House of Commons Hansard #140 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was magazines.

Topics

Foreign Publishers Advertising Services Act
Government Orders

3:10 p.m.

Reform

Leon Benoit Lakeland, AB

They do not need your help, Sheila. Nor do they want it.

Foreign Publishers Advertising Services Act
Government Orders

3:10 p.m.

Liberal

Sheila Copps Hamilton East, ON

I hear the member. Approximately $45 million in postal subsidies are going out to organizations as diverse as the Ontario Corn Producers Association. Those organizations have indicated very clearly to the government that they support the policy and they support the government because they want their voices heard in the Canadian agricultural industry.

This is about the future of Canadian magazines for veterans, Canadian magazines for fishermen, Canadian news magazines, business magazines like BC Business Magazine which has supported the policy put forward by the government, and Canadian scholarly and consumer magazines. This is about making sure that we have Canadian kids magazines to tell stories for our kids.

There is also criticism from those who say the legislation may upset the United States. Those opposite seem to forget the reason they were elected to the Parliament of Canada was to fight for the interest and the survival of their country. Those people who say the legislation will upset the United States must understand the fact that no country on earth has ever imported and read as many magazines per capita as Canada now imports from the United States. The legislation will keep that market open.

No country in the history of the globe has ever exported as many magazines per capita to any other country in the world as has the United States to the Canadian market. We are more open to American magazines than any other country in the world.

Can we imagine the reaction of Americans if they walked into their neighbourhood smoke shop and saw that 80% of the magazines being sold on the rack were Canadian magazines? That is what we would like our American neighbours to think about.

The United States is our closest ally and friend. We welcome American cultural influences with open arms, but we have a responsibility and a legacy to our children to stand up for Canada. With serious respect, we will not subject as has been suggested in some quarters Canada's laws to scrutiny and approval by the United States before we pass them.

Can we imagine the United States Congress putting a bill before parliament before it passed its own legislation? The simple fact is that unless Canadians stand up for culture, who will? Unless Canada stands up for Canadian interests, who will? Of course there are risks in acting but there is a far greater risk in doing nothing.

There is a far greater risk in the cultural cowardice being shown by the members of the Reform Party. There is a far greater risk in failing to stand up for Canada's legitimate interests.

Some critics think that governments should not get involved in policies to help periodicals. But the answer to that is simple: if Canada does not support Canadian culture, if Quebeckers and the Quebec government do not support Quebec culture, who will?

Unless we stand up for our interests who will? Forty years ago there were only a handful of Canadian magazines. The government of Prime Minister Lester Pearson saw a need to act in the national and public interest to create a framework, not to write the magazines, not to censor the magazines and not to block other magazines, but to create a basis for 1,500 Canadian magazines that we all enjoy.

This Christmas I want my daughter to be able to read about Canadian tradition. I want her to read about my sister-in-law's tourtiere. I also want her to read about how I prepare my garden in Canada for our Canadian winters. I do not want her to have to read a magazine that celebrates American holidays, American culture and American values because it is the only choice she has. That is what is at stake.

From L'Actualité to Western Living , from Vancouver magazine to Canadian Geographic , from Maclean's to Canadian Gardening , 1,500 magazines in our country now tell us the story of who we are. They talk about our way of life. They allow us to see the regions of the country we do not have a chance to visit personally. They allow us to read the stories of all the ages, from kindergarten to great-grandparent.

Maybe we could do nothing to ensure the chance for these magazines to survive but we would be the losers. The losers especially would be our children.

The other suggestion by those cultural cowards is that we should test the bill in the courts before we bring it into parliament. I suggest that such an approach compromises the democratic, judicial and parliamentary principles that say that the highest place for laws to be made and the responsibility for those laws reposes in the Parliament of Canada. Those naysayers would tie the hands of parliament and make us hostage to every group that did not like a proposed law.

We will not compromise Canada's basic legislative rights as a nation by seeking external approval from outside governments before legislating in Canada's national interest.

I would like to add to the point made over and over again by the Minister for International Trade. Advertising services are just that, services. Services are subject to the general agreement on services. The measure before parliament is absolutely and completely consistent with Canada's international obligations under that agreement.

I underscore another point that has been made over and over in the past few months. This bill will not oppose any foreign publisher's ability to export products into the Canadian market. We will continue to have and nurture the most open magazine market in the world. This will not affect existing commercial operations.

The objectives of Canada on this matter are fair. The approach taken in this bill is fair. The need for action is clear. The need for speed is vital. There are no taxes proposed by this bill. There are no subsidies in this bill. There is no restriction on the circulation of foreign goods proposed by this bill.

This bill shows that we are committed to regulating advertising services to develop our own policies reflecting the nature of our country and the identity of our people.

Canadian cultural achievements are not a coincidence. Achievements in our culture and our country require the work, the intelligence, the dedication and the creativity of many individuals and of parliament.

To contribute to these achievements, Canadian citizens must resolve to promote Canadian content and to support Canadian culture.

That is why the bill to establish the foreign publishers advertising services act is before parliament. It is not about parliament acting in the government's interest or in parliament's interest. It is about parliament acting in the interests of Canada.

Advertising revenues are the backbone of Canadian magazines and the fuel for a crucial vehicle of social, economic, political and cultural expression of our nation. What we seek as Canadians is a chance to hear our own stories, to see our own creators, to watch our own talent and to hear our own voices at home and abroad.

The new bill before the House is in support of a cultural heritage grounded in history and handed to our generation by generations of parliamentarians who had the courage to make a difference in the past.

This bill upholds longstanding Canadian cultural objectives and it upholds and supports the right of Canada and the right of Canadians to advance and promote Canadian culture and by doing so to advance and promote our identity and our nationhood.

Members of parliament who truly believe that Canada is a nation worth supporting and preserving have no option but to support this legislation.

Foreign Publishers Advertising Services Act
Government Orders

3:20 p.m.

Reform

Leon Benoit Lakeland, AB

Madam Speaker, on a point of order, I ask for unanimous consent of the House to have the minister answer questions on her presentation.

Foreign Publishers Advertising Services Act
Government Orders

3:20 p.m.

The Acting Speaker (Ms. Thibeault)

Is there unanimous consent?

Foreign Publishers Advertising Services Act
Government Orders

3:20 p.m.

Some hon. members

No.

Foreign Publishers Advertising Services Act
Government Orders

3:20 p.m.

Reform

Inky Mark Dauphin—Swan River, MB

Madam Speaker, unfortunately the minister is still living in the seventies. This is the nineties and we have to accept that the world and society change.

Prior to my coming to the House this afternoon I attended a meeting of the heritage committee and we had before us the chairman of the National Film Board. What refreshing ideas I heard this morning.

