Vol. 26 (1) Spring 2007, 75–88© 2007, American Marketing AssociationISSN: 0743-9156 (print), 1547-7207 (electronic) 75

Effects of Changing Public Policies of CulturalProtectionism on Sources of Cultural Identity andConsumer Information

Bruce A. Huhmann and Najam U. Saqib

Advertiser-supported cultural industries provide (1) advertisers with vehicles to reach consumers, (2)consumers with information about products that suit their needs and local sources of availability, and(3) countries with tools for maintaining cultural identity. The impact of abolishing culturalprotectionism is examined through the analysis of Canadian magazine industry data and advertisingcontent. Three studies reveal the adverse effects of ending protectionist policies on marketshare/circulation of leading domestic magazines. In addition, new magazine growth was stagnant forleading domestic magazines but robust for smaller niche magazines. Imported U.S. magazinesmaintained market share, thus weakening domestic magazine advertising as a marketingcommunication channel between Canadian advertisers and consumers.

Bruce A. Huhmann is an associate professor, Department of Market-ing, College of Business, New Mexico State University (e-mail:bhuhmann@nmsu.edu). Najam U. Saqib is an assistant professor,School of Business Management, Faculty of Business, Ryerson Uni-versity (e-mail: nsaqib@ryerson.ca). The authors thank the anony-mous JPP&M reviewers for their significant editorial improvements.The authors also thank Celina Lac and Laurel Sedor for their assis-tance in coding the advertisements. This article was accepted underthe former editor, Joel Cohen.

Although free trade is lauded for making prices morecompetitive and business operations more efficient,there is also a concern that free trade will harm domes-

tic industries (Granzin, Brazell, and Painter 1997). Internalpressure to protect domestic jobs and industries can lead acountry to adopt protectionist policies, despite the disputesthat such policies often create with trade partners. Trade dis-putes may deteriorate into a trade war (Jones 1994). Such atrade war almost erupted between the United States andCanada over the Canadian magazine advertising industry.

Cultural products are an increasing proportion of inter-national trade (Scott 2000). Fear of losing cultural identityoften leads governments to adopt protectionist policies thatare aimed at maintaining cultural industries (e.g., motionpictures, music, television programming, literature, periodi-cals). Advertiser-supported cultural industries not only helpmaintain a country’s cultural identity but also provide vehi-cles for domestic advertisers to promote their products andinform consumers about marketing-related issues throughboth editorial and advertising content. When such vehiclesare not available for the domestic market, marketers aredeprived of a communication channel with their consumers.

In addition, consumers are deprived of a source of informa-tion about goods and services that are locally available ortargeted to their specific needs. Thus, changes in publicpolicies that could lead to the loss of an advertiser-supportedcultural industry have important implications for marketers.

Supporters of cultural protectionism point to the necessityof protecting cultural industries from larger foreign (oftenU.S.) competitors to maintain the integrity of the domesticculture (e.g., De Bens and De Smaele 2001; Hesmondhalghand Pratt 2005; Nordenstreng and Varis 1974; Tunstall1977). Critics charge that this is merely a convenient excusefor offering domestic firms easy access to profitable markets(Chadha and Kavoori 2000; Scott 2000). For example, theCanadian magazine advertising market had revenues of$672 million in 1999 (Television Bureau of Canada 2005).However, legislation protected this industry from foreigncompetition.

This article examines the impact of ending cultural pro-tectionist policies in the context of the Canadian magazineindustry. Under pressure from the World Trade Organiza-tion (WTO) and the U.S. government, the Canadian Parlia-ment passed the Foreign Publishers Advertising ServicesAct (1999), commonly referred to as Bill C-55, whichopened the Canadian magazine advertising industry to for-eign competition for the first time in more than threedecades. To determine the effect of exposing a previouslyprotected cultural industry to foreign competition, this arti-cle analyzes industry data and the advertising content ofCanadian and U.S. magazines available in Canada. Threestudies find that eliminating cultural protectionism hasallowed leading importers to maintain circulation and mar-ket share, despite the increasing fragmentation of consumermedia. Alternatively, leading domestic competitors wereharmed, and smaller domestic competitors (i.e., magazines

76 Public Policies of Cultural Protectionism

Date Event

1792 The first Canadian magazine, Nova Scotia Magazine andComprehensive Review of Literature, Politics, andNews, begins publication. Publication ends after threeyears.

1875 The Postal Act offers subsidized, lower postage rates todomestic Canadian periodicals.

1965 Parliament enacts Tariff Code 9958, which prohibitsimportation of split-run magazine issues that containadvertising primarily directed at Canadians (e.g., listingCanadian sources of availability) that is not identical toall editions of the periodical.

1976 Canada prohibits income tax deductions for advertismentsin foreign-owned publications to maintain the domesticadvertising revenue pool to support Canadianpublications.

1993 Technological advances enable foreign publishers to cir-cumvent Tariff 9958. Investment Canada rules that Tar-iff 9958 will not apply to a Canadian split-run edition ofSports Illustrated, which will be electronically transmit-ted to publishing facilities in Canada.

1994 In its recommendation to close the loophole in Tariff 9958,the government-appointed Task Force on the CanadianMagazine Industry reports that 53 U.S. consumer maga-zines and 70 business and trade magazines are poised tobegin publishing Canadian split-run editions using thesame technology as Sports Illustrated.

