Canada

The Canadian Government Used “Fake News” To Drive Real Estate Borrowing… Seriously

The Canadian Government Used “Fake News” To Drive Real Estate Borrowing… Seriously.

Canadians have been addicted to debt for quite some time, especially when it comes to real estate. So why is the Government of Canada paying hundreds of thousands to discreetly distribute ghost-written articles on how to take out more debt? Ottawa-based Blacklock’s Reporter took a dive through government contracts for over half a million dollars, to distribute content written by various departments. Amongst the pile of eyebrow raising content your tax dollars paid for, are articles with marketing-like copy on how to take out a HELOC, and joining the affordable “condo boom.”

News Canada

News Canada is a news distributor that, in their own words, provides “ready-to-use, timely lifestyle content that is free of charge and copyright.” Basically, they provide free content for news organizations looking to generate extra print pages or pageviews. Total win, right? News companies are looking for content, and these folks are just giving it away. Except, if they don’t get any ad dollars or subscriptions, how do they pay for this stuff?

Nah, they aren’t a startup trying to figure out a new model. News Canada is an O.G. of sponsored content, doing it since the early 1980s. They’re a little more controversial than your average marketing firm’s sponsored content though, since it’s not always marked as sponsored by the republisher. Even trickier, it’s often not clear who the original sponsor is, or that they may of wrote the “article.” This becomes a teensy bit of an issue when it’s a government agency. After-all, as Blacklock’s Tom Korski points out, The Department of Canadian Heritage now considers “state-sponsored” content to be “fake news.”

For more on the Government’s use of News Canada, Jesse Ward did a killer write-up a couple of years ago.

Over $577,000 Spent Distributing Ghost-Written Government News

The Government of Canada has paid a hefty sum to distribute their content. According to the Blacklock analysis, over $577,000 was spent in 2017 alone. Health Canada was the biggest spender, with over $239,741 in contracts to News Canada last year. Statistics Canada wasn’t exactly skimping either, with over $61,071 in spending. This appears to exclude contracts to News Canada subsidiary “Fifth Story,” which also does “electronic media distribution” according to some contracts.

Better Dwelling. Source: Government of Canada Filings, Blacklock’s Reporter.

The Canadian Government Discretely Distributed Real Estate Content

Most of this content being ghost written by government employees is generally harmless. Letting someone know a few ways to beef up their privacy, or that tax filing is easier than ever, isn’t going to do much harm. However, there’s some clear examples that appear to be narrative crafting for banks and real estate.

It gets a little dicey when the government starts introducing new products or insights to people. The Financial Consumer Agency of Canada (FCAC) recently paid for an article called Achieve Your Long-Term Financial Goals With Your Home Equity. The article introduces people to HELOCs, as well as how to take one out. Not a great idea, since it’s a growing area of concern at the moment.

Better Dwelling. Source: Bank Filings.

Statistics Canada recently paid for distribution of a piece called Watch These Five Real Estate Trends, which ran just last month. Some eyebrow raising language included “the condo boom continues,” and calling condos a “cost-conscious housing option.” Pretty sure StatsCan didn’t crunch the numbers on cap rates, or the interest rates people are paying before writing that one.

The worst part is these releases aren’t the kind of content you would ever find on a government agency’s own websites. Typical media releases, written by the department’s media relations professionals, are usually backed by concrete points – not suggestive marketing lingo. Why the government would write their own content, and pay to have it distributed is still unclear.

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38 Comments

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  • Jay 7 months ago

    It’s important to know that these News Canada stories are different from Media and Press Releases. Every journalist uses media and PR at some point, to get a story started. They then supplement the story with additional details, context, and eliminate any “marketing speak” that might be present.

    The News Canada stories are normally reprinted word for word. They’re eliminating journalistic integrity, since the person paying for the content to be distributed is writing something to promote their own product. There’s no fact checking gate keeper at all.

  • BFB 7 months ago

    Surprise, surprise. Statistics “Junk Data on Foreign Buying” Canada is calling condos “cost-conscious.” Do they not have anyone that works in Vancouver, at all? Or do they just pump out numbers from behind a desk in Ottawa, and tell everyone things are fine?

  • Bluetheimpala 7 months ago

    More fraudulent, unethical and potentially illegal behaviour bubbling up. This time from our government which isn’t a surprise as they have their own agenda independent from the populous. I think we’ll see a wave of investigations over the next few months. Everything is converging, something rotten is going on. Tick tock.

