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House of Commons Hansard #241 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was magazines.

Topics

Committees Of The HouseRoutine Proceedings

3:30 p.m.

Some hon. members

Agreed.

Committees Of The HouseRoutine Proceedings

3:30 p.m.

The Deputy Speaker

Is it the pleasure of the House to adopt the motion?

Committees Of The HouseRoutine Proceedings

3:30 p.m.

Some hon. members

Agreed.

(Motion agreed to)

Foreign Publishers Advertising Services ActGovernment Orders

June 9th, 1999 / 3:30 p.m.

Hamilton East Ontario

Liberal

Sheila Copps LiberalMinister of Canadian Heritage

moved the second reading of, and concurrence in, amendments made by the Senate to Bill C-55, an act respecting advertising services supplied by foreign periodical publishers.

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3:30 p.m.

Progressive Conservative

Mark Muise Progressive Conservative West Nova, NS

Mr. Speaker, I rise on a point of order concerning the amendments that the Senate has sent to this House on Bill C-55.

I want to focus on amendment No. 3 that proposes to add a new clause 21.(1). I submit that this amendment proposes to do what no member of the House of Commons can do, which is to amend the bill beyond its scope as was decided by the House at second reading. This House sent to the Senate a bill which had as its stated purpose, and I quote the minister in her second reading speech: “Under the Bill introduced in the House of Commons, only Canadian publishers will have the right to sell advertising directed at the Canadian market”. Later in the same speech she told this House: “Parliament is being asked to prohibit the sale and distribution of advertising services directed specifically at the Canadian market”—

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3:35 p.m.

The Deputy Speaker

Order, please. The hon. parliamentary secretary on another point of order. I am hearing a point of order. I stress this.

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3:35 p.m.

Liberal

Peter Adams Liberal Peterborough, ON

Mr. Speaker, my point of order is that what you are hearing is not in fact a point of order, it is debate.

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3:35 p.m.

The Deputy Speaker

The hon. member for West Nova is making a point of order concerning the admissibility of the amendments before this House as I understand it. In that sense, while it may be close to debate and he may be perhaps going on a little long on his point, I think I need to hear his point if there is some argument as to the procedural acceptability of the motion before the House, which I understand the hon. member for West Nova to have indicated at the outset of his remarks.

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3:35 p.m.

Progressive Conservative

Mark Muise Progressive Conservative West Nova, NS

Mr. Speaker, yes, I would like to finish my point of order if I could. I was quoting:

Parliament is being asked to prohibit the sale and distribution of advertising services directed specifically at the Canadian market by non-Canadian publishers. Parliament is being asked to put in place fines for foreign publishers that attempt to violate these laws.

Those statements are clear and unequivocal. Prohibit, not regulate. Prohibit. We all know that any similar amendment proposed in the House to modify such a prohibition would not survive for five seconds.

The Senate amendments, particularly the new clause 21.1, have the effect of breaking the prohibition and turning the machinery into a regulatory regime. To regulate is the opposite of prohibit.

The Senate can send whatever message it likes, but so far as this House is concerned, the issue of an absolute prohibition has been settled by three readings and a committee examination which was concurred in by the House.

Beauchesne's and Erskine May make reference to the long title of a bill as being a factor in establishing the scope of a bill. If this were the sole criterion, it would put great power in the hands of those officials who draft bills and who are not accountable to the House.

I submit that a minister in setting forth the concepts, as she sees them at second reading, goes a great distance in setting out the scope of a bill. In this instance we were told by the minister that this bill was not about subsidies. We were told that there was to be a prohibition.

The Senate amendments fly in the face of the decision of the House and ask the House to swallow itself whole. Unless the Chair intervenes to disallow the proposed Senate amendments, there will be nothing to prevent a government from bringing all its legislation to the House in a bland form, have ministers play games with their credibility and then use the Senate to insert all of the controversial measures, remitting them back to the House for a one-shot vote under time allocation.

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3:35 p.m.

The Deputy Speaker

I hesitate to interrupt the hon. member but I am interested to know, and I know he is about to conclude, whether he is suggesting in his point that the financial prerogatives of the House have been in any way impaired by the amendments before us. I would be interested in hearing his views on that point.

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3:35 p.m.

Progressive Conservative

Mark Muise Progressive Conservative West Nova, NS

Mr. Speaker, I am not making reference to the financial aspect. If you would let me finish I have but a short period and you will see exactly where I am going with this.

Mr. Speaker, I ask you to assert the right of the House of Commons to be able to believe ministers of the crown when they address the House. I ask you to rule that these amendments exceed the scope of the bill that was sent to the Senate. Sir, assert the primacy of the House of Commons. Open the great doors of the House and throw these amendments out.

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3:40 p.m.

The Deputy Speaker

The Chair wishes to thank the hon. member for West Nova for raising this issue before the House. I know it is an interesting point but one that has been dealt with before.

I would refer the hon. member to the decision of the Speaker of this House made on November 19, 1996, in respect of a similar argument advanced by the hon. member for St. Albert on a bill then under consideration.

In that decision by the Speaker he indicated that there were two amendments by the Senate for which concurrence of the House was being sought. The member for St. Albert had asked the Speaker at that time to rule on the procedural acceptability of changes made by the Senate. The Speaker stated, and I quote from page 6411 of Hansard :

My view is that your Speaker cannot stand as a procedural judge on what is done by the Senate. What they do over there, they do over there.

In his ruling the Speaker cited with great reverence the decision of Mr. Speaker Fraser made on April 26, 1990, which is published in the book whose publication we are celebrating today. I refer the hon. member to the decision of Mr. Speaker Fraser which was made on an argument advanced on a bill to amend the Unemployment Insurance Act brought forward in 1990.

I can tell the hon. member that the hon. member for Glengarry—Prescott—Russell and I argued something along the lines he is arguing today, but with the additional argument about financial measures. I can also tell the hon. member that at that time we lost our argument as he is going to lose his today.

This argument in my view is not well founded. I quote from Mr. Speaker Fraser's ruling on page 10723 of Hansard , April 26, 1990, where he said:

—the Speaker of the House of Commons cannot unilaterally rule out of order amendments from the other place. I can comment, as I am doing, but the House as a whole must ultimately make the decision to accept or reject amendments from the Senate, whether they be in order according to our rules or not.

As Mr. Speaker Parent said, it comes down to a decision of the House.

I am afraid the hon. member may, by his arguments later, advance arguments as to why the House should reject the amendments made by the Senate, but in my view it is not the place of the Speaker or presiding officer of the House to rule these amendments out of order, at least on the grounds advanced by the hon. member for West Nova.

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3:45 p.m.

Liberal

Sheila Copps Liberal Hamilton East, ON

Mr. Speaker, I thank the Senate for the work it has done. Many things have been said in the last number of days about the Senate and its work or lack thereof. However I have to say that here was one very strong case of how the Senate took its responsibility very seriously, dealt in a very conscientious fashion with a piece of legislation and assisted ably in helping Canada achieve an historic agreement.

For the first time in its dealings with any nation, the United States has finally accepted the right of Canadian content in Canadian cultural industry.

