Government Operations Committee on June 15th, 2017

[The Chair, Conservative, Tom Lukiwski]

Colleagues, I call this meeting to order. It's meeting number 94 of the Standing Committee on Government Operations and Estimates.

We have with us today a number of witnesses who will be talking about the government's communications policy pertaining to government advertising.

Before we begin, I'm just going to check with our technicians, as we do have video conference participants from Toronto. We were trying to get the video conference established before we commenced. I see we don't have it yet, although we should within a matter of minutes.

We wanted to have our witnesses from Toronto give their opening statements first, but I think we'll start with some of our other witnesses since we don't have the video conference link established.

Number two on my list is Madam Baird from the Treasury Board Secretariat.

Madam Baird, welcome to committee. Perhaps you wouldn't mind giving us your opening statement, please.

[Louise Baird, Assistant Secretary, Strategic Communications and Ministerial Affairs, Treasury Board Secretariat]

Certainly, Mr. Chair, and thank you for the invitation to appear before your committee.

My name is Louise Baird. I'm the assistant secretary of communications and ministerial affairs at the Treasury Board Secretariat.

Today I'd like to take you through the key elements of the Government of Canada's new policy on communications and federal identity that governs advertising. I'll highlight some of the significant changes from the former communications policy.

This new policy sets out rules for the government's communications activities and, first and foremost, how it communicates with the public on policies, program, and services.

Prior to May of last year, the policy, which first came into effect in 2002, had not been significantly updated since 2006. There were some minor modifications introduced in 2012, but these were mostly administrative in nature.

As we all know, the communications environment has evolved dramatically in recent years. Canadians seek out their information through digital channels, and government now primarily interacts with the public through the web and social media.

The new combined policy is supported by the new directive on the management of communications.

Together they modernize the practice of Government of Canada communications to keep pace with how citizens communicate in what is largely a digital environment.

The policy has been streamlined by removing requirements that were duplicated in other Treasury Board policies and by focusing on what is most important. The result is that the number of policy requirements has been reduced from 330 down to 97.

Whereas the previous policy targeted the institution as a whole, the new policy provides more precision. It clarifies accountabilities for deputy heads and for heads of communications, and it provides greater flexibility for departments to determine roles and responsibilities based on their specific needs.

It also sets out the rules related to the Government of Canada's corporate identity. The consistent use of this identity helps brand initiatives, allowing Canadians to easily recognize government programs. It covers the Canada word mark, departmental signatures, and the arms of Canada. The Government of Canada's identity continues to have primacy over the identity of individual departments. It cannot be overshadowed by other logos.

Treasury Board approval is required for those who wish to replace official symbols or add an additional identifying symbol to a department's corporate identity. One new feature: departments must now use their applied title, which is the official departmental name, or the title "Government of Canada" in all of their communications products and activities.

Allow me to take you through four key elements of the new policy: non-partisan communications, spokespersons, digital communications, and public opinion research.

There's been a significant strengthening of the policy and directive with respect to non-partisan communications. While the previous policy required the public service to carry out communications activities in a non-partisan way, it did not include a definition of “non-partisan”. There was really no specific guidance. The new policy explicitly defines, for the first time, the term “non-partisan communications”. “Non-partisan communications” means:

Objective, factual and explanatory; Free from political party slogans, images, identifiers; bias; designation; or affiliation; The primary colour associated with the governing party [cannot be] used in a dominant way, unless an item is commonly depicted in that colour; and Advertising [must not include the] name, voice or image of a minister, member of Parliament or senator.

Let me emphasize that all Government of Canada communications activities must be non-partisan.

With regard to advertising, we put in place an independent third party oversight mechanism to ensure non-partisanship. It's mandatory that campaigns with budgets over $500,000 must be reviewed. Departments may voluntarily submit smaller budget campaigns for review.

During the review process, should there be a disagreement, the matter will be referred to the secretary of the Treasury Board for resolution. To date, there have been no disagreements with the reviews.

