Public Accounts Committee on Feb. 23rd, 2021

[Kody Blois, Liberal, Kings—Hants, NS]

Just so I'm clear, Ms. Acton, you said you haven't received a complaint yet. Since 2016, since this robust process where it's very easy to go ahead and submit something, there have been no complaints to date.

[Kelly Acton]

That is correct.

[Kody Blois, Liberal, Kings—Hants, NS]

Mr. Hayes, the focus of the Auditor General's office is to look at process. You've highlighted some of the areas where the Government of Canada can improve in terms of its internal process, but just so everyone who's watching the public accounts committee at home is clear, there were no findings that there was a high level of partisanship or any wrongdoing in terms of the actual outcome. Mr. Green spoke about this.

I'd like to focus on outcome. You're talking a lot about process. You had no findings to suggest there were any concerns here by the government.

[Andrew Hayes]

What we found was that the information available to us when we were reviewing the files was not sufficient to establish that the criteria had been reviewed by Ad Standards or by PSPC when they were conducting the review, so we can't say with any assurance whether or not there were problems.

In terms of the complaint process, while there haven't been many complaints—or none until, I guess, yours—for a number of years, I would say that in itself could be a good thing or a bad thing. I worry as a manager when I see zero complaints, because I wonder whether or not that means the process is working fine, or whether it means that people don't know about the process, or there are maybe problems with the process.

We highlighted one about independence and objectivity in our report, and I know that's been addressed according to the information from the secretary and the deputy minister.

[Kody Blois, Liberal, Kings—Hants, NS]

I would like to move on, but I appreciate that.

[Peter Wallace]

I just have a very quick intervention, out of an abundance of clarity. The complaints process that we're talking about now dates back to 2020. There was a reference to the earlier period. It would not apply for the earlier period.

Thank you.

[Kody Blois, Liberal, Kings—Hants, NS]

Mr. Hayes, at one point during the line of questioning earlier, you talked about.... I do have some concerns about more elements being externally reviewed.

As has been mentioned, there were three out of 1,800 that, as I understand it, would have gone to Ad Standards Canada to be reviewed, but I think it's fair to note too that our public servants who are working on this take an oath to be non-partisan as well.

Do you actually see concerns? Outside the processes you handled, surely our public servants who are working on this, so long as they're following the standard—and I think our departments have talked about the mechanism they've had to tighten this up—are well placed to handle some of this discretion as well. Would you not agree?

[Andrew Hayes]

I would agree that our public servants have a code of values and ethics for the public service to adhere to, which includes neutrality and independence. So, on principle, I agree with that. We didn't see the evidence in the file to be able to assess how rigorous the examinations were, even by public servants.

[Kody Blois, Liberal, Kings—Hants, NS]

My final question is on cost. What is this costing the Government of Canada annually to contract with the external agency to try to keep this process in place?

Certainly I think it's clear that we can do a better job on process. It doesn't seem like there's a major issue here. There has been a policy change by the government, and it seems there has been a lot of good work that's been done, but what is the cost overall to have that third party evaluate these projects?

[Kelly Acton]

Thank you very much for the question.

I can confirm that it is $199,000. That's the value of the contract right now with Ad Standards.

[Kody Blois, Liberal, Kings—Hants, NS]

Is that the cost per year?

[Kelly Acton]

Yes, it is per year.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Blois.

We will now go to Mr. Blanchette-Joncas for six minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

I will come back to Mr. Wallace and the question I asked earlier.

Let me summarize it for you, Mr. Wallace.

In 2016, we already knew that the federal government was spending much more on digital advertising than on television advertising. Then, in 2018, the gap widened even further, with the federal government spending five times more on advertising on digital platforms than it did on television or newspaper ads.

However, the Auditor General did a report on Government of Canada advertising. The Treasury Board Secretariat had already proposed a new threshold, which you specified between June and December 2019. Finally, on April 1, 2020, you decided to lower the threshold from $500,000 to $250,000 because it's cheaper to advertise online and the $500,000 threshold was no longer realistic.

You say that cost remains the most reliable indicator of risk and that the new approach will cover about 80% of the government's annual advertising budget.

Since we know that the government has been spending more online for four years and the threshold has never been lowered, does it mean that the external review mechanism was basically inadequate for all those years?

[Peter Wallace]

There are a couple of different things. We do very much appreciate the review from the Auditor General, pointing us to the need to re-evaluate thresholds and make sure those thresholds are appropriate. It is not necessarily that digital advertising is cheaper. Digital advertising provides a reach but it is actually priced. There is a market, and it is my personal view that there's no free lunch in advertising or anything else.

The market clears and the market is adjusting, so expenditures, whether digital or traditional, remain expenditures on advertising. They are a reliable mechanism in understanding the core criteria associated with audience reach, which is essentially what it costs to purchase eyeballs or ears, or the ability to project content. That's consistent across digital and non-digital media, this ability of markets to equilibriate and determine the appropriate pricing of other elements.

However, in some respects, digital may require and may promote the use of smaller bundles of advertising in a more agile way. Because of that, it does make sense to lower the threshold, and our review determined that lowering it to $250,000 is required to make sure that we continue to capture 80% of all advertising directly and have it go through an external review process.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Wallace, I want to be clear on the situation. Why was the threshold lowered to $250,000? Why is the Treasury Board okay with it? Is it because digital advertising is cheaper and it's harder to reach the $500,000 mark? Is that the reason?

[Peter Wallace]

No, not at all. It's to make sure we continue to capture 80% of all of the advertising being done. To the extent there are risks, and we appreciate there are risks, and whether or not they're realized, whether or not there's evidence or concerns about partisan advertising, it's a very bad thing. We absolutely need to make sure there is a second check. That's being done through Ads Canada.

The question is, do we have everything reviewed and have it go through all the same fairly mechanistic bureaucratic processes or do we set a threshold? Generally, in public administration, we set a threshold. In this case, the threshold collects 80% of the advertising being done and allows for a smaller number of ads to be done, again in compliance with policy but just not secondarily reviewed.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Wallace, can you confirm that government ad spending has increased over the past five years?

[The Chair, Conservative, Kelly Block]

Mr. Wallace.

[Jean-Pierre Blais]

Madam Chair, I can provide the answer because it is in the report—

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Chair, my question is for Mr. Wallace, from the Treasury Board.

[Jean-Pierre Blais]

All right.

[Peter Wallace]

Thank you.

[The Chair, Conservative, Kelly Block]

Mr. Wallace, can you answer the member's question?