Government Responds to the Final Report of the Task Force on the Canadian Magazine Industry
TORONTO, December 22, 1994 Canadian Heritage Minister Michel Dupuy today announced the Government's response to the recommendations contained in the final report of the Task Force on the Canadian Magazine Industry.Mr. Dupuy noted that the Government addressed all of the Task Force's recommendations, including accepting the recommendation to implement a new excise tax on all split-run magazines that contain ads directed at Canadians.
The excise tax will be levied on split-run editions on a per-issue basis at a rate of 80 per cent of the amount charged for all advertising appearing in that issue. Magazines that would otherwise have been subject to the tax will be exempt at the number of issues per annum that were distributed in Canada prior to March 26, 1993. In the case of Sports Illustrated Canada, which began publishing in April 1993, future editions will be subject to the tax.
Mr. Dupuy added that the excise tax simply maintains the Government's long-standing policy to channel Canadian advertising expenditures to Canadian magazines. This initiative underscores the federal government's commitment to support the continued existence of a viable, original and vibrant Canadian magazine industry. The Government is committed to measures, such as this one, designed to strengthen the structures upon which Canadian cultural expression can flourish.
Mr. Dupuy pointed out that the proposed 80 per cent excise tax on magazines that print Canadian advertising editions:
will not be paid by the consumer;
would be paid by the printer or distributor of any magazine subject to the tax;
will not limit the access Canadians have to foreign publications; and
is consistent with existing international trade agreements and obligations.
Minister Dupuy also announced that the Government will:
maintain existing policy instruments;
work with the magazine industry to meet the objective of encouraging voluntary compliance with the requirements of section 19 of the Income Tax Act;
incorporate an anti-avoidance clause into section 19 of the Income Tax Act to ensure de facto Canadian ownership;
issue information to advertisers and advertising agencies concerning the terms of section 19 of the Income Tax Act;
review its current advertising practices to meet the spirit of the Task Force recommendation that the placement of advertising be consistent with federal publishing policy;
bring to the attention of the provinces any recommendations proposing action by them;
take note of the recommendations on the Management Counselling Program within the Cultural Industries Development Fund and on the postal subsidy, and consider them in light of the budgetary situation;
take note of the Task Force recommendation on GST in the context of the GST review process; and
consult the magazine industry on any further measures considered by the industry to be beneficial.
The Minister added that the role of the Minister of Canadian Heritage will be fully taken into account in any review the Government may undertake with respect to foreign investment in the cultural sector.
Information:
Alain Garceau
Office of the Hon. Michel Dupuy
(819) 997-7788
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