CULTURE CLASH

	May 21, 1999
	Correspondent Tom Bearden reports on Canada’s latest efforts to limit US cultural influence – an effort that restricts Canadian advertisers from purchasing space in Canadian editions of American magazines.

MARGARET WARNER: US and Canadian trade officials have been in negotiations today, trying to avert a clash over culture. Tom Bearden reports on the background. TOM BEARDEN: The newsstands in Canada are dominated by American magazines. TV screens are dominated by American productions. SPOKESMAN: Let's wish a happy birthday to odor eaters. SPOKESMAN: As we continue here. Fastball, fire escape on the mix. TOM BEARDEN: The radio stations play mostly American music. The Canadian government has long feared the country's culture is in danger of being swamped by American pop culture. Over the last 30 years, it has passed a number of laws to ensure that Canadian movies, music, and television producers can compete against the American entertainment giants. Sheila Copps is Canada's Heritage Minister, the government office that is charged with protecting Canadian culture. SHEILA COPPS, Minister of Heritage, Canada: It was a no-brainer here in Canada, because we know that for us to survive as a unique country beside the most powerful nation on earth, governments need to play a role. TOM BEARDEN: Now Minister Copps has introduced another law, known as C-55. It would make it illegal for Canadian advertisers to buy space in Canadian editions of American magazines. But the US Trade Representative's office warns if C-55 is implemented, it may touch off a trade war that would impose billions of dollars in tariffs on steel and textile imports from Canada. The dispute centers on so-called "split runs"-- one edition intended for the US market, the other for the Canadian. In the Canadian edition, the American publisher replaces some of the US Advertising with Canadian ads. Francois de Gaspe Beaubien runs TELEMEDIA, which publishes 12 Canadian magazines. He says the American ads cover the costs of the magazines' editorial content, allowing the US magazines to offer much lower rates for Canadian advertisers. FRANCOIS DE GASPE-BEAUBIEN, President, TELEMEDIA: They can undercut our advertising rates substantially, and we need those advertising revenues in order to create the editorial product that then people can choose, and choose at the newsstand or choose through subscriptions. So without C-55, we get the dumping of an ad service, and we go out of business. TOM BEARDEN: But Deputy US Trade representative Richard Fisher says the issue with C-55 isn't culture, it's protectionism. RICHARD FISHER, Deputy US Trade Representative: Let's say "Sports Illustrated," which currently sells 100,000 issues in Canada-- despite all these disadvantages, if they contained an advertisement for a Canadian company, they would be fined, they would be considered a criminal violation, and their property could be seized. Now, to criminalize relations between the two greatest trading powers in the world, the two closest friends we find rather astonishing, and very disturbing. And we're trying to avoid this train wreck, as I call it, because it's inappropriate to the relationship we have with Canada. TOM BEARDEN: Minister Copps and others in the Canadian government point to the fact that 85 percent of all newsstand sales of magazines in Canada go to American publishers, as evidence of the need for C-55. But George Green, head of the international division of Hearst Publications, says Canadian magazines have 75 percent of the entire magazine market. GEORGE GREEN, President, Hearst Publications International: This has nothing to do with culture. This has to do with economic protectionism. The magazines, for example, are able to charge twice the price that American magazines charge to advertisers. TOM BEARDEN: Green says the bill isn't even good for the Canadian industry. GEORGE GREEN: The quality of Canadian magazines, we think, is inferior to that of the rest of the world, and that's because it's a protected industry. A protected industry doesn't have any reason to get better. TOM BEARDEN: The head of the Canadian Advertising Association, Ron Lund, says C-55 would actually hurt Canadian businesses. RON LUND, President, Canadian Advertisers Association: It really hurts Canadian advertisers, wholly owned Canadian advertisers, because a US advertiser can, in fact, advertise in a US publication through their US parent, and they can also advertise in a Canadian magazine. Canadian companies, on the other hand, can only advertise in Canadian magazines, cannot advertise in US magazines. TOM BEARDEN: But some Canadian cultural historians think the concept behind C-55, regardless of business concerns, is one of the most important issues in Canada. Laurier Laupier is the head of Telefilm Canada, an organization which distributes government grants to Canadian television and film producers; he's been in the middle of Canadian culture war with the US for decades. He says the US threat to retaliate over split-run magazines is infuriating. LAURIER LAUPIEERE, Telefilm