I asked her about culture because she was before the committee talking about Canadian culture policy. I asked the chairman in terms of promotion or protection which would she prefer. She said there was a time when this country probably needed protection and I agree. In the nineties with changing technologies her own statement was protection is less and less sustainable. We know what that means. That means we cannot afford to continue to give grants and subsidies and put censorship in place.

The chairman of the National Film Board stated there is no problem with Canadian content because Canadians want to buy and watch and hear things that are Canadian.

She told us about the National Film Board and its super success. The National Film Board has promoted Canada around the world. It has done a great job, even with reduced funding. The chairman told the committee that one of the problems in this country is that we do not have a master plan for cultural policy. Everything is a little piece here, a little piece there. She has a lot of good advice for all of us in this House.

The system is so convoluted that we need to streamline our system in cultural policy. There is too much overlap. There is too much overlap.

Other advice she gives the committee is that we have to follow the right paradigm. We cannot continue to do things we have done in the past. That is excellent advice.

I am very pleased to have the opportunity to intervene as critic for Canadian heritage on behalf of the official opposition on the bill at second reading. Most important, I am speaking on behalf of Canadians. While the minister may speak on behalf of the Government of Canada I will speak from the opposition benches for Canadians and their parliament. It is my job to make certain the interests of Canadians are served by the bill. Whose interests would this law serve? That is a good question.

More fundamental, it is my job to make sure this bill is necessary. If there is one thing Canadians do not need it is one more unnecessary law. Does it address a real problem or is the bill a solution in search of a problem? That is an interesting question. It is my job to make sure the bill is not a bad law. No law in a particular area of policy is better than a bad law that leads to unintended consequences.

I call the attention of the government and the House to what I hope are unintended consequences of the bill. We also have to think about how a law with international implications reflects on Canada. Does it reflect well? How will it be received on a world stage? We are a global community. What does Bill C-55 say about Canada? Is this a law crafted so that it prepares Canada for the 21st century? Does this law try to perpetuate a tired old policy better suited to the 19th century?

Most important, it is my job to see that if this bill cuts back the freedoms Canadians enjoy and if it limits our freedoms members of the House will want to make sure that is justified. If this bill would roll back freedoms without any good reason then the House should not leave sober second thought to the unelected place. We know where that is.

The duly elected members of parliament should stand to oppose a bad law to preserve the freedoms and protect the interests of Canadians who elected them. That is true irrespective of where we sit in this place.

Bill C-55, the foreign publishers advertising services act, is Canada's response to the World Trade Organization, the WTO dispute settlement panel and the WTO appellate body's ruling issued in March and June 1997. The WTO ruled against Canada's punitive tariffs and tax measures against split run editions of foreign magazines and hidden postal subsidies for Canadian magazines. The deadline for Canada's response is October 30, 1998.

In an attempt to overcome the ruling this bill construes advertising not as a good but instead Bill C-55 creates a statutory definition of advertising as a service. What is a split run edition? “Magazines with editorial content broadly similar to their foreign original but with advertising aimed at a Canadian audience”.

Why does the Minister of Canadian Heritage target split run editions? A press release from the day she tabled Bill C-55, October 8, 1998 says: “Under the act only Canadian periodical publishers will be able to sell advertising services aimed primarily at the Canadian market to Canadian advertisers”.

In the same press release the minister says: “More than 80% of magazines sold at Canadian news stands are foreign, most from the United States”. Does the heritage minister's assertion stand up? The short answer is no. The minister's own department admits that at least 50% of magazines sold in Canada are Canadian magazines.

Let me repeat that the Department of Canadian Heritage admits that at least 50% of the magazines sold in Canada are Canadian magazines. The minister appears to be concocting a need by choosing her statistics very selectively.

Further, the minister knows that 75% of all magazines read by Canadians are read in the home. These are magazines they subscribe to or receive by controlled circulation. What is controlled circulation? They are the magazines we receive with our newspapers or are otherwise distributed directly to our homes, in most cases at no cost. These 94% of magazines received by subscription or by controlled circulation are Canadian owned. This leaves me to ask the following question of the Minister of Canadian Heritage: What problem is the minister trying to fix? Why is the minister looking for a problem when none exists?

Bill C-55 is a solution in search of a problem. Whose interest is the heritage minister trying to defend? Canadians? They already read Canadian magazines with a Canadian viewpoint. Magazines like Maclean's , Saturday Night and Chatelaine are already well read. If we include newspapers, we are well supplied with a Canadian outlook on ourselves and on the world. Canadian readership for Canadian publications already supports a healthy Canadian advertising market. Again, whose interest is the heritage minister trying to defend?

If the heritage minister really wants to do something for Canadian magazines she would do well to heed the advice of the defence minister. In a speech delivered January 17, 1997 he said “Perhaps in a new digital world, policies of cultural promotion make more sense than traditional policies of protection”. Promotion, not protection. Promotion, yes, but this bill does not promote, it protects an industry that is already healthy.

This bill is really unnecessary. That in itself suggests that Bill C-55 is a bad law. There are other problems with Bill C-55 that make it a bad law.

Bill C-55 tries to redefine magazine advertising as a service, but the redefinition of advertising as a service is contrived. Magazine advertising is printed on paper with ink and appears in thousands of magazines. The advertising is a tangible good. We can see it, touch it, write on it, pick it up, tear it out or crumple it up. Magazines sell advertising space, not an advertising service. The minister is inventing a definition that is not based on reality.

The minister has introduced Bill C-55 in response to rulings from the World Trade Organization, a dispute settlement panel and appellate body. These rulings were issued in March and June 1997 against Canada's punitive tariff and tax measures, against split run editions of foreign magazines and hidden postal subsidies for Canadian magazines.

The minister wants to protect us against the dangerous incursion of publications like the New England Journal of Medicine .

Let us step back for a moment and look at the bigger picture of Canada's international trade. Canada is heavily dependent on two-way trade with the United States. In fact we know that trade represents in excess of $1 billion a day. Canadians' standard of living, our jobs, our ability to sell our goods and services is heavily dependent on a good trading relationship with the United States. Therefore, it is proper to ask how the United States has reacted to Bill C-55.

I will read from some remarks released in Geneva by the U.S. trade representative in response to Bill C-55:

On October 8, the Canadian government introduced a bill in Parliament that, if enacted, would ban foreign-owned publishers from using the magazines they publish to carry any advertisement aimed primarily at Canadian consumers.

Unfortunately, it leaves foreign-produced split-run periodicals precisely where they have been for the past 30 years—shut out of the Canadian market.

What is also disturbing about the bill is that it apparently represents Canada's idea of compliance, with the panel and appellate body reports on this subject.

Canada seems to believe that while it may violate the GATT for a government to confiscate 80 percent of the advertising revenues generated by imported split-run magazines, it is perfectly acceptable to ban those advertisements altogether.