These reviews are conducted at two stages; an initial one, done in the planning stages with concepts and story boards; and a final review, done prior to the advertising going to market.

These reviews are currently carried out by Advertising Standards Canada, who we'll hear from, through a contract with the Government of Canada. The Treasury Board Secretariat meets regularly with the ASC and Public Services and Procurement Canada to discuss the review process and other operational issues. At the end of the review, all these review reports are posted publicly on Canada.ca. ASC is the national not-for-profit organization that administers the Canadian Code of Advertising Standards. The code sets the criteria for acceptable advertising that is truthful, fair, and accurate. You'll hear more from ASC directly in a few minutes.

The government has also asked the Office of the Auditor General to audit the review mechanism and criteria to assess the effectiveness of the process. The Auditor General will confirm the scope and timing of this audit.

Under the policy, departments have not been allowed to advertise during a general federal election. The new policy extends that period to include the 90 days prior to a general federal election on a fixed date.

I'll make two additional points on advertising. Under the new policy, it is now prohibited to advertise initiatives not yet approved by Parliament, and trade agreements that require ratification cannot be advertised until ratified.

Let me now turn to the subject of spokespersons. Ministers continue to be the principal spokespersons for their departments. However, the new policy clarifies the role of departmental officials to ensure government information is made available to Canadians in a more complete and timely manner.

This is being achieved by allowing subject matter experts, including scientists, to speak publicly about their work without being designated as a media spokesperson. Designated media spokespersons continue to speak in an official capacity on behalf of their department regarding its policies, programs, services, and initiatives. In performing their duties, all public servants must respect privacy and security policies, and the values and ethics code for the public service.

Turning to digital communications, the new policy sets out very clearly a digital-first approach. What this means is that departments and agencies are using the web and social media as the principal channels to connect with Canadians. It's important that the government make information available and engage citizens on the platforms of their choice.

At the same time, we recognize that there are Canadians who will continue to require traditional methods of communications, so multiple channels are still being used to meet the diverse needs of the public. This approach allows the government to reach and engage with Canadians effectively in the official language of their choice, regardless of where they reside or what tools they have at their disposal.

One of the objectives of the policy is to ensure that the views and interests of the public are considered when developing policies, programs, services, and initiatives.

This brings us to the issue of public opinion research. Public opinion research is an important tool for seeking the views of Canadians. In the new policy, the approval level for this research has moved from the minister to the deputy head. This also provides an additional safeguard against the potential of public opinion research becoming politicized.

In addition, the policy provides a new definition of “public opinion research”, making it less restrictive. For example, usability testing, which is often used in the development of web content, is no longer considered public opinion research. This will make it easier to continually improve government information and client services through the use of various web analytics tools.

Mr. Chair, this concludes my remarks. I'll now turn it over to my colleagues.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We also have with us today from Advertising Standards Canada, Jani Yates and Janet Feasby.

Welcome. I'm hoping you're able to hear us as well as see us. We originally had you scheduled to give your presentation first, but because of the delay in getting our video conference link, we had to move on without you. Now that you're here, I would ask that you please give us your opening statements. Following the opening statements of our other witnesses here on site, we'll enter into a question and answer period.

Please, the floor is yours.

[Jani Yates, President and Chief Executive Officer, Advertising Standards Canada]

Good morning.

Thank you for the opportunity to speak to the Standing Committee on Government Operations and Estimates. Ad Standards is the national, independent, not-for-profit advertising self-regulatory body. For over 60 years, we have fostered community confidence in advertising and ensured the integrity and viability of advertising in Canada through responsible industry self-regulation. Advertising Standards Canada administers the Canadian Code of Advertising Standards, the principal instrument for advertising self-regulation in Canada and a national mechanism for accepting and responding to consumers’ complaints about advertising.

Through pre-clearance of advertising and through industry education, ASC Clearance Services also helps to ensure that advertising in five regulated categories complies with the government requirements affecting advertising, as well as specific industry codes and guidelines. The five regulated categories are children’s advertising, alcohol, food and non-alcoholic beverages, cosmetics, and consumer-directed non-prescription drugs.

