Canada And U.S.: Sparring Over the Airwaves

With the support of the Reagan administration, several members of the U.S. Congress are readying "mirror" legislation in retaliation against Canadian tax policy they claim discriminates against U.S. radio and television stations on the U.S.-Canadian border.

Canadian law disallows otherwise-permitted tax credits to Canadian advertisers who use U.S. radio and television stations to reach a primarily Canadian market. The 1975 policy was initiated "to develop small broadcasting companies in Canada," according to Mark Lortie, a spokesperson for the Canadian embassy.

In response, fifteen American border stations formed the ad-hoc "U.S. Board of Broadcasters" and filed a formal complaint with the U.S. Special' Trade Representative's (STR) office. Then-President Carter responded by drawing up a proposal for ."mirror legislation" echoing the Canadian statutes, and designed to affect Canadian stations near the border.

Although the Carter administration was unable to push through the legislation before last November's election, President Reagan has voiced support for similar legislation.

The Board of Broadcasters charges that the Canadian tax policy is unreasonable and an unjustifiable barrier to the export of a U.S. service. The border stations have a hefty stake in the issue: the fifteen-member Board estimates that as result of the Canadian policy, they have lost over $20 million a year in advertising revenues.

The Canadian government has shown no indications of changing its policy and, according to a Canadian embassy spokesperson, has no intentions of doing so even if the proposed legislation is passed.

It's basically a domestic action taken within Canada for our own reasons," she said. "The legislation was passed to protect our own culture."