Excise tax would put SI Canada in the red

A proposed federal excise tax on Sports Illustrated Canada would cause the magazine to suspend publication, says one of the title's executives.Nick Wattson, general sales manager for SI Canada, says the proposed 80% tax on advertising sales, plus agency commissions and...

A proposed federal excise tax on Sports Illustrated Canada would cause the magazine to suspend publication, says one of the title’s executives.

Nick Wattson, general sales manager for SI Canada, says the proposed 80% tax on advertising sales, plus agency commissions and discounts would put the magazine in the red even before printing, distribution and other costs.

Wattson says SI Canada has no interest in paying to publish nor increasing its advertising rates.

He says although the magazine has not taken any steps so far to counter the proposed excise tax, nor will it until the tax becomes law, it is clear the sports title’s publisher, Time Canada, is angry.

A press release from Time Canada in Toronto says the planned 80% excise tax is ‘aimed squarely’ at SI Canada and because any levy would be retroactive to Dec. 22, it ‘would clearly amount to a confiscation of our business.’

In the event the tax is imposed, Wattson says the publisher will challenge its legal validity in court.

Wattson says he only found out about the planned excise tax from a statement on tv Dec. 22 by National Heritage Minister Michel Dupuy.

So far, Wattson says, there has been no reaction from advertisers to Dupuy’s announcement.

Catherine Keachie, executive director of the Canadian Magazine Publishers’ Association, has stated the planned excise tax in no way contravenes Canada’s trade obligations.