CANADA LOSES ROUND OF MAGAZINE FIGHT
By Adnews Staff
Canada was dealt a blow last week as the World Trade Organization ruled that Ottawa illegally taxed a Canadian version of Sports Illustrated. The report says Ottawa can't impose an 80% advertising tax on foreign magazines. Nor can it stop foreign magazines from publishing Canadian versions with Canadian advertising and some added Canadian editorial content. In addition, the report says that it is illegal to subsidize postal rates only for Canadian magazines, but said it was OK to keep a special fund Ottawa has to help offset postal costs. Ottawa could appeal the decision, but the chances of winning are remote since WTO has no cultural exemption. Sports Illustrated stopped publishing its three-year-old Canadian edition after Ottawa imposed the 80% tax in December 1995 on advertising in split-run U.S. magazines aimed at Canadian readers. The new rules came after Sports Illustrated got around restrictions on foreign magazines that carried Canadian advertising by electronically beaming its magazine to a Canadian printer.