1995 In December, Parliaments enacts Bill C-103 (Tax on Split-Run Periodicals), which levies an 80% excise tax on adrevenue from split-run editions of foreign magazines.

1997 On June 30, the WTO dispute-settlement panel and appel-late body rules against Canada’s tariffs, excise taxes,and postal subsidies.

1998 In response to the WTO ruling, the Minister of CanadianHeritage introduces Bill C-55 into the House of Com-mons on October 8. Bill C-55 eliminates preferentialpostal rates but makes it a criminal offense for Canadianfirms to advertise in foreign magazines, with fines of upto $250,000, and creates an investigative body withsearch-and-seizure rights to confiscate foreign maga-zines with illegal advertisements run by Canadians.

1999 The United States threatens to implement US$3 billion inretaliatory measures. A trade war is averted when a sub-stantial revision of Bill C-55 (Foreign Publishers Adver-tising Services Act) is passed. Criminalization of foreignadvertising and the search-and-seizure powers aredropped. Canadian advertisers can now buy advertise-ments in split-run foreign magazines and receive a taxdeduction for 50%. Canadian advertisers can receive a100% tax deduction if the magazine features at least80% unique Canadian content. Foreign publishers stillcannot have full ownership of Canadian publishers.

Table 1. A Brief Chronology of Cultural Protectionismand the Canadian Magazine Industry

targeting niche and language-minority audiences) havethrived.

Cultural Protectionism: The Case ofCanadian Magazine Advertising

Canadian publishers had long lobbied for cultural protec-tionist policies in fear of larger U.S. competitors. Theybelieved that U.S. magazines would introduce split-run edi-tions into the Canadian market and drive Canadian maga-zines out of business by undercutting the price of ad space.Whereas Canadian magazines would need to cover theexpense of generating editorial material, the editorialexpense for U.S. split-runs would already have been cov-ered by U.S. ad revenue.

Split-run editions are versions of a magazine with all ormostly the same editorial material but with advertising tai-lored to a particular geographic audience. For example,U.S.-based Hearst Magazines publishes 36 split-run editionsof Cosmopolitan and 10 split-run editions of Esquire forvarious international audiences. Split-runs can also be pub-lished for specific geographical regions within a country,such as Sports Illustrated, which has 9 split-run editions forvarious regions of the United States, as well as Canadianand international editions (Standard Rate and Data Service2004).

Before cultural protections against split-run magazineshad been enacted in 1965, Time magazine and Reader’sDigest had begun Canadian editions. Reader’s Digest pub-lishes mostly editorial content unique to the Canadian edi-tion and, since 1976, has been published by a 75%Canadian-owned foundation. Thus, it is now considered aCanadian magazine rather than a split-run version of theU.S. Reader’s Digest. Conversely, the Canadian edition ofTime fits the definition of a split-run magazine; it usesmostly the same editorial content but generates additional adrevenue from Canadian advertisers (Granatstein and Mas-terton 1999).

The combination of legislation (see Table 1) that formedCanada’s public policy protecting its domestic magazineindustry gave Canadian magazines a distinct advantage overforeign competitors in both circulation and ad revenue mar-kets (Schwanen 1998). Although Canada’s policy of cul-tural protectionism made it unprofitable for foreign maga-zines to develop Canadian split-run editions, Canada nevercompletely closed its borders to foreign magazines. Sub-scription prices of foreign magazines were frequently higheras foreign publishers attempted to recoup higher postagecosts, but foreign firms often pass higher operating costs ina country along to that country’s consumers (Feenstra1995).

Despite higher prices, foreign magazines garneredapproximately 80% of all newsstand sales in Canada by1998. For example, U.S. magazines represented 95% of for-eign magazine newsstand sales in Canada, and 71 U.S.magazines had Canadian circulations of 30,000 or higher.When only English-language publications are considered,Canadian magazines garnered only 18.5% of newsstandsales (Thirty-Sixth Parliament, 1st Session 1998; WTO1997).

Journal of Public Policy & Marketing 77

To the surprise of the magazine industry, the ForeignPublishers Advertising Services Act of 1999 (Bill C-55)passed, ending three decades of cultural protectionism(Stein 1999a). The bill had been radically transformed (seeTable 1) at the last moment before its passage in May(Granatstein 1999; Thirty-Sixth Parliament, 1st Session1998). In addition, Canada has a reputation for successfullyprotecting its cultural industries through public policy,despite the proximity to the United States and the sharedlanguage among both countries’ majority populations. Thus,unlike many trade policy changes (Dutt and Mitra 2005),Bill C-55 appears to be exogenous.

Although Canadian publishers were shocked, U.S. pub-lishers and Canadian advertisers were pleased. Publishers inthe United States stated that their Canadian counterpartsshould not feel threatened by the deal because spending onmagazine advertisements should increase as more magazineoptions become available to Canadian advertisers (Stein1999a). Canadian publishers feared that magazine ad spend-ing would shift from Canadian magazines to split-runeditions of U.S. magazines, which would lead to a “deathspiral” for many of the approximately 1500 Canadianmagazines; lower ad revenues would lead to lower-qualityeditorial content, which would be followed by even lowerrevenues (Schwanen 1998). Publishers in the United Statescountered that if Canadian magazines were forced to com-pete for advertising dollars with split-run editions of foreignmagazines, their editorial product would become muchstronger and would boost their circulation (Stein 1999b).