    • Build The Pipeline 7 months ago

      Guaranteed bailout if they’re doing this. I’m sure some people can argue that they influenced them to take out a HELOC, or buy a condo, even if just subtly. This government is reckless, and only working to pad their friends pockets.

      • vnm 7 months ago

        However deserving of the guillotine, a guaranteed bailout because of few ill-considered promo articles? … not so much as a an extra flea on the elephant stampede of low interest rates they perpetrated. More just a sign of an unchecked bureaucracy meets desperate newspaper industry.

        • Bluetheimpala 7 months ago

          Agree. This is just one piece. Mortgage fraud. Property value fraud. Funding fraud. Money laundering. Community lending. Developer collusion. Media complicity. Lack of financial oversight. Lack of government intervention. When the dust settles this will such a mess that even if we had funds, which we don’t, who do we bail out as a result of which immoral/illegal act? This is what a cluster fuck looks like people. Hunker down and get ready.

          • vnm 7 months ago

            Absolutely, and kudos to Better Dwelling for exposing it. Good journalists would be the first to agree and be similarly appalled. The corruption is so ubiquitous, it’s the wallpaper we don’t notice anymore. But the cosmetic airbrushing, like a slum landlord’s cheap coat of paint to hide defects is starting to peel, and the house of cards is coming apart at the seams. Kinda ironic that a real estate boom has become the major cause of homelessness in the city.

      • Bluetheimpala 7 months ago

        We have nothing to bail them out with. We’re running a federal deficit. If there is a downturn funds will need to be conserved. A bailout is a nice thought but in reality very little can and will be done. We did it to ourselves… Ate too much, puked and now we’re eating the puke. Tick tock. BD4L.

        • xelan 7 months ago

          who cares, just add 700B more to the deficit like US did in 2008. Government can’t run out of money they can always borrow more and Central Bank can always print more if they want.
          Budget surpluses look like a joke on this picture:
          https://wolfstreet.com/wp-content/uploads/2016/10/US-Gross-National-Debt-1980-2016.png

          • Bluetheimpala 7 months ago

            While the canadian dollar is stable and safe the reality is we’re not a reserve currency. Countries like Canada cannot issue debt unabated to pay for our problems unlike the US and even Europe. While I agree in general I think the realities of our tiny little country will be highlighted as we have little ability to tackle major economic issues…maybe why we’ve been prolonging the inevitable. tick tock.

          • Grizzly Gus 7 months ago

            I agree Blue. I feel like if tried something like QE, negative rates or even keeping rates low while the US is not doing the same we risk destroying our dollar. A lot of our economy involves selling raw material to the US and then buying back finished goods. Our dollar drops then all of these finished goods start to get more and more expensive. Feel like we would then have to raise a lot faster or risk run away inflation. Potentially worse for household debt

  • Ahmed 7 months ago

    That Halifax Examiner article you link to is very revealing about the Harper government. They spent almost over a million distributing scripts to tv and radio? What-the-actual-fuck? I’ve never seen a news story on tv labeled as “sponsored.”

    https://www.halifaxexaminer.ca/featured/garbage-journalism/

    Am I getting this correctly, you need to file a freedom of information request for EACH one of these contracts? Considering this article says the government is now responding with 80 year timelines that cost 100s of thousands of dollars, we’ll never know what kind of news they’re manufacturing.

    https://www.thestar.com/news/canada/2018/04/12/federal-department-tells-researcher-his-document-request-will-be-ready-in-80-years.html

  • Ian 7 months ago

    The worst part is News Canada articles don’t usually get distributed in newspapers with a high level of publication quality. You’ll usually find them in community newspapers, that target seniors. Shame on the government for still using this tactic.

    • Bluetheimpala 7 months ago

      I agree… If these received more attention they would be scrutinized. Having it appear in a penny saver in Coburg probably has a lot of weight with some cohorts, mainly the elderly and less educated. Gross.

  • Justin Thyme 7 months ago

    Blackrock?

    The epitome of American oligarchical culture?

    And you are quoting THEM as a source on CANADA?

    I remember when Better Dwelling used to be an impartial overview of deep data on the Canadian real estate scene.

    Now, it has degenerated into the typical American sensationalist blog, looking for the far-weird angle just to gain audience and generate add revenue.

    • Sammy 7 months ago

      Someone that can’t tell the difference between “Blacklock” and “Blackrock” really shouldn’t act so entitled. The first is an Ottawa subscription service, that is fully accredited for media access to parliament. Blackrock, is the world’s largest shadowbank, and likely manages your pension (if you’re lucky enough to have one). Both are superior sources to a comment troll with a questionable ability to discern details.