Due to Ad Standards’ experience in reviewing advertising, in 2016 the Government of Canada asked us to review government advertising based on criteria outlined in the policy on communications and federal identity and the directive on the management of communications. Ms. Baird just went through the four key areas: objective, free from political party slogans and the primary colours associated with that, etc.

Ad Standards has just completed its first year, having undertaken over 1,800 reviews. The process involves an initial review of advertising campaigns with budgets over $500,000, which is mandatory, while departments may also choose to voluntarily submit campaigns with smaller budgets for our review. The initial review is then followed by a final review. Ad Standards’ reviews are posted on the Government of Canada’s website.

We have just signed a second-year contract, ending March 31, 2018, under which we will continue to review Government of Canada advertising against the criteria set out in the contract. We will also continue to participate in quarterly, or as needed, meetings to review the process and any other emerging operational issues.

Ad Standards thanks the Government of Canada for this opportunity and welcomes any questions.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, both of you, for your opening statements.

We'll now go to Madame Fox for an opening statement, hopefully of 10 minutes or less.

[Christiane Fox, Deputy Minister, Intergovernmental Affairs and Youth, Privy Council Office]

Perfect, thank you.

Mr. Chair, ladies and gentlemen of the committee, thank you for this invitation to provide information on government advertising with my colleagues from other central agencies.

I am here today in my former role as the PCO's assistant secretary to the cabinet for communications and consultations. I have since accepted a new position as deputy minister of intergovernmental affairs and youth, but I occupied the assistant secretary position from March 2015 until last week.

As mentioned by my Treasury Board Secretariat colleague, the current process for the management of advertising was established in 2016. There were two important changes in the policy. The first one was the introduction of a clear non-partisan requirement for all government communications, and more specifically for advertising, and the establishment of an independent, mandatory oversight mechanism for any campaign with a budget of over $500,000. The second change was the suspension of advertising activities 90 days prior to a general election on a fixed date. Another important change last year was the commitment made by the President of the Treasury Board to reduce advertising expenditures, which was also confirmed in budget 2016.

Also important to highlight is the fact that campaigns on initiatives that are subject to parliamentary approval or related to trade agreements that require ratification, as Ms. Baird pointed out, cannot take place until such approval has been received.

As noted by my colleague, the new advertising oversight mechanism is now in place for all campaigns over the $500,000 threshold. On a voluntary basis, we can also submit for approval campaigns with a different value.

It is important to note that this process was established as an interim mechanism. The government has asked the Office of the Auditor General of Canada (OAG) to conduct an audit of this process. The scope and timing of these audits will be determined by the OAG. This process will remain in effect until a permanent oversight mechanism is established, in the form of legislation.

As part of its advisory role during campaign implementation, including ensuring that all advertising activities comply with the government's laws, policies and procedures, Public Services and Procurement Canada serves as the liaison between departments and Advertising Standards Canada (ASC) during the ASC's review process.

With respect to the role of each of the players in the government advertising process, the respective roles and responsibilities of institutions are established for all stages of an advertising campaign, including planning, implementation, and evaluation. In terms of PCO's role more specifically, it's very much in line with our role in government communications more broadly in that it focuses on the coordination of government communications generally and on advertising specifically.

In collaboration with departments, ministers' offices, and the Prime Minister's Office, PCO develops the Government of Canada's annual advertising plan in accordance with government priorities as determined by the Prime Minister, cabinet, cabinet committees, the Clerk of the Privy Council, and as described in the Speech from the Throne and in the budget.

PCO provides leadership, a challenge function, strategic direction and coordination during the implementation of major advertising campaigns. We also advise client departments on advertising, creative, and media strategies. Having a global view of all advertising campaigns within the government's broader communications strategy allows us to provide strategic advice on campaign timing and messaging. Our overarching role also allows us to share lessons learned from recent campaigns and apply them to future campaigns. We also provide feedback on creative work and on strategies, including suggesting alternative means of reaching target audiences and ensuring that all safety regulations are followed.

