The tentative deal struck between Canada and the U.S. over amendments to Bill C-55, the controversial law governing the right of Canadian firms to advertise in split-run foreign magazines coming into Canada, could have repercussions for marketers, agencies and creative services alike, according to some media buyers.

David Cairns, president of Toronto media management company Carat Cairns, says it’s time to set aside the purely cultural issues surrounding Bill C-55 and take a look at how the bill could adversely affect the Canadian advertising industry as a whole.

‘If a manufacturer in Minneapolis wants to market in both the United States and Canada, currently they would say, ‘I don’t know anything about Canada, I need a Canadian agency.’ If, however, they have [Canadian readership and product consumption survey] PMB in their office…then it’s more likely they’ll do a plan for the U.S. and a plan for Canada with the same publications and book it out of the U.S.’

‘People like me will be affected by this,’ says Cairns. ‘Canadian publishers will lose revenue, along with sales people and even creative services, because you’ll end up with the same kind of ads.’

As it stands at press time, the new magazine agreement will limit a foreign publisher with less than 50% Canadian editorial content to selling no more than 18% of its advertising space to Canadian firms hoping to reach an exclusively Canadian segment of the magazine’s readership. To sell any more than that, the publisher would have to set up a Canadian operation and produce a magazine containing a ‘majority’ of Canadian content.

The 18% will be phased in over three years with 12% allowable immediately upon enactment of the bill, 15% after 18 months and 18% after 36 months.

The impact of Bill C-55 is not really expected to be felt in Canada for 12 to 18 months as U.S. publishers assess whether to enter Canada as a split-run, whether to set up a Canadian operation or whether to be content with newsstand sales. (Hearst Corp., publisher of Cosmopolitan, Good Housekeeping, Redbook and Esquire, has reportedly expressed an interest in establishing Canadian split-runs of its magazines.)

Canada’s magazine industry firmly believes that C-55 will have a devastating effect on the publishing business in this country and is now awaiting details of an assistance package from the federal government that will help level the playing field when they begin their battle with U.S. split-run magazines.

Postal subsidies and a tax credit to publishers for the creation of editorial content are just two of the measures being talked about.

However, not all members of the media industry are preaching doom and gloom.

David Harrison says Bill C-55 is good news from the point of view of advertisers, who will soon have greater access and choice when it comes to reaching their markets.

Harrison, president and CEO of Toronto media management company Harrison, Young, Pesonen & Newell and chair of the Institute of Canadian Advertisers, worked with a coalition of the ICA, the Association of Canadian Advertisers and the Canadian Media Directors Council, to make sure the interests of Canadian advertisers were considered during the C-55 hearings.

He says it remains to be seen what U.S. publishers might come to Canada to sell their ad pages but it could be a year before it all takes place.

‘U.S. magazines will need to have readership information to be able to sell in Canada, and that will take a while to get on stream,’ he says.

Ann Boden, president of BBDO’s media buying division Optimum Media Direction Canada (OMD), doesn’t expect Canadian advertisers to flock to U.S. publications, but by the same token, she says, the name of the game is effective and efficient media placement, and U.S. publications that meet client objectives will get used.

‘If it’s legal for me to advertise my client in U.S. magazines that are targeted and [meet our] objectives and do all those things at a better price, than it behooves me to recommend it to my clients.

Having said that, Boden affirms her company has a lot of partnerships with magazines that go beyond numbers, adding, ‘That will be hard to do with U.S. publications.’