I firmly believe that the concurrent work of the Senate while the negotiations were going on actually helped to show the Americans that we were serious about the legislation and that we were serious that any legislation would include Canadian content. That is the crux of this debate.

I congratulate the Senate on its very serious work on a piece of legislation which will prove in the long term to be an historic piece of legislation, not just for Canada but for our approach in future international trade negotiations.

Let us look at where we were two years ago and where we are today. Two years ago Canada lost a decision by the World Trade Organization. We did not like it. Most of us thought it was an unfair ruling, but it was a final ruling with no right of appeal. There was no way around it, many people thought.

What did that ruling give the United States? It gave the United States 100% access to our magazine advertising market. It gave the United States the whole enchilada. It had everything. It had a ruling which would have entitled it to crush the Canadian magazine industry and decimate Canadian magazines. Those are the facts. The United States won and we were left with nothing.

Where are we today as a result of these amendments? The United States will have access to up to 18% of the advertising market, not the 100% it got from the WTO ruling, not the 100% it originally insisted it was entitled to, not 90%, not 80%, not 50% but 18%, and that only after a three year transition period.

We judge a tree by its fruit. We started from zero following the decision of the World Trade Organization. We built this bill and this agreement piece by piece. This is what the critics must understand.

They are up in arms, saying that we have shortchanged Canadian periodicals and even culture, whereas the very opposite is true.

Following the decision by the World Trade Organization, we went on from zero to recover 82% of the lost ground. To all those who predicted that we would end up in a trade war with the United States, with all due respect, I am proud to say that they were mistaken.

The road was long and exhausting. I want especially to congratulate the Senate on its work. It gave us the push we needed to get an agreement that recognized, for the first time, Canadian content in a bill that will not be contested by the Americans.

We reached a good agreement for Canada. We have before us a bill that, with the amendments, protects the interests of all Canadians. We have achieved an unprecedented agreement with the Americans on Canadian content.

Let us make no mistake about it. This agreement and this legislation will be at the forefront of future international agreements which recognize culture and cultural content as legitimate aspirations of any nation.

We got written agreement from the United States that it will not appeal this legislation to a national or international organization. We demanded that publishers wanting to exceed the 18% limit on advertising revenues publish a magazine with mostly Canadian content.

What is more, should some Canadian magazines suffer we have the capacity and the will to help, and we shall do so. Yes, it will cost something but let us imagine the alternative. Let us imagine if we had let the WTO ruling stand with no effort to find a solution. The United States would have had everything and Canada would have been left with nothing. Now we have claimed back or clawed back 82% of what we had before we were deep-sixed by the WTO ruling.

Naturally, the matter has been in the wings a long time. Issues have sometimes heated up between the two countries, but Canada has done a good deal.

We must have Canadian periodicals that speak to us of our history and of our values, that bring together Canada's four corners and that speak of Canadian issues of interest to Canadians.

Was it all worth it? Absolutely, because culture is the soul of a nation. A country does not abandon its cultural identity simply because it has lost a case before the WTO. A country does not abandon its cultural identity because its adversary is 10 times more powerful.

We like Americans but we are not Americans. We are friends with the United States but we are different and we want to keep that difference. We like American movies and we like Hollywood, but we want to have our own cultural diversity.

We share North American values but we also have unique Canadian values. We want to nurture the instruments that allow Canadians to express our values, to speak to each other, to speak to our children, to learn about our past, to engage in the present, and to build Canada's future.

We want to be able to share our ideas, our stories and our values with the rest of the world. This agreement with the United States and this law before the House of Commons today, with regulations and the power to guarantee Canadian stories, will allow us to do these things.

I had the privilege over the last couple of days of sharing a unique experience with colleagues from all sides of the House. Along with a member of the official opposition and two other colleagues in the House, I went to recognize two very unique sites in Canadian history. One was the beaches of Normandy, the place where the D-Day sacrifice by Canadian Armed Forces was so great, a sacrifice that guaranteed peace in our time.

From there we travelled to Belgium where we had the privilege of declaring the medical site of John McCrae, the place where the poem In Flanders Fields was written, as a Canadian national historic site. Some day someone will write about that Canadian national historic site, Flanders Fields. Some day someone will write about the recognition of D-Day, the beaches of Normandy and Juno Beach as part of our history.

As a result of these amendments which protect and enshrine the concept of Canadian content in the law and which have forced the Americans to the international table on the issue of content for the first time in history, I hope we will continue to have the opportunity to share the very important stories of our grandparents with our children.

I believe that this legislation is good legislation. I believe the support of all sides of the House will help us to move the benchmark forward and be the first country in the world which has brought the Americans to the table on the question of content and won. I am very proud of this legislation and I hope and believe that all members of the House will see the benefit and value of Bill C-55 in its amended form.

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3:55 p.m.

Reform

Inky Mark Reform Dauphin—Swan River, MB

Mr. Speaker, I am pleased to take part in the debate on Bill C-55. We all know it has been a long haul since the bill was introduced in the House.

I agree with the PC member who raised a point of order that there is no doubt that the intent of this bill has changed substantially. Let me say at this time that the Reform Party will not support the amendments as they have been presented to the House.

Let me propose an amendment to the motion:

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

“a message be sent to the Senate to acquaint their Honours that the House disagrees with the amendments made by the Senate to Bill C-55, an act respecting advertising services supplied by foreign periodical publishers, since the amendments allow the bill to continue placing unreasonable limits on fundamental freedoms such as freedom of contract, freedom of speech, freedom of the press and the infringement on property rights as guaranteed in the Charter of Rights and Freedoms and the Canadian Bill of Rights”.

Having listened to the minister of heritage—

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3:55 p.m.

The Deputy Speaker

I am trying to be helpful here. The hon. member wishes to move an amendment. If he moves it now, he will terminate his speech immediately. You do not move an amendment in the middle of a speech. Does the hon. member wish to hold off and move his amendment at the conclusion of his remarks? I sense he wants to go on and I sense he has made a very brief speech. I am trying to be fair.

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4 p.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Mr. Speaker, I rise on a point of order. Is this an amendment that is receivable?

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4 p.m.

The Deputy Speaker

The hon. member for Dauphin—Swan River appears to want to continue his remarks, having posed an amendment. I have not put the amendment to the House and I am prepared to refrain from doing so until later when it might be moved when he has concluded his remarks. I think that would be fairer. Otherwise, I will review the matter from the procedural perspective and make a ruling. However, if I put the question to the House at the moment, the hon. member will lose his right to speak. Which does he prefer?

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4 p.m.

Reform

Inky Mark Reform Dauphin—Swan River, MB

Mr. Speaker, I appreciate your guidance. I did make an error in presenting the subamendment at this time. I will certainly continue to debate the amendments from the Senate.

We heard the heritage minister indicate that there may have been a victory on this bill, a rather shallow victory, if it is a victory over the trade war; win, lose or draw or wherever we are. Let us not forget that Bill C-55, with the amendments attached, is really about trade. As I have indicated all along, the bill really belongs to the Minister of International Trade and not to the Minister of Canadian Heritage.

I would remind the government that with our current status with the United States, almost 85% of everything we produce heads south. Our economy is closely linked with the economy of the United States. I am sure our loonie would not be where it is if it had not for the vibrant economy of the United States.

