Canada

Mad about magazines

Canadian and American negotiators tussle over the question of ownership

John Geddes May 10 1999
Canada

Mad about magazines

Canadian and American negotiators tussle over the question of ownership

John Geddes May 10 1999

Mad about magazines

Canadian and American negotiators tussle over the question of ownership

Canada

The feud between Ottawa and Washington over Canada's protection of its magazine industry was, until last week, a dispute steeped in eye-glazing interpretations of international trade law. But suddenly, in the final stages of negotiations, it has turned into a debate about a more fundamental question: who should own Canada's cultural industries? Federal officials said a tentative “new framework” has been hammered out with the Americans in a deal that might relax rules that now favour Canadian ownership of Canadian magazines. In exchange, U.S. publishers would be required to provide a substantial amount of Canadian content—nobody was saying exactly how much—in magazines aimed at the Canadian market.

No clear details of the prospective pact were revealed by tight-lipped officials. The terms arrived at in eight bargaining sessions over three months are likely to remain closely guarded until after the framework is presented early this week to Trade Minister Sergio Marchi and Heritage Minister Sheila Copps, who share responsibility for the magazine issue. But the mere consideration of a shift in policy away from Canadian ownership left no doubt that Ottawa is anxious to soften its stand on magazines to avert threatened U.S. retaliation against Canadian exports, such as steel or wool suits. “They can always hurt us more than we can possibly dream of hurting them,” said one senior Canadian official. “We don’t have a lot of cards, so we have to play them very well.”

Before last week, Ottawa had laid just one card on the table: Bill C-55. The legislation, which is before a Senate committee for its final review on the way to being passed into law, would maintain the government’s long-standing ban on so-called split

runs—Canadian editions of U.S. magazines that contain very little Canadian editorial content but lots of lucrative Canadian advertising. Bill C-55 would impose stiff fines on U.S. publishers that sell ad space in split runs to Canadian advertisers. (The venerable Canadian editions of Time and Reader’s Digest have been exempted from Ottawa’s anti-split-run policy.)

Just last month, Copps touted the proposed law as indispensible. “If we want the Canadian magazine industry to maintain healthy competition with foreign periodicals, we need Bill C-55,” she told the Senate committee. Last week, though, federal officials insisted that Bill C-55 was not the only way to achieve the real policy goal—fostering Canadian content. One alternative: extend the income tax deduction that Canadian companies now get for advertising in Canadian magazines to some U.S.owned magazines targeted at the Canadian market—as long as they

contain plenty of Canadian articles. Other ideas that could be in the new framework: allowing certain split runs deemed not to threaten Canadian magazines, and ease the rule requiring 75-percent Canadian ownership of Canadian magazine publishers.

Culture lobbyists, led by the Canadian Conference of the Arts, argue that Canadian ownership is essential to maintaining high-quality homegrown content in the long run. They also wonder what would happen to the federal rules that require Canadian control of news-

papers and broadcasting, and prevent foreign corporations from buying Canadian book publishers and retailers. Government officials insisted that changing the magazine rules would not clear the way for bigger foreign stakes in those industries.

With fresh controversy brewing in Canada, the fate of any magazine deal in the United States was equally in doubt. Washington bristles against conditions being put on U.S. access to foreign markets, and influential commentators are urging the Clinton administration not to bend. “Canadian culture is apparently so weak,” scoffed prominent economist Lester Thurow recently in USA Today, “that its citizens cannot be trusted to buy magazines wisely.” But the debate about what magazines Canadian consumers buy may soon be drowned out by an even louder one about whether the whole industry is up for sale.

John Geddes

in Ottawa