Ian Morrison’s review of the tax measures designed to stem
the flow of advertising dollars to U.S.
media was conveniently incomplete. Section 19 of the Income Tax Act disallowed as
a deductible business expense the cost of advertising in foreign-owned publications to
protect magazines in the 1960s because U.S.
titles like Time were publishing Canadian editions. Bill C-58 similarly shielded
television in 1976 because American stations close to the border were selling
ads in Canada. That
set off a trade dispute in which the U.S.
disallowed as a business expense the cost of attending conventions in Canada.
More than 100 were cancelled the following year as a result. A ceasefire in this cross-border
business war was only negotiated with the 1988 Free Trade Agreement. This might
prove a cautionary tale about the perils of scheming to redistribute
cross-border commerce, especially in the current era of “America First.”
Marc Edge
University of Malta