We also provide advice on public opinion research activities related to advertising, such as the best concept testing approaches for a given campaign. We can suggest, for example, in-person versus online testing. We also conduct post-campaign evaluation analyses.

While PCO always ensures that government communications are non-partisan, it does not play an active role in the non-partisan review process or in contracting for advertising. Rather, this is part of Public Services and Procurement Canada's and Treasury Board Secretariat's responsibilities.

Advertising activities can be funded by two sources: departmental operating budgets and the central fund, which was established in 2004 to support major government priorities. Last year, the government announced a permanent annual reduction of $40 million in advertising expenditures.

The objective when planning government activities is to stay within this commitment by using both paid and unpaid communications channels to inform Canadians on key programs and services.

From 2005-06 to 2014-15, the government's advertising expenditures averaged approximately $80 million per year. According to the information collected by Public Services and Procurement Canada , we anticipate last year's expenditures to be less than $40 million. Final expenditures, once all invoices are received and verified, will be published in the annual report on advertising activities prepared by my colleagues.

This year's plan is very much a continuation of a number of last year's themes, for example, education and skills, Canada 150, free admission to Parks Canada places, settlement services for newcomers, and remembrance. All these initiatives will be funded via the central fund. National Defence and the RCMP will also continue their recruitment advertising campaigns using departmental funds for this year.

So how are advertising campaigns selected?

As part of the annual advertising planning cycle, departments and agencies prepare their annual advertising forecast. These forecasts include proposals to access the central fund for key government priorities.

Based on these priorities and the budget available in the central fund, PCO then prepares the Government of Canada advertising plan in close collaboration with departments and the Prime Minister's Office. The plan is then presented to the prime minister for approval and shared with the Cabinet Committee on Open and Transparent Government.

Once the plan is approved by the prime minister, PCO then prepares an omnibus Treasury Board submission to seek funding authority for campaigns funded via the central fund. The funding amounts are then submitted to Parliament as part of the government's estimates process.

Departmental advertising is also an important part of government advertising activities. It is most often local and targeted. Examples include legally required advertising, such as notices regarding permits or endangered species. There are also revenue-generating activities—such as Parks Canada tourism advertising—, program-related activities—such as the agricultural loans program— and recruitment-related advertising, as I said, for the RCMP or DND. There are also Health Canada recruitment notices for nurses for the North.

While advertising themes are relatively similar from year to year, at any time, unforeseen advertising campaigns could be deployed in the context of a major health crisis such as we saw during 2009-10 with H1N1. As has been mentioned by my Treasury Board colleagues, regardless of the source of funds, all government advertising is subject to the legislation, policies, and procedures that govern this function.

To assist all departments in complying with the new partisan requirement, a new coordination process was put in place, and PSPC serves as the liaison between the departments and ASC. As was also noted, the government's overall advertising expenditure has in fact been reduced. Given this cap, we need to work with departments on both earned and bought media in communicating our activities.

My colleague Marc Saint-Pierre will now give you an overview of the role of Public Services and Procurement Canada.

I hope this overview has been helpful to you today. I'd be happy to take your questions.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Finally, we have Monsieur Saint-Pierre.

Please give us your opening statement, sir.

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

Mr. Chair, members of the committee, ladies and gentlemen, my name is Marc Saint-Pierre. I am the director general of government information services at Public Services and Procurement Canada. I am accompanied by Caroline Mitchell, director of advertising coordination and partnerships at PSPC.

It is our pleasure to be here with you today to explain our department's roles and priorities as defined in Treasury Board's new policy on communications and federal identity, published in May 2016, and which relate to your important work.

Our department is responsible for three components of advertising. These components are managed by three separate administrative units.

The first component concerns the communications sector, which reports to the deputy minister and is responsible for coordinating advertising purchases within our department. However, as you know, PSPC is a very small advertiser, accounting for less than 1% of government spending.

