The federal Foreign Publishers Advertising Services Act is designed to prevent foreign (particularly American) magazines from taking away Canadian advertising dollars. The Canadian government drafted this legislation after the U.S. successfully argued before the World Trade Organization that Canada’s former tax on split-run magazines contravened international trade laws. ("Split runs" are foreign magazines printed in Canada, but with little Canadian content — and that compete with Canadian magazines for domestic advertising revenue.)

Unlike the tax on split-run periodicals, the Foreign Publishers Advertising Services Act prohibit Canadian advertisers from placing ads in foreign magazines and will fine foreign publishers found in violation of this rule. The Act makes it an offence for a foreign periodical publisher to supply advertising services directed at the Canadian market to Canadian advertisers (section 3).

Exemptions

Unlike the aggressive measures in section three, the section 21.1 exemptions allow foreign publishers to supply advertising services directed at the Canadian market — provided that the revenues generated by those services represent no more than a certain percentage of the publisher’s total revenues. That percentage is:

• 12 per cent in the first 18 months of the Act (section 21.1(a))
• 15 per cent in the subsequent 18 months (section 21.1(b))
• 18 per cent thereafter (section 21.1(c))

An agent or a representative of a Canadian advertiser who obtains advertising services supplied by a foreign publisher is deemed to be acting on behalf of that Canadian advertiser (section 3(5)).

The Foreign Publishers Advertising Services Act also give the Minister of Heritage power to investigate any companies suspected of supplying advertising to a Canadian advertiser (section 4).

The Minister may require the foreign publisher, without delay or within a specified period, to:

• cease supplying advertising services in contravention of section 3 of the Act
• not execute the transaction or finalize the arrangement
• show cause why no contravention of the Act has occurred, or will occur

Full Text: Foreign Publishers Advertising Services Act