Canada: It is threatening us, because it insists that cultural products must be treated the same as a widget, and consequently, the terms of free trade, et cetera. Look at the magazines. All right, here is the most powerful country in the world, the elephant living next to the mouse. The mouse scratches itself, the elephant goes in a stampede and then in a rage. I mean, at best, it is most inelegant. TOM BEARDEN: But the US Trade Representative's office says it must contest what it sees as an effort to exclude US products. RICHARD FISHER: We are the best of friends. Canada sells 85 percent of all their exports-- all their exports-- to the united states. We sell a quarter of ours to Canada. And the thought of saying that because you advertise in an American magazine you are engaging in a criminal activity-- that is, the magazine is engaging in a criminal activity-- it really, really is totally confusing to us. SPOKESMAN: You get what you give. On the mix 99.9. TOM BEARDEN: But magazines aren't the only cultural outlets that concern Minister Copps. Mix 99.9 FM in Toronto is one of the country's top radio stations. SPOKESMAN: Nine young Canadian lads from Scarborough, Ontario, taking the world by storm with their latest C.D. Called "Stunt". New mixed music from Barenaked Ladies: TOM BEARDEN: According to Canada's broadcasting laws, the station's play list must consist of at least 35 percent Canadian-produced and performed music, and Minister Copps wants to raise it even further. The requirement is called Cancon, for Canadian content. The government has used Cancon laws for more than three decades to help get young Canadian artists on the radio. Mix 99.9's Jim Johnston says he has to overplay Canadian music just to meet the quotas. JIM JOHNSTON: I have no problems with Canadian music, but we're in the situation where we're dealing with a lot of artist fatigue, not just with our station but stations overall. And with that, I think you're in a situation where, you know, there's fatigue, period, for your audience, and we're just hoping that, you know, we're not going to see audience levels much lower than where we're at right now. And Canadian broadcasters are having a tough time with it. I think it's important to point out that we're all proud of the Canadian music scene. We're all the part of the music scene. That's where we live. It's what we do. We have accepted the fact that we have to deal with 35%. And we're trying as hard as we can to make it work. TOM BEARDEN: But Copps says Cancon isn't a hindrance, but rather a resounding success. SHEILA COPPS: If you were at the Grammy's this year, where they had sort of the parade of the Canadian divas, 30 years ago, we had no music industry in this country. And somebody came along-- a government-- and said that when we issue a license, in return for that license, you must play a certain number of Canadian songs. So over the course of the last 25 years, we've seen an explosion in Canadian music, partly because you have this basic building block. TOM BEARDEN: There is also a Cancon quota for television broadcasters. 60 percent of air time, half of prime time, must be filled with Canadian programming, like this prime time program called "Traders." Those programs have to compete with the American networks, whose affiliates are just across the border and on cable systems. ACTOR: I went through a dark night, friends. Oh, yes, a dark night full of demons. TOM BEARDEN: The government is so committed to ensuring a viable entertainment industry, that it directly subsidizes program producers like Alliance Atlantis. The company that makes "traders." Mike Macmillan is the head of Alliance/Atlantis. MIKE Macmillan: We share a continent with an enormous, articulate, entertaining neighbor, and I think it's very important that any grownup, modern country have its own ability to tell its own stories on TV and radio, film, other expression of popular culture. So the Canadian content laws have been helpful in making sure that we can carve out some space within our own home market. TOM BEARDEN: You couldn't do it otherwise? MIKE Macmillan: Well, the economics without that would be very difficult indeed, because it costs a lot of money to produce compelling, entertaining television, regardless of where it's produced. TOM BEARDEN: For Laupierre, the issue of cultural protection is an emotional one. LAURIER LAUPIERRE: What interests us, essentially, is to have a capacity as a people to tell our stories to our people, to our children, the way we want to tell our stories and to have the instruments necessary to achieve that and not to be bullied by anyone not to do so. TOM BEARDEN: Who is bullying you? LAURIER LAUPIERRE: You are. Not you personally. The United States is bullying us by threatening us and treating our cultural assets as if they were widgets. TOM BEARDEN: Earlier this week, bilateral trade talks between the U.S. and Canada appeared to break down. But today the US Deputy Trade Representative told the NewsHour talks are continuing and substantial progress has been made in avoiding a trade war.