The second component is the responsibility of the PSPC acquisitions branch, which is the contracting authority for the advertising services used by institutions. Thus, the department is responsible for the integrity of the government contracting process for advertising and public opinion research.

Finally, through the integrated services branch (ISB), which is my branch, our department provides advice to institutions on advertising laws, policies and procedures. This is the third and final component for which our department is responsible, providing advisory and consulting services and training.

The advertising coordination directorate, under Ms. Mitchell, is also responsible for the dissemination of advertising materials and best practices. These resources are available to hundreds of advertising and marketing specialists in the Canadian government.

We advise and guide institutions on the efficient implementation and management of advertising activities that comply with the government's laws, policies and procedures including the non-partisan review of advertising materials.

This directorate also has regular discussions with associations and stakeholders in the industry about current practices and new trends. It also produces the Government of Canada annual report on advertising activities.

Finally, ISB manages the agency of coordination better known as...

“agency of record”, or AOR.

It is a private company under contract to our department following a public tendering process awarded in June 2015. The AOR 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.

I will now share with you a concrete example of PSPC's role in non-partisan advertising. Last year, in 2016, the Department of Finance managed a campaign for the budget and fiscal economic update initiative for Canadians. This campaign was an over $500,000 case, so we went through a two-step process.

The first review is on initial draft creative material and consists of the following. Finance Canada will submit the advertising review form, which can be found on the web, along with the creative material to PSPC for an initial non-partisan review. PSPC will complete that form and forward it to Advertising Standards Canada for initial review of the creative material of the Department of Finance. ASC returns its determination that the draft creative materials of Finance Canada meet all non-partisan criteria to PSPC. We inform Finance of this decision by sending them the form, and the form is also sent to Treasury Board.

The second part of this review is on the final creative materials. Once again, Finance will submit to us, PSPC, the form with all the final creative materials for final non-partisan review. We will complete our part of the review submission form and forward all creative materials to ASC for final review, both in French and in English. ASC will return to PSPC its determination that the final creative materials of Finance meet all non-partisan criteria. We will send that form to Finance, and we will send a copy to Treasury Board. After that, those forms are posted on the website.

I have the Finance example that you can see there. You have a four-page document explaining all the ASC agreements on this.

As of June 1, 2017, 15 campaigns were reviewed and approved as part of this new process. To name a few: Immigration, Refugees and Citizenship Canada's electronic travel authorization campaign and settlement services campaign; Canada Revenue Agency's services campaign and tax compliance campaign; and finally, National Defence's recruitment ambitions campaign, phase one, and its priority occupations campaign. Finally, another example will be Employment and Social Development Canada's campaign on helping young Canadians succeed.

The next annual report is to be released in January 2018. We will provide information on the business volume of all of Government of Canada advertising campaigns contracted between April 1, 2016, and March 31, 2017, including all campaigns that went through this new review.

Advertising activities in the Government of Canada are governed by an administrative framework and various rules to ensure sound management of advertising campaigns. First, the departments and agencies must develop the advertising projects that reflect the government's priorities, and they must be submitted to the Privy Council Office, 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. The cabinet also determines the maximum amount of funding for each one and confirms the source of funding. As was said previously, advertising funds can come from existing departmental resources or from the central advertising fund.

One of the basic principles of government advertising is that the institutions are ultimately responsible for their advertising campaigns, including, and it must be noted, decisions on the types of media used. Institutions' media choices are based on a number of factors, including: campaign objectives; target audience and market; type, time, and scope of the campaign; budget; and the cost of various media options.

You may recall that in our 2015-16 annual report, total advertising expenditures were $42.2 million. Of that amount, 51% was spent on television, 34% on digital advertising, and 15% on print, radio and out of home. At a glance, 49 institutions launched more than 70 advertising campaigns between April 1, 2015 and March 31, 2016. Of these, 11 institutions had media expenditures of more than $500,000, accounting for 86.7% of all advertising expenditures.

I would like to conclude with four points.