Canadian officials are justifying their new bill on the grounds that it is governed by the anti-discrimination provisions of the GATS rather than the GATT. Conveniently, Canada has made no commitments regarding advertising under the GATS.

It is surprising that Canada would believe its GATT v. GATS argument which the panel and the appellate body so soundly rejected in 1997, has taken on credibility in 1998. The clear and intended effect of Canada's proposed legislation is to prevent imported magazines from being used to carry advertisements aimed at the Canadian market.

This is precisely what Canada's 80 percent tax prevents as well.

Taken together, the bill, introduced on October 8 and perpetuation of Canada's postal subsidy scheme, which the Canadian government has also announced, send a very troubling signal regarding Canada's seriousness in abiding by its international obligations and, in particular, in observing both the letter and the spirit of the WTO's dispute settlement rules.

For well over a year Canada has steadfastly refused to disclose any of the alternatives it was considering or to consult with interested governments regarding its compliance.

Then, after dragging out its response for almost 15 months, the Canadian government has suddenly announced proposed replacement measures that are still discriminatory and protectionist.

We strongly urge Canada to reconsider the course it has chosen. The United States intends to react vigorously if that is not the case.

The Asian flu on the financial markets is already affecting Canada. Commodity prices are down and Canadian farmers may be the hardest hit. The prices they are getting for their wheat and barley are trending down. Canadian farmers are more dependent than ever on United States markets. There is already a dispute between the United States and Canada on wheat and barley. Why would we want to do anything to make trade relations between our two countries even worse than they are already?

As Ron Lund of the Association of Canadian Advertisers said, Bill C-55 represents “the thin edge of the wedge” on trade relations between Canada and the United States. If the heritage minister pushes on split run magazines, then all trade is called into question. It could be the tip of the iceberg. The United States already has the support of the World Trade Organization on split run magazines. Canada should stand up for itself when we know we are in the right on trade issues, but why are we setting out to provoke the United States when it has a quasi-judicial ruling in its hip pocket?

The minister is putting Canadian farms, Canadian jobs, the Canadian standard of living and international trade relations at risk with Bill C-55. Does she have the support of the Minister for International Trade, the Minister of Agriculture and Agri-Food and the Minister of Industry?

I have shown how this bill is unnecessary. I have shown how Bill C-55 is a bad law from the standpoint of international trade and our domestic economy.

I want to look at what Bill C-55 does to fundamental rights, freedoms and our legal rights. Under section 2 of the Canadian Charter of Rights and Freedoms everyone is guaranteed “freedom of expression, freedom of the press and other media of communication and freedom of association”. Further, under section 8 of the charter, “everyone has the right to be secure against unreasonable search and seizure”.

I want to zero in on the word “unreasonable”. The opposite word “reasonable” appears in section 1 of the charter and I would like to quote that as well:

The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

We have rights and freedoms under the charter. Those rights and freedoms are guaranteed and are subject only to reasonable limits. Bill C-55 would limit the ability of Canadian advertisers to promote their products and services on the printed pages of magazines. It limits their freedom of expression. It limits their freedom of speech. Bill C-55 limits who publishers and advertisers may associate with in promoting their products and services.

If the heritage minister thought a split run publisher had sold space to a Canadian advertiser she could send out her investigators with Criminal Code powers to search and to seize property. Magazine police. Is this reasonable?

Split run publishers are law-abiding people. Even the threat of Bill C-55 on the Order Paper may be enough to limit split run publishers accepting more advertising from Canadians. So is it reasonable to create a force of magazine police who could be sent out after law-abiding publishers and presses? These people are respectable corporate citizens. They are not common criminals.

Even more, is it reasonable to limit the free expression and the freedom of association in advertising? The Canadian publishing industry is healthy. The commentary news and advertising from Canadian publishers is read by a very large share of the Canadian market. In fact, Canadian publishers are well received abroad. We know that Canadians want to read things that are Canadian and watch films that are Canadian. The market is there.

One Canadian publisher said: “I have been a relentless opponent of these restrictive rules all the time. I have been in this business nearly 30 years. As the proprietor of Saturday Night , I am opposed to the restrictions that representatives of the magazine industry are advocating on American publications”. He continued: “We have been well received in those foreign countries—the U.K., the U.S.A. and Israel—where we do business. Canada should behave as those other countries do”.

In fact, I have even heard that Conrad Black opposes this bill.

Bill C-55 is not reasonable. It is absurd. What is worse, Bill C-55 is being used to put absurd limits on fundamental freedoms and legal rights. Where is the sense in that?

There are also implications for the constitutional division of powers between the provinces and the federal government.

More than once, the minister has shown that she cares little about the impact of federal law and policy on other levels of government. She demonstrated that in her old portfolio of environment. Last summer she undercut her own officials who had worked for months on a plan for the town of Banff. The heritage minister does not play well with others. And here we go again.

Nothing in constitutional or case law puts print media in federal jurisdiction. I refer the House to section 91 of the Constitution Act, 1867. Further, the act intrudes into provincial jurisdiction on property and civil rights. I refer members to subsection 92(13) of the Constitution Act, 1867. Bill C-55 cannot be justified under the peace, order and good government power of the federal government.

At this time, I want to read a paragraph from an article put together by the C.D. Howe Institute. It is its summation on this issue of restrictive legislation. I quote from the last page:

Canada should vigorously defend its right to promote its culture through subsidies, tax breaks and sensible content requirements and definitions aimed at ensuring the continued availability to Canadians of products from their own culture, and, in general, a fair competitive environment for domestic cultural productions that are demonstrably of special value to Canadians. Canada should also insist that government policy be able to treat magazines containing Canadian stories aimed at Canadians differently in certain respects from those produced for a foreign audience. But by clinging to measures that increasingly restrict access to information, that threatens Canada's commercial interests, and that possibly accelerate, rather than prevent, cultural assimilation,—

<—which this minister is so concerned about—

—the federal government instead risks taking Canada down a path toward poorer cultural and economic health, and is diminishing the chances of arriving at a negotiated agreement with other countries on the proper line to draw between free trade and culture.

I could go on at length because there is all kinds of evidence to show that this bill is the wrong thing to do for this government.

It is clear that Bill C-55 is just asking for a series of lengthy and costly legal challenges brought under constitutional law, all at taxpayer expense. All this to deliver a thinly veiled threat.

Bill C-55 does not serve the public interest, Canadians' interests. In fact, it threatens Canadian trade and it threatens jobs and Canadian livelihoods.

Bill C-55 is unnecessary. The Canadian magazine industry is healthy and competitive. It does not require protection. Canadian publishers are well received internationally. Bill C-55 represents a tired 19th century policy. In the 21st century, let us concentrate on promotion, not protection.

With Bill C-55, the heritage minister treads into jurisdictions where federal power and regulation do not belong.

