Policy 2.3.15: Full Program Costing - Labour and Facilities Cost Rates

STATEMENT OF POLICY

The Corporation has endorsed the concept of charging CBC/Radio-Canada programs for the internal Labour & Facilities that they use in the program production process. This policy regulates:

  1. What cost rates are to be used to charge programs for the Labour and Facilities utilized, and
  2. How these cost rates are to be determined.

This policy does not regulate Labour & Facility rates used for external purposes, but rates established under this policy may be used for external purposes.

Labour Cost Rates

  • Labour rates are to be set for each major function/activity identified by the program areas using the salary scales within each bargaining unit.
    1. There are to be two rates for each function/activity: 1. A “standard” rate based on regular salaries and benefits paid.
    2. An “overtime” rate based on overtime premiums, penalties and benefits paid.
  • Labour rates are to be applied nationally, based on the bargaining unit of the service provider.
  • The “standard” labour rates are to be calculated using a capacity level assumption of 100%.
  • Labour rates are to be set at least annually, to be effective April 1st. of each year

Facility Cost Rates

  • Media management will periodically determine which facilities are to be charged to programs and therefore require cost rates.
  • Facility rates are to be determined based on market conditions. If a market rate is not available, then replacement cost may be used to calculate a rate.
  • Facility rates are to be set at least annually, to be effective April 1st. of each year.

HISTORY

  • This policy was updated January 2004.
  • This was originally Corporate Finance and Administration Policy 702.12 - Activity Rate Cards.

PERSON RESPONSIBLE FOR INTERPRETATION AND APPLICATION

All questions pertaining to the interpretation or application of this policy should be referred to the Director, Policy and Internal Control.

DEPARTMENT RESPONSIBLE TO UPDATE THIS WEBPAGE

Corporate Secretariat.

APPENDIX A

OBJECTIVE

The objective of this Policy and the Guidelines that follow, is to provide a framework to ensure that Labour and Facility rates are :

  • Determined using a consistent set of criteria.
  • Comparable between bargaining units and/or media lines.
  • Fair and practical.
  • Simple and understandable.

RESPONSIBILITIES

The Senior Financial Officers at the network centres (Toronto and Montreal) will be responsible for:

  • Ensuring that labour rates are calculated at least annually and are available for use by April 1 of each fiscal year.
  • Coordinating a periodic review of facility rates by the Production Center management and ensuring that facility rates are revised accordingly and available for use by April 1 of each fiscal year.
  • Ensuring that adequate documentation is maintained to support the labour and facilities cost rates being used.

Corporate Industrial Relations is responsible for providing Senior Financial Officers with estimates of salary cost increases by December 31 of each year, so that these estimates can be used in determining the labour rates that will be effective on the following April 1.

Corporate Finance & Admin is responsible for providing Senior Financial Officers with national average percentages or amounts for benefit costs by December 31 of each year so that these estimates can be used in determining the labour rates that will be effective on the following April 1.

GUIDELINES

The following guidelines are to be used in determining labour and facility cost rates.

STANDARD LABOUR RATES

The costs to be considered in developing the standard labour rates include the following:

  • Top of scale salary for each function/activity identified for each bargaining unit. If a significant number of employees ( nationally ) are not at top of scale a more appropriate pay level may be used for any function/activity.
  • Benefit costs, using established rates, percentages or actual fixed costs/ amounts.
  • Cost of penalties which occur during standard work hours.

The 100% capacity used in calculating standard labour rates is made up as follows :

  • 5 days per week for 52 weeks, less allowances for statutory holidays (officially 11 days) granted by CBC/Radio-Canada, annual leave entitlement (based on actual entitlement or averages) and for other absences (i.e. STD, special leave, etc.).
  • The resulting days are then multiplied by the standard hours in a workday as identified for each bargaining unit.

Although rates are calculated for each bargaining unit, similar functions/activities in the English and French units should be priced the same where possible. Therefore, once rates have been calculated for each bargaining unit, they are to be reviewed and significant differences investigated. Where the rates are relatively close they should be changed to a single rate as agreed upon by the Senior Financial Officers at the network centres.

OVERTIME LABOUR RATES

The costs to be considered in developing the overtime labour rates include:

  • Overtime premiums paid (time & one half, double time etc. due to regular overtime worked, work on a day off, work on a legal holiday etc.)
  • Penalty costs associated with overtime hours worked (turnaround, 2nd meal displacements, shift differentials, call-back, night premium, etc.)
  • Benefit costs that apply to overtime payments.

Overtime labour rates can be established in one of the following ways:

  • Determining overtime costs for each function/activity and dividing by overtime hours worked.
  • Expressing overtime costs as a percentage mark-up on the standard labour rates.

FACILITY RATES

  • Facility rates will be based on market rates. If market rates are not available for a particular facility, replacement cost may be used.
  • For comparison purposes, media management may elect to use one market to establish a single market rate for a certain type of facility regardless of location.

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