I would just remind the House that it was Reform that stood up for Canadian jobs because we were concerned about a potential trade war. It was Reform that stood up for the steel workers of Hamilton and Sault Ste. Marie. We are the ones in the Chamber who defended the jobs in the labour industry, the agricultural industry as well as the plastics industry in the country. We defended the jobs of the textile workers in Montreal.

We know, as Canadians, that we are different from our neighbours to the south. We speak differently. We have a Canadian accent. We say things in a Canadian manner. Our culture is very different. We are much more receptive to other cultures. We are a very diverse country. We are different from Americans, and Canadians know that. Legislation is not going to make us any more different than we already are. We know that we have a rich culture and that we will celebrate that.

At this time, I would like to state for the record that Canadians do read Canadian magazines and they prefer to buy magazines that are Canadian. Even though the publishing association said that 80% of magazines on the stands are foreign magazines, they also said that 50% of magazines purchased in Canada are foreign.

The latest numbers on readership, taking into account controlled circulation, magazines distributed via bulk delivery, including newspapers, show that only 4.9% of magazines read in Canada are bought off the stands, which is a pretty small number; 35.7% of magazines read are received by paid subscription; and 59.4% of magazines read are received by controlled circulation. In other words, 75% of all magazines read or received by controlled circulation and 94% of these are Canadian owned. Why are we so concerned that Canadians are not reading magazines produced in this country?

I would like the House to hear what other people are saying about this magazine bill.

As I said at the beginning, this bill has run a long time. We have probably been at this bill for over 12 months. It has certainly developed a life of its own.

I will quote a fairly recent article in the May 26 edition of the National Post by Jonathon Gatehouse. He states:

Less than a month after the bill was introduced, Gordon Griffin, the American Ambassador to Canada, warned a blue-chip business luncheon in Ottawa that the provocation would not go unnoticed south of the border, calling C-55 “faulty public policy” and spoke openly about a possible trade war.

As we have experienced, this potential trade war has created this amendment that we are dealing with today in the House. In fact, that same newspaper article states:

The Knives are out and as one senior Liberal told the National Post last week, many in cabinet blame Ms. Copps for almost dragging Canada into the worst trade war in memory with her ill-timed rhetoric.

“Keeping on message has been a constant problem”, said the source. “Every time Sheila would come forward and say something particularly strident, the U.S. would fluff out their feathers”.

I will quote another article in the May 26 edition of the Toronto Star written by Valerie Lawton. She states:

Split-run publishers who opt for that route, however would have to go through an investment review process run by Canadian Heritage.

Ultimate power to say yes or no to proposals would rest with the heritage minister.

The Globe and Mail of May 26, in an article by Heather Scofield and Shawn McCarthy, states:

Heritage Minister Sheila Copps and International Trade Minister Sergio Marchi—who have often been at odds in recent months over how far the government could go to meet U.S. demands—are expected to argue the deal does not sacrifice the domestic magazine industry even as it averts a trade war that would have slashed access to the U.S. market for key industrial products such as steel and textiles.

The article goes on to state:

The agreement provides significant less protection for the Canadian magazine than Ms. Copps originally had promised. The Heritage Minister will attempt to save face by announcing the government's plan to shift responsibility to her department for screening all foreign investment in Canadian cultural industries government sources say.

That did happen in the week following.

The National Post article of May 26, written by Giles Gherson, states:

But a senior magazine-industry representative bitterly complains: “I can't believe the ignominy of the complete and utter cave-in by the Canadian government. They've just capitulated”. This representative said that the Canadian content win by Ottawa is meaningless since few U.S. magazines will want more than 18% Canadian ads, making Canadian content a non-issue.

Only two weeks ago, Sheila Copps, the Heritage Minister, was adamant that this so-called de minimis exemption would be restricted to split-runs with no more than a single digit amount of Canadian advertising—in other words 9% ceiling.

As we know, that has ballooned to 18% over three years.

I will continue the quote:

In the end, the feisty combative Heritage Minister settled on an exemption large enough to drive a pick-up through. Crying sellout, the Canadian magazine industry is privately livid at the Chrétien government's backsliding.

On May 27 in the Toronto Star , in another article by Valerie Lawton, she states:

But plans for a subsidy package to help ease the new pressure on Canadian magazines still haven't been worked out. Copps said she didn't know how much money will be available.

We still do not know how much this deal will cost Canadian taxpayers.

The article goes on to state:

He predicted that even with subsidies—which the industry has long said it never wanted to be dependent on—some magazines will die.

We know that statistically even with the subsidization that is currently occurring, one-third of English published magazines are not viable and up to one-quarter of the French magazines are also not viable.

I continue to quote the article. It states:

Copps said repeatedly that Canada had won an important concession from the Americans—that for the first time the U.S. has recognized Canada's right to protect and promote Canadian content in magazines. But the US suggested it had done nothing of the kind. This issue has nothing to do with culture. It was simply a matter of ensuring competition, said a senior trade official. The issue is one of commerce... The key issue here has to be access to a market.

This essentially is what the amendment does to Bill C-55. It gives access. It is about trade. The Reform Party has always taken the position that Bill C-55 is really a trade bill and not a bill that should come from the Canadian heritage department.

In an editorial in the Ottawa Sun on May 27, it stated:

Poor Sheila Copps won't be allowed to lead the charge into a ludicrous and—

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4:10 p.m.

The Deputy Speaker

The hon. member for Dauphin—Swan River knows very well that he must refer to members of this House by their title or their constituency name. I am sure he meant the hon. heritage minister in his remarks. I know he will want to use that expression in any future reference to the hon. minister.

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4:10 p.m.

Reform

Inky Mark Reform Dauphin—Swan River, MB

Mr. Speaker, I certainly will comply. My apologies to the heritage minister. I will refer to her as the heritage minister, even though I am quoting from a magazine article.

An article in the May 27 Toronto Star , written by Rosemary Speirs, states:

In mitigation, (the heritage minister) is offering government subsidies. The publishers had argued fiercely for a chance to survive on their own—not on capricious government grants. Now they'll have little choice but to accept an unwanted federal largesse.

Yesterday, (the heritage minister) fought the perception that she'd lost in cabinet. But in the last couple of weeks, (the heritage minister) was sidelined while (the international trade minister) and (the Prime Minister's) principal secretary, Eddie Goldenberg, handled final negotiations.

It is quite obvious from the magazine articles that I have quoted from that it was the trade minister who came to the rescue to make sure that this country would not end up in a potential trade war with the United States.

An article in the May 27 Globe and Mail , written by Shawn McCarthy, states:

The American side not only objected to the magazine legislation but saw (the heritage minister) as the leader of an international effort to include cultural protections in trade deals and blunt the growing U.S. dominance of global media and entertainment industries.

Although (the heritage minister's) anti-American bravura might have political appeal and cultural nationalism remains a hot-bottom Liberal issue, neither was worth a trade war that would hit steel, apparel, wood and plastic producers—and sour a commercial relationship that often depends on the goodwill of Canadians' giant neighbour.

(The heritage minister), unhappy about the government's compromise, left the damage control to the Prime Minister's Office, International Trade Officials and the Canadian Embassy in Washington.