Worst of all, Bill C-55 is a bad law that puts unreasonable limits on free speech, freedom of the press, freedom of association and uses magazine police or culture cops, as we have been calling them, to threaten law-abiding citizens. It is a very bad law.

In view of this, I want to move the following amendment. I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following therefor:

Bill C-55, an act respecting advertising services supplied by foreign periodical publishers, be not now read a second time, but that it be read a second time this day six months hence.

Foreign Publishers Advertising Services Act
Government Orders

3:50 p.m.

The Acting Speaker (Ms. Thibeault)

The amendment is receivable.

Foreign Publishers Advertising Services Act
Government Orders

3:50 p.m.

Bloc

Suzanne Tremblay Rimouski—Mitis, QC

Madam Speaker, we are debating today, at second reading, Bill C-55 respecting advertising services supplied by foreign periodical publishers.

This bill was made necessary after Sports Illustrated used electronic means to circumvent Tariff 9958, 1965, which prohibits the import of split-run magazines, that is foreign magazines containing advertising directed at the Canadian market. Sports Illustrated circumvented Canadian regulations by electronically importing its editorial content and printing its magazine in Canada.

In 1995, Canada enacted Bill C-103 providing for an 80% excise tax on the earnings from the sale of advertising in such magazines. Four measures including this one were declared contrary to the GATT agreements signed by Canada in 1947 and renewed in 1994.

As a result, Canada had to review its policy of support to magazines and its legislation providing for an 80% excise tax in particular.

Today, the heritage minister is putting forward a bill denying foreign magazines access to the Canadian advertising market. The government's position is that Canada has the right to protect its advertising market because advertising is a service and, under the General Agreement on Trade in Services, advertising is exempt.

Is exempt any industry not included in the list of industries covered by the agreement. There is a cultural exception when an agreement includes a text providing for the exclusion of part of that agreement.

The Bloc Quebecois agrees in principle with the bill at second reading. However, we will listen carefully to the representations that will be made to the committee on this issue. In 1995, former minister Michel Dupuy had assured us that his Bill C-103 was in compliance with international trade rules, and now the Minister of Canadian Heritage is making the same claim.

Let us take a look at the background of this legislation.

In 1990, Time-Warner received assurances from Revenue Canada that its plan to publish a Canadian edition of Sports Illustrated would not contravene tariff number 9958.

On August 15, 1990, Investment Canada confirmed that the magazine Sports Illustrated in Canada would not be subject to the Investment Canada Act.

Consequently, Time-Warner thought it was authorized to move into Canada.

On January 7, 1993, Time-Warner announced that it would publish a split run edition of Sports Illustrated .

Of course, since the Minister of Communication had not been informed of the decisions made by his colleague from industry, he objected, invoking tariff number 9958, to a split run edition of Sports Illustrated in Canada.

On April 5, 1993, Sports Illustrated published its first issue out of Richmond Hill. Since its publication did not extend across the border physically, tariff 9958 did not apply.

Rather than take immediate action, the government ordered a report on the magazine industry in April 1993.

In December 1993, Time Warner announced its intention of increasing the number of split runs from six to twelve a year.

On March 24, 1994, the task force published its report. It recommended applying an excise tax of 80% on split run magazines, but exempting Sports Illustrated on condition that it not publish more than six issues a year. The Canadian industry opposed the latter part of the recommendation, and rightly so.

In December 1995, Bill C-103 was passed.

On March 11, 1996, Mickey Kantor, the American trade secretary, announced that he was filing a complaint with the World Trade Organization to protest, first, the 80% excise tax on split run magazines under Bill C-103, second, the lower postal rates granted Canadian publications, third, the postal subsidy and, fourth, tariff 9958 making it illegal to import split runs into Canada.

On June 30, 1997, the WTO went along with the American arguments and outlawed the four measures for protecting Canadian magazines, stipulating that, since magazines were goods, Canadian policies to protect them had to be consistent with GATT rules on goods.

In August 1997, Canada advised the WTO that it would respect the ruling.

In July and October 1997, the Government of Canada announced a series of measures to comply with the decision of the WTO and promote the Canadian and Quebec magazine industry.

In order to comply with the decision of the WTO, Canada proposed the following, beginning with the tariff code 9958 measure. This code prevented the importing into Canada of split run magazines. It will be repealed by an order in council.

Second, Bill C-103 amended the Excise Act. This amendment authorized the government to levy an 80% excise tax on Canadian advertising revenues declared by periodical publishers. The act will be amended by a ways and means motion.

Third, the postal subsidy. With this measure, Heritage Canada paid Canada Post nearly $50 million to have it accord certain magazines reduced rates. This measure will be maintained, except that Heritage Canada will now put this money into accounts the magazines have with Canada Post.

Fourth, preferential postal rates. This measure would allow Canada Post to give Canadian magazines a preferential rate. The rates for foreign magazines will be reduced to the preferential Canadian rate. This measure will cost Canada Post $16 million.

I will now deal with reaction to the legislation so far.

Canadian publishers applauded the introduction of this legislation. The president of the Magazine Association of Canada, François de Gaspé Beaubien, even accompanied the Minister of Canadian Heritage during the briefing that followed the bill's introduction. For the association, the issue was to avoid having foreign publishers, who make their profits in foreign markets, competing with Canadian magazines by offering lower advertising rates than the Canadians could offer.

Canadian magazines get more than 60% of their revenues from advertising sales. The association also did not want the loss of advertising revenue made up by grants. Not only was this unrealistic—it would have taken hundreds of millions of dollars—but it also involved some ethical issues. What they wanted was a measure that would protect editorial independence.

The Association of Canadian Advertisers declared its intent to challenge the legislation under the charter. However, the legal experts involved in drafting the legislation are of the opinion that the association has little chance of success, because it is merely confirming a practice that has been in existence for several decades in Canada.

The American Secretary of State for Commerce has indicated, however, that he will again challenge these provisions for protecting the Canadian advertising market.

The Financial Post of Saturday, October 10, 1998 reported on page 4 that the United States wants to wage another battle with Canada to block the bill we have before us today, because in their opinion it contains protectionist and discriminatory provisions.

Yet those provisions have but one objective: to prevent U.S. competition with the Canadian magazine industry. The Americans feel that Canada is trying to find some new ploys for getting out of its obligations under GATT. However, the U.S. government has yet to follow up on its original statements.

In its dispute against the United States concerning Sports Illustrated , Canada lost, because it was established, under the WTO dispute settlement mechanism, that the magazine was a good and that the 1997 GATT rules did apply, since the advertising must use this good as a vehicle. And, as we all know, there is no cultural exemption clause in the GATT.

By entitling the bill an Act respecting advertising services supplied by foreign periodical publishers, and by prohibiting in clause 3 foreign publishers from supplying advertising services directed at the Canadian market, the government wants to ensure that the legislation before us today deals with advertising and therefore falls under the General Agreement of Tariffs and Trade. Since Canada did not include advertising in the list of services subject to the Agreement, the Department of Canadian Heritage believes that its bill, if challenged, will stand up scrutiny at the WTO.

