Fifteen U.S television stations stretching across the continent from Maine to the State of Washington yesterday asked President Carter to retaliate for what they claim is tax discrimination by Canadian authorities.
For the past two years, Canada - through legislation known as Bill C-58 - has not allowed the cost broadcast advertising of U.S. stations to be deducted from Canadian taxes as a normal business expense if the advertising is directed at Canadian audiences.
The U.S. group said that the effect is equal to the imposition of a 100 percent Canadian import tariff on those Canadian advertisers who choose to buy time on the U.S. stations.
The U.S.-Canadian dispute is a homely illustration of the pocketbook impact of the sometimes esoteric trade issues that negotiators wrestle with in marathon sessions of the kind that have been going on in Geneva.
Special Trade Representative Robert S. Strauss unsuccessfully raised the question on behalf of the U.S. stations last March when the major industrial nations plunged into talks on a new trade agreement. At that level, it is still unresolved.
The Canadian argument is that the nearly $20 million that Canadians have paid yearly to buy RV commercials from U.S. broadcasters could be better used to strengthen Canadian stations. There is an element, as well, of national pride and an effort to protect Canadian culture from being overwhelmed by American influence, which already is pervasive.
Bill C-58 also has barred Canadian firms from deducting the cost of advertising in U.S. magazines, resulting in the withdrawal by Time Inc. of its Canadian edition after a bitter dispute. A Canadian newsweekly, Macleans', has benefitted from the ruling.
In various ways, the U.S. government has challenged the Canadian government on behalf of the broadcasters, but without success. Earlier this month, the Canadian government formally rejected a State Department note of May 23, 1978, which protested Bill C-58 as unfair. Efforts by the Treasury and Commerce departments to find a solution also have been rebuffed.
At a press conference here yesterday, Leslie G. Arries Jr., president of WIVB-TV in Buffalo, N.Y., acting as spokesman for the group, revealed they had filed a formal complaint with Strauss under Section 301 of the U.S. Trade Act of 1974.
Strauss' office said that a public hearing on the broadcasters complaint would be held, probably at the end of November. Meanwhile, the STR intends to form an interagency group to consider the problem, gather information, and deal with the Canadian government.
The group apparently views its latest move as a last-ditch effort. Only last year, in an effort to persuade the Canadians to modify their position, the U.S. Senate refused to grant Canada an exemption from a new tax law that limits foreign convention deductions by U.S. businessmen to no more than two a year.