Relations between (the heritage minister) and (the international trade minister) deteriorated to the point that their respective staffs engaged in public slanging matches though not by name, (the international trade minister) would sign anything just to avoid a fight with the Americans, (the heritage minister's) staff suggested, while trade officials characterized (the heritage minister) as erratic and irrational.

I will continue on with what people have said over the last several weeks about the current Bill C-55.

An article written by Valerie Lawton in the May 27 Toronto Star states:

Trade officials were also frustrated with (the heritage minister), saying she didn't fully appreciate U.S. threats of a trade war.

“I don't know if there would have been anybody's hide to save had there not been some extreme positions put out there”, one trade official said. “Any sort of seemingly back-tracking on her issues is her own making. She was the one who said some very strong things at the beginning of the whole issue. It's just a fact that she now has to live with some of the things she said”.

A source close to (the heritage minister) said the minister would have preferred to give U.S. split runs less access to the Canadian advertising market. But he said she'll be satisfied with the deal as long as it follows up with an adequate subsidy package.

We can see that these amendments deal with trade over and over again.

The last article I will quote was an editorial written in the National Post on May 27.

Her posturing nationalism and xenophobic fear of English speaking culture Canada shares with the U.S., Britain, Australia and a quarter of the world are philistine absurdities and a national embarrassment. They also amount to unforced folly at a time when, as we have repeatedly warned here, the Americans are looking for a pretext to throws bones to their own native protectionism.

Is this the type of politician we want protecting Canadian culture? Would you even take her advice on what movie to see?

Many people do not agree with the amendments made to this bill because they really do change the intent of the bill.

The Canadian Magazine Publishers Association is led by François de Gaspé Beaubien. To be fair, I know Mr. Beaubien is a gentleman, and I would like to read into the record his opposition point of view. It is not that I agree with what Mr. Beaubien says regarding the amendments but I think his point of view is relevant. As the House knows, Mr. Beaubien and the Reform Party are on opposite sides of the fence, but in this case Reform is in opposition to the amendments as is Mr. Beaubien.

Mr. Beaubien wrote an open letter to the Prime Minister. I will quote the last page of his letter to make sure Mr. Beaubien is on the record in opposition to the amendments to the bill:

First, acceding to the U.S. demand for a so-called de minimis of 20%, give or take a few points, would gut Bill C-55. It would be a straight giveaway of a very significant portion of the Canadian advertising services market without any requirement that the U.S. publishers print one word about Canada. They would simply recycle editorial content from their U.S. editions, capturing incremental profits in Canada with virtually no costs. Giving away this slice of our advertising services market to unfair and insurmountable competition from U.S. publishers would mean the death of Canadian magazines that Canadians want to read.

Second, giving Canadian tax benefits to U.S. publishers who would enjoy this cost-free access to our advertising market is a straight transfer of Canadian taxpayer dollars to further pad the incremental profits of huge U.S. multinationals like Time Warner with absolutely no return to Canada.

The last point I will make on behalf of Mr. Beaubien, whom I disagree with, is he says:

Third, changing Canadian foreign investment rules to allow U.S. publishers to establish their magazines as Canadian publications with unlimited access to Canadian advertising revenues on the basis of a vaguely defined and unenforceable content requirement would be nothing more than the final sellout. Some have tried to claim that the U.S. has made a concession by agreeing to such a requirement. Nothing could be further from the truth. Far from accepting a Canadian content requirement, the U.S. has agreed to...legislation or regulation. This gives them free rein to object in future, which they surely would, if Canada tried to make such a requirement stick. This reality would represent the last nail in the coffin of the cultural policy in the magazine sector that has been pursued by successive governments for over three decades.

I read this as an example of objections to the amendments. As this House knows this government went to bat for the publishing industry. Here again we have the publishing industry objecting to the Senate amendments.

Right from the very beginning Bill C-55 had two combatants, the advertising industry and the magazine publishing industry. To be fair to the advertisers, I must for the record state their position in terms of the amendments and their impact on the bill.

The advertising industry has been kept out of the consultation process right from day one. It is certainly not unreasonable to expect problems when governments put together bills without consulting the whole industry. It should not be a surprise that the government has had all kinds of problems with this bill since it was tabled in the House. This alone should send the bill back to the drawing board as I have echoed many times during the debate on Bill C-55.

I will give the position and point of view of the Association of Canadian Advertisers which I believe is only fair at this time. The Association of Canadian Advertisers believes that market conditions should prevail. It is the association's considered view that the Canadian magazine industry would be best served through the disciplines of the market system.

The association does not subscribe to the doom and gloom scenarios of those who argue that the unfettered market is anathema to a vibrant and dynamic Canadian magazine industry. It indicates that one needs only to look at the great success story of the Ontario wine industry following the implementation of the Canada-U.S. Free Trade Agreement.

Remember the dire predictions for the survival of the Canadian wine industry in the face of a flood of cheaper priced wines from the United States. As history has shown to the contrary the wine industry in Ontario has flourished in an unfettered market. Moreover it has become a source of national pride as the industry garners one prestigious national award after another.

Another concern the advertising association has is that there needs to be a framework for acceptable intervention. It is the association's understanding that the government may deem it necessary to intervene in the market on behalf of the Canadian magazine industry on the grounds that the Canadian magazine industry as a public good merits assistance. Should this be the case, it is its view that such intervention is best accomplished through direct payments to publishers out of general government revenues, preferably based on Canadian content performance milestones.

Support for the Canadian magazine industry should not be borne either directly or indirectly by taxation or subsidy policies that ultimately target Canadian advertisers. We are still waiting to hear how much the subsidy will be on this magazine deal.

Punitive interventions are unacceptable according to the magazine advertisers. Any regulations that restrict advertising dollars to magazines meeting certain Canadian content requirements is also unacceptable to the Association of Canadian Advertisers. This is a dangerous road to go down. It would provide an indirect subsidy to the Canadian magazine industry which would effectively be borne by advertisers rather than the public. Initially it is fundamentally inconsistent with the very basic notion of commercial free speech.

Finally, any such regulations would be inconsistent with the World Trade Organization appellate body ruling and the GATT, 1994.

My belief is that the Association of Canadian Advertisers welcomes any new vehicles through which advertisers can convey their commercial messages. Advertisers need more mechanisms to inform consumers as they become more discerning and sophisticated in their reading and buying habits. This is clearly a void in the Canadian marketplace that is being filled by some U.S. publications. Consumers buy them. In order to effectively reach consumers Canadian advertisers require unrestricted access to those magazines that best deliver their messages. This set of amendments certainly restricts access to the marketplace.

As we are hopefully debating this bill for the last time, we need to review how we got into this mess in the first place. As I have indicated, we have been at this for at least 12 months and we still have not gotten out of it. How did we get here in the first place? For the record I need to talk about some of the background to this legislation.

In 1997 the United States successfully challenged Canada's protectionist magazine regime at the World Trade Organization. The WTO panel found three components of Canada's magazine policies to be illegal under the General Agreement on Tariffs and Trade, GATT, a key trade agreement administered by the WTO. The panel condemned a ban in place since 1965 on imports of magazines with advertising directed at Canadians; a 1995 special excise tax on so-called split-run magazines; and discriminatory postal rates for imported magazines. After Canada appealed the panel's report, the WTO appellate body found a fourth violation, Canada's discriminatory postal subsidy program for Canadian produced magazines.

