Thank you, Mr. Chair and committee members.
Good morning. My name is John Hinds, and I'm the CEO of News Media Canada. We're the voice of Canada's newspapers, and we currently represent over 800 daily, weekly, and community papers from coast to coast to coast in English and French.
On behalf of all our newspapers, I would like to thank the committee for this invitation to consider this important issue.
I am here today to speak on the importance of government advertising policy and its impact on communicating effectively with Canadians.
The first issue I would like to deal with is a perception that Canada's newspapers hear far too often: that nobody reads newspapers anymore, or that people don't advertise in newspapers because nobody reads them. Nothing could be further from the truth. In fact, more than ever, Canadians read newspapers. Almost nine in 10 Canadians read a newspaper every week, and that's up from five years ago. Six in 10 Canadians are reading print newspapers every week. Newspaper readership is now multi-platform, with three in 10 Canadians reading both print and digital formats. Even 85% of millennials are reading newspapers, with phone, of course, being their preferred platform.
As you all know, Canada's newspapers are facing a business challenge, as they grapple with changing revenue models, but we don't have a readership problem. There is still a strong case to be made for print readership and for print advertising, particularly with certain key demographic groups. Eight in 10 boomers are reading newspapers, and 64% of those are reading in print. Of business decision-makers, 92% are reading newspapers, and 71% of those are reading print.
Indeed, one of the challenges that you have likely heard about is the ongoing lack of access to broadband by many Canadians. This was referred to by Minister Joly in her cultural announcement last week. In Atlantic Canada, for example, only 70% of non-urban residents have access to broadband, and much less so in the north. Similarly, in Quebec, nearly one quarter of non-urban residents do not have broadband access.
This inequity extends to low-income Canadians. While 95% of Canadians in the highest income quartile are connected, only 62% of those in the lowest income quartile have access. We have also heard a lot about data caps and costs of access to quality broadband.
At News Media Canada, we believe that the Government of Canada has a duty to inform all Canadians about its programs, services, policies, and decisions. Advertising is one of the ways in which the government ensures that individuals, families, and businesses have the information they need to exercise their rights and responsibilities, and to make informed decisions about their health, safety, and security.
While the race to digital is well under way, an important factor that currently escapes many who are responsible for federal government advertising is that Canadians trust ads that appear in newspapers and on news websites. According to a 2016 study by Advertising Standards Canada, 73% of Canadians are very comfortable or somewhat comfortable with ads in newspapers—higher than any other news medium in the country.
Canadians still trust traditional media the most. According to the 2017 Reuters Institute “Digital News Report”, eight out of 10 Canadians still consider traditional media and their brands among the most trustworthy sources. In short, Canadians trust advertising content in newspapers, both print and digital, more than any other media. Ads on social media, such as Facebook, and in search engines, such as Google, are among the least trusted. The difference is most pronounced in the digital sphere, where only 18% of Canadians trust an ad on a mobile device, compared to almost 40% for a newspaper website.
Our research data shows that Canadians want to see advertising of government programs and services in their newspapers: 72% of Canadians want to see government ads in newspapers, while only 40% want to see them in an Internet search, and only 34% on social media.
We believe that the Government of Canada's advertising policy should reflect where Canadians look to find information about their community, and that newspapers, both print and digital, play a vital role in informing Canadians. We believe that the government's advertising spend should be smart and provide information to Canadians in trusted formats where they want to see ads.
We recognize that the government is spending less on advertising. It spent 39% less last year than in previous years. In 2015-16, the federal government spent $42.2 million on advertising, a reduction of $26.5 million from the previous year.
Despite this fact, the decline in federal government advertising expenditure has been well out of line with private sector advertisers. Of the $42.2 million that the federal government spent in advertising last year, the amount spent in daily newspapers was $513,120 or 1.7% of the total government ad spend. The amount spent in community newspapers, $488,563, was 1.6% of the total government ad spend. This decline is way out of line with non-government advertising revenues.
Despite our recent challenges, newspapers remain the third-largest advertising vehicle in Canada, behind digital and TV, with revenues of over $2 billion, or about 17% of total ad sales.
There's an added benefit of a government advertising policy that encourages placing ads in Canada's newspapers. Ads placed in newspapers are effective, and they have the added advantage of strengthening Canadian businesses and Canada's communities.
The Government of Canada has traditionally been the largest advertiser in the country, and for decades the government understood that by working with local media businesses they were enabling local media, not only to inform local residents about government programs and services, but also to report on town councils and local hockey games, while engaging businesses and volunteers in raising funds for local hospitals and the like. Local news doesn't happen when those advertising dollars are sent to Silicon Valley. In addition, these local newspapers employ Canadians and pay taxes, and newspapers still employ about 65% of the journalists in Canada.
This is not an issue that's taking place in a conceptual bubble. My colleague Duff Jamison recently reported that the newspaper in Rainy River had closed. The decline in advertising revenue was the reason, and according to the publisher the largest advertising decline was in government advertising.
I'm coming to you today to underscore the unfairness on today's playing field and to offer you a simple message: that government advertising dollars spent in Canadian newspapers, both print and online, provide an effective way to reach all Canadians, give value for money spent, and support Canadian businesses and communities.
As elected officials and trustees of the public purse, this is a message I sincerely hope you take to heart.
Thank you.