Canada

The passage of Time

IAN URQUHART March 8 1976
Canada

The passage of Time

IAN URQUHART March 8 1976

The passage of Time

IAN URQUHART

More than 10 months after it was introduced, the bill removing special tax privileges for Time magazine was finally passed by the House of Commons late last month. The vote—134 to 95—was a foregone conclusion, with most Liberals and the NDP backing the bill and the Conservatives and Créditistes against it.* But the debate dragged on endlessly and became one of the longest in the current parliamentary session (16 full days were devoted to the bill in the Commons compared to just 12 days for the wage-price control bill late last year). Nor is it completely over: the bill still must pass through the Senate before it becomes law.

At stake was a grandfather clause in the Income Tax Act protecting Time, Reader’s Digest and several scientific magazines, all of which began publishing in Canada before 1965. It was in that year that the Liberal government, acting on recommendations from a royal commission appointed by the previous Conservative government, moved to prevent advertisers from claiming the cost of advertising in a foreign magazine as a tax-deductible expense. If such advertising were no longer tax-deductible, the government reasoned, then it would become more costly to the advertisers and they might be persuaded to shift some of their business to Canadian maga-

* Six Liberals—Norm Cafik, Simma Holt, Alan Martin, Dave Rooney, Jean-Robert Roy and Jacques Trudel— broke party ranks to vote against the bill. Two Tories who voted for the bill on second reading—David MacDonald and Flora MacDonald—stayed away on the final vote, perhaps out of a desire not to embarrass their new leader, Joe Clark, by splitting the party on the first vote after the leadership convention.

zines. To qualify as a Canadian magazine, a periodical had to be 75% Canadianowned and “not substantially the same” as a foreign magazine. The government has interpreted “not substantially the same” to mean 80% different.

But in 1965 Ottawa agreed under tremendous pressure from the United States government to exempt from the legislation those foreign magazines already being published in Canada, including Time and Reader’s Digest. Then, early last year, the government, reacting to growing nationalist sentiment, announced it would remove this grandfather clause from the Income Tax Act. Again a lobby built up against the legislation and many Liberal MPS, particularly those from Quebec, came under pressure to do something to save Reader’s Digest, which said it might fold if the bill were passed. Early last month, the government announced that Reader’s Digest would qualify as a “Canadian” magazine if 75% of its shares were held by Canadians and if the magazine edited and condensed its excerpted material in Canada to meet the 80% content guideline. Reader’s Digest said it could meet these criteria. But after the Commons passed the bill, Time announced that it would no longer publish its four to six pages of Canadian news, although it will continue to print in Canada and offer advertisers lower rates to make up for the loss of tax deductibility.

Much of the debate in the Commons centred on Maclean’s, with the Conservatives, particularly those from western

Canada, charging that the bill was intended to give Maclean-Hunter Limited a monopoly in the newsmagazine field. “This bill is sometimes known around Canada as the Maclean-Hunter monopoly bill,” said Allan McKinnon, (pc-Victoria). Added Gordon Ritchie (pc-Dauphin): “Maclean’s writes about Toronto, about Bloor and Jarvis Streets, and about the lakefront. This is as uninteresting to most western Canadians as it is uninteresting to Quebeckers. Many of its articles seem quite risqué. Sometimes I think the magazine should be sold under the counter as other pornographic and risqué magazines are.”

Maclean’s publisher, Lloyd Hodgkinson, said that passage of the bill by parliament will not affect the magazine’s longstanding timetable, which sets a tentative starting date of October, 1977, for moving to weekly frequency. IAN URQUHART