Evidence of meeting #34 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was advertising.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Marc Saint-Pierre  Director General, Government Information Services Sector, Department of Public Works and Government Services
Louise de Jourdan  Director, Advertising Coordination and Partnerships, Department of Public Works and Government Services
Julien Brazeau  Associate Deputy Commissioner, Competition Promotion Branch, Competition Bureau
Mark Schaan  Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry
Adam Scott  Director, Business and Regulatory Analysis, Telecommunications Policy Branch, Strategic Policy Sector, Department of Industry
Jeanne Pratt  Senior Deputy Commissioner, Mergers and Monopolistic Practices Branch, Competition Bureau

11 a.m.

Liberal

The Chair Liberal Hedy Fry

I call the meeting to order.

This morning, as you can see, we have the Department of Public Works and Government Services for the first hour.

We will begin. Members of the department, you know the usual drill. You have 10 minutes between you, and after you finish there will be a question and answer session, then we will move on to the second hour after that.

Mr. Saint-Pierre.

11 a.m.

Marc Saint-Pierre Director General, Government Information Services Sector, Department of Public Works and Government Services

Madam Chair, ladies and gentlemen, my name is Marc Saint-Pierre, and I am the director general of government information services at Public Services and Procurement Canada, or PSPC for short. I am accompanied this morning by Louise de Jourdan, director of advertising coordination and partnerships at PSPC.

It's our pleasure to be here with you today to explain our department's roles and responsibilities to you as defined in the Treasury Board's new policy on communication and federal identity published last May, which relates to your important work.

As the main service provider for the federal government's departments and agencies, our department has two major functions that directly affect the media: first, advertising: and second, buying Canadian media sources.

As defined in Treasury Board's new Policy on Communications and Federal Identity, our main role with respect to advertising is fulfilled by the advertising coordination and partnerships directorate Ms. Jourdan is responsible for. These resources are available to hundreds of advertising and marketing specialists in the Canadian government. We advise and guide departments and agencies on the efficient implementation and management of advertising activities that comply with the government's laws, policies, and procedures.

Ms. Jourdan's directorate has regular discussions with associations and stakeholders in the industry about current practices and new trends. It also produces the Government of Canada's annual report on advertising activities, which you received a copy of.

Finally, the directorate manages the agency of record, a private company under contract to our department following a public tendering process awarded in June 2015. The agency of record is the only unit authorized to buy the vast majority of advertising space and air time at the lowest possible cost for the roughly one hundred government institutions subject to the Policy on Communications and Federal Identity.

Advertising activities in the Government of Canada are governed by the Treasury Board administrative framework and various rules to ensure sound management of advertising campaigns. First, departments and agencies must develop advertising projects that reflect the government's priorities and must submit them to the Privy Council, which is responsible for coordinating all advertising in the Government of Canada. The projects are then presented to cabinet, which decides which ones will be implemented and how much the overall budget will be. The cabinet also determines the maximum amount of funding for each investment and confirms the source of funding. Advertising funds can come from existing departmental resources or from the central advertising fund.

One of the basic principles of government advertising is that each department and agency is ultimately responsible for their advertising campaigns, including decisions on the type of media used. Institutions' media choice is based on a number of factors, including campaign objectives, target audience and market, campaign type, time and scope of the campaign, budget, and the cost of various media options.

You may recall that, in our 2014-15 annual report, total advertising expenditures were nearly $50 million, with 54% of these expenditures being earmarked for the purchase of television ads, followed by 28% to purchase advertising space on the Internet. Ten years earlier, in 2004-05, television ads accounted for 44% of expenditures, followed by 17% of expenditures for advertising in newspapers and dailies, and only 1% of expenditures for online ads.

We do not yet have official data for the 2015-16 fiscal year since the annual report is currently being drafted. This report will be made public no later than January 31. Provisional estimates indicate that we have total expenditures of nearly $42 million. For the period from April 1, 2016, to early October 2016, the fragmentary data on advertising purchased by the agency of record indicates a total of less than $10 million, with over 90% of expenditures having gone to the spring 2016 census campaign.

At its peak, in 2009-10, the Government of Canada spent approximately $136 million on advertising. Over the last six years, we have seen a significant decline in government advertising expenditures, averaging $80 million per fiscal year.

I would remind you that, in Budget 2016, the government announced a recurring additional reduction of $40 million per year. According to the data available, Canada is trending an expenditure of approximately $15.5 billion U.S. in advertising in 2017. The Government of Canada's planned expenditures will account for less than half of a percent of that advertising expenditure.

I'll turn now to the second function of our department, which is media purchasing. For over a decade we have been managing the electronic media monitoring program known as EMM. It provides an effective option on common services to help departments and agencies to meet their responsibilities in monitoring and analyzing the public environment. The program provides media sources to over 100 eligible departments and agencies. This assists departments and agencies with identifying and tracking current and emerging issues related to department policies, program services, or initiatives.