Study 1Study 1 investigates the impact of changes in public policythat protect a cultural industry that provides importantadvertising vehicles for communicating with consumers.Magazines typically depend on two main sources of reve-nue: advertising revenue and paid circulation. Given thateconomic research has found that trade liberalization oftenredistributes resources away from previously protected sec-tors (e.g., Eastman and Stykolt 1967; Feenstra 1995; Feen-stra and Hanson 2003; Harris and Lemieux 2005), wehypothesize the following impacts on leading English Cana-dian (EC) magazines and their imported U.S. competitors:

H1: Bill C-55’s passage will adversely affect (a) the circulationand (b) the rates charged for ad placement in leading ECmagazines.

H2: Bill C-55’s passage will positively affect the circulation ofleading U.S. magazines sold in Canada.

MethodAn indicator of the health of an advertising vehicle is its cir-culation. Another is the amount charged for ad placement.We chose two common ad rates as benchmarks: the rates forone-page black-and-white advertisements (BW-RATE) andone-page four-color bleed advertisements (4C-RATE).“Bleed” means that the ad visual extends to the edge of thepaper (i.e., no margins); bleed has traditionally been moreexpensive than margins. Study 1 examines the effect of BillC-55 on circulation, BW-RATE, and 4C-RATE for leadingEC and U.S. magazines sold in Canada between 1996 and

2002. The sources for the data we used in this study were themonthly Canadian Advertising Rates & Data, published byMaclean Hunter, Toronto, and the yearly Media Digest,published by the Canadian Media Directors’ Council andrelying on Print Measurement Bureau data. Circulation datawere available for leading EC and French Canadian (FC)consumer magazines with audited circulations of at least30,000 and U.S. consumer magazines with paid Canadiancirculations of at least 25,000; however, ad rate data wereavailable only for EC and FC magazines. To standardize thedata across the years, we converted BW-RATE and 4C-RATE into constant dollars to adjust for inflation, and weconverted circulation data into circulation per million(CIRC) to account for population changes.

We used a dummy variable (PREPOST) to test whetherthe passage of Bill C-55 had an effect on the dependentvariables. One level (0) indicated that the circulation and adrate data were collected before the passage of Bill C-55,from February 1996 to February 1999. The second level (1)indicated that the circulation and ad rate data were collectedafter the passage of Bill C-55, from February 2000 to Feb-ruary 2002.

Many other variables could also influence ad rates or cir-culation (e.g., increasing Internet use as a source of enter-tainment and news; the overall economy; changes in theCanadian advertising industry; two new assistance pro-grams, the Publication Assistance Program begun in 1999and the Canada Magazine Fund begun in 2000, that wereinstituted to help Canadian magazines compete after thepassage of Bill C-55). Therefore, we created dummyvariables for each year of the analysis, and we included thecirculation or ad rate data for a control group of magazines(or a counterfactual) in the analyses. Because this was anonexperimental study of the impact of policy changes, weused counterfactuals to control for other characteristics thatmay have also affected the variables of interest (White2005). Because the U.S. magazines sold in Canada arealmost exclusively written in English, Bill C-55 should nothave affected FC magazines; however, FC magazines aresubject to the same economic, industry, and market forces asEC magazines. Thus, FC magazines are well suited to be thecounterfactual in each of the studies.

Each regression analysis includes year dummy variables,a dummy variable for EC or U.S. magazines sold in Canada,and an EC × PREPOST or a U.S. × PREPOST interaction.The year dummy variables measure the level of the depen-dent variable for the FC magazines in each year. The EC (orU.S.) dummy variable measures the difference in the depen-dent variable between the EC (or U.S.) and the FC maga-zines, net any interaction effect. The interaction is the partof the regression analyses of greatest concern. The inter-action measures the change in the dependent variable in theperiod following the passage of Bill C-55, net any changesthat would have occurred anyway over the years as con-trolled by the inclusion of the FC magazines. A negativeregression coefficient for the interaction indicates a decreasein the dependent variable for the EC (or U.S.) magazines inthe post–Bill C-55 period. A positive regression coefficientindicates an increase in the dependent variable after Bill C-55 relative to what happened to the counterfactual.

78 Public Policies of Cultural Protectionism

Table 2. Bill C-55’s Effect on the Circulation and Ad Rates of Leading EC Magazines, with Leading FC Magazines as aCounterfactual

Independent Regression Standard ErrorVariable Coefficient of Coefficient Standardized b t-Value

CIRC = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β8EC + β9EC × PREPOSTAdjusted R2 = .394, Mean-Square (9, 854) = 46,680,306.859, F = 63.288, p < .001

1996 2915.115 748.482 .126 3.895***1997 2461.952 748.482 .106 3.289**1998 2445.617 748.482 .105 3.267**1999 2212.678 748.482 .095 2.956**2000 3405.669 787.880 .147 4.323***2001 3044.231 787.880 .131 3.864***2002 2733.359 787.880 .118 3.469**EC 4628.136 648.268 .428 7.139***EC × PREPOST –2336.947 1135.844 –.123 –2.057*

