Government Operations Committee on Oct. 3rd, 2017

[Erin Weir, NDP, Regina—Lewvan, SK]

In terms of how to encourage more government advertising in print media, we've heard a couple of different options.

Mr. Saras, you mentioned the Italian government directly subsidizing publications.

Mr. Holmes, you mentioned tax measures to support advertising.

Those are legitimate policy tools, but they're really outside our committee's purview. We're looking at the government's advertising policy, so I'm wondering if witnesses are looking for a requirement that a government put a certain percentage of its ad spending into print, if you're looking for the government to mirror the private sector's allocation of advertising dollars between different media.

If you could design the policy, what would you be looking for?

[John Hinds]

I think we'd ask for a smart policy, really targeting who you are advertising to. As we said earlier, if seniors are reading and boomers are reading newspapers, you should be targeting to the people you want to target. If you're targeting people in rural Canada, you should be using the most appropriate medium for that.

I think what we're saying, and what we've said to government all along, is you need to know who you're targeting, and then target your advertising dollars to that. The broad brush of digital may give you lots of clicks, but is it really impacting people who need it? And I would argue, again, that when you look at broadband penetration, when you look at seniors, when you look at low-income Canadians, many of whom the government are targeting for their advertising campaigns, again filtering the targeting of those people and those groups into the advertising buy is important. So I think we're saying buy smart.

[Erin Weir, NDP, Regina—Lewvan, SK]

Beyond encouraging government decision-makers to be smarter, how could we actually change the policy to encourage that?

[Matthew Holmes]

I could build on that. I would advocate for some specific values being put into the guidance that address a requirement for a diversity of media and forms of media being recipients of the advertising as well as some sort of assessment or benchmarking for the actual magnifier effect, the economic impact of that advertising that goes beyond just the audience. As I said in my testimony, we never had to question ourselves about that. Everything we did as a government advertising in Canadian media was ipso facto Canadian media. That's no longer the case.

[Erin Weir, NDP, Regina—Lewvan, SK]

I don't want to exclude our video conference guests, just in terms of your asks of the government policy.

[The Chair, Conservative, Tom Lukiwski]

Perhaps we'll go to Edmonton first.

[Dennis Merrell]

I think, further to the comment that was just made, that really if the federal government advertising policy more reflected what John mentioned, private sector advertising, certainly they're spending more vociferously in community newspapers and dailies than is the federal government, and you have to wonder about that. They do seem to understand that in order to reach particularly community newspaper audiences, which are largely rural, you just really need to at some point look at newspapers because they're the one medium that can really effectively reach 80% to 90% of those folks living outside the major centres.

I think that if the policy more reflected...we really as a government should try to reach the majority of Canadians. You just simply can't do that through digital advertising alone. And I think it has gotten tilted far too much in that direction, in my opinion.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Mr. Saras.

[Thomas Saras]

Yes. At this point, a percentage of the total budget every year was devoted to support the ethnic press. I don't know how much that portion was, but we were arguing always for a bigger part because much of their total amount was going to the mainstream media.

As I've said before, the last three years, my members have not been receiving even a penny from the Government of Canada. I believe that the last year even the Government of Ontario cut down in advertisement, although next year we are going to have elections here and now I hear that they are preparing a budget for advertisement. And besides all those things, if you allow me, the Government of Quebec, for example, instead of supporting the ethnic press or the press as an industry, imposed a new taxation on the circulation of the papers for environmental reasons, which means these people not only don't receive a penny, but now they have to start paying to the Government of Quebec for circulating 10,000 copies or 15,000 copies or 5,000 copies. This is going to—

[The Chair, Conservative, Tom Lukiwski]

Unfortunately, Mr. Saras, we're well over time. We'll have to go to our final intervenor.

Madam Ratansi, please.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you all for being here.

I am coming back to the purpose of this study which is that in May of 2016 the government came up with a new policy that put a cap on what ASC would review, a $500,000 cap on advertising, and it should be non-partisan.