The Bloc Quebecois hopes that the government is right in this case. Even if importation of split run editions has a lesser impact in Quebec, the Bloc Quebecois does not have the slightest interest in seeing the Canadian cultural industry weakened, since several of our magazines are published in symbiosis with Canadian periodicals and would thus be affected by a policy which would open the Canadian advertising market to foreign publishers.

We need to be reminded however that the WTO decision regarding Sports Illustrated shed some light on the weakness of the Canadian vision in terms of protecting our cultural industry in international trade agreements. The WTO decided that advertizing—a service—needing a magazine as a vehicle—a good—a good that could be replaced by other imported goods—the WTO had even compared the content of various magazines—Canada could not exempt these goods from its obligations under the 1994 GATT, a better and improved version of the 1947 GATT.

Thus experts were of the opinion that several measures aimed at protecting culture using a tangible vehicle could lead to complaints to the WTO under the 1994 GATT. The Americans could then circumvent the cultural exemption provided for by NAFTA.

Experts who appeared before the heritage committee and the Canadian Conference of the Arts have urged the Canadian government to take more proactive steps to protect Canadian and Quebec cultural interests under international trade agreements.

As the multilateral agreement on investment, the now infamous MAI, which was being negotiated at the OECD, just hit a major stumbling block, it is timely for the government to adopt a real strategy to defend cultural exemption under every international trade agreement. Of course, in this case, we are talking about a home made cultural exemption protecting the current and future capacity of Canada and Quebec to take measures promoting their respective cultures.

Negotiations are planned for the turn of the century. They are supposed to deal with services and maybe investments. The 1994 GATT contains a major flaw in that it does not provide for cultural exemption. Neither does the General Agreement on Trade in Services. At most, it provides for exemptions for services not on the list of services to which the agreement applies.

The Bloc Quebecois is therefore calling on the government to give some thought to the experts' and artists' proposal for a real team to be constituted, which would include artists and representatives from Quebec, with a view to raising awareness across the country of the importance of obtaining a cultural exception.

In this connection, Canada could play the same role as the Minister of Foreign Affairs did in the land mine issue.

This multifaceted team, on which Quebec would play a full role, must be given the expertise and financial resources required for it to do a proper lobbying job. The tools are in place. Now what is needed is the political desire to make use of them, and to get to work.

In Statistic Canada's 1997 edition, in the chapter entitled “Canada, its culture, heritage and identity”, we learn that, in 1994, Canada had 1,400 periodicals, that industry revenues totalled $867 million with $520 million coming from advertising, and that the profit margin was 6% in the anglophone markets and 13% in the francophone markets. In English Canada, 80% of magazines at newsstands are foreign, whereas in Quebec the proportion is 20%, according to the February 26, 1997 issue of La Presse .

The report by the task force on the periodical industry entitled “A matter of balance” indicates, at page 40, that Canadians buy $700 million worth of American magazines, while Americans buy $60 million worth of Canadian magazines. Canada imports from the States 25 times more magazines than it exports there.

Some 95% of Canadian French language periodicals are sold within the province, and Canadian publishers draw only 25% of their circulation revenues within their own market.

According to The Citizen , a Heritage Canada study, which we were unfortunately unable to obtain a copy of, even under the Access to Information Act—and I could even mention that the case is being appealed to the information commissioner—concluded that 40 American magazines were selling well enough in Canada, over 50,000 copies, to make a split run worthwhile; that 40 Canadian magazines were on the point of going bankrupt; and that the American magazines would take over 40% of the advertising revenue invested by Canadians in Canadian magazines, which would be disastrous for this cultural sector if allowed to continue unchecked, unless we take steps to come to its assistance.

As I entered the House, one of my colleagues, the member for Repentigny, handed me the fall 1998 issue of the Canadian Parliamentary Review , volume 21, No. 3, the magazine of the Commonwealth Parliamentary Association, Canada section, which contains a wonderful article by Dennis Browne about Canadian culture's uphill battle with international trade and split runs.

I will, since I have the time, quote from this absolutely extraordinary article, which I urge my Reform Party colleagues to read. Naturally, in a parliamentary democracy, everyone is entitled to one's opinion, and one might be the only one to hold a particular opinion and still be right, but I think it important that the Reform Party members give more thought to the interests of Canadian culture than to party ideology, which sometimes keeps us from seeing clearly.

Here is what Mr. Browne had to say. He writes, on page 21:

To understand the magazine case, we must know a bit about the magazine industry. Following the hon. member's speech, it seems to me he needs to learn a thing or two about the magazine industry. The most important point is that the industry has two income streams and two cost streams. The income streams are earnings from subscriptions and news stand sales, and earnings from the sale of advertising included in the magazine.

The cost streams streams are the cost of the magazine's editorial content, including photos and articles, and the costs of printing and distributing the magazine. In the Sports Illustrated case, it appears the revenues generated from news stand sales and subscriptions are more than adequate to cover the production and distribution costs of this magazine. Prior to the case, Time Warner was selling about 140,000 copies of each edition in Canada. The business had been going on for many years and I do not think the company was losing money.

The other big cost, editorial content, was fully paid for by advertising sold to American advertisers. This case was brought to the WTO by the United States to challenge Canadian measures that effectively denied American magazines access to Canadian advertisers.

Thus the case was not about market access, or even about ordinary profits. It was about super profits. When the editorial content is already paid for and the selling price fully covers the production and distribution costs, practically every dollar paid for Canadian advertising in Sports Illustrated will be pure profit for the publisher. With their existing high levels of circulation in Canada, they already had the cake; so they went for the icing.

The WTO decision is not going to lead to sales of more copies of Sports Illustrated in Canada. It is just going to make the business of selling the same number of copies much more profitable. But what will be the Time Warner's icing is the Canadian magazine publishers' cake. The total amount of money routinely spent by Canadian advertisers in the print media is not increasing. Every Canadian dollar spent for advertising in American magazines will reduce the revenue pool available to Canadian magazine publishers.

There should be no doubt about American magazines being able to attract Canadian advertising. With their editorial costs already being paid, they can readily discount the price for advertising by as much as 80% and still make money.

Canadian publishers will not be able to compete with this type of cut-throat competition. Without their advertising revenues, Canadian magazines will not be able to pay for good quality editorial content. If that is the result, the magazines will appeal less and less to consumers and Canada could lose one of its forums—a very important forum—for cultural expression. To protect the advertising income stream for Canadian magazine publishers, Canada had put in place a combination of measures, four of which were challenged in the WTO case.

