Saying that Canadian editions of U.S. magazines are unfair competition, Canada plans to slap them with an 80 percent excise tax.
Heritage Minister Michel Dupuy will announce the tax at a news conference Thursday afternoon, External Affairs spokesman Kevin Sinnott confirmed Wednesday.The tax will affect "split-run" editions - in which a few pages of a U.S. magazine are replaced with Canadian editorial content. The publisher also resells a few advertising pages to Canadian businesses.
Canadian magazine publishers say the practice is unfair because it eats up scarce advertising dollars needed to keep home-grown publications afloat.
A U.S. State Department spokesman said Tuesday that American officials were examining their right to retaliate against such a tax under the North American Free Trade Agreement.
NAFTA allows the Canadian government to prop up cultural industries such as magazine publishing. But Canada faces possible retaliation of "equivalent commercial effect" if the measure has a financial impact on its trade partner.