4C-RATE = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β8EC + β9EC × PREPOSTAdjusted R2 = .692, Mean-Square (9, 854) = 690,460.166, F = 214.375, p < .001

1996 53.738 6.199 .200 8.668***1997 53.380 6.199 .198 8.611***1998 56.047 6.199 .208 9.041***1999 57.347 6.199 .213 9.251***2000 60.922 6.526 .226 9.336***2001 57.494 6.526 .214 8.811***2002 55.254 6.526 .205 8.467***EC 41.299 5.369 .329 7.692***EC × PREPOST –4.100 9.408 –.019 –.436

BW-RATE = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β8EC + β9EC × PREPOSTAdjusted R2 = .668, Mean-Square (9, 807) = 424,387.409, F = 183.137, p < .001

1996 43.941 5.423 .199 8.102***1997 44.151 5.423 .200 8.141***1998 45.494 5.423 .206 8.388***1999 44.932 5.423 .203 8.285***2000 49.168 5.709 .223 8.613***2001 48.830 5.709 .221 8.553***2002 45.143 5.709 .204 7.908***EC 34.303 4.697 .333 7.303***EC × PREPOST –7.243 8.230 –.040 –.880

*p < .05.**p < .01.***p < .001.

ResultsH1 predicted that the passage of Bill C-55 would have anadverse impact on the circulation of and ad rates charged by leading EC magazines because resources would be redis-tributed away from these previous protected domestic pro-ducers. The results for CIRC (see Table 2) show a signifi-cant, negative EC × PREPOST interaction, in support ofH1a. In the years following the passage of Bill C-55, CIRCfor EC magazines declined compared with what happenedto FC magazines (i.e., compared with what we assumewould have happened had Bill C-55 not been passed). How-ever, the results in Table 2 do not support H1b, because therewere no EC × PREPOST interactions for 4C-RATE or BW-RATE.

H2 predicted that Bill C-55 would positively affect thecirculation of leading U.S. magazines sold in Canada. The

lack of a US × PREPOST interaction (see Table 3) leads tothe rejection of H2.

We conducted follow-up analyses to investigate the pro-portion of EC magazines that decreased their circulation andad rates after Bill C-55 and to explicate the EC × PREPOSTinteraction on CIRC. Follow-up analyses show that 72.3%of EC magazines decreased their circulation after Bill C-55,but EC magazines were about an even split between thosethat raised and those that lowered ad rates; 48.2% loweredtheir 4C-RATE, and 49.4% lowered their BW-RATE afterBill C-55. The EC magazines that lowered their 4C-RATEwere almost always the same as those that lowered theirBW-RATE (r = .992, p < .01). In addition, strong correla-tions were present for EC magazines between CIRC and4C-RATE (r = .694, p < .01) and CIRC and BW-RATE (r =.690, p < .01). Further analysis shows that EC magazines

Journal of Public Policy & Marketing 79

Table 3. Bill C-55’s Effect on the Circulation of Leading U.S. Magazines Sold in Canada, with Leading FC Magazines as aCounterfactual

Independent Regression Standard ErrorVariable Coefficient of Coefficient Standardized b t-Value

CIRC = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β8US + β9US × PREPOSTAdjusted R2 = .560, Mean-Square (9, 762) = 976,073,401.8, F = 110.091, p < .001

1996 4257.359 336.067 .358 12.668*1997 4288.194 336.067 .361 12.760*1998 4163.006 336.067 .350 12.387*1999 4109.919 336.067 .346 12.229*2000 4327.978 351.790 .364 12.303*2001 4183.207 351.790 .352 11.891*2002 4192.937 351.790 .353 11.919*US –1355.446 291.847 –.237 –4.644*US × PREPOST –331.646 445.804 –.038 –.744

*p < .001.

that lowered their ad rates in the years after the passage ofBill C-55 had an average actual circulation of 255,722,whereas those that raised their ad rates in the years after thepassage of Bill C-55 had an average actual circulation of218,746. To test directly whether EC magazines withdeclining versus rising ad rates after Bill C-55 differed incirculation size, we conducted a regression on the EC andFC (as a counterfactual) magazine CIRC data. The model(adjusted R2 = .360, F = 154.488, p < .001) included EC, aΔ4C-RATE variable (0 = up, and 1 = down), and an inter-action. The negative interaction (standardized β = –.122, t =–2.164, p < .05) means that the larger an EC magazine’s cir-culation, the more likely its ad rates were to decrease afterBill C-55.

We also conducted a follow-up analysis on CIRC usingan alternative counterfactual (i.e., U.S. magazines in theUnited States) to determine whether the lower circulationsfor leading EC magazines after Bill C-55 were part of anoverall decline in leading North American magazines due tosome outside factors (e.g., increasing use of the Internet,changes in reading habits) or, perhaps, because EC maga-zines had been in decline compared with FC magazines,regardless of Bill C-55’s passage. We gathered circulationdata for leading U.S. magazines in the United States fromreports published by the Magazine Publishers of America.We reran the same regression analyses on CIRC that appearin Tables 1 and 2 with these U.S. magazines in the UnitedStates as the counterfactual. As with the FC magazine coun-terfactual, the model investigating the impact on CIRC forEC magazines (adjusted R2 = .394, F = 63.898, p < .001)had a significant EC × PREPOST interaction (standardizedβ = –.118, t = –2.006, p < .05), but the model investigatingthe impact on CIRC for leading U.S. magazines sold inCanada (adjusted R2 = .362, F = 78.505, p < .001) had noUS × PREPOST interaction (standardized β = –.007, t =–.187, not significant [n.s.]).

