Thank you, and good afternoon, Mr. Chairman and members of the committee.
We are very pleased to have this opportunity to participate, with our comments, in your committee's important investigation into the role of the public broadcaster in the 21st century.
The Association of Canadian Advertisers is the only association solely representing the interests of advertisers in this country. Our members, over 200 companies and divisions, represent a wide range of industry sectors, including manufacturing, retail, packaged goods, financial services, and communications. They are the top advertisers in Canada, with estimated annual sales of close to $350 billion.
Our organization is concerned, specifically, with the advertising function in our economy and the many different processes it can encompass. Your committee’s mandate for this investigation is quite broad. It encompasses CBC’s role, the services it offers, and the emergence of new media. However, our comments will be confined to the financial services area specified in the mandate.
Advertising is a significant economic force in the world. In virtually all developed countries, advertising is considered an important and necessary component of the communications infrastructure. It is estimated that total worldwide disposable advertising expenditures approached $2 trillion U.S. last year.
Advertising, as you would expect, is also a significant economic force in Canada. Advertising expenditures in 2005 were projected at $13 billion. Direct and indirect employment in this sector represents about 250,000 jobs, or about 2% of all jobs in Canada. Importantly, about 79% of total advertising expenditures remain in the Canadian economy as value added. Compared to most Canadian industries, this is a very high level of domestic content.
Advertising increases government revenues through the income tax derived from the jobs it creates and from the greater sales-tax base that results from it. In short, without the ability, via advertising, to communicate and establish strong brands, we would not be able to differentiate our benefits.