budget is released, usually early in the new year," Lacroix said in a note to employees.

"I'll tell you what I can when I can. Hang in there."

CBC is currently in the process of laying off up to 800 employees to save $171 million in 2009-10.

The lobby group Friends of Canadian Broadcasting raised the issue at an appearance before the parliamentary heritage committee on Monday.

Ian Morrison, spokesperson for the broadcast watchdog group, said the government was "kicking the CBC when it is down."

Morrison accused Heritage Minister James Moore of misleading the committee when he guaranteed there would be no cuts to the CBC budget.

Moore said in response to a question from Liberal MP Pablo Rodriguez on April 29 that the government would not be cutting the CBC.

"Friends was relieved to hear Minister Moore's promise to the MPs on April 29. Obviously, we're disappointed that he misled the heritage committee," Morrison said.

A spokeswoman for Moore said the minister did not mislead the committee.

"During the election campaign, we promised to maintain funding levels to the CBC, and that is what has been done," said Deirdra McCracken.

She said the five per cent identified by Lacroix could be reallocated within the CBC rather than cut.

"We've asked the committee to identify the bottom five per cent of programming, and it can be reallocated to more efficient programming," she said. McCracken refused to guarantee there would be no cut to CBC's parliamentary allocation under the review.

"In the case of the CBC, we'll see what it comes up with," she said.

The Canadian Media Guild, one of the unions that represent CBC employees, also objected to the review during its appearance before the heritage committee.

"Such a cutback would be devastating and would hurt efforts to restore local programming proposed by the CBC," said spokesman Marc-Phillippe Laurin.

CBC listeners in Windsor and Sudbury have held protests to express their disappointment over cutbacks in local newsrooms, he said.

Laurin urged the government to follow the recommendations of a February 2008 report from the heritage committee to raise CBC's allocation to the equivalent of $40 per Canadian, from the current level of $34 per Canadian.

Laurin also warned that the move to digital transmission over the next few years could result in the loss of an over-the-air signal to 10 million Canadians. Broadcasters are balking at the cost of shifting regional transmitters to digital, he said.

Several speakers before the committee expressed concern about the loss of regional programming.

Sylvain Lacroix, representing francophones in the Timmins area, said northern Ontario has been all but abandoned by the private networks, and recent cuts to CBC have further hurt regional programming.

Any new framework for Canadian TV should mandate spending on regional news and programming, he said.