Split-run editions may get second life in Canada

Folio: The Magazine for Magazine Management, Feb 1, 1997 by Jenna Schnuer

In December 1995, the Canadian government passed into law an 80 percent excise tax on split-run editions from foreign publishers -- a move that angered the U.S. government. Now, the World Trade Organization has sided with Washington. In January, according to Canada's Financial Post, the WTO sent word to the Canadian and U.S. capitals that the "prohibition on 'split-run' magazines violated international trading rules." (The WTO became involved at the request of U.S. Trade Representative Mickey Kantor.) Canada is expected to appeal the decision, and a final ruling from the WTO is expected soon. "I'm very happy that the interim report has given the U.S. and the American magazine industry a victory here," says George Gross, executive vice president for the Magazine Publishers of America.

Time Inc.'s launch of Sports Illustrated Canada nearly three years ago sparked the latest crisis. Canadian publishers beseeched their government to act, arguing that split-run editions -- with their costs all but covered in their domestic markets -- would undercut Canadian publications. The result was a tax on foreign publishers whose Canadian editions do not contain 80 percent original content.