The import ban on split-run magazines is clearly a breach of the GATT principle calling for the elimination of quotas. An import ban is the ultimate “quota” since imports are zero. Canada sought to justify the ban under the exception permitting quotas “necessary to secure compliance with domestic regulations”—in this case an income tax regulation that disallows business deductions for advertising placed in split-run editions.

I could read another excerpt from the article which would show that the important thing is, above all, to defend Canada's cultural industry, which is something the Bloc Quebecois has always done with great determination since coming here, for a simple, good and single reason. We in the Bloc Quebecois feel it is important for Canada to have a very strong culture, a very strong identity, because when we are sovereign we want to have as our neighbour a country that is capable of separating its identity from that of its American neighbours, its culture from the American entertainment industry.

Finally, however, the Bloc Quebecois does regret that the Liberals have themselves been responsible for some measures that have been counter-productive to the development of the magazine industry. First of all, they made a substantial reduction in the postal subsidy. In 1989, this was $220 million, and when the Liberals came into power it was $77 million. The previous government had, of course, already drastically cut subsidies, but the Liberals were no more capable of protecting this sector of our cultural industry, for between 1994 and 1998 they reduced the subsidy considerably again, by 40%, so the $77 million of subsidies ended up at $47.3 million.

Second, during the election campaign, the Liberal government, the present Prime Minister at its head, travelled across Canada promising to abolish the GST on all reading material. Yet, as we speak that has still not happened.

With these two counterproductive measures, the Liberal government itself did enormous damage to the cultural industry. Since surpluses are appearing in the Canadian government's budget, I hope that the Liberals will remember their promises to the Canadian people and take measures to promote literacy in Canada and in Quebec by abolishing the GST, at least on reading material, and by increasing subsidies as required, so that the cultural industry of magazines and publishing can do more than just survive.

Committees Of The House
Routine Proceedings

4:15 p.m.

Liberal

Shaughnessy Cohen Windsor—St. Clair, ON

Madam Speaker, I understand, if you seek it, there would be unanimous consent to allow me to move concurrence in the 13th report of the Standing Committee on Justice and Human Rights.

I further understand that there is unanimous consent to put the question forthwith without the need of a vote.

Committees Of The House
Routine Proceedings

4:15 p.m.

The Acting Speaker (Ms. Thibeault)

Is there unanimous consent to proceed in such a fashion?

Committees Of The House
Routine Proceedings

4:15 p.m.

Some hon. members

Agreed.

(Motion agreed to)

The House resumed consideration of the motion that Bill C-55, an act respecting advertising services supplied by foreign periodical publishers, be read the second time and referred to a committee; and of the amendment.

Foreign Publishers Advertising Services Act
Government Orders

4:15 p.m.

NDP

Bill Blaikie Winnipeg—Transcona, MB

Madam Speaker, I might just say on the last matter that there may have been consultations but not everybody was consulted. I only gave unanimous consent out of respect for the judgment of the hon. member, not because there had been consultations or discussion.

I am rising to speak to Bill C-55. It has been an interesting debate so far. The contribution of the Reform Party on this matter shows why Liberal government members continue to have it so easy. They bring forward a bill to try to protect Canadian magazines like the Legion Magazine and various other ones. They have what I would call the political advantage of having an official opposition that wants to attack such a proposition in the name of unfettered free enterprise or however it is that they defend this indefensible position.

From the outset I say that the NDP supports the bill with some reservations. Mostly our reservations come in the form of wishing the minister either would or could go further. What Bill C-55 will do, if it succeeds, is entrench the status quo. There is grandparenting of some existing arrangements which I would like to have seen challenged. There is nothing in the bill that particularly promotes Canadian magazines but it is a form of protecting them. I do not see anything wrong with protecting Canadian magazines.

When I listened to my Reform colleagues it was almost as if there was something wrong with the word protect when it came to this matter. It is also important to promote but there is nothing wrong with protect. These are the same people who talk day in and day out about protecting Canadians from various other things like crime and various threats to their security. There is nothing wrong with protecting Canadians from the economic power of the American magazine industry. I do not think that is something we should apologize for.

We are glad that the government has moved to find a way within the limits of the World Trade Organization to do what Canadians have traditionally done in this industry. Our quarrel comes with the fact that government members are not critical enough of the agreements in which they find themselves. I am talking particularly about the WTO.

There is a fundamental contradiction between the ideology, the world view embodied in the World Trade Organization, and the whole notion of the protection of culture. This is something the minister understood well in a previous incarnation. Perhaps she understands it every bit as well in this incarnation but is not as able to say so from where she sits now. However there is the fundamental contradiction between culture and free trade as it is understood at the WTO and NAFTA. The fact is that our previous policy has been tested against the ideology and the world view of the WTO and has been shot down.

It is fine for the government to come forward and try another way. What would also be useful would be for the government to say maybe this should tell us something about the world view of the WTO and about the wisdom of signing these kinds of agreements. That would be refreshing but we have not heard that from the minister and we have not heard it from the government.

Instead what we heard the other day, not from the Minister for Canadian Heritage but from the Minister for International Trade, was a government clinging right to the end to the idea of trying to preserve the multilateral agreement on investment, which many Canadians feel would pose a similar threat to Canadian culture, the kind of threat that various provisions at the WTO now provide.

This is an occasion to reflect on the larger conflict between protecting culture and the whole dominant world view or the dominant global ideology of free trade embodied in the WTO and in NAFTA. That world view was to be embodied in the multilateral agreement on investment but fortunately it will not be because the talks on the MAI at the OECD in Paris have broken down.

Why have they broken down? They broke down because Canadians and others all over the world, but finally the French socialist government, said this was an unacceptable way of setting up the relationship between governments and investors and between governments and corporations.

This relationship that was to be institutionalized through the MAI would have given the rights of investors and corporations a status and power that would have threatened the ability of democratically elected governments to properly exercise their sovereignty in the interest of their respective citizenry, particularly in the area of culture because as we know the French government wanted a complete carve-out of culture. They did not want the MAI to deal with culture at all.

This is an opportunity for us to reflect on this larger question. In her opening speech I heard the minister talk about standing up for Canada. Then she said what I think was kind of strange. She said the way we stand up for Canada is that we abide by the rules set by these global organizations.

I would say that Canada has obligations when it enters into agreements. When we respect those obligations it might be argued that we are doing the right thing from the point of view of international relationships, but I would not call it standing up for Canada if the obligations we are respecting are arguably not in the interest of Canada or in this case of Canadian culture.

I would say standing up for Canada is to point out how inadequate the rules of the particular organization are and seek to change them rather than try to somehow get around them or try another way without really admitting that we have probably signed on to something that we should not have. That is what I think we have here with respect to the Canadian signing of the WTO, which is far different from the GATT.

Whatever could be said about the GATT prior to the creation of the WTO in 1994 there was a voluntary aspect to it. The WTO is a quite different matter. The government should have thought much more seriously than it did before it signed on so uncritically to such an agreement as the WTO.