DiscussionThe circulation data for the Canadian magazine industryseems to indicate that opening the industry to foreign com-

petition has hurt leading EC magazines. In terms of circula-tion adjusted for changes in the Canadian population, ECmagazines experienced an overall 18% decrease in theperiod following the passage of Bill C-55. This was a sig-nificant decline regardless of whether we used leading FCmagazines or leading U.S. magazines in the United States asa counterfactual to control for extraneous influences on cir-culation. Conversely, in general, leading U.S. magazinessold in Canada have maintained circulation as the circula-tion of many of their primary competitors (i.e., EC maga-zines) has declined. Given strong sales pre–Bill C-55, it mayhave been difficult for U.S. magazines to increase theirCanadian circulation significantly. In terms of ad ratesadjusted for inflation, EC magazines were almost evenlysplit between those that raised and those that lowered 4C-RATE and BW-RATE after the passage of Bill C-55. Therelationship between demand and price (e.g., ad rates)depends on elasticity of demand and costs. Thus, it is possi-ble that more EC magazines would have lowered ad rates ifdemand for advertising had been more elastic.

Study 2Industry data on the circulation and ad rates analyzed inStudy 1 were available only for leading Canadian magazines(i.e., circulation of at least 30,000). Although these largermagazines represent both the dominant culture and the largesubcultural groups within Canadian society, the impact ofBill C-55 on magazines and, thus, advertising vehiclesavailable to marketers interested in targeting even more spe-cific subcultures and interest groups cannot be ascertainedfrom these data. Many of these small-circulation Canadian(SC) magazines target specialized interest groups and thusare useful to marketers who are interested in reaching theseniche markets. For example, Vines targets wine lovers,Pacific Yachting targets recreational boaters in BritishColumbia, and MusicWorks targets new music aficionados.Other SC magazines target specific language minorities(e.g., Zdrowy Styl targets Polish-speaking Canadians,Inuktitut targets Inuit-speaking Canadians).

80 Public Policies of Cultural Protectionism

Because annual circulation data were not available forindividual small magazines, we analyzed another indicator,the number of competitors. The number of competitorstends to decrease when a market is not growing. GivenStudy 1’s results, we expected the following:

H3: The number of competitors has grown for (a) U.S. maga-zines sold in Canada but not for (b) EC or (c) SC magazinesafter Bill C-55.

Although annual circulation data for individual smallmagazines were unavailable, aggregate data were available;thus, we could calculate overall market share. Because lead-ing U.S. magazines sold in Canada have maintained circula-tion and EC magazines have lost circulation, the marketshares of these competing groups have likely shifted sincethe Canadian market opened to greater foreign (especiallyU.S.) competition. Thus:

H4: Whereas (a) leading U.S. magazines sold in Canada haveincreased market share, the market share of (b) EC and (c)SC magazines has declined.

MethodWhereas circulation and ad rate data for SC magazines werenot readily available, information on the number of Cana-dian magazine titles and aggregate Canadian circulation wasavailable from Magazines Canada, Canadian AdvertisingRates & Data, and Standard Rate and Data Service. Thus,the change in the number of Canadian magazine titles withcirculations of less than 30,000 (i.e., SC magazines) couldbe compared with the change in the number of EC magazinetitles. Furthermore, market share for both groups could becompared with the market share of leading U.S. magazinesin Canada. The number of titles and the market share of FCmagazines (with circulations of at least 30,000) were coun-terfactuals in the analyses.

To account for the increasing population between 1996and 2004, we divided the number of magazine titles by theCanadian population in millions, as reported by StatisticsCanada, to create the dependent variable TITLES/MIL. Wecalculated market share as a group’s circulation divided bythe aggregate circulation of all consumer magazines inCanada. As with Study 1, dummy variables for each yearcontrol for changes other than the passage of Bill C-55 byindicating changes to the FC magazines each year. The twoother independent variables were a dummy variable repre-senting EC, SC, or U.S. magazines in Canada and an EC ×PREPOST, SC × PREPOST, or US × PREPOST interaction.The PREPOST dummy variable indicates that the data arefrom before (0) or after (1) the passage of Bill C-55.

ResultsH3 predicted growth in the number of magazine titles forU.S. magazines in Canada but no growth for EC or SCmagazines. The regression results in Table 4 show no US ×PREPOST interaction, which rejects H3a, and no EC × PRE-POST interaction, which supports H3b. H3c is also rejected.Table 4 shows an SC × PREPOST interaction with a posi-tive regression coefficient, which indicates that the numberof SC magazine competitors has increased in the period fol-

lowing the passage of Bill C-55. Follow-up analysis showsthat TITLES/MIL for SC magazines has increased 25%,from a mean of 21.26 in the period before Bill C-55 to 26.73in the years since the passage of Bill C-55.

