MAGAZINE WARS
By Adnews Staff
A trade war could soon heat up between Canada and the U.S. Canada's Parliament is close to passing a bill the levies an 80% excise tax on the advertising revenue of Canadian editions of foreign magazines. These "split-run" magazines carry a lot of Canadian advertising but little Canadian editorial content. Bill C-103 is aimed at Sports Illustrated Canada which has been published since April 1993. U.S. Trade Representative Mickey Kantor is threatening to investigate under Washington's Section 301 trade law, which could lead to retaliatory restrictions of Canadian imports or investments in the U.S. Sports Illustrated may challenge the law in court on the grounds that it violates the Income Tax Act or perhaps event the Charter of Rights and Freedoms. The bill was passed by the House of Commons last week and it now goes to the Senate. It is expected to be approved by the end of the year. It exempts long-established split-run publications such as the Canadian editions of Time and Reader's Digest. It affects only those launched after March 25, 1993, five days before the first issue of Sports Illustrated Canada.