04 March 2004

The Fed's Advertising Scheme is a Joke

By David Agren

Big Brother is watching you. Actually, the rink boards and display ads in areas and stadiums across the country brandish the Government of Canada logo, but they might as well display the well-worn slogan from 1984, George Orwell’s chilling and prophetic vision penned over 50 years ago. The ads were placed throughout the country (mostly in Quebec) through the federal government’s mismanaged and recently suspended $250-million advertising program.

Auditor General Sheila Fraser recently rebuked the program in a tersely worded audit, saying the federal bureaucrats in charge “broke nearly every rule in the book,” and that the agencies hired to place the ads pocketed $100 million for work of dubious value.

Besides laundering taxpayers’ money through firms connected to the Liberal Party in Quebec, the advertising program stealthily subsidized professional sports — a practice Canadians rebelled against in 2000 when the federal government attempted to assist Canadian NHL teams.

The perpetually imperiled Canadian Football League collected almost $1 million to stick the maple leaf on its players’ helmets — similar to the tiny American flags its NFL counterparts voluntarily wear for patriotic reasons. A government-sponsored study found only six per cent of fans and one per cent of television viewers recalled seeing the government logo at CFL games while 25 per cent remembered the Molson ads. It also questioned the value of advertising in CFL stadiums when the league’s clubs fly the flag for free.

As with virtually all government spending decisions, the entire sponsorship program and process for placing ads became a political football. Former prime minister Jean Chrétien hatched the advertising scheme after Quebec voters narrowly rejected separation in 1995 to sell separatists on Canada’s value. Accordingly, most of the ads were placed in the province by Quebec-based ad agencies.

The minor-league Montreal Impact soccer club snagged $250,000 in ad revenue, while the bureaucrats rejected a request from the Edmonton Drillers, a soccer club that folded. Government ads blanketed the cavernous and often vacant Olympic Stadium, home to the Montreal Expos, even thought the team draws the majority of its fans from English-speaking parts of the city that voted overwhelmingly against separation. As far back as 1998, the Ottawa Citizen reported that Eastern NHL teams received more sponsorship money than their equally cash-strapped Western brethren.

Even worse, crown corporations like Via Rail and Canada Post and their provincial cousins regularly purchase advertising in sporting events despite having little reason to do so. Canada Post enjoys a monopoly on mail delivery, forcing Canadians to use its service. Chronic money-loser Via Rail still advertises in cities it abandoned.

The Liberals’ advertising fiasco drew in both crowns as they paid politically connected agencies outrageous fees for work that private corporations would balk at. While working for Via Rail in 2001, double Olympic gold-medallist Myriam Bédard questioned an inflated invoice sent by Groupaction — a firm mentioned in Fraser’s damning audit — and got fired for her trouble. Via Rail chairman Jean Pelletier, who was once chief of staff to Chrétien, disparaged the whistler blower in La Presse, calling her “a poor girl... a girl who doesn’t have a husband that I know of.” “She has the stress of a single mom who has economic responsibilities. Basically, I pity her,” he added.

But why does the federal government — and its provincial counterparts of all political stripes — advertise in the first place? Economists recognize that information is not free. Advertising simply imparts information to consumers, thus lowering their transaction costs. Political advertising drops the cost of voting — with the price measured in time, another economic good.

While corporations impart information to consumers to drive sales and swell profits, government ads strive to build political capital and concentrate power. The federal government’s ads frequently scold, nag and exhort Canadians to modify their lifestyles and behave in a patronizing fashion. Quit smoking, pay child support, register all your guns and don’t drink the water while hiking.

In the case of Quebec, placing ads at hockey rinks and other events reminds residents of where their prosperity supposedly flows from. It’s not Big Brother watching, but Big Mother, a benevolent entity responsible for their health, welfare, security and quality of life — even their recreation. It’s time for all governments to exit the advertising and sports sponsorship arenas.

This article originally appeared in The Reflector