Canadian Content in Magazines

A Policy on Investment in the Periodical Publishing Sector

The Investment Canada Act requires that foreign investments in the cultural industries, including the production, distribution and sale of periodicals, be compatible with national cultural policies in addition to being of "net benefit" to Canada.

The Government of Canada is announcing a foreign investment policy for the periodicals publishing sector that will allow investment opportunities in the publication, distribution and sale of periodicals, provided that such investments result in the production of Canadian content in magazines. The following policy statement and investment review guidelines are intended to provide guidance to investors in respect of the application of the Investment Canada Act to the periodical publishing sector.

I : Policy Statement

Canadian Content in Magazines: A Policy on Investment in the Periodical Publishing Sector

The Government of Canada recognizes the importance of ensuring the availability to Canadians of periodicals that are relevant to Canadian life and culture, reflect an identifiably Canadian perspective and meet the information needs of Canadian readers.

The Government of Canada has, therefore, maintained a longstanding cultural policy that has served to enhance the Canadian periodical publishing industry's capacity to produce and distribute domestic periodicals, published by viable Canadian publishers, in all genres and in all regions. This policy framework recognizes the importance of a strong Canadian-owned periodical publishing sector in order to maintain and increase the presence of distinct Canadian periodical titles. This framework also recognizes the relationship between the production of editorial content for the Canadian market and access to revenues from the Canadian advertising services market.

Under the Investment Canada Act, investments in the cultural industries must be of "net benefit" to Canada, including compatibility with Canada's cultural policy objectives.

In this regard, it is the policy of the Government of Canada to ensure a commitment to the production of majority Canadian editorial content in respect of foreign investments in the periodical publishing sector, including investments to establish or, directly or indirectly, acquire foreign businesses to produce and sell periodicals in Canada and to access the Canadian advertising services market. Further, it is the policy of the Government of Canada not to permit foreign acquisitions of Canadian-owned and Canadian-controlled periodical publishing businesses.

II : Investment Review Guidelines

Foreign investments with respect to the publication, distribution and sale of periodicals are subject to review for net benefit to Canada pursuant to Part IV of the Investment Canada Act, including the investment's compatibility with Canada's cultural policies.

For the publication of periodicals:

i. Net benefit will include, inter alia, undertakings by foreign investors that result in a majority of original editorial content for the Canadian market in each issue of each periodical title. The amount of original content for the Canadian market will be determined as a percentage of the total space occupied by the total editorial content contained in the periodical.

Original editorial content means non-advertising content that is:

1. authored by Canadians, including, but not limited to, writers, journalists, illustrators and photographers; or
2. created for the Canadian market and does not appear in any other edition of one or more periodicals published outside Canada.

ii. Net benefit may also include undertakings by the foreign investor such as:

• creating an employment infrastructure by directly employing an editorial and support staff composed of persons resident in Canada with respect to the investment and to establish or expand a place of business in Canada.
• supporting the infrastructure in the publishing sector by having their titles edited, typeset and printed in Canada.

III : Administrative Guidelines

1. All foreign investments will be reviewed consistent with the Related Business Guidelines of the Investment Canada Act, whereby an investment by a non-Canadian in a periodical title is deemed to be a new Canadian business and is subject to notification under the Act. However, investors may submit a single application under the Investment Canada Act covering one or more periodical titles.

2. Investors will normally be required to make undertakings in perpetuity. Investors will be required to report quarterly on their performance in relation to their undertakings, which will be reviewed on an annual basis.