Good afternoon. My name is Ron Lund. I'm the president of the Association of Canadian Advertisers. With me is Chris Williams, our vice-president, digital. We thank you for the opportunity to appear before this committee.
To begin, I want to underscore that ACA shares and supports the government's objective of reducing childhood obesity. To foster this support, over the last year, ACA has chaired a steering committee comprised of the largest food and beverage manufacturers in Canada, food service and restaurant operations, and their respective national associations.
In fact, for more than a decade, food and beverage manufacturers have strived to reshape the landscape of marketing to children in Canada through the voluntary children's advertising initiative, or CAI, promoting better-for-you dietary choices and healthy lifestyles to children under 12.
As you all know, the CAI is not without its detractors, and we know we can do better. That's why industry supports regulated restrictions for advertising foods and beverages high in sugar, sodium, and/or saturated fats to children, and that these restrictions must apply to all food and beverage companies. While these regulations must be effective, they also must be evidence-based, doable, and targeted to the intended audience and outcome without costly overreach or other unintended consequences.
Even with the promised amendment to Bill S-228 to define children as being under 13, significant amounts of Health Canada's approach will in fact capture a much broader audience than just those under 13, namely adults, with obvious charter implications. Health Canada's proposed definition for “child-directed” is particularly problematic. Quoting from the document, for television, “child-directed” marketing of food and beverages would be prohibited on weekdays from 6 a.m. to 9 a.m. and from 3 p.m. to 9 p.m., and on weekends from 6 a.m. to 9 p.m.
These proposed time bans for television are tantamount to a complete ban of all food and beverage advertising. For example, of the top 100 programs reported in the fall ratings by Numeris, 60% of these programs would be captured under Health Canada's proposal, effectively banning food and beverage advertising to adults.
The definition of “child-directed” for the Internet is similarly ungrounded. The consultation document refers to child-directed marketing on the internet as including “all unhealthy food and beverage marketing on websites, platforms and apps that are popular with children, even when these digital channels are intended for adults.”
Health Canada presupposes that all digital advertising works the same as broadcast. The language as written in fact would preclude most publishers and tech companies from accepting any food or beverage advertising.
A ban on food advertising to adults on television is not, and certainly should not be, the objective of Bill S-228, and exposes the bill to risks of a challenge. There's also a significant economic impact. Bill S-228, in combination with what Health Canada has proposed to support the bill, would have a serious impact on the Canadian economy, and not only on sponsorships, but in many other ways, especially with the struggling broadcast industry.
ACA commissioned an economic analysis that demonstrates the impacts of restriction on food and beverage advertising will be severe. It will reduce advertising revenues by between $860 million to $1.1 billion per year, including by $300 million to the already ailing broadcast industry. It could reduce GDP by between $5.4 billion to $7.28 billion. It could reduce employment by between 22,000 to 30,000 person-years. Wages and salaries earned by Canadians would drop by between $1.6 billion to $2.11 billion per year. Provincial taxes would drop by between $225 million to $300 million, and federal taxes would drop by between $306 million to $407 million.
It's really important to realize that the promised amendment to define children under 13 would actually have very little impact on these numbers.
We have three concerns. Our first concern is with the term “unhealthy” in Bill S-228. It demonizes food and beverages, and is out of step with other Health Canada initiatives. Second, the language and factors to determine whether an advertisement is directed primarily at children is imprecise and opens the door to regulatory overreach. Third, Bill S-228's coming into force provision leaves no time to prepare or execute.
To address these concerns, we have proposed amendments to the bill and we offer a few other proposed partnership solutions as well.
Let me start with the amendments. The actual language is at the end of the document. I had a hard time reading them, so I just summarized them here. We propose the following:
As has already been committed to, amend the age to define children as under 13. Replace all references to “unhealthy food” with the term “foods high in” as a determination by which foods can or cannot be marketed to children under 13. Right now under Bill S-228, positively regarded food products such as apple juice, cheese, and yogourt would be branded as unhealthy. In fact, defining foods as unhealthy is contrary to the current policy and practice. The Food and Drugs Act does not define “healthy”.
Moreover, Health Canada and the CFIA prohibit the use of the word “healthy”, which is considered a health claim. Consistent with the recommendations of dietitians, the terms “healthy” and “unhealthy” may be used to refer to a healthy or unhealthy eating pattern or a healthy or unhealthy diet, but not to individual foods.
