RE:Confused of Canada
So to try to answer your question: there is very specific wording that governs the TV licence. The BBC have a charter, which ensures it is at arms length from the government, is not wholey funded by the taxpayer, and also has rules governing how it is to operate such as being available to all. This also prevents it using general taxation or subscription methods to be funded (though this could change with a change in laws). The charter is renewed every 10 years, and has been deliberately set up to preserve the status quo.
In order to watch TV programmes as they are being broadcast in the UK, you must have a TV licence. As of last year, to watch iPlayer (the video on demand service of the BBC) you must have a TV licence.
If you don't fall into those two categories, you don't have to have a licence. So for me, I have Netflix & Amazon subscriptions and only watch TV on demand and not iPlayer - i don't require a licence. I have TVs but they're all for console gaming or watching DVDs. I still don't require a licence.
Personally I would object to having to pay the BBCs bills because I don't use their content.
Would it work out cheaper if paid via general taxation? probably. But then I would have to pay and the selfish type of capitalist I am, I don't want to pay for something I don't use, nor, in my opinion, find of benefit to the public at large. (Though you'd find plenty of my countrymen willing to argue it is of public benefit)
If they went to a subscription model, you'd still have people like me not paying, the effect of general inertia of the populace and the lack of people succumbing to their threats so it would almost certainly raise costs for those who wanted it if the BBC wanted to maintain it's current level of funding. Not to mention that plenty of people don't watch the BBC but do watch other broadcasters and currently legally have to pay the BBC, and wouldn't have to under subscription.
So we're stuck in this ridiculous situation where it's an apparently optional cost, requiring significant knowledge of the loopholes to avoid (as I do), and using threats and legally powerless enforcement officers to shake down those who are suspected of evasion. It is very deliberately kept vague as to what rights their enforcers have (actually very few, though they give the impression they are the equivalent of the police with search warrants) and as such, hundreds of people are prosecuted every year when their only way of catching such people is to get them to self-incriminate themselves. Whilst I object to freeloaders, I object more to the enforcement methods which no other organisation would ever get away with, and thus, I (legally) do not pay for a TV Licence.