Since 2015, Liberals quadrupled spending on Facebook, Google
OTTAWA— Google and Facebook received a growing share of the federal government’s advertising budget after the Trudeau Liberals took power, as Ottawa quadrupled how much it spent each year on ads from the American web giants between 2015 and 2019.
Responding to questions from the Star, Public Services and Procurement Canada provided figures that show the federal government spent at least $ 3.9 million advertising on Google and Facebook in 2015- 16, the first fiscal year after Prime Minister Justin Trudeau’s Liberals took power.
That amounted to about 9.2 per cent of the government’s total ad spending that year, as reported in the federal
procurement department’s latest annual report on government advertising.
Government ad spending with Google and Facebook increased each year after that and hit $ 15.8 million in 2018- 19, with $ 10.4 million on Google and $ 5.4 million Facebook and its social media subsidiary, Instagram, the procurement department said.
This represented more than a quarter — about 27 per cent — of the government’s total ad budget of $ 58.6 million that year, down slightly from the 31 per cent share that went to Google and Facebook one year earlier.
Responding to the figures, New Democrat MP Charlie Angus acknowledged these internet giants are “efficient advertising machines” that can reach wide audiences at low costs. But he also said the ballooning amount of government ad dollars going to Google and Facebook shows “the real hypocrisy” of the Trudeau Liberals, who have pledged to support Canadian media and creative industries that have struggled amidst the rise of foreign tech giants in the digital age.
Angus said that, “at the very least,” Ottawa should ensure sales tax is charged on advertisements purchased from Google and Facebook. As it stands, the federal government does not charge sales tax on services purchased from foreign digital companies, but the Liberals have pledged to change that.
“They say they’re going to take on the tech giants … but they’re paying an enormous amount of advertising revenue that’s going to another country, and we’re not even getting the tax from it,” Angus said.
“That’s something that needs to be addressed.”
Procurement Minister Anita Anand’s office did not respond to questions from the Star about ad spending with Google and Facebook and referred to the department’s response detailing the increase.
In that response, the procurement department said the government is “committed to meeting Canadians on the platforms where they are at.” It also noted that Ottawa spent more on “domestic media” ads in 2018- 19, “reversing the trend of previous years.”
This included an additional $ 2.3 million on print advertising, which had dropped to $ 0.6 million the previous year, and another $ 9.1 million on TV after it fell to $ 4.5 million.
John Hinds is the chief executive officer of News Media
Canada, an advocacy group that represents hundreds of newspapers and digital news publications, including Torstar, which owns the Star.
Hinds said Monday that web giants like Google and Facebook have been reaping an increasing share of ad dollars for years.
The Public Policy Forum reported in 2017 that Google and Facebook “pocket two of every three digital ad dollars spent in Canada,” citing statistics that Canadian publishers accounted for just 11.5 per cent of digital ad impressions between January and March 2016.
News Media Canada published its own report in September 2020 that said Google and Facebook have an “effective duopoly in the market for digital ads” in Canada, having
reaped $ 7.5 billion in Canadian digital ad revenue in 2019, up from a combined $ 2.8 billion in 2014.
Hinds argued the federal government could fulfil its stated intent to support Canadian media content by advertising with digital publishers based in this country. He said this would also ensure government ads reach wide audiences of readers and viewers.
“Are you really fulfilling your mandate to reach Canadians when you just push the button with these digital players?” Hinds said.
“When you spend that money in California, it doesn’t pay for any local content. If the public policy objective is to maintain and support local news creation … the best way to do it is advertising,” he said.