The member for Dauphin—Swan River who spoke for the Reform Party quoted somebody from the National Film Board—I think it was the chairperson—saying that the whole notion of protection of culture was becoming less and less sustainable. He seemed to indicate that he felt that person was perhaps making a fiscal argument. I was not there so I can only speculate, but I think another way in which protection is becoming less and less sustainable is the agreements the government keeps entering into.

It is not a question of fiscal sustainability. It is a question of sustainability in the face of repeated signing on to agreements like NAFTA and the WTO and the MAI, were it to have been signed, that put in jeopardy our ability to sustain policies which protect Canadian culture. It is not a question of sustainability in any fiscal sense. It is a question of being able to sustain policies in the face of signing agreements that constitute a challenge to these policies. I would say this is something the government ought to be looking at.

It is not a surprise to me, though, that Reform Party members seem so blasé about the potential disappearance of so many Canadian magazines and almost seem to make a virtue out of allowing American magazines to penetrate even further and dominate the Canadian market. I think they have a fascination for American culture that sometimes I find disturbing. We saw that only recently when we heard that the leader of the Reform Party's first reaction when he thought something problematic was happening in the country, that is the sovereignists might win the referendum, was to call the American ambassador and invite him to participate in some post-referendum process.

We support the bill with reservations. We regret that the government is not willing to challenge the agreements that make this kind of legislation possible. We regret that the government continues to pursue in what we think is an uncritical way further agreements like the MAI which would inhibit the ability of the government to act to protect culture. We regret that the minister of trade, instead of saying yes, the MAI is not only dead but should be dead, seems to be saying the MAI is dead and devoting the rest of his life to finding out how it can be revived, to finding a new venue for it perhaps at the WTO.

This does not give us any comfort. It does not give any comfort to Canadians who feel the Canadian government should have taken a position much more like the French government which found the whole underlying premise and intention of the agreement to be inadequate.

With all these reservations and regrets we nonetheless say that the bill should go to committee. We hope in the very limited way the Liberals seem able to act the bill will be successful in protecting Canadian culture and Canadian magazines.

Foreign Publishers Advertising Services Act
Government Orders

4:25 p.m.

The Acting Speaker (Ms. Thibeault)

It is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of adjournment is as follows: The hon. member for Sackville—Eastern Shore, the Atlantic Groundfish Strategy.

Foreign Publishers Advertising Services Act
Government Orders

4:25 p.m.

Progressive Conservative

Scott Brison Kings—Hants, NS

Madam Speaker, it is with pleasure that I rise today before the House to address Bill C-55, the Foreign Publishers Advertising Services Act.

First I want to state my position relative to issues including trade. Our party continues to support and believe in the intrinsic strength of trade. We recognize that if we are to enable Canadians to prosper in a global and increasingly competitive environment we need to seek ways to attach the hands of Canadians to the levers of opportunity.

We should not try to protect them from all the risks of globalization if in doing so we prevent them from participating in the opportunities and the rewards potentially gained from full and unfettered participation.

That being the case, we have strong reservations about unfettered free market dogma that may denigrate or reduce our ability to protect our culture. The Conservative government of the past with the free trade agreement sought to protect culture. We recognize that Canadian culture, particularly with a relatively small population—effectively we are a mouse sleeping next to an elephant—is in a unique situation.

We cannot take a cookie cutter approach or some type of economic dogma that will effectively say how we should pursue this. We can believe in free trade. We can believe in achieving success in a global environment and still stand in this parliament to protect the ability of Canadians to speak to each other through cultural vehicles like the Canadian magazine industry.

I believe many of us in this House feel quite strongly about the MAI, that there is a need for and significant benefit to be derived from a multilateral agreement on investment. However, that does not mean any multilateral agreement on investment. There were some serious flaws in the MAI and culture may not have been adequately protected under it. That was the objection France took to the MAI.

That being the case, I believe it is in the best interests of all Canadians for parliamentarians and this government to work toward a multilateral agreement on investment.

It is important before we pursue trade agreements that we increase the level of dialogue between Canadians and their governments. That is why we need to follow the model of the Australian government which in 1996 introduced the Australian model for treaty negotiation which increased significantly the dialogue between the federal and provincial governments. In fact municipal governments should be consulted as well because these governments are affected significantly by the federal government's engagement in trade treaty processes and deserve to be consulted.

If we do that we will help decrease the demonization that has occurred because of globalization. If we open up the process to Canadians and allow them to see clearly that globalization is not all bad we will achieve far more than the current behind closed doors strategy that the government is pursuing.

The government developed this piece of legislation to help protect our Canadian magazine industry following last October's WTO ruling against Canadian imposed excise tax and custom tariffs on split run magazines entering from the U.S. In the ruling the WTO maintained that these measures contravened existing international free trade agreements.

Bill C-55 is a very important piece of legislation. Aside from providing support to our Canadian magazine publishers it sends a clear message to all Canadians that we are intent on protecting and maintaining our cultural sovereignty in the midst of ever increasing pressures from global forces, particularly, as I mentioned before, the U.S. I described it as being analogous to a mouse next to an elephant and in a cultural sense that is very accurate.

The pop culture which emanates from the U.S. is very difficult to compete with, but I would argue that our Canadian cultural policies have resulted in some significant successes by providing an incubational cultural setting to musicians such as Sarah McLachlan, Bryan Adams or K.D. Lang who have gone on to become very successful. These individuals started as a result of cultural policies in Canada which enabled them to grow and develop their skills in the Canadian marketplace first.

The Canadian magazine industry is similar to that. We want to protect our cultural integrity in Canada. It has been a major priority of any trade discussion. Conservative governments fought to protect culture in trade discussions as early as 1988. Most recently the stumbling block in the MAI for both Canada and France was largely due to the reticence of OECD partners to engage in more stringent protection for cultural industries.

It is very important to note that the WTO in its decision was not questioning Canada's right to protect its cultural industries. It objected to a policy that directly targeted U.S. magazines. Rather than target U.S. magazines directly, Bill C-55 will focus its attention on putting restraints on advertising services. Essentially, Bill C-55 will restrict the sale of advertising directed at the Canadian market to Canadian publications.

It should be noted that U.S. magazines can still sell Canadian advertising in their magazines. However, these advertisements must appear throughout their North American publications. They cannot be solely targeted toward the Canadian market.

The bill contains provisions that would allow the government to impose stiff fines as high as $250,000 on foreign publishers who contravene this legislation.

This is a very complex issue and Bill C-55 seeks to address it. I am somewhat concerned about the ability of legislation of this type to control or to effectively try to regulate what is going to become an increasingly difficult industry to regulate. Magazines are one thing. The Internet is another. Increasingly Canadians are going to be reading publications, newspapers, magazines and books on their computers.

