From Susan Munroe,
Your Guide to Canada Online.
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The Canadian federal government is changing how it handles advertising contracts. Ralph Goodale, the minister responsible for Communication Canada, announced the new advertising rules on April 28, 2003, saying the goal is to increase value for money and conduct government spending on advertising in an open and fair way.

Problems with Advertising Contracts

Canadian federal government advertising and marketing contracts came under attack in May 2002 when an audit of the government's Sponsorship Program revealed that "senior public servants responsible for managing the contracts demonstrated an appalling disregard for the Financial Administration Act" and other government contracting regulations and policies. Some of the Sponsorship Program contracts were referred to the RCMP for investigation of criminal activities.

In response to the problems, the federal government undertook a review of how sponsorships, advertising and public opinion research could be better managed. The new advertising rules are part of the government's attempt to improve its handling of communications activities.

New Government Advertising Rules

Changes to the way the federal government handles advertising contracts are being phased in over 2003 and 2004. Changes to the advertising rules include:

• the requirement that the firm providing the advertising service be 100 percent Canadian-owned has been reduced to 80 percent
• the number of suppliers for advertising contracts and the number of opportunities to compete will be increased
• suppliers will mostly be paid on an hourly basis, as opposed to the previous commission system. Performance systems and retainers may also be used as appropriate.
• a public competition is to be used to select an Agency of Record for federal government advertising
• the federal government is strengthening its internal capacity for advertising management, both centrally at Communication Canada and in individual government departments
• an annual report will be produced on federal government advertising activities
• in 2005, the new advertising system will be audited.