PSPC negotiates the purchase of major sources from content providers that have exclusive news distribution rights. The department provides access to roughly 60 Canadian news sources. This includes newspapers such as The Globe and Mail, La Voix de l'est in Granby, and the Saskatoon StarPhoenix, as well as other media products, such as news wire and transcript from television and radio.

Each year more than $6.5 million is invested in acquisitions from regional and national news sources in English and in French from various regions across Canada. More than 95% of these expenditures are earmarked for purchase of licences for print and online content produced by newspapers. This acquisition is essential for the government because it allows federal departments and agencies to use these sources legitimately and legally since they are, as you know, protected by copyright.

I would like to conclude my remarks with four short statements.

First, the choice of media for advertising campaigns is not within the purview of PSPC, but the institutions responsible for the advertising campaigns.

Second, Treasury Board's new Policy on Communications and Federal Identity, which came out in May 2016, indicates that digital media and platforms are the primary means for interacting with the public. Multiple channels are still used to meet the diverse needs of the public.

Third, Budget 2016 announced that the Canadian government's overall advertising budget in the foreseeable future would be modest and limited, far from the average spending in the 2009-15 period, which was more than $85 million annually.

Fourth and finally, PSPC will continue to work together with suppliers to purchase Canadian media sources within its budget allocation. The fast pace at which the news circulates is a technological challenge that government and industry must face. Our department will continue its efforts, working with its suppliers to maximize the delivery of sources in real time and in compliance with copyright.

On behalf of PSPC, I thank you for your attention. We would be happy to answer your questions to the best of our knowledge.

Thank you, Madam Chair.

11:10 a.m.

Liberal

The Chair Liberal Hedy Fry

Thank you very much, Monsieur Saint-Pierre.

Now we will begin. The first round is a seven-minute round, which includes questions and answers. I'm asking everyone to be as close to your timelines as possible.

We will begin our first round of questions with Mr. O'Regan from the Liberal Party.

November 1st, 2016 / 11:10 a.m.

Liberal

Seamus O'Regan Liberal St. John's South—Mount Pearl, NL

Thank you both for appearing.

One of the common threads that we have heard from a number of smaller sources, particularly smaller local news sources—and not just rural, but smaller sources within cities etc., but basically media—whether it be newspapers, radio, or TV is that they are not receiving the amount of advertising dollars they used to receive from the federal government. Increasingly the federal government is using the new media in its acquisitions, and certainly your numbers bear witness to that.

We're trying to get a handle on the primary function, as you see it, of the federal government in purchasing advertising. In the eyes of some of the people who receive that advertising, these newspapers, radio stations, and television stations I'm speaking of, they see it as a support to them, as well as being a way for us to communicate with our constituents and with the citizenry.

Is that a condition, or is it a consideration, when you are acquiring advertising?

11:10 a.m.

Louise de Jourdan Director, Advertising Coordination and Partnerships, Department of Public Works and Government Services

In fact it's not. The communications policy is very clear: advertising is one way that the Government of Canada fulfills its obligation to communicate with Canadians about its policies, programs, and services, and the like. In the section on advertising, it's actually very clear. The choices are made by departments. Departments are not to use advertising in a way where it shows a preferential choice for a particular supplier. It goes without saying that media relies on ad revenues as their primary vehicle for sustaining their business. The Government of Canada policy is quite clear that it is not a socio-economic tool, so there are no considerations given to that at all.

11:10 a.m.

Liberal

Seamus O'Regan Liberal St. John's South—Mount Pearl, NL

Maybe walk me through the process of what guidelines exist, or how the departments themselves go through the choices of where they place their advertising.

11:10 a.m.

Director, Advertising Coordination and Partnerships, Department of Public Works and Government Services

Louise de Jourdan

First of all, the guidelines don't come from us. Public Works is the operational arm. The policies and any guidelines, processes, procedures come from Treasury Board Secretariat, which is responsible for administrative policy.

As the operational arm, I can walk you through the process. Our job is to in fact do just that: we work with departments to help them understand what the processes are; what laws, policies, and procedures they're supposed to follow in managing their advertising. I can't speak for their particular choices, but I can speak to the process writ large.

A department, typically, for a large campaign, would work with an advertising agency. Advertising agencies are à la fine pointe of their industry. They have proprietary research tools and other research tools. They stay on top of where to find their audience, what their media consumption habits are, what they react to, the time of day that they're on different media. They have access to all of this information.

