Ontario to direct portion of ad budgets at Ontario publishers

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Ontario’s Ford government will direct one-quarter of its advertising budget towards news publishers in Canada’s largest province, a targeted boost for a major domestic industry facing unprecedented pressure from internationally owned technology giants.

That should amount to about $25 million in advertising each year going to Ontario publishers, including Postmedia Network Inc., which owns National Post, the Toronto Sun, Ottawa Citizen and community papers in the province.

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“This is important. Everyone understands the value of journalism and a free press and its criticality to Canada and to democracy,” said Andrew MacLeod, Postmedia’s president and chief executive officer.

“I’m certainly extremely grateful to the leadership of Premier (Doug) Ford and his team. My hope is this will serve as an example, a North Star, not just for other provincial governments, but for the federal government and for major corporations.”

In a letter, sent to Metrolinx (the public transit Crown corporation), the Ontario Lottery Gaming Corporation, the Ontario Cannabis Retail Corporation and the Liquor Control Board of Ontario, Ontario Finance Minister Peter Bethlenfalvy asks the government agencies to have the policy implemented by Sept. 3.

“Our government believes strongly in the importance of supporting and promoting Ontario-made products, services and workers,” Bethlenfalvy’s letter says.

The initiative is in addition to the Progressive Conservative government’s Building Ontario Businesses Initiative, which uses government procurement spending to support Ontario businesses, the Ontario Made Manufacturing Investment Tax Credit and initiatives aimed at boosting sales of Ontario-made beer and wine.

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“In addition to these actions, we believe there’s a compelling opportunity to leverage the advertising spends of Ontario’s major government agencies to support Ontario workers and content,” the letter says.

Ontario’s major government agencies spend more than $100 million each year on advertising. “These significant advertising budgets should help support Ontario-based publishers and the Ontario-based workers creating local news content for people in our province,” the letter says.

Publications eligible for the government advertising must be designated “Qualified Canadian Journalism Organizations” by the federal Canada Revenue Agency and must be Ontario-based corporations, trusts or partnerships.

“The Government of Ontario is making similar commitments with our own advertising spending, helping to provide even more support for Ontario jobs and promote Ontario culture,” the letter says.

MacLeod said the initiative is something the publishing industry has been lobbying for with the Ontario government and other governments in Canada, including the federal government, and that it “didn’t make sense” that advertising dollars, paid for by taxpayers, were going to Google and Facebook.

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“As I’ve said countless times, the single biggest challenge facing our industry is that 90 per cent of the digital advertising budgets flow to foreign platforms,” MacLeod said. “This is the first major, material step where we’re seeing a significant institution, the province of Ontario, allocating a material portion of their spend on Ontario publishers, which supports Ontario journalism, Ontario jobs and the Ontario economy.”

Companies, including Postmedia, will need to wait to figure out just how much money they could get and what it will mean, MacLeod said.

“It’s a hugely meaningful moment for our industry, certainly from an Ontario perspective, and to the extent that it serves as a beacon or a catalyst for other provincial governments and for the federal government to do the same,” MacLeod said.

“What does it mean for Postmedia? I think time will tell. But we’re one of the larger players, and we should have a meaningful pro rata portion of that based on the audiences that we reach in Ontario.”

The directive will be reviewed quarterly, the letter says. If it is not working to meet the objectives of “promoting local content and culture and supporting Ontario jobs,” the government notes it may withdraw the funding directive.

Postmedia, the largest newspaper company in Canada, saw its revenues drop to $97.3 million for the three-month period ending Feb. 29, 2024. It was mostly attributable to a 20.8 per cent fall in advertising revenue.

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