My question is to everyone. Is $500,000 a higher limit, because we had professors of journalism who told us that when you're asking for government advertising, is it the economic plan in action, is this the advertising you're wanting? Or is it advertising that says “Here is my program” with a Liberal logo on it? What is it that you're looking for, because we're saying the new policy has to address non-partisanship. How are we all going to ensure that non-partisanship is addressed? Secondly, is the $500,000 limit, from a governance perspective, too high a limit? If the ethnic media were to access advertising, say, and it was not an envelope of $500,000, what should be the limit?

Mr. Hinds, perhaps I can start with you.

[John Hinds]

Certainly. I think in terms of the ASC limits, most large campaigns would be over the $500,000 mark.

In our view, we would like to see smart government advertising in terms of advertising government programs and services. I don't think there's much partisan advertising around now. Obviously, political parties, MPs, and third-party interest groups, will also advertise but that's the partisan....

In terms of government advertising, I think what we're looking for is engagement with Canadians about government programs and services in their communities.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

How do we balance? If I advertise programs in the Toronto Star or The Globe and Mail or the digital media, or in magazines, how do I choose which local papers I should go to? I think I need help from everyone. How does the government choose which local papers or ethnic papers it should go to, because it has a limited budget?

[Thomas Saras]

The government has the ability to monitor the circulation. Usually, the circulation plays a major role for the decision-makers as to which paper they will advertise in. Therefore this is not a problem.

The other thing about the $500,000 or not, that depends on the programs and the message the government wants to send out to communities. If the government comes out every day with new measures, of course new advertisements would follow in order to make sure that across the board all communities receive the message.

If the government—

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Saras, I have a question for you.

You said that the government had sent money to a group of individuals who created a company and you thought there was some sort of collusion or a fraud with Public Services and Procurement. How would we be able to ensure that the governance structure is strong so that this type of fraud cannot take place?

[Thomas Saras]

Don't interpret my statements, please. I never meant that and I never said that.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Then it was me—

[Thomas Saras]

There was a problem and still there is a problem. One of the people today referred to Cossette. Cossette Media is the official agency of the Government of Canada, the agency of record, and therefore they keep records of all the newspapers that are receiving government advertising. It has nothing to do with the distribution of the ads.

We are talking about third companies that are doing nothing, absolutely nothing. They keep some connection with public works Canada and they manage to get advertisements for their own clients or the people they represent.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you for the clarification.

I have one more question, though, and the people from Edmonton can also answer the question if they wish.

Mr. Hinds, you said that all data say people are reading more newspapers, but the unfortunate thing is you're not able to monetize that. Can everybody help me? How do you monetize it? I have local newspapers. I have a very assertive woman who runs her local newspaper out of her home, and she's after every MP, every local councillor, everyone, to advertise for any event that takes place. So tell me how you monetize these things, how do you take advantage of it?

[John Hinds]

I think print advertising is still the mainstay of most small newspapers, and I would encourage you to advertise in the newspaper. Obviously it's an effective thing. Most newspapers also have a digital platform. Digital advertising is much less lucrative. The challenge of the newspaper industry is it has traded print dollars for digital cents. You get a Google ad and it's a fraction of a cent, so you have to have a lot more Google ads if you want to recover that money that you've lost in a print ad. Advertising is key, and print advertising is a real mainstay, and remains a mainstay as people continue to read print.

[Matthew Holmes]

I would like to add to that quickly.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Sure.

[Matthew Holmes]

The advertising revenue is going directly into the creation of more Canadian content, more Canadian voices, more Canadian news coverage, whereas almost to a T the digital ads go to no content creation whatsoever. At best they might pick up some free Canadian content and put that on their platform.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Jamison and Mr. Merrell, do you have any thoughts?

[The Chair, Conservative, Tom Lukiwski]

Quickly if you could, please, gentlemen.