Mr. Speaker, it is my pleasure to speak today to back up my colleagues from the Reform Party and to speak against the ill conceived Bill C-103.
The bill will needlessly and rightfully attract retaliation by American trading interests. In my role as the critic for international trade for our party, that is a concern to me. Furthermore, it will cheat Canadian sports readers of the bit of Canadian content they presently enjoy.
I offer some background and a bit of history to put the bill in perspective. Decades ago rules were written to protect Canada's cultural industries. Even though the importation of American magazines was and still is allowed, the government of the day imposed some severe restrictions on advertising. Canadian businesses can only deduct the cost of their Canadian magazine advertisements if they appear in Canadian publications. That is why we see so many American magazines on our news stands. They are strictly aimed at the American market and if Canadians are interested they can buy these magazines.
However the government introduced customs regulations which prohibit the import of split runs. These are essentially American magazines that contain some Canadian content and some Canadian advertising and are trucked across the border.
Furthermore, in the NAFTA regulations Canada did retain the right to protect its cultural industries. However, in so doing, the Americans were saying they at least retained the right to retaliate in kind. That is a very important feature. They are exercising that right to retaliate and we think that will happen.
Furthermore, all these rules were written before any advances in technology could be fully understood or predicted. When it became possible to beam magazines across the border and have them printed in Canada, Sports Illustrated took advantage of this new technology and circumvented the split run border rules.
Since April 1993 it has produced several issues per year that are essentially American versions with some Canadian stories. There is a lot less American advertising but there is a problem. There is some Canadian advertising. The big concern is not that Canadians are being bombarded with American sports stories by trying to get their eager hands on some Canadian sports stories. The concern is that Canadian advertisers will spend their advertising dollars in these largely American publications even though these advertisers will not be able to deduct the cost of doing business.
The fact that Sports Illustrated has not been successful in recruiting many Canadian advertisers does not seem to impress the government. It is bound and determined to enter into a trade war over the Sports Illustrated issue. It is a very serious matter, one the government needs to review.
Therefore, what do we do? We have the Liberal government introducing Bill C-103, largely a protectionist bill. The bill imposes an excise tax on the highest level Canadian participant of split run ventures. The excise tax is 80 per cent of the value of all advertisements contained in such magazines or newspapers. It is assumed this excise tax will never be collected because it will effectively kill the Canadian edition of Sports Illustrated or any ventures that could come on to the drawing board. That is what I call protectionism.
The Liberals in 1988 were opposed to the free trade agreement with the United States, although they have largely been converted since. It is sort of a revival. However, sometimes I wonder what their real commitment is. Are they committed to the free trade principle or not? Here it would indicate they are not.
The Minister of Canadian Heritage is quoted as saying Americans cannot retaliate against this protectionism move because the magazine is printed in Canada. I have news for the minister. There is more than one way to cross a border than by walking across it; planes fly and now we have computer beams from the satellites. We cannot stop progress. The Americans will retaliate against the bill and they have every right to. They can make life miserable for Canadian exporters in all kinds of ways, justified or not. We will not be able to cry foul because our hands will not be entirely clean in this matter. We are introducing a bill which is largely a protectionist bill.
What about our artists, our writers and our publishers? What if they want to take advantage of the American marketplace which is much larger and more lucrative than our own?
Approximately 500 new channels will be available by satellite. How will we control this type of information flow? I say we
control it in the marketplace. If we have a good Canadian cultural industry, it is a business and it will compete. If it is poor it will not.
The government is being hypercritical in that it says it is trying to protect our magazine industry while at the same time crushing it to death with taxes. When we ask businesses in Canada why they are not expanding, the common theme has always been that taxes and the cost of doing business in Canada are too high.
That is where we should be concentrating. We should be trying to balance our budgets and bring our Canadian businesses into a competitive position so they can compete in the international marketplace. I believe they will do very well. We are asking our Canadian industries to compete with one hand tied behind their backs. There is the GST. There is a very high tax level and they simply cannot compete under those circumstances.
Some would have us believe our cultural industries cannot compete effectively on the basis of pure competition. That is nonsense. We have some very good Canadian cultural content. It would be even better if it had to face the true test of the marketplace. That test is whether there is a quality product. There are a number of Canadian cultural industry businesses which pass the test and some which will have to fall by the wayside because they simply are not quality products. The question we have to ask is whether we should be supporting the industry through subsidy and protectionism. I do not believe so and I will be voting against the bill.