      Go troll elsewhere. I read the comments for reader insights, not because it gives 🤡 like you a platform.

      • Bluetheimpala 7 months ago

        Black rock is not Goldman… Fink says shit that happens and is much more transparent. Still have to be take. With a grain of salt but I agree that their comments hold weight over blog comments. Good post Sammy.

        • Sammy 7 months ago

          Thanks, it’s one thing to be positive about the market – which I am. It’s another thing to deceitfully convince people there is no risk. HELOCs are no joke. People should be able to understand the money they are borrowing, or they make the market more unstable.

          • Bluetheimpala 7 months ago

            I am hoping we can get through this and then make real changes to our financial system, real estate ownership rules and lending practices. Canada is a gem but if we are the world’s shitting ground then that’s all we’ll be. Need a strong government to look out for Canada!

          • Justin Thyme 7 months ago

            It’s not all about investing and making money on money, HELOCS are a credible vehicle for many retirees who have decided that ‘the last check will bounce’. There is absolutely nothing wrong with that philosophy. It is NOT about ‘he who dies with the most money, wins’.

            The Canadian Government does NOT make its policies strictly to make investors even more rich than they are. It’s about a comfortable retirement.

            And the government is not JUST Toronto and Vancouver. There are still many, many millions of Canadians who live in areas of the country where condos are still a viable alternative to renting, as a life style. Again, it;s not about investing, it is about home ownership and having your rent money go into your own pockets as ownership instead of the pockets of an investor.

            This article is nothing but a government conspiracy theory on steroids.

    • Bluetheimpala 7 months ago

      Yeah Justin you seem to back and forth on your commenting. Thought you were a troll and then you brought some value and then you toss in some pro-china garbage or in this case anti-American… Never know what side you’re on. Time will tell. Tick tock.

      • Grizzly Gus 7 months ago

        I think he is just anti capitalist/ establishment. Only consistent thing to draw from his posts

      • Justin Thyme 7 months ago

        So a troll is anyone who professes a viewpoint counter to yours? Interesting definition.

        China is THE most successful economy on earth today. Pointing that out is NOT trolling. Koski is a government conspiracist. Nothing trolling about pointing that out. America has long ago left Capitalism behind and turned to an neo-liberal oligarchy. Nothing trolling about pointing that out. By 2050, America will be somewhere around the world’s fifth or sixth largest economy, and the blame can be left entirely at the feet of the American MBA programs and Friedman . That is pretty much an established and recognized fact by everyone who is NOT American centric. Americans are substituting ideology for sound economic future planning. A one trillion dollar deficit WITHOUT a recession is just pure stupidity. They will soon be paying one TRILLION dollars JUST IN INTEREST on their debt. That is NOT a country that is in good shape.

        • Alistair McLaughlin 7 months ago

          Japan was the most successful economy on earth in 1989. You should learn from history instead of making predictions that people much smarter than yourself know better than to make. You’re fingers keep typing out cheques that your mind can’t cash. Spend a few years reading and learning and gaining more life experience, then come back here and lecture us with your forecasts.

          By the way, attacking BD articles as “conspiracy theories” when in fact everything was sourced and accurate, is the very height of trollishness. Act like a troll, you’ll get called a troll.

          Finally, here are some figures for you to chew on. Obviously, the US is in no worse shape debt-wise than China, and in better shape than Canada.

          Public Debt % GDP Private Debt % GDP Total debt % of GDP
          Canada 92% 218% 310%
          China 47% 210% 257%
          USA 108% 150% 258%

          Here’s my source:

          http://debt-economics.org/review-data.php

          Download the spreadsheets and add the columns yourself if you don’t believe me.
          I know what your dodge is here. You’re going to tell me that GDP means nothing and that only PPP is important, which is idiot-speak for “I don’t know WTF I’m talking about., so don’t bother. Now go do some research and come back here with some accurate information. Otherwise bugger off.

  • Russ 7 months ago

    Good Article. It is what they are not telling you. This is how they intend to keep this housing market going . They keep saying the housing market is showing sign of getting bullish again while at same time they mention to start discounting the 2016 year also.

  • H 7 months ago

    None of the articles you mentioned that were printed by the Canadian government is fake news. This terrible spin. Just because the opinion of Better Dwelling that HELOCs are a cause for concern or a bad idea, does not make it so. It does work for some people, but it is not for everyone. All financial products are not for everyone.