Again, we conducted follow-up analyses with leadingU.S. magazines in the United States as the counterfactualrather than FC magazines. To calculate TITLES/MIL, wedivided the number of leading U.S. magazines in the UnitedStates (according to Standard Rate and Data Service) byyearly Census Bureau reports of the U.S. population. In themodel investigating TITLES/MIL for U.S. magazines inCanada (adjusted R2 = .999, F = 2265.299, p < .001), therewas a significant US × PREPOST interaction (standardizedβ = .431, t = 1.503, p < .05); for EC magazines (adjustedR2 = .998, F = 680.454, p < .001), there was no interactionwith PREPOST (standardized β = .037, t = 1.503, n.s.); andfor SC magazines (adjusted R2 = .990, F = 167.418, p <.001), there was a significant SC × PREPOST interaction(standardized β = .166, t = 3.359, p < .05).

H4 predicted a post–Bill C-55 market share increase forleading U.S. magazines sold in Canada but a decrease forEC and SC magazines. The results in Table 5 provide sup-port only for H4b. The negative EC × PREPOST interactionindicates a decline in the market share of EC magazines.Leading U.S. magazines sold in Canada maintained (but didnot increase) market share, but SC magazines increasedmarket share after Bill C-55. We obtained similar results inalternative analyses with the counterfactual as the marketshare of the top 50 U.S. consumer magazines in the UnitedStates (according to the Audit Bureau of Circulation). In themodel investigating the market share of leading U.S. maga-zines in Canada (adjusted R2 = .999, F = 1617.34, p < .001),there was no interaction with PREPOST (standardized β =–.030, t = –1.899, n.s.); for EC magazines (adjusted R2 =.998, F = 297.379, p < .001), there was a negative EC ×PREPOST interaction (standardized β = –.106, t = –2.867,p < .05); and for SC magazines (adjusted R2 = .990, F =163.901, p < .001), there was a positive SC × PREPOSTinteraction (standardized β = .166, t = 3.336, p < .05), indi-cating an increased market share after Bill C-55.

DiscussionStudy 2 examined the effect of Bill C-55 on market sharesand the number of magazine titles while controlling forchanges in the population over the period from 1996 to2004. The number of EC magazines (i.e., leading EC maga-zines with circulations of at least 30,000) remained rela-tively constant, but the number of titles of SC magazinesincreased 25% after Bill C-55. The number of leading U.S.magazine competitors was unchanged compared with whathappened to FC magazines but increased compared withwhat happened to leading U.S. magazines in the UnitedStates, because several leading U.S. magazines in the UnitedStates ceased or suspended publication during the tight adrevenue years of 2000–2002 (e.g., Consumers Digest,Mademoiselle, McCall’s, New Woman, Teen, WorkingWoman). The after Bill C-55 environment in Canada wasmore favorable to imported U.S. magazines.

Market share of EC magazines has declined, but leadingU.S. magazines sold in Canada have maintained market

Journal of Public Policy & Marketing 81

Table 4. Bill C-55’s Effect on the Number of U.S. Magazines in Canada and Leading EC and SC Magazine Titles per MillionPopulation, with Leading FC Magazines as a Counterfactual

Independent Regression Standard ErrorVariable Coefficient of Coefficient Standardized b t-Value

TITLES/MIL = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β82003 + β92004 + β10US + β11US × PREPOSTAdjusted R2 = .993, Mean-Square (11, 7) = 8.634, F = 219.730, p < .001

1996 1.426 .157 .207 9.102**1997 1.706 .157 .247 10.889**1998 1.691 .157 .245 10.794**1999 1.653 .157 .240 10.548**2000 1.696 .154 .246 11.046**2001 1.835 .154 .266 11.952**2002 1.763 .154 .256 11.485**2003 1.616 .154 .234 10.526**2004 1.593 .154 .231 10.378**US 1.120 .140 .344 7.994**US × PREPOST .001 .188 .000 .002

TITLES/MIL = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β82003 + β92004 + β10EC + β11EC × PREPOSTAdjusted R2 = .993, Mean-Square (11, 7) = 12.548, F = 218.749, p < .001

1996 2.148 .232 .211 9.264**1997 1.850 .232 .182 7.978**1998 1.972 .232 .194 8.505**1999 1.962 .232 .193 8.460**2000 2.040 .227 .200 8.980**2001 1.695 .227 .166 7.458**2002 2.075 .227 .204 9.134**2003 2.355 .227 .231 10.366**2004 2.250 .227 .221 9.902**EC 2.260 .207 .471 10.896**EC × PREPOST .061 .278 .009 .220

TITLES/MIL = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β82003 + β92004 + β10SC + β11SC × PREPOSTAdjusted R2 = .990, Mean-Square (11, 7) = 493.325, F = 161.147, p < .001

1996 –.727 1.694 –.011 –.4291997 1.221 1.694 .019 .7211998 3.283 1.694 .051 1.9381999 4.156 1.694 .065 2.453*2000 1.137 1.660 .018 .6852001 1.786 1.660 .028 1.0762002 2.024 1.660 .032 1.2202003 2.177 1.660 .034 1.3112004 3.291 1.660 .051 1.983SC 24.053 1.515 .798 15.874**SC × PREPOST 6.597 2.033 .163 3.245*

*p < .05.**p < .001.

share, and SC magazines have increased their market share.Since the passage of Bill C-55, SC magazines have becomemore important, which will provide domestic advertiserswith vehicles to reach specific target markets more preciselyand will provide Canadian consumers with informationsources about products tailored to more specialized inter-ests. We obtained these results regardless of whether weused leading FC magazines or U.S. magazines in the UnitedStates as the counterfactual.

