The Ontario government is directing Crown corporations and government agencies to spend at least a quarter of their advertising budgets with Ontario-based news organizations to help offset declining revenues at the province’s publishers.
The directive is outlined in letters sent June 28 to organizations such as transit agency Metrolinx, Ontario Lottery Gaming Corp., Ontario Cannabis Retail Corp. and the Liquor Control Board of Ontario, or LCBO. The policy is to be implemented by Sept. 3.
Ontario’s major government agencies together spend more than $100-million annually on marketing, the letters state.
“When in place across Ontario’s major agencies, this new initiative promises to flow over $25 million to Ontario-based publishers, helping to protect jobs and promote local content and culture,” it reads.
The Ontario government is making a similar commitment with its own advertising spending.
The news was welcomed by the news publishers, who are grappling with financial challenges. In Ontario, a court approved the insolvency proposal of Metroland, a sister company of the Toronto Star, earlier this year. And SaltWire Network Inc. and The Halifax Herald Ltd., publisher of The Chronicle Herald in Halifax, were pushed into insolvency by a creditor in March.
News Media Canada, which has been advocating for such policies, welcomed the news.
“We commend the Ford government for this smart, forward-looking policy that will support trusted news brands while delivering value to taxpayers. We encourage other governments and corporate Canada to support our domestic news businesses rather than foreign giants who do little to combat misinformation and disinformation,” Paul Deegan, president and chief executive officer of News Media Canada, said in a statement.
Andrew Saunders, president and chief executive officer of The Globe and Mail, said he applauds the Ontario government’s decision.
“The policy will keep money within the province, support local journalism, Ontario workers, and will provide an effective advertising solution for government agencies,” Mr. Saunders said in a statement.
Mr. Deegan said he is not aware of any other provinces considering similar directives.
News Media Canada pushed for the federal government to earmark 25 per cent of its domestic advertising spending toward “trusted Canadian news sources” ahead of the 2024 federal budget, and has continued lobbying Ottawa for such an initiative.
The Department of Canadian Heritage did not answer questions about whether the federal government would make a similar commitment.
The federal government spent $86.09-million on advertising in the 2022-23 fiscal year, with 71 per cent – or $48.08-million – going toward digital marketing such as social media and search engine optimization.
The remaining 29 per cent went to traditional media, with the bulk of it – $9.93-million – being spent on television ads. A smaller portion – $945,000 – went to print.
Lori Henson, government advertising policy manager at Rebuild Local News, a non-profit that advocates for policies to address the local news crisis, said redirecting government ad spending can be an effective tool.
“It has real bipartisan appeal and it doesn’t cost additional money,” Ms. Henson said.
In the United States, a number of major cities – including New York, Chicago and San Francisco – have introduced similar measures.
In New York, for instance, the city’s mayor in 2019 signed an executive order mandating all municipal agencies to spend at least half of their advertising budgets with community and ethnic media outlets.
That mandate generated $1-million of revenue for those publications in just the first year, said Ms. Henson, growing to between $16-million and $17-million in the few years since.
“We’ve seen the city agencies in New York grow more compliant and more intentional with their spend, so we expect that number to continue to grow,” she said.