Effective October 30, 1998 Canada terminated its longstanding ban on split-run imports, eliminated the 1995 special excise tax on split runs and modified its discriminatory postal rates and postal subsidies for magazines. However, Canada introduced Bill C-55 which simply accomplished the same results as the import ban and excise tax and would have kept U.S. and other foreign produced split-run magazines from competing in the Canadian market.

Bill C-55 would have prohibited U.S. and non-Canadian publishing companies and ethnic publications on pain of criminal fine from using the magazines they produce to advertise directly to Canadian readers. Among the four measures the WTO condemned was the compensatory 80% tax imposed by the Canadian government on imported magazines carrying this type of advertising. The tax put U.S. and other imported magazines at a significant commercial disadvantage in comparison to Canadian produced magazines.

Having finally agreed to eliminate the tax on these advertisements, the Canadian government proposed to ban them altogether. Canada will continue in a slightly modified form its postal subsidies for Canadian produced magazines and the United States will monitor closely the effect of that modification.

Beyond everything, Bill C-55, inclusive with the amendments, has shown over and over again a lack of consultation and planning. Even on the issue of subsidizing magazines, basic questions needed to be asked.

In terms of subsidization, should it have been short term? What are the needs of the readers in this country? Were the readers in this country even asked? We are dealing with amendments that have come back from the Senate which has indicated that the intent of the bill has changed substantially and I agree. It basically is a trade bill.

What determines success? The survivability of magazines that are not viable. As hon. members know, we spend considerable funds subsidizing magazines today. What will happen with this set of amendments? We already know that this deal will cost a substantial amount, perhaps up to $300 million will be given to the magazine publishing industry. I raise the question, why are we doing this? How long will this occur? Will the magazine publishing industry continue to receive upward of $300 million from here on in, year in and year out? Again, it will cost taxpayers a lot of money.

There are split-run editions in this country today. As we informed the House months ago, there were ethnic split runs in this country of which the government was not aware. I would like to inform the House that there are actually national magazines in this country that do split runs in the Canadian marketplace. Again, that is more information that the government probably did not come across.

I would read into the record a letter written by Ruth Kelly, the publisher and editor of the Alberta Venture Magazine . Her comments were published in the Marketing Magazine . Her letter concerns split runs within her own borders. We are trying to deal with split runs outside our borders, but at the same time we are not even aware that there are split runs in this country.

Her letter reads:

The pros and cons of Bill C-55 have been strenuously debated in the pages of your magazine, among others. As the publisher and editor of a business magazine that serves a regional audience, I thought long and hard about the ramifications of this legislative firewall. Ultimately, I decided that I could not support Bill C-55. The hypocrisy of a business magazine taking a stance that advocates protectionism for its industry, at the potential expense of others, was untenable for me.

Obviously, Paul Jones, publisher of Canadian Business and spokesperson for the Canadian Magazine Publishers Association, has experienced no such qualms. I am not sure how he has reconciled his stance with the free trade gospel so fervently espoused by Canadian Business editor Arthur Johnson. That, however, I am willing to leave up to his conscience—and the judgment of his readers.

I am somewhat more curious as to how Jones can speak so persuasively about the evils of split run editions even as he comes into my market and poaches my advertising dollars with nary a hint of guilt.

I emphasize this point:

For decades, regional magazines have faced the same kind of competitive practices about which Jones moans. Nationals like Maclean's , Canadian Business and Chatelaine create regional editions which are designated as such for the purpose of advertising sales only.

In other words, they are split runs.

They offer only a token, if at all, amount of editorial coverage to the regions, do not invest in the publishing infrastructure in that region, and do not participate in the cultural or business lives of the regional community. Feel free to correct me if I'm wrong, but I believe that adequately describes the bugaboo of American split run magazines.

She concludes by saying:

Regional magazines have learned to compete against Canadian split runs by developing strong relationships with our readers and ensuring that advertisers benefit from that relationship. If Jones and his national brethren fear the spectre of competition, I would suggest they give me a call. I would be happy to run a seminar on Competition 101—but it would have to be held in Alberta. Hopefully, most of them know where that is.

That was the letter written by Ruth Kelly, publisher and editor.

The government did not rush in to give regional magazines a subsidy to help fend off the national magazines when they were doing their split runs. Obviously, as this letter shows, our national magazines, which the government has gone to bat for, have done the same thing that they are complaining about, which is that they are being preyed upon by our neighbours to the south, the American split runs. Where is the justice?

The biggest question that has not been answered with all of these changes and amendments is how much this deal will cost the Canadian taxpayer. We have asked the minister in the House the same question, but we have received no answer.

Who will be the beneficiaries and for how long? As I have indicated, the government has gone to bat for the publishing industry, principally two large corporations. We have read in the press that a deal has been made and magazine publishers will receive subsidization. This amendment points to this very fact. How can we support these amendments unless we know the costs associated with them? The government refuses to divulge that information to let the people of the country know what this will cost.

What has been agreed to between the United States and Canada? That is another question we have received very little answer to in this House.

I would like to deal with some of the key points that the government has agreed to with our American counterparts. The key amendments to Bill C-55 include the following key provisions.

Canada agreed to amend Bill C-55 to narrow its scope by exempting foreign-owned magazines that are published in Canada or exported to Canada and carry advertisements directed primarily at the Canadian market within the permissible level.

Initially foreign magazines exported to Canada that carry less than 12% of Canadian ads will not be subject to Bill C-55 penalties. After 18 months the level grows to 15%. After 36 months it will grow to 18%, as we have read in the amendments to the bill.

The terms incorporated in the agreement will provide new opportunities for foreign investment. Very little of this information has been discussed in this House. Effective 90 days after the signing of this agreement Canada will permit up to 51% foreign ownership in the establishment and acquisition of businesses to publish, distribute and sell periodicals, except for the acquisition of Canadian-owned businesses. After one year Canada will permit up to and including 100% foreign ownership. Partnerships of foreign investors with majority Canadian ownership will be permitted.

Investments will continue to be subject to a net benefit review under section 38 of the Investment Canada Act. Under the review, among other things, Canadian investment officials will consider contributions to the Canadian economy, the effect of the investment on competition and compatibility with cultural policies. Publishers may be asked to undertake substantial levels of original editorial content in periodicals published in Canada.

The original editorial content means non-advertising content that is authored by Canadians, including, but not limited to, writers, journalists, illustrators and photographers; or created for the Canadian market and does not appear in any other edition of one or more periodicals published outside Canada.

The question I ask is, who won this contest? Did we win this contest or did our neighbours win the contest? Or was it a draw?

The key tax provisions of concern to U.S. publishers include the following terms, again as impacted by the amendments to this bill. Within one year of the signing of this agreement section 19 of the Income Tax Act will be amended so as to allow advertisers deductions for advertisements in periodicals regardless of the nationality of the publishers or the place of production.

Canada will further amend the Income Tax Act to modify the amount of the allowable deduction in the original editorial content requirement to permit half the deduction of advertising costs for advertisers in publications with zero to 79% original editorial content, and a full deduction of advertising costs for advertisers in publications with 80% or more original editorial content.

