Canadian Government Says Technology Circumvents Law

Article excerpt

THE CANADIAN GOVERNMENT has ordered a task force review of laws protecting the domestic publishing industry in the light of modern technology that allows the electronic transmission of foreign publications for printing in Canada.

Government officials concluded that the technology has circumvented a 28-year-old tariff code designed to block U.S. magazines filled with Canadian advertising.

The tariff code is aimed at so-called split runs -- Canadian editions of foreign magazines that barely differ from the original publication but replace the original advertisements with Canadian ads.

These split-run magazines -- and four succeeding issues- can be stopped at the border, but the Canadian government fears that, under the present rules, it cannot stop the electronic transmission of the publication for printing in Canada.

Communications Minister Warren Beattie ordered the task force review, which is to recommend ways of strengthening the protection, after Sports Illustrated printed a Canadian edition that attracted C$250,000 in 40 pages of advertising.

A joint statement from the federal Communications and Revenue departments said the new electronic technologies were not envisioned when regulations were set up in 1965.

The Sports Illustrated Canada editions are being edited and produced in New York with the page proofs transmitted electronically to a printer in Toronto. Nothing physically crosses the border so the tariff code does not apply.

"What is essential to us is to ensure a strong advertising base for the Canadian magazine industry" Beattie said. "The government will move quickly to close any loophole that allows companies to bypass policy by printing in Canada."

Meantime, Time Canada managing director Sandra Berry said Sports Illustrated was planning to publish a Canadian edition 51 times a year if the current test run of six issues this year is successful.

The magazine's publisher, U.S. media conglomerate Time Warner, said it planned to expand to 12 Canadian issues next year and then look at weekly publication.

The Canadian Magazine Publishers Association said there are 40 foreign publications with Canadian circulation of more than 50,000 that could justify split-run editions.

The Canadian objection to split runs is that they can offer lower ad rates than Canadian competitors because they have already covered the cost of producing the magazine in their home markets with advertising there. …