First, Public Services and Procurement Canada (PSPC) plays an important role in the management of advertising within the Government of Canada. It provides advice about relevant government legislation, policies and procedures to federal institutions as they undertake advertising.

Second, with the updating of the policy on communications and federal identity, PSPC has updated its procedures to assist federal institutions in obtaining non-partisan reviews.

Third, PSPC helps federal institutions submit advertising materials for campaigns over $500,000, in both production costs and media placements costs, to the Advertising Standards Canada for the two part non-partisan review process. As I said, there is the initial stage where draft creative is reviewed, and the final phase where final materials are reviewed prior to placement or airing.

Overall, at this point, the process is working smoothly.

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 very much.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much to all of our witnesses.

Colleagues, we'll commence with our rounds of questioning. I have a quick comment before we do. We have a little less than 90 minutes for the remainder of this meeting. I'd like to save about five minutes or so at the end to go in camera to talk about future business and our future meetings. We should be able to get through a complete full round and one additional seven-minute round.

With that, I'll start the questioning with Mr. Whalen, for seven minutes, please.

[Nick Whalen, Liberal, St. John's East, NL]

Thank you very much, Mr. Chair, and thank you, witness, for joining us on somewhat short notice. Obviously, advertising standards and advertising spend of the government was an election issue in 2015 and commitments were made, so we're thankful for this opportunity to try to evaluate whether the measures that have been put in place are sufficient and achieve the goal.

My first question concerns the types of media that are being purchased. When I look at the spend for the previous year, for which we have reports, about 51% was on television, 34% on digital, and 15% on print. How does that compare to the previous distribution of media spend, say, over the period of study that you talked about, for the previous nine years?

[Louise Baird]

I can start and my colleagues might want to add something.

In the policy, we did emphasize that digital should be the initial approach for government departments to communicate with Canadians. Obviously, that's what's happening in the world. People are using digital more often, so we have seen quite a significant rise in the percentage of digital campaigns. I think we're up at about 34% of spend that's on digital now.

[Nick Whalen, Liberal, St. John's East, NL]

If I look at print and radio, which is like small-market marketing campaigns, it looks to be about $6 million for that fiscal year.

What would it have been over the previous period of time? Government advertising in small-market media tends to support that media. It's a good buffer for them. How much has been withdrawn from the small-media marketing by government? If it was $6 million in the previous year, what was it like over the previous nine years?

[Christiane Fox]

I think I can answer part of that question, in the sense that absolutely, there has been an increase in digital. As you noted, that's what the dollar distribution—

[Nick Whalen, Liberal, St. John's East, NL]

Do you have a dollar amount for the decreases?

[Christiane Fox]

Yes.

It's 34% in digital in 2015—

[Nick Whalen, Liberal, St. John's East, NL]

I was just worried about the print and radio. What has been the reduction? We're spending about $6 million per year now. What were we spending on average on print and radio in the previous 10 years?

[Christiane Fox]

I can tell you percentages. From 2011 to 2012, we were spending 14% in digital and now, we're spending 34%.

[Nick Whalen, Liberal, St. John's East, NL]

For print and radio, please.

[Christiane Fox]

For print and radio, I'll see if I have that somewhere.

[Nick Whalen, Liberal, St. John's East, NL]

I'm assuming it's roughly a reversal, but also a reduction.

[Marc Saint-Pierre]

Media by radio for fiscal year 2010-11 is $4.879 million and for fiscal year 2016-17—

[Nick Whalen, Liberal, St. John's East, NL]

What was the print for that year? That was just radio.

[Marc Saint-Pierre]

That's 8% for radio and for print, I have it divided in all kinds of print.

[Nick Whalen, Liberal, St. John's East, NL]

From the percentages, it sounds like it's a drop, but it's about a role reversal really. It used to be 34% of $80 million, so something on the order of $25 million or $26 million and it dropped down to $6 million. Therefore, we've taken $20 million per year out of the small-market media buy. Is that about right?

[Christiane Fox]

I'd have to check the math, but, yes.