Current tax deductions were not available to advertisers if the foreign-owned magazines were published under a licensing agreement with a Canadian. As a result of the agreement, periodicals published under such licensing arrangements will not be excluded under the Income Tax Act.

Another term of reference is that a consultation clause is included in the agreement so that Canada and the United States can consult annually on any matter regarding the agreement.

It is unfortunate that we have not debated the terms of the agreement in the House.

The Reform Party will not support these amendments as they basically deal with trade and not culture. It is unfortunate that governments tend to wrap themselves around a flag and try to sell trade issues as culture. Even with the amendments, it would be interesting to see how this amended bill would stand up to a charter challenge.

With all the changes in technology that are currently occurring in the world, governments all have to realize that they need to thoroughly evaluate all of their grants and subsidies. We have heard that the Internet will have a huge impact in the future, not only in terms of culture, but also trade.

I believe that Canadian culture should be promoted, as many people have indicated, and promoted front and centre on all international fronts. Canadians do things well. We know that. We have a great track record. We need to seriously believe that promotion is the way to save our rich and diverse culture. We are not Americans. We are Canadians and we should not give in to protectionism which costs taxpayers dearly.

I move:

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

“a message be sent to the Senate to acquaint their Honours that the House disagrees with the amendments made by the Senate to Bill C-55, an act respecting advertising services supplied by foreign periodical publishers, since the amendments allow the bill to continue placing unreasonable limits on fundamental freedoms such as freedom of contract, freedom of speech, freedom of the press and the infringement on property rights as guaranteed in the Charter of Rights and Freedoms and the Canadian Bill of Rights”.

Foreign Publishers Advertising Services ActGovernment Orders

4:45 p.m.

The Deputy Speaker

The debate is now on the amendment.

Before we resume debate, it is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Winnipeg North Centre, health care; the hon. member for Mississauga South, human resources development; the hon. member for Yorkton—Melville, agriculture; the hon. member for Bras d'Or—Cape Breton, employment insurance.

Foreign Publishers Advertising Services ActGovernment Orders

4:45 p.m.

Bloc

Maurice Dumas Bloc Argenteuil—Papineau, QC

Mr. Speaker, I am pleased to speak to Bill C-55, an act respecting advertising services supplied by foreign periodical publishers.

This bill was originally introduced by the Minister of Canadian Heritage for the purpose of limiting access to Canada's advertising market to Canadian magazines only. Unfortunately, as we see, the Canadian government has given in to pressure from the United States. In effect, it has decided to open the domestic advertising market to foreign publishers by authorizing them to publish in Canada.

The Bloc Quebecois believes that by giving in to the Americans like this the federal government is giving them ammunition in their fight to reduce cultural protection measures. In fact, the Canadian government's concessions with respect to magazines are merely the latest in a series of such concessions that began the day after the Liberal government was elected in 1993.

Many in the House will remember the well-known case of Ginn Publishing and Maxwell-Macmillan. Contrary to Canadian cultural policy, cabinet authorized the handover of these Canadian publishing houses to American interests when there were Canadian publishers prepared to buy them.

The CRTC also gave in to the Americans in the case of the country music specialty channel. The Americans had threatened $1 million in reprisals if the CRTC decided to cancel the American station's licence, in accordance with its policy at the time, because a similar Canadian station was already licensed in Canada.

The objective of this CRTC policy was to counteract American broadcasting competition. After the Country Music Network affair the CRTC abandoned the policy.

In the DMX affair the minister also gave in to the Americans. In this case, we will recall, the CRTC gave a broadcasting licence to DMX although it did not meet quotas for Canadian and French language content. The entire artistic community rose up in arms over this.

It is quite obvious that the Americans are nibbling away, and successfully, at the scope of Canada's cultural policies.

We had obtained assurances from the present Minister of Canadian Heritage and from her predecessor that Bills C-103 and C-55 in their original versions would conform on all points with international trade treaty requirements. The ability of the Governments of Canada and Quebec to defend the rights of citizens has been jeopardized considerably by the federal government's errors, not on just one occasion, but two.

It is the Canadian and Quebec governments' ability to adopt cultural protection measures that is being questioned here.

The Bloc Quebecois feels that the periodicals issue is a clear demonstration of Canada's inability to defend its own culture in a bilateral and single-sector negotiation.

Quebec's culture is the focal point of the sovereignist project. Quebec must therefore be at the negotiating table for the coming millennium talks, starting next fall at Seattle, under the auspices of the World Trade Organization.

The Bloc Quebecois is opposed to this bill. It is vital, before explaining the reasons for this opposition, to speak to the procedure followed in this matter for the benefit of those watching.

The federal government simply improvised in this most important matter. Bill C-55 was intended to keep the advertising market exclusively for Canadian magazine publishers.

As usual, the bill was sent to the Senate for ratification, but there the usual procedure came to a halt.

The Minister of Canadian Heritage, the senators and the witnesses who appeared before the Senate Standing Committee on Transport and Communications debated the bill, which limited access to the advertising market to Canadian publishers only.

There was an unusual occurrence in this matter. In fact, on the last day of hearings by the Senate committee, the Minister of Canadian Heritage tabled amendments to reflect the agreement she had negotiated with the Americans. The result: the Liberal majority passed Bill C-55 in its amended form, which now gives foreign publishers access to the domestic advertising market.

Today, before this House, the government is asking us to ratify its legislation. Clearly, no committee was in a position to evaluate the impact of the amendments the minister made to the bill. No witness was heard on these amendments, which give foreign publishers access to Canada's advertising market.

It is fairly unusual, indeed surprising, to have the Minister of Canadian Heritage table these amendments in the Senate. The House of Commons has always been the place for Quebecers and Canadians to debate legislation. The members comply with the rules. How did the Minister of Canadian Heritage dare to circumvent these rules and the spirit of this House?

I cannot support this bill when I have not heard witnesses speak to the measures the government brought to the Standing Committee on Canadian Heritage. This is an unprecedented and unacceptable improvisation on its part. It would be more reassuring if the improvisation were left to the Ligue nationale d'improvisation, a Quebec cultural invention that enjoys worldwide success.

Order must be established so that the government will comply with the rules of the House of Commons. Cultural legislation will have a bearing on Quebec and Canada's cultural future.

The main purpose of the bill was to limit advertising revenue to Canadian magazine publishers only. This measure was introduced last October in place of Bill C-103, which the World Trade Organization considered incompatible with Canada's international commitments proposed by the previous Liberal government.

It is important to remember that, at the time, the government told anyone who would listen that its bill was consistent with our international commitments. Unfortunately, that was not the case. The federal government was proven very wrong indeed.

The Minister of Canadian Heritage said that the original bill was consistent with the government's commitments. She claimed that it was still consistent with WTO and NAFTA rules. Why did the minister decide to give in and open the publishing market to foreign magazines?

A number of questions come to mind. Did she have doubts about her ability to convince a NAFTA dispute tribunal? If so, why did she then introduce Bill C-55 in its original format? And, if she was certain of winning, why did she cave in?

