Cellphone industry targeted in Ottawa's $9M ad campaign

The federal government is spending $9 million on ads targeting Canada's cellphone companies, a government official says.

Earlier this fall, Industry Canada launched newspaper and radio ads, as well as a website, ostensibly to publicize the government's efforts to promote competition in the wireless industry. Television ads soon followed.

But the television ads contain no reference to the government's auction of additional wireless spectrum, which is intended to allow new providers to enter the market. 

"There’s been a lot of talk about wireless competition in Canada. Fact is, our largest wireless companies hold over 85 per cent of the airwaves," the ad's narrator begins.

"And Canadians pay some of the highest wireless rates in the developed world."

Actors in the ad say they want “More choice,” “lower prices” and “better service.”

Industry Canada is spending $8 million on the ads, while Public Works is providing an additional $1 million.

'Providing Canadians with more choices'

New Democrat MP Glenn Thibeault tabled a question on Oct. 16 asking Industry Minister James Moore how much his department was spending on the ads and for the website design. The government has 45 days to respond to written questions tabled in the House.

The print and radio ads started in September, while the TV ads started Nov. 4 and will run until Dec. 22. The TV ads are worth $2.6 million of the total being spent.

A spokesman for Moore said the ads tell Canadians about the government's wireless policy.

"Our government has an obligation to ensure the facts about our wireless policy are communicated to Canadians. These ads provide those facts," Jake Enwright said in an email to CBC News.

"Our policy to increase competition in the wireless sector is providing Canadians with more choices and access to the latest technology at lower prices."

Enwright refused to say how long the ads would run, or on what specific date they started.

The wireless industry had its own ad campaign running earlier this year as American company Verizon was rumoured to be considering entering the Canadian market. The company later said it wouldn't be coming to Canada.

The government promised in the throne speech in October to force wireless companies to limit cellular roaming fees. It also promised to force many of those same companies to unbundle TV channels in their cable television businesses.

'Unprecedented'

The Canadian Wireless Telecommunications Association represents the telecom industry in Canada, including the so-called big three: Rogers, Bell and Telus. Bernard Lord, executive director of the association, called the ad campaign outrageous.

"We believe this is unprecedented — for the federal government to use tax dollars to attack an industry that contributes so much to the Canadian economy, that has made record investments in recent years, and that plays by the rules," Lord said.

Companies in the industry pay multiple fees to get access to it, Lord said, including buying the spectrum used to provide cellphone signals, and fees to use that spectrum.

The industry generates more than $50 billion a year for the Canadian economy, Lord said, and directly and indirectly employs more than 300,000 Canadians.

What's more, he said, the government's ads offer no real information and don't mention policy.

"No one believes this is a good use of tax dollars," he said.

'More interested in talking points'

Thibeault, who tabled the question to Moore about how much the ads cost, said the government doesn't understand the telecommunications industry.

"I think the Conservatives, when you look at that, they're really more interested in talking points about protecting consumers than doing anything," Thibeault said.

"Even the $9 million [spent on ads] is twice as much as they spend on the Office of Consumer Affairs," at Industry Canada, he said.

Thibeault said the government shouldn't let companies sit on wireless spectrum they aren't using and should attach conditions to an upcoming spectrum auction that would require the winning company to roll out service in rural and northern communities such as Sudbury, Ont., and Trois-Rivières, Que.

"What [I'm] calling for is the government to enforce the current rules and regulations that are in place, making sure we put a spectrum auction with requirements that would actually benefit northern and rural communities, and then there would be no need for foreign entrants," Thibeault said.

Gregory Thomas, head of the Canadian Taxpayers' Federation, said the federal government needs a version of a government of Ontario provision that requires the auditor general to review most government advertising.

"There are far fewer Ontario taxpayer dollars wasted at the provincial level than at the federal level because, to their credit, Ontario has given the auditor general the authority to review and approve government advertising before it runs," he said.

The federal government has several "egregious" examples of spending money to promote a partisan agenda, he said, including the Economic Action Plan ads and a proposed Canada Job Grant that hasn't yet been brought into force.

"There's no evidence that any of this advertising does anybody any good except to promote the image of the Harper government ... this government's taking things to a new level," Thomas said.