Time to Keep Federal Advertising Dollars in Canada

The Canadian government has supported journalism for generations. Since the founding of Canada’s first newspaper, the Halifax Gazette, which dates to 1752, government advertising has been an important source of revenue for newspapers. Even prior to Confederation, direct supports, like the former Publications Assistance Program, which subsidized the postal delivery of non-daily newspapers, ensured that Canadians have access to high-quality Canadian news.

Twenty years ago, the federal government spent $110 million on advertising, which was managed by 30 advertising agencies. Print newspapers and magazines accounted for about one-third of federal advertising spending, while internet advertising accounted for less than 1 per cent of the spend.

Last year, the Government of Canada spent a total of $140 million on advertising, involving one Agency of Record for media planning and placement. While the one Agency of Record model is efficient, we are concerned with where scarce ad dollars are being spent.

Last year, just $6 million or five per cent of federal advertising dollars went toward print publications. That is a far cry from the roughly one-third of twenty years ago. For comparison, government spending on Facebook/Instagram ads alone accounted for almost double what is spent on all print advertising combined. And the spending on Twitter, Snapchat, and TikTok combined was greater than all print expenditures.

Today, digital advertising accounts for more than 50 per cent of all federal ad spending. According to the U.S. Department of Justice, which is suing Google, the company “pockets on average more than 30 per cent of the advertising dollars that flow through its digital advertising technology products.”

Social media companies operating in Canada do not employ journalists and they are shielded from liability by Section 230 of Title 47 of the United States Code. They enjoy all the benefits of being a publisher without any of the obligations.

Digital search and social giants have contributed greatly to connecting people, businesses, and communities. Yet, there have been unintended consequences. While they provide the essential plumbing of our digital age, they have not figured out a way to separate the clean drinking water (e.g., fact-based news and information) from the sewage (e.g., fake news).

Trusted news sources provide an important filter that helps Canadians make informed choices. Real journalism, which is based on editorial judgment and rigorous fact-checking, costs real money, which comes from advertising and/or subscription revenue. Canadian news publishers employ real journalists, who adhere to strict editorial standards, and publishers can be held liable for their content. Yet, federal advertising dollars that once helped fund our newsrooms have shifted largely to Big Tech companies that benefit from our content.

The federal government has recognized that the business of journalism is in trouble. It has taken steps to fill news deserts and areas of news poverty through the Local Journalism Initiative. It has also introduced Bill C-18, the Online News Act, which will allow publishers to come together to negotiate fair content licensing agreements with web giants and level the digital playing field.

One of the most powerful tools in any government’s policy toolkit is procurement. Procurement can help governments advance socio economic policy objectives, including job creation, and deliver better outcomes. Indeed, the federal government’s Policy on Social Procurement facilitates and supports the inclusion of socio-economic measures in procurement to support the goal of achieving best value for the Crown and, in turn, for Canadians.

Isn’t it time for the federal government to align its advertising spending with its public policy goal of supporting accountable and trusted sources of information? Isn’t it time to support the home team and keep advertising dollars, which support fact-based, fact-checked civic journalism, in Canada? The consequences of inaction are more misinformation and disinformation, a less informed and engaged citizenry, less robust public discourse, and a loss of community.

Paul Deegan is president and chief executive officer of News Media Canada