The bill that has come back to us from the Senate is very different from the one it received. It unfortunately opens the door to foreign publishers interested in the domestic advertising market. Foreign publishers who decide to publish their magazines in Canada, by recycling editorial content, will be able to sell up to 18% of their advertising space to Canadian advertisers.

The bill then allows U.S. publishers to set up shop in Canada, provided their investment application is approved by the Minister of Canadian Heritage. If they publish 50% or more Canadian content, these U.S. publishers, like Canadian magazine publishers, will be able to grant Canadian advertisers tax breaks.

The amendments water down the rules limiting foreign ownership in the magazine industry. Now a Canadian magazine could be 49% foreign owned.

Representatives of the Magazine Association of Canada have expressed their disappointment with this agreement between Canada and the United States. They expressed it as follows, and I quote “In our opinion, the agreement puts the magazine industry at risk by allowing American magazines to take over an unacceptable proportion of the Canadian advertising services market through unfairly lowered advertising rates”.

These concessions are unacceptable. The Bloc Quebecois cannot support the bill.

In an interview given to the Globe and Mail —and I repeat the quote given by my colleague from the Reform Party—François de Gaspé Beaubien said that the United States has 19 women's magazines, containing 19,000 pages of advertising. If these foreign publishers sold 18% of their magazine pages in Canada, they could sell 3,400 pages.

The principal Canadian magazines for women, however, contain a total of 4,800 pages of advertising. That means that 18% of the pages set aside for advertising by the United States represent 63% of the pages of advertising in Canadian magazines.

The threat is serious. Some have estimated that the Americans could go after some 50% of all advertising revenues in Canada, approximately $300 million, with the authorization given them to sell 18% of their advertising pages to Canadian advertisers.

The Bloc would like to know what resources will be allocated to administer the new proposed rules.

At this point we know very little of the support measures. What form will they take? How much money will be spent on them? Where will this money come from? Will programs be set or proportional to the loss incurred by the Canadian publishers? Will they be adaptable if, in the coming decade, the proportion of revenues taken away from Canadian publishers by foreign publishers turns out to be greater than expected? Will there be one office responsible for ensuring that foreign publishers in fact meet their quotas? Will there be resources allocated to ensure that foreign publishers authorized to set up in Canada meet the conditions for setting up on the Canadian market, namely that of publishing over 50% of Canadian editorial content?

However, quite apart from the publishing industry, the minister, in negotiating this agreement with the Americans, though she was convinced she was in compliance with all the international trade agreements, simply reinforced the Americans' habit of challenging our existing and future cultural measures.

How, then, will the Americans react the next time a government, generally the Government of Canada or Quebec, takes some step to protect the development of its culture when we have already backed down in one area in which we felt we were right? Do the Americans just have to raise their voices a bit to scare us, to make us backtrack, to make us not apply our cultural measures?

Multilateral and multisectorial negotiations will be starting this fall, under the auspices of the World Trade Organization, in Seattle. If Canada has given in on such an important issue, what will it do in the WTO negotiations?

Incidentally, we no longer know what the government's position will be on the place culture will take in international trade agreements. Does Canada favour a general cultural exception clause, defined by us, as it did at the time of the MAI? Or does it intend to initiate negotiations on culture in some context other than the WTO?

The Bloc Quebecois is concerned. We would like to see Quebecers at the international negotiating tables representing our interests.

We are seriously wondering, if Canada is not capable of defending its own cultural measures, what will become of ours, particularly our Charte de la langue française?

Quebec must be at the WTO negotiating table. This is only common sense.

Foreign Publishers Advertising Services ActGovernment Orders

5 p.m.

NDP

Wendy Lill NDP Dartmouth, NS

Madam Speaker, it is my pleasure to speak to the Senate amendments to Bill C-55, an act respecting advertising services supplied by foreign periodical publishers.

I have been on my feet many times over the last year on this bill. I have been asking questions, making statements and following it very closely. This is kind of the 11th hour on this debate and I will try to say some things that mean something to me at this time.

I am very concerned about the direction the bill has taken. I will speak personally as a new rookie MP. I have watched the bill with great interest from its inception around a year ago. I remember watching a press conference on television. The ministers of heritage and industry were tanned and confident as they talked about this wonderful bill which had been crafted, which was WTO-proof, dragon-proof and was going to be able to defend us in the big, wide world of mega-magazines and split runs and all of that.

We all felt good about that in our hearts. We thought it sounded good. It sounded like a net benefit to Canadian culture, as we see so much stuff coming across our border that is not Canadian.

The New Democratic Party and I gave our cautious consent because there were things in it that we did not really agree with. We would have liked to have seen it go further, but we did believe in the spirit of it. We believed that it was an effort to say that we can work within the trade agreements and protect our culture at the same time.

We are now a year down the line. The bill that was put forward that day was digested and picked over by all of us. I will talk about some of the contents of the Canadian-made Bill C-55 just for the record. It is no longer there, but these are some of the ideas we were supporting.

Bill C-55 was to make it an offence to provide Canadian advertising services aimed at the Canadian market to be placed in foreign periodical publications, except for those currently receiving Canadian advertising. For people who do not understand anything about this business and are probably sick to death of hearing about it without understanding it, the whole basis of this is that there is a certain amount of money out there for magazines to use to create their product. It is the Canadian advertising industry which Canadian magazines are dependent on for their survival, along with government subsidies and the enormous support they get from the people who buy the magazines.

The bill is all about advertising. It is about trying to protect this pool of advertising, this amount of moneys that is available to support our industry, our writers, our editors, our publishers, our photographers and all of the people who want to read our stories. That was the intent of Bill C-55 that sunny day many months ago.

There was an offence, which would have been enforceable by Canadian law, after an investigation was ordered by the Minister of Canadian Heritage. This would have happened if foreign periodical publications used Canadian advertising. The penalties would have ranged from the maximum of $20,000 for an individual's first offence on a summary conviction, to $250,000 for a corporate offender on indictment. Offences that took place outside of Canada by foreign individuals or corporations would have been deemed to have taken place in Canada for the purposes of enforcement of the act.

I am using the past tense because this is no longer the bill that we are talking about.

The government would have collected unpaid fines levied upon conviction in the same manner as a civil judgment. The cabinet would have made regulations relating to the investigators, the conduct of the investigations and the definition of the Canadian market.

The whole bill was based on the fact that we were going to protect the Canadian advertising market for Canadian magazines. The minister of culture had her dukes up. She was ready to fight. She was ready to stand up to the American bully. We heard this over and over.

Before I go on, I will say that I like American magazines. I do not want to say that they have no place in this constellation. I like them a great deal and I have tremendous admiration for American writers. I like a whole lot about the United States and its talent and its spirit. A lot of its talent and spirit managed to manifest itself in this deal but it was not to our benefit. It was to the American's benefit.

It is not the talent and spirit of the Americans that I do not like, it is the velocity and the volume of the American product that just overwhelms our shores. I think that Bill C-55 was an 11th hour effort to protect the Canadian magazine industry from being swamped by thousands of shiny, glossy, sexy American magazines which we see row by row, bicep by bicep, cleavage by cleavage in our airport bookstores and in chains of American bookstores, which we now have all over our country.

What we were hoping was going to happen was that we would have some control over this wave, which was what the Canadian version of Bill C-55 was all about.

