Mags Canada asks Ontario for tax credit, end to unfair competition and blue box equity

Magazines Canada wants a tax credit for its members in Ontario, a jurisidiction that is home to half of Canadian magazines and where every other cultural industry has such tax relief. The requuest was part of a pre-budget submission made this week to Greg Sorbara, the Ontario treasurer. It's not the first time a tax credit has been talked about.

The magazine association said a tax credit would result in

• More original Ontario-authored content and more content on multiple platforms.
• Increased ad revenue and share of ad revenues
• Greater newsstand competitiveness (particularly with U.S. titles)
• Increased profitability (and therefore corporate tax)
• Increased employment (and therefore more income taxes)
• More and better magazines, both print and digital

In addition, the treasurer was asked to direct the Liquor Control Board of Ontario to stop selling advertising in its Food and Drink magazine.

"Food & Drink has no real distribution costs, does not pay Retail Sales Allowance and has no costs for subscriber development and renewal," said the brief. "It uses its beverage alcohol ad sales base to capture other mainstream national advertising, which impacts Ontario magazines and other media negatively.

"...Food & Drink hinders the growth of existing Ontario magazines and discourages the launch of new ones. Beverage alcohol advertisers have told us that they feel compelled to advertise in Food & Drink."

And Magazines Canada wants foreign publishers to pay their fair share of blue box costs.

"There is currently no mechanism to levy foreign companies who distribute magazines in Ontario. As a result, Ontario companies are paying for foreign companies as well as themselves."

It asked for a requirement that all foreign magazines that enter Ontario register with Stewardship Ontario and pay blue box fees.

"Ontario publishers are environmentally responsible, are registered with and pay fees to Stewardship Ontario, yet U.S.- based magazines and Canadian wholesalers are currently receiving a free ride. The largest volume of magazines comes from the United States. Since 2004, blue box levies have increased 1,726%. Initiatives to identify “first importer” status, e.g. trying to levy foreign-based publishers through their Canadian-based wholesalers/distributors and mailers, have not worked.and pay their fair share of the blue box levies."