The “high in” framework for nutrient thresholds is referenced in Health Canada's front-of-package labelling draft regulations and the forthcoming Canada Food Guide and should also be used, we say, to determine which foods may or may not be marketed to children, namely those with more than 15% of the recommended daily value of salt, sugar, and saturated fats.
Appropriate definitions of “high in” will also need to be developed for restaurants and other food service applications, recognizing that the DVs, daily values, should reflect the consumption of meals rather than of individual products.
The third recommendation is to revise item (ii) of proposed paragraph 30(1)(e.1) to read:
setting out factors to be considered in determining whether an advertisement is directed primarily at children, without unreasonably limiting access by an audience other than children to that advertisement;
The extra hurdle of adding the words “unreasonably limiting” is necessary to prevent regulatory overreach, which has already been evident in Health Canada's discussion document around determining whether an advertisement is primarily directed at children.
The last recommendation concerns the coming into force date. It leaves, as I said, no time to prepare or execute. The impact of Bill S-228 will be substantial, not only for marketers but also for the broadcast media, as well as the beneficiaries of sponsorships, as we've heard, not only for amateur sports and cultural and community-based events, but for such other things as the Calgary Stampede.
As such, we recommend that the coming into force date be amended to December 14, 2022, consistent with other parts of the healthy eating strategy.
You will note that none of these proposed amendments is in the least bit out of step or inconsistent with the intent of Bill S-228 . Consequently, we urge you to adopt them.
Moving on to other Health Canada and industry partnership solutions, we have several that we'd like to talk about.
The first one is to create a regulatory framework requiring pre-clearance of food and beverage advertising to children for digital advertising. Pre-clearance for broadcast advertising is mandatory, while digital advertising is voluntary. Moving to a mandatory pre-clearance of digital would reduce exposure to food and beverage ads to children and build upon the existing regulatory framework under the Broadcast Code for Advertising to Children.
We would recommend that Ad Standards provide the oversight, monitoring, and enforcement, of course in partnership with Health Canada.
Second, for broadcast advertising, “child-directed” should be redefined as advertising where children represent 25% or more of the audience. This represents a significant reduction from the voluntary 35% child audience threshold.
As noted, the time slot ban advocated by Health Canada would virtually ban all food and beverage advertising, including that directed to adults. Audience composition measurement promotes more precise audience targeting and would deliver on Bill S-228's objective without costly overreach and, I repeat for the third time, a charter challenge.
I'll move to the third point, developing a Canadian “best in class” regulatory framework for restricting digital marketing directed at kids. Advertisers are committed to mandatory pre-clearance of food and beverage advertising to children for foods and beverages below a 15% DV of saturated fat, sugar, and sodium at a campaign level, bringing it in line with broadcast. Foods above the 15% DV threshold would not be approved for digital advertising to kids.
Working with Health Canada and IAB Canada, we will develop the most effective ways to deliver a digital reach threshold ensuring that 75% of any campaign audience is 13 years of age or older. We would also implement rigorous record keeping to ensure that children under 13 are not being targeted and were not targeted through audits, random samples, and some other things that we're looking at.
The fourth recommendation would be enforcement. As with broadcast, media would not accept food and beverage ads directed at children unless they carry an Ad Standards clearance number. In cases of digital, compliance would require companies to report annually to Ad Standards on the placement of advertising. As I said, we're looking at some more technical solutions with IAB Canada. Ad Standards would investigate and report on any complaints from the public and stakeholders regarding alleged non-compliance.
For non-compliance, Ad Standards would admonish the advertiser to ensure that the issue is resolved and does not recur. Ad Standards would also publish annual compliance reports, identifying any non-compliant advertisers. Further enforcement, such as fines and criminal charges, would be administered through the regulation by CFIA.
In conclusion, I want to reiterate that we do in fact support the government's objective of reducing childhood obesity. To help achieve this point, our member companies have unique experience and insights to commit meaningful, multi-faceted, multi-stakeholder approaches to healthy eating and to the effective restriction of food and beverage marketing to children. We ask, however, that such strategies and measures be implemented without unnecessary regulatory overreach and economic harm from inadvertent prohibition of the lawful and constitutional right to market foods and beverages to adults.
To support this, we again urge that the aforementioned amendments be adopted by this committee.