However, what we have seen is a complete collapse of the government's will to stand up to the American bully in the final analysis. In one of my first experiences as a rookie MP, it was a very sad day when I heard that the deal, which we had taken through the House in a democratic process, had collapsed.

When I look around the room, I see others who might feel the same; that we were doing some good work in terms of looking at this legislation and really trying to make some amendments to make it as good as it could be. We voted on Bill C-55 and sent it to the Senate.

What I was not aware of was that the democratic bills in the House of Commons go somewhere else. They go to Washington where they are really worked on. That was quite a shock to me. I think it would shock most Canadians to realize that there is actually a four stage journey or maybe five. It goes from the House to the Senate, from the Senate to the United States, back to the Senate and then it comes back to the House to be rammed through.

The bill that has come back here, which went to the Senate from the United States in the last couple of weeks, is a very different bill. It is one which I will run through right now and then tell the House what it means to the people in the magazine industry, to the people who like to read Canadian magazines and to the cultural workers in the country.

The made-in-America deal, which has just been penned and signed, commits Canada to amend our foreign investment policy so it falls under section 38 of the Investment Canada Act, allowing for the cabinet to regulate and prescribe what and how much foreign ownership Americans can have in our industry. The agreement also forces Canada to allow for increased ownership, up to 51% after 90 days, and up to 100% within a year.

The new made-in-America Bill C-55 also commits Canada to change the Income Tax Act to allow advertisers to receive deductions for placing ads in American publications aimed at the Canadian market.

The new made-in-America Bill C-55 contains a “without prejudice” section to diminish the agreement's ability to set a precedent under the WTO, NAFTA, Investment Canada Act or under Bill C-55.

One of the central issues that I am concerned about is that this deal sets out the surrender of our market by prescribing the formula to allow for American split runs to invade our market with a total of 12% of total Canadian ad content immediately, rising to 18% within 36 months.

The tax act shall also be amended to allow for one-half deductions in magazines with up to 79% original content and 100% for publications with more than 80% original editorial content.

The definition of Canadian content at this point in time is one that I am extremely concerned about because it has now metamorphosed into a completely different meaning than the one we all knew it to be, and that is one of being material written by Canadians or having some involvement by Canadians. One of the questions I asked the minister today in the House of Commons dealt the issue of Canadian content.

The new wording for Canadian content means that as long as it is original to a split-run magazine in Canada then it is considered Canadian content. It no longer has to be written or published by a Canadian or have a Canadian theme. Nothing like that is important any more, as long as it is created originally for the Canadian market and has not appeared in another edition in Canada. The idea of Canadian content is watered down so significantly that I fear very much the precedent it is setting for all of the other Canadian cultural industries which are also very much dependent on the idea of Canadian content.

I would like to mention right now some of the impact this is going to have on our industry. We have over 900,000 Canadian workers in culture. This is a 1997 UNESCO figure. We have a responsibility in the House to protect these workers along with the idea of Canadian content.

We were told by the government that we had a chance to stand up to the American entertainment monolith. We had a chance to defend this at the WTO but we did not do that. We did not use our cultural exemption contained in NAFTA. We ignored our own legal advice regarding Bill C-55 being WTO proof. We basically showed the Americans that we had no interest in protecting culture. I think that is coming right down to the bottom line.

We have simply said “It is all right, this is just one more product we will negotiate with you and we will in fact give in to you”. The only lesson the Americans have learned here is that if they threaten a trade war with the Canadians, do not worry because the Canadians will surrender.

By refusing to use the existing trade rules to protect our magazines we are saying we will allow the Americans to make up international rules as they go along. It is therefore only a matter of time before American interests go after Canadian content on television, ownership levels in our broadcasting industry, support for our book publishing industry, support for our feature films and so on.

The creation of this new fund, which is going to be a fund to augment the deathblow to the Canadian industry, is suspect. This government reduced direct cultural support by over $500 million between 1993 and 1998. That is in the official estimates. Any new fund will not necessarily restore money and there is no indication at this point where the money is coming from.

In closing, I would like to read into the record a motion that I was going to put forward. It is interesting that the Reform member put forward a motion which said the new made in America Bill C-55 did not go nearly far enough. I was going to put another motion forward. I will read it into the record.

The motion we would have moved would have been:

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

—a Message be sent to the Senate to acquaint Their Honours that this House disagrees with the amendments made by the Senate to Bill C-55, an act respecting advertising services supplied by foreign periodical publishers, for the following reasons:

The Senate amendments subvert the intent of Bill C-55 to protect the Canadian periodical industry in the face of American based split-run magazine editions and actually threaten the future of the Canadian periodical industry by

(a) granting a substantial amount of Canadian advertising services to foreign periodical publications aimed solely at the Canadian market;

(b) giving incentives to new foreign periodical publications to be created and aimed at the Canadian market that were not foreseen or discussed by the Standing Committee on Canadian Heritage in their study of the bill;

(c) granting sweeping powers to the Governor in Council to define revenue levels and determine Canadian content especially but not exclusively in section 20 of the bill.

In closing, we believe that American made Bill C-55 is a craven bill and a tragedy for Canadian culture.

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5:20 p.m.

NDP

Michelle Dockrill NDP Bras D'Or, NS

Madam Speaker, on behalf of the New Democratic Party, I commend my colleague from Dartmouth for her tireless efforts and hard work in doing what unfortunately our heritage minister has been unable to do and that has been to remain committed to maintaining our Canadian culture and heritage. I think that is a real shame.

I was in the House on quite a number of occasions when I heard the minister make reference to this bill. I remember one day specifically she made reference to the fact that she wanted to guarantee that her 10 year old daughter was able to continue to read her magazines.

Similar to the minister I also have a 10 year old daughter. I would like to hope that when my 10 year old daughter picks up a magazine and reads about Canada, that she is reading it from a Canadian perspective and not from the perspective of somebody sitting on a warm beach in Los Angeles. I differ with the minister with respect to wanting to guarantee what type of literature my daughter has access to.

My colleague from Dartmouth talked about the number of concerns she and the New Democratic Party have with respect to Bill C-55. Could she tell us what she feels is the most important issue, or what is the most important thing we as Canadians are losing with respect to Bill C-55?

Foreign Publishers Advertising Services ActGovernment Orders

5:20 p.m.

NDP

Wendy Lill NDP Dartmouth, NS

Madam Speaker, the most important thing that we are losing is our ability to protect our culture. We are losing our ability to keep those Canadian titles in the bookstores, specifically to keep those Canadian titles on the magazine racks.

The Minister of Canadian Heritage will say that there was 100% of advertising revenue and we have given away 18% and that it could have been much worse. If 100 new American split-run magazines come in here and each one of them has 18% of its advertising revenue Canadian, I would say that that valuable pool of Canadian advertising revenue would dry up very quickly.

There will be Canadian magazines out there. There will continue to be Canadian magazines, but there will be fewer of them. Many of them will go under. We will begin to see magazines which purport to be Canadian but in fact are American knockoffs of Canadian magazines that have no heart or soul or particular interest in this place as an experience, as a land to live in and to fight for, but in fact a market in which they can extract more revenue. That is the central tragedy of this bill.