The World: Insider's View - Canada, Friday, 17 June 2005 03:57PM

The advertising industry in Canada is reeling from a remuneration scandal and it could be another six months before the industry can begin to move on, Gregor Angus says.

The Canadian ad industry is being rocked to its core by a scandal that much of the international industry has, to date, been oblivious to.

The seeds of the scandal date back to 1995, when the Quebec provincial government held a referendum on Quebec sovereignty. The vote was very close and led to some introspection within the previously confident Liberal government. The result was the launch of a huge sponsorship programme to promote the "Canada brand" and to gain some share of heart in Quebec, through supporting local events and causes.

In principle this wasn't a bad, or even controversial, proposal. The big problem (although judgment has yet to be made officially ) was high-level political corruption and mismanagement of the funds. It appears that much of the public money allocated for the project was channelled to friends and contacts within the ad industry and some of it was allegedly funnelled back into the Liberal party war chest. The results of the programme are reported not to reflect the investment made by government.

The impact of this affair on Canadian politics cannot be overestimated.

The initial report into the scandal was published in the run-up to last year's Federal election. The Liberal Party, which has for so long seemed unassailable (and, until the report, was doing well in polls), was re-elected with the narrowest of margins and weak support in Quebec.

The official inquiry into the scandal is underway, with the first indicted executive, Paul Coffin of the Montreal-based Communication Coffin, pleading guilty to 15 of 18 charges that his company overbilled the government by $1.2 million.

For the reputation of the industry in Canada, the scandal is calamitous.

Between May 2002 and the end of April 2005, there were 43,000 different reports and articles on the case, many of which included gross generalisations about the industry and the manner in which we are renumerated.

As the chairman of the Association of Quebec Advertising Agencies, dealing with the fall-out is all-consuming. Through no wrong doing on the part of the vast majority of the industry, we are all tainted. Our confidence is being tested as our staff, clients, friends and families digest this onslaught of bad news.

On the positive side, the full report is expected to be published next autumn. Those involved are being called to justice and we can be assured that from now on, government contracts will be scrutinised in an appropriate way.

On a personal level, it'll be a relief to meet people who don't look concerned when I say what I do, hesitantly ask whether we were involved and, when they learn we were not, wince sympathetically at the beating our industry is getting.

- Gregor Angus is the president of BBDO Montreal.

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