Typically, a department would work with their advertising agency, and they would say to them—I'm just making this up—“Okay, here's my communications challenge. This is what I want to do. I need to speak to parents of small children about the importance of getting vaccinated.” They would sit down, and they would say, “Here's what we've done in the past. Here are some numbers. Here's how successful we are. Here's where we think there might be a gap.” They would work together with their ad agency, which would come back with research, so evidence, to support their recommendations for media. They would say, “Okay, according to the latest research, this is where you will find these people. Mothers of these small children are using this media, at this time of day. You might wish to do this.” They'll come back with recommendations for a plan. It will be reviewed by departmental experts, so people who are professionals in the communications field, and they might challenge this back and forth. They'll look at whether it jibes with the budget and whatever else. If it all seems to make sense, they will approve that plan.

Then it comes into my group, which does not look at it from a communications perspective; that's not our job. Our job is to look at it and see whether the plan meets policy requirements with respect to things like the federal identity program. So, “Yes, you're creative. It's clearly marked Government of Canada in the way that it should be. You're reaching out to both anglophone and francophone Canadians in an equal way”—based on population distribution and those types of things—“Now with the new policy, your advertising is non-partisan.” We look, and if it hits all of those marks, we then give it an authorization number. That then goes to the next step, which is the buying process. So that authorization number—sorry....

11:15 a.m.

Liberal

The Chair Liberal Hedy Fry

That's okay. You just have one minute left that's all. I'm just warning you.

11:15 a.m.

Director, Advertising Coordination and Partnerships, Department of Public Works and Government Services

Louise de Jourdan

Okay. That authorization number then approves the purchase. There's a contracting department within Public Works. They issue a contract to the agency of record that Marc spoke about, which is the agency hired by the Government of Canada to execute most of its buys. I'm going to say 95% of all buys go through them for the purpose of getting volume discounts and that kind of thing. Then the buy is executed. The agency of record will provide information during the campaign about the results at the end of the campaign, and it's monitored, and changes are made accordingly.

That's basically how it works.

11:15 a.m.

Liberal

Seamus O'Regan Liberal St. John's South—Mount Pearl, NL

Thank you.

11:15 a.m.

Liberal

The Chair Liberal Hedy Fry

We go to Mr. Maguire for the Conservatives.

11:15 a.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Thank you for your presentations.

I think you've probably answered some of this. To continue along that vein of the government's responsibility, do you think it's to support local journalism through its advertising spending, or should it only focus on getting out the product in the best way possible?

11:15 a.m.

Director, Advertising Coordination and Partnerships, Department of Public Works and Government Services

Louise de Jourdan

Well, there's a word in there, “should”. Should is different. I'm not going to speak about that.

Currently the policies and procedures dictate that advertising is a communications vehicle, a tool. Departments are monitored on their results in using advertising like other communications vehicles, how well they do it to meet the job at hand, which is to communicate with Canadians. It's not for any other purpose at this time.

11:20 a.m.

Director General, Government Information Services Sector, Department of Public Works and Government Services

Marc Saint-Pierre

The advertising budget is not a grants and contributions program, so it's specific to achieving advertising objectives in reaching the clientele you want to reach—as of now.

11:20 a.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Do you believe that the federal government has a responsibility to support local journalism in that manner?

11:20 a.m.

Director General, Government Information Services Sector, Department of Public Works and Government Services

Marc Saint-Pierre

My understanding is that a department like Heritage has a grants and contributions program to help the print industry, but it's not within Public Works. It has no grants and contributions program.

11:20 a.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

In regard to something you mentioned in your presentation about digital media and that sort of thing as well, I just want to know all the digital media platforms that the government advertises on today.

Can you elaborate a little more on that, please?

11:20 a.m.

Director, Advertising Coordination and Partnerships, Department of Public Works and Government Services

Louise de Jourdan

Yes. We use Facebook, YouTube, Twitter, Pinterest, Google, Instagram, LinkedIn, Snapchat, Tumblr, Reddit, all in different proportions, the largest of which are Facebook, YouTube, and Google, for search purposes.

11:20 a.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

When you're using those mechanisms and say Facebook is the largest one, where do those funds go? Do you pay those to a Canadian subsidiary or the American side, or—?

11:20 a.m.

Director, Advertising Coordination and Partnerships, Department of Public Works and Government Services

Louise de Jourdan

It's paid. The bill is given to the agency of record. The agency of record is the one that enters into the contracts on our behalf. The contract would be between the agency of record and these social media platforms. It's paid in Canadian dollars.

11:20 a.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Yes, so it's—

11:20 a.m.

Director, Advertising Coordination and Partnerships, Department of Public Works and Government Services

Louise de Jourdan

It's billed. The invoice is in Canadian dollars and it's paid in Canadian dollars.

11:20 a.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Through the Canadian side of the company.

11:20 a.m.

Director, Advertising Coordination and Partnerships, Department of Public Works and Government Services

11:20 a.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Is that the same with Google and some of the other ones as well?