Study 3Study 2 shows that the number of active competitors amongEC magazines has not changed. In addition, as a group, ECmagazines have lost market share, whereas U.S. magazinesin Canada have maintained market share. Study 1 found thatpaid circulation has declined for EC magazines, and furtheranalysis found that EC magazines that lowered their ad ratesafter Bill C-55 had larger circulations than those that raisedtheir ad rates in the years following the passage of Bill C-55.

82 Public Policies of Cultural Protectionism

Table 5. Bill C-55’s Effect on Market Share of Leading U.S. Magazines in Canada and Leading EC and SC Magazines, withLeading FC Magazines as a Counterfactual

Independent Regression Standard ErrorVariable Coefficient of Coefficient Standardized b t-Value

MKTSHARE = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β82003 + β92004 + β10US + β11US × PREPOSTAdjusted R2 = .994, Mean-Square (11, 7) = 268.055, F = 267.101, p < .001

1996 13.042 .792 .339 16.468***1997 13.869 .792 .361 17.511***1998 13.562 .792 .353 17.124***1999 13.132 .792 .342 16.582***2000 14.162 .776 .368 18.250***2001 13.493 .776 .351 17.389***2002 13.437 .776 .350 17.316***2003 13.512 .776 .351 17.413***2004 12.526 .776 .326 16.142***US –.085 .708 –.005 –.120US × PREPOST –2.242 .950 –.092 –2.359

MKTSHARE = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β82003 + β92004 + β10EC + β11EC × PREPOSTAdjusted R2 = .989, Mean-Square (11, 7) = 2366.281, F = 150.278, p < .001

1996 18.825 3.137 .165 6.001***1997 10.774 3.137 .094 3.435*1998 13.809 3.137 .121 4.402**1999 10.197 3.137 .089 3.251*2000 13.527 3.074 .118 4.401**2001 11.744 3.074 .103 3.821**2002 15.215 3.074 .133 4.950**2003 14.563 3.074 .127 4.738**2004 12.081 3.074 .106 3.931**EC 44.155 2.806 .819 15.737***EC × PREPOST –10.578 3.764 –.146 –2.810*

MKTSHARE = β11996 + β21997 + β31998 + β41999 + β52000 + β62001 + β72002 + β82003 + β92004 + β10SC + β11SC × PREPOSTAdjusted R2 = .958, Mean-Square (11, 7) = 615.102, F = 38.593, p < .001

1996 7.828 3.156 .133 2.480*1997 15.812 3.156 .270 5.010**1998 13.309 3.156 .227 4.217**1999 16.657 3.156 .284 5.278***2000 12.242 3.092 .209 3.959**2001 14.696 3.092 .251 4.752**2002 12.563 3.092 .214 4.062**2003 13.274 3.092 .226 4.292**2004 14.356 3.092 .245 4.642**SC 2.324 2.823 .084 .823SC × PREPOST 12.721 3.787 .343 3.359*

*p < .05.**p < .01.***p < .001.

Therefore, we conducted Study 3 to determine the effect ofeliminating cultural protectionist public policies on revenue-generating advertising content of some specific EC maga-zines in comparison with some specific leading U.S. maga-zines sold in Canada.

Ad revenue represents approximately two-thirds of Cana-dian magazine industry revenues (Thirty-Sixth Parliament,1st Session 1998). However, general audience magazinesare more dependent on advertising revenue than are nichemagazines (Schwanen 1998). Although advertising ratesand circulation are good indicators of the health of periodi-

cals, declining ad rates or circulation is not necessary for aperiodical to cease operations. For example, when the U.S.general-interest magazines Look and Life died in 1971 and1972, respectively, they still had a combined audience of 70million readers per issue. It became apparent that these twopublications were in trouble only when the number of adpages was examined. Ad pages for Life and Look dropped34% from 4834 in 1966 to 3196 in 1970 (Perlstein 2001). Amagazine can collect its ad rate only when an advertisementis placed. In addition, advertising revenues are higher forlarger ad sizes and if an advertisement includes certain spe-

Journal of Public Policy & Marketing 83

cial ad formats, such as color, bleed, mail-in cards attachedto the advertisement, or a smaller-than-magazine-sizedinsert.

Because Studies 1 and 2 suggest that eliminating protec-tionist public policies adversely affects leading domesticbrands compared with leading imports, we expected thefollowing:

H5: The number of ad pages per issue will (a) decrease for ECmagazines but (b) increase for U.S. magazines sold inCanada after Bill C-55.

H6: The size of advertisements will (a) decrease in EC maga-zines but (b) increase in leading U.S. magazines sold inCanada after Bill C-55’s passage.

