Controversial ad law on hold in Canada

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OTTAWA--A controversial Canadian law targeting U.S. and foreign magazines is on hold until at least February.

Canada's proposed Foreign Publishers Advertising Services Act isn't expected to be approved before Parliament breaks for the Christmas holidays at the end of the week; the law would make it illegal for foreign magazines to run ads from Canadian marketers in special Canadian editions of foreign magazines, which are known as "split-run" titles.

This is Canada's latest move to tackle split-run magazines, with the new law designed to keep Canadian ad dollars at home and protect Canadian magazines from U.S. competition. U.S. titles account for close to 80% of the magazines sold in Canada.

Publishing companies could be hit with fines of up to $160,000 for breaking the rules, while individuals could face a penalty of up to $65,000.

"It's not a question of the bill dying when the House (of Commons) adjourns," says Anne-Sophie Lawless, spokeswoman in the office of Heritage Minister Sheila Copps, who is behind the law. "They'll pick it up in February," when lawmakers are scheduled to return to business.

Strong opposition to the law has come from a coalition of major Canadian ad industry groups and the U.S. itself, which has threatened trade sanctions over the matter.

Several published reports suggest Canadian Prime Minister Jean Chretien wants to avoid another trade fight with the U.S. over magazines and may have the bill die before it's passed.

Canada and the U.S. last clashed over magazines in 1997, when the World Trade Organization ruled against Canada's policy on split-run titles.

Copyright December 1998, Crain Communications Inc.

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