Mr. Speaker, I am very happy to take part in this debate today because Bill C-103 is one of the many measures the government has over time designed to assist in the development of Canada's cultural industries.
It is very important that we ensure Canada's cultural industries develop to their fullest. This is an area I have had a great deal of interest in since I became a member of Parliament seven years ago.
In the last Parliament as deputy critic for Canadian culture, I sat on the relevant committee and worked with the hon. member for Mount Royal, now the Secretary of State for Multiculturalism and Status of Women, in these areas and with other members on a number of reports that talked about safeguarding our cultural industries.
It is interesting to note with our colleagues from the Bloc today that whatever our differences may be, all Canadians, within and outside Quebec, agree that with our linguistic, regional and geographic differences it is very important that our very special culture in French and English be protected and that our federal government do everything possible to protect that culture.
Public policy for cultural industries has always operated on two premises. The first is that cultural products are important as a transmitter of social identity. The second is that it is difficult for the Canadian market to generate economically viable cultural enterprises.
Nobody knows this better than I. I once said I was going to have a sign made that said "pariah: do not appoint to arts boards". In my small region of Atlantic Canada I have served over the years on practically every arts endeavour and cultural endeavour that has gone belly up because we did not have the people or the money to keep it going.
It is terribly important that the federal government take a hand and ensure cultural industries do not die aborning because of regional disparity, small population, small markets, et cetera.
Policy is focused on supplementing the domestic markets' internal capacity to generate revenues with financial and institutional tools. These tools are an attempt to ensure a minimum choice of indigenous cultural works alongside the overwhelming presence of foreign ones.
In the area of magazine selection, in any store that sells periodicals and magazines Canadian periodicals are overwhelmed by sheer numbers of those that come from our neighbour to the south. It is a fine statement that they are not overwhelmed in content or in standard but merely in numbers.
As our cultural enterprises matured and in many cases became more self-sufficient, the government developed and refined the legislative and regulatory framework, the third set of tools within which these enterprises could further prosper and compete at home and abroad.
The challenge for all of us is for government to monitor and review its policies and make amendments or realignments when these are required. Today clearly, as the explosion of technology takes place all around us here in Canada and around the world, characteristics that define the current environment are challenges that confront our cultural sector.
First, the removal of international barriers to trade generates increased competition in production and distribution of cultural goods and services and global markets.
Second, the vertical and horizontal integration of conglomerates operating on a world scale is having a profound impact on the content of cultural products made available to consumers.
Third, the convergence between information transmitters and the producers of the content they transmit is leading to an explosion of new types of goods and services available to a an ever increasing number of consumers.
Take the first challenge as an example, the removal of trade barriers and increased international competition. In this area the impact cannot be underestimated. Access to production and dis-
tribution networks is paradoxically becoming both easier and more challenging at the same time.
Technological innovation has rendered electronic distribution of content available to increasing number of creators but the costs associated with marketing, promotion and distribution both in domestic and international markets challenged the ability of creators to exploit their new market potential. We cannot underestimate the impact of such issues as control over technology, control over access to distribution networks and the capacity of governments to regulate the flow into domestic markets of cultural products distributed electronically from abroad. Most of us are fully aware of this in our own homes on a daily basis. Sports Illustrated Canada is a case in point. I am sorry my hon. colleague from Prince Edward Island cannot agree with me on this. We talked about Sports Illustrated a few minutes ago. For almost 30 years the policy tool designed to regulate the importation of magazines containing advertising aimed at Canadians worked well but it is technologically specific in that it addresses the physical importation of foreign magazines today. Sports Illustrated is not physically imported but beamed across the border to a printing plant in Ontario.
Our cultural sector has reached a level of economic maturity that will allow it to compete in domestic and international markets but only if it can operate within a legislative and regulatory framework that will encourage its continued development. That is why we have Bill C-103.
The government has reached the point at which it has to update its policy for the magazine industry because of such developments as the beaming of Sports Illustrated to a printing plant in Ontario. It is a logical evolution in our policy instruments and it is a necessity to protect our investment in cultural industry.
The bill demonstrates the federal government's continued commitment to the development of the Canadian magazine industry that is viable, original and dynamic.
Since 1965 there have been two legislative measures in place, section 19 of the Income Tax Act and Customs Tariff code 9958. The objective of both measures was to ensure an adequate flow of advertising revenues to support a vibrant Canadian periodical industry. We need to make sure Canadians have the opportunity to read their own magazines at home, to reflect upon them the ideas that are home grown and home developed in this country, to ensure our culture remains strong, our sense of Canadianism and Canadian identity remains viable.
Until the Sports Illustrated case, the instruments put in place by the federal government were not as successful. However, we have a loophole that needs to be plugged. This loophole has been exploited by Sports Illustrated over the last two years. Tariff code 9958 applies only in cases in which split run editions are physically imported into Canada. As I mentioned before, Sports Illustrated got around this by electronically beaming the magazine to a Canadian printing plant.
I suppose this is a case in which the letter of the law may have been upheld but the spirit of the law was being violated. Fortunately the federal government has made a concerted effort and come forward with these amendments to change the situation so that Sports Illustrated can no longer circumvent the true spirit as well as the letter of the law.
The amendments to the Excise Tax Act take into consideration that the task force on the Excise Tax Act issued its final report in March. Its main recommendation was that excise taxes be imposed on split run editions and periodicals. The tax is designed to encourage original editorial content in magazines containing advertisements primarily directed at Canadians. It will impose a tax of 80 per cent of the value of all advertisements contained in split run editions of magazines circulating in Canada. That encourages Canadian advertisers to place advertisements in magazines which have original content. It reiterates the government's longstanding policy objectives in a manner consistent with our international trade obligations.
The amendment to the Income Tax Act will add an anti-avoidance rule. The purpose of the anti-avoidance rule is to ensure newspapers and periodicals that profess to be Canadian are controlled by Canadians.
Canadians throughout history have formed their own identity, that mosaic unique to this land and its people. In their periodic re-examination of cultural policies, Canadians are continually discovering and defining what Robertson Davies has called our national soul.
In the past couple of days our national soul has gone through quite an experiment but has come through and come out the other side. As we stand here today reaching out to each other and remembering what a joy and a benefit it is to be a Canadian, I am proud that our government is doing the nuts and bolts as well as the emotions to make that possible.