The deal, which will result in changes to a bill now before the Canadian Senate, stipulates that non-Canadian publishers will be able to sell up to 18% of ad space to Canadian advertisers in so-called split-run editions, which reprint existing content for the Canadian market and then sell ad space to local companies. The percentage would be phased in over three years. Magazines wishing to sell more Canadian ad space would need to carry a majority of Canadian editorial content. In addition, Canadian advertisers will receive a 50% tax deduction for their expenditures in U.S.-owned magazines that have less than 80% Canadian content. Previously, there was no deduction.
Senior U.S. trade representatives called the pact "a way to achieve a livable resolution." They suggested that several U.S. publishers, including Hearst Corp., had indicated interest in going ahead with Canadian editions.
Copyright May 1999, Crain Communications Inc.