    Condos are the affordable option when compared to freehold, but for some, renting is still the better option.

    • Bluetheimpala 7 months ago

      I think the headline is a little click at but the underlying issue has not changed; a government was supporting a narrative that either promoted or brought attention to debt products at a time when asset values were out of whack. 2014, ok I think it is fair game but in 2017 when we’re 6-18 months out from a major fuck up… That’s what they were spending budget on. Pumping a bubble.

      • mica 7 months ago

        Title seems click bait-y, until you realize that the Ministry of Heritage has been actively trying to ban other deptartments from doing exactly this. This is a part of the stuff they’re saying should be illegal.

      • Bluetheimpala 7 months ago

        *clickbait
        and FYI my comment is not to slag off the liberals…sentiment applies to any government. Disgusting what they did a day will no doubt be replicated in the future.

    • mica 7 months ago

      Found the agent. Did you read the article, or just skim it with rage, trying to figure out a bitchy comment?

      The Ministry of Heritage defines fake news as any “state sponsored” media. It could be a completely fact-based article, but our Heritage Ministry is taking a stand for journalistic integrity. Other departments, often funded by the industry they’re promoting, are not. If Russia produced news articles about Canadian real estate, even if fact based, would you consider it news, or a manipulation of sovereign media?

      People struggle to understand the difference between a public broadcaster, and state news. The CBC is a public broadcaster, at no point are they being fed news where it’s unclear who paid for it to be made. This is news the government is writing, and distributing, without declaring their intention.

      What are they hoping to accomplish by getting people to take out a HELOC? Well, let’s start with the fact the FCAC is funded largely by banks. Starting to seem a little more sketchy, or is thoughts of commissions disappearing too much to let you see clearly?

    • Alistair McLaughlin 7 months ago

      It would seem to qualify as fake news by the Government of Canada’s own definition.

  • vnm 7 months ago

    The U.K. government once sponsored a study, hosting an outdoor picnic for schoolchildren in a park, to determine whether a piece of bread with peanut butter on one side, when dropped, fell more frequently face up or face down, and broadcast it on public television. Turned out to be 50/50.
    At least it was instructive, entertaining, and resolved an age old debate — something you can’t say about this Ottawa initiative.

  • xelan 7 months ago

    While HELOC is a part of the problem here is a very interesting and quite detailed article regarding Canadian financial situation I came across yesterday.
    It’s dated 2017 so you could’ve seen it already but for those of you who hasn’t here is the link:
    http://www.collective-evolution.com/2017/05/25/is-a-financial-crisis-coming-to-canada/
    It has links to the sources of almost all facts presented there so you can verify all information yourself.

    P.S. I apologize, the other day I expressed opinion that CMHC is in a good shape. Looks like that’s not the case. According to this article CMHC only covers 9% of all loans on their balance shit. I tried to follow the source and verify that myself but failed since it’s a 100 page document with a lot of numbers in it but in this case I would trust those numbers.

  • Justin Thyme 7 months ago

    Despite ALL of your prognostications, housing prices AND the stock market are still going up (or at least not crashing and burning).

    The fact is, they will CONTINUE to go up as log as there are no other vehicles to absorb excess exuberant money. As long as there are enough people with huge sums of money in their pocket that can not be spent any where else, it will be spent on the stock market and the housing market.

    The expression ‘money burning a hole in your pocket’ has NEVER been more appropriate.

    • xelan 7 months ago

      Not sure if we live in the same country.
      Let me tell you about Canada:
      TSX YTD Return -5.41% as of today. It will only crash when it becomes obvious to everyone including you that we are in a big trouble. That’s definitely not the case at the moment.

      Half of the all population in CANADA live paycheck to paycheck. What “money burning a hole in your pocket” you are talking about?:)

      Or you mean virtual wealth like HELOC, Line of credit, credit cards or even equity? Then I would agree with you, we have ton of those and that’s the only reason why some parts of our RE market are going up at the moment. But since our household debt is already at record 170% how much more can you borrow, especially when interest rates are going up?

  • vnm 7 months ago

    The problem with your rationale:
    there are enough PEOPLE
    who have enough MONEY
    and don’t mind LOSING
    it.

  • buigen 7 months ago

    Reminds me of a scene from the movie ‘the big short’ which goes like… everything around clearly looks messed up and still things not crashing down? It was obvious that regulators, governments, banks, insurers, rating agencies were all complicit and colluding to actively prop up the bubble going as long as they could.

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