These are questions we have to ask. They deserve significant diligence, research and rigour to ensure that we develop public policies that are not only relevant in 1998 but are relevant as we enter the 21st century.

I believe that Bill C-55 is the right legislation now. We have significant concerns about the bill and, hopefully, they can be resolved. We have concerns about the effects of harmonizing commercial postal rates, which I will elaborate on later in my discussion.

Some people may be wondering why we should impose measures to protect our Canadian magazine industry. Reform members have expressed their consternation that we would try to protect the Canadian magazine industry. Reform has 60 culture critics in its caucus. Unfortunately most Canadians do not share their views that Canadian culture should not be protected. We feel very strongly about this in our caucus. That may be one of the defining differences between a Progressive Conservative and Reform leadership at this juncture.

There are very important reasons for us to protect this particular industry. The Canadian magazine industry employs a large number of Canadians and pumps millions of dollars into our economy. It provides employment opportunities to thousands of Canadians. Many of our most distinguished writers have developed their skills through the Canadian magazine industry and have gone on to succeed internationally.

The Canadian market is one of the most open markets in the world for imported magazines. Imports account for 50% of magazine sales in Canada and over 80% of newsstand space. To say that somehow we have inordinate amounts of protection for the Canadian magazine industry which is preventing foreign publications from entering is an easily debunked argument.

Despite the intense competition from foreign magazines, Canadian magazines continue to attract their share of viewers, allowing them to compete in a very competitive industry. At this stage, without this type of legislation, we would not be able to ensure that Canadian magazines would survive.

I look at it from a national unity perspective as well. It is very important for us to protect our ability as Canadians to converse with each other. The Canadian magazine industry plays a very important cultural role in defining who we are as a people and where we stand as a nation. Culture defines our beliefs and our values.

We are not automatically born with a culture. We may be born into a culture, but it is something we learn. It is a nurturing thing. It is one of the things I treasure as a Canadian.

One of the cultural entities I treasure as a Canadian is the CBC. That is another defining difference between a Progressive Conservative and Reform leadership at this juncture, although Reform has a lot of very good members, all of whom will be welcomed into our ranks after Saturday.

We need Canada's magazine industry to prosper so that future generations of young Canadians have the opportunity to learn more about their country and to gain a better understanding of peoples across this great nation. One of the things Canada suffers as a sparsely populated, large geographic mass is that there is not enough opportunity for our peoples to speak with each other and learn more about each other. One of the ways to facilitate that is to protect our magazine industry.

The member for West Nova, a member of our caucus, is on the heritage committee and has studied this issue at length. I always have some concerns about measures that may be viewed as being protectionist. In discussions with him I have learned a great deal about the uniqueness of the Canadian magazine industry and the importance of this industry to our culture, to our young Canadians and to our education system. I share his views that the magazine industry needs to be protected.

Successive governments have implemented laws designed to help Canadian publishers gain sufficient advertising dollars to remain competitive in this market. The issue beginning in 1993 with Sports Illustrated opened the door to competition that would have gutted the Canadian magazine industry if it were allowed to go ahead unfettered.

If we look at the fact that Canadian publishers rely on advertising revenue for anywhere from 65% to 100% of their income, it is imperative that we intervene to protect them against potential competition from U.S. competitors in this very important cultural sector.

Advertising plays a pivotal role in modern day society. It has increasingly become a cornerstone of communication. We are seeing it everywhere. Prior to radio and TV, magazines could depend on receiving the bulk of advertising revenue. However, they have since struggled to maintain their own niche and their own market to survive.

Advertising has changed in the last 10 years more than it has changed in the last 60 years. I would argue that due to technology and emerging global markets we are going to see the Canadian magazine industry and the entire media changing so rapidly that in a fairly short period of time we are going to have to evaluate the real needs and how we are going to go about protecting Canadian culture in the future.

It is going to become increasingly difficult. We have to become more rigorous. We need to work with other countries, particularly countries with a small population base, to develop strategies to protect their cultural interests. At the same time we do not want to hold them back or handcuff them to the Luddite mentality that somehow trade is going to hurt the country. Trade is not the enemy here. However, unfettered global forces, when an incubational industry is not ready, can have a demonstrably negative effect on a particular industry or sector. What we are saying is that we need a transitional strategy to allow Canadian publications to get to the next step.

At some point, and it is already happening, Canadian cultural entities cannot only compete globally but can succeed beyond our wildest dreams globally. However, it takes an incubational structure to allow that to occur in a large country with a very small group of people. We must never forget that.

One size does not fit all in economic policy; one size does not fit all in trade policy. With the combined impact of globalization and what has been in some areas unfettered market forces, we must be careful to ensure we attach people's hands to the labours of the global opportunities and that we provide people with the opportunities to succeed in a global environment. It may be such a thing that Marx may have been wrong about communism, but if we are not careful, it may prove that he was right about capitalism.

We have a great deal of work to do. While we continue to espouse, support and develop freer markets with greater trade opportunities, we must ensure that we do not forget the people we represent. We need to ensure they can compete and succeed in those markets.

It means things like a vibrant cultural industry. It means a strong set of educational policies in Canada to provide young Canadians with the skills to compete and to succeed in a global knowledge based society.

In the national unity context, we are about to see an election in Quebec. Many of us are watching this election, as we have watched those elections in the past, with a great deal of concern and interest. We need to ensure particularly in a national unity context at this critical juncture that we facilitate the ability of Canadians to speak to each other in a very profound way.

This is not the time for allowing the Canadian magazine industry to wither on the vine.

This bill is far from perfect. Despite having a full year to consult with the leading international trade experts, countless legal advisers and representatives from Canada's publishing industry, we find that a number of issues still need to be clarified.

As I mentioned earlier the postal rate changes could have adverse effects on small community based publications. Legion branches, which previously enjoyed postal rate subsidies, could be in danger of losing this assistance. That is a great concern. We do not do enough for our veterans. We need to work harder to support our veterans and our legions. The same could be said for members of religious denominations who provide their congregations with periodicals and updates of church activities.

Because those organizations are not charging their members for their materials, they are no longer entitled to direct postal rate subsidies as are other Canadian magazine publishers. This issue must be addressed by the minister either through amendments or regulations. I am certain the member for West Nova will be providing and promoting appropriate amendments for this.

The last section of the bill which relates to the grandfathering clause must be more clearly defined. As it stands, the bill appears to restrict important contributors to our Canadian magazine industry such as Reader's Digest and Time Warner from ever expanding their present interests to future investment possibilities. I understand that was not the nature or intent of the bill. We have to be careful in this House and in the other place to always beware of the law of unintended consequences and to be extremely careful, rigorous and thorough in the legislation we produce.

In short, we support, with some reservations, Bill C-55. We believe that Canadians need to compete and succeed in a global market, but at the same time we have a vibrant cultural industry in Canada that is too important to throw away.