H7: The usage of cost-increasing ad formats (i.e., color, bleed,mail-in cards, or inserts) will (a) decrease for advertise-ments run in EC magazines but (b) increase for advertise-ments run in U.S. magazines in Canada after Bill C-55.

MethodTo test the impact of ending cultural protectionism on somespecific leading domestic cultural products, we selected fiveof the most read, nationally distributed EC consumer maga-zines (according to the 1998 Media Digest) for a longitudi-nal content analysis: Canadian Living, Chatelaine, Home-maker’s Magazine, Macleans, and Reader’s Digest(Canada). For comparison, we selected five leading U.S.consumer magazines sold in Canada (Cosmopolitan, GoodHousekeeping, National Geographic, People, and Youngand Modern). To negate the impact of changes in the Cana-dian economy or magazine industry other than the passageof Bill C-55, we used three FC magazines (Châtelaine,L’Actualité, and Selection du Readers Digest) as the coun-terfactual. We purchased issues of the EC, U.S., and FCmagazines from newsstands in Canada.

We hired two judges and trained them to code the Decem-ber issues of these magazines from 1998 (preceding the pas-sage of Bill C-55), 1999 (the year of Bill C-55’s passage),2000 (one year after Bill C-55), 2001 (two years after BillC-55), 2002 (three years after Bill C-55), and 2003 (fouryears after Bill C-55) to provide sufficient time for anychange to be observed. If the magazine was a weekly orbiweekly, the first December issue was coded. The judgescoded the following categories: the number of ad pages ineach magazine issue; the size of each advertisement; andwhether the advertisement was on a front or back cover,used color or bleed, had an attached mail-in card, or was aninsert smaller than magazine size. Following the work ofRust and Cooil (1994), we calculated interjudge agreementin terms of proportional reduction in loss, which rangedfrom 94 for bleed to 99 for an attached mail-in card.

The regression analyses for Study 3 used a similar proce-dure to that used in Studies 1 and 2. Year dummy variablesrepresent the annual level of the dependent variable for FCmagazines. Another dummy variable represents the changein the dependent variable due to being an EC magazine or aU.S. magazine sold in Canada, net any interaction effect.Again, the interaction with PREPOST is of primary impor-tance because it represents any change in the dependentvariable between the periods before and after Bill C-55’s

passage, net any changes that may have happened anywaygiven the changes to the counterfactual.

We studied three dependent variables that influence amagazine’s ad revenues: the number of ad pages(ADPAGES); the size of the advertisements (ADSIZE); andthe use of formats that increase ad cost, such as the use ofcolor, bleed, cover positions, attached mail-in cards, orsmaller-than-magazine-sized inserts (COSTMORE). Wetested ADPAGES at the magazine issue level of analysis(i.e., 30 EC or 30 U.S. magazine issues, with 18 FC maga-zine issues used as a control group), but we tested ADSIZEand COSTMORE at the individual ad level of analysis.

ResultsThe hypotheses predicted that there would be a decrease inADPAGES (H5), ADSIZE (H6), and COSTMORE (H7) foradvertisements run in EC magazines but an increase in thesevariables for advertisements run in U.S. magazines sold inCanada after Bill C-55. The regression results show a lackof any interactions with PREPOST for EC (see Table 6) orU.S. magazines sold in Canada (see Table 7). Alternativeanalyses with data on leading U.S. magazines in the UnitedStates did not alter the nonsignificant interaction effects.This means that when the effects of economic, industry, andmarket factors are accounted for through the FC magazinecounterfactual, there are no significant changes inADPAGES, ADSIZE, or COSTMORE for either the ECmagazines or the U.S. magazines sold in Canada. Thus, wereject H5–H7.

DiscussionWhereas the macrolevel results of the first two studiesdemonstrated some negative consequences of the passage ofBill C-55 for EC magazines, the results are less clear forspecific magazine publications at a micro level. When weaccounted for other economic, industry, and market factorsusing the FC magazine control group, there were no changesin the three ad revenue variables for the sample of EC maga-zines or U.S. magazines sold in Canada.

General DiscussionThe three studies we presented in this article examine theeffect of ending protectionist public policies on culturalindustries that serve as important cultural identity agents forcountries, information sources for consumers, and market-ing communication channels for domestic advertisers.Specifically, we examined the health of the Canadian maga-zine industry before and after the end of 34 years of publicpolicy that promoted cultural protectionism. In 1999, Bill C-55 (i.e., the Foreign Publisher’s Advertising Services Act)opened the Canadian magazine advertising industry to for-eign competition.

A resource-advantage view of competition (Hunt andArnett 2001) holds that eliminating public policies that limiteconomic freedom (e.g., Canada’s protectionist tariffs,excise taxes, and postal rate subsidies that formed the cul-tural protectionist regime for the Canadian magazine adver-tising market) should promote productivity and economicgrowth in an industry. Thus, a resource-advantage view pre-

84 Public Policies of Cultural Protectionism

Table 6. Bill C-55’s Effect on the Number of Advertisements, Ad Size, and Cost-Increasing Formats for Leading ECMagazines, with Leading FC Magazines as a Counterfactual

Independent Regression Standard ErrorVariable Coefficient of Coefficient Standardized b t-Value

ADPAGES = β11998 + β21999 + β32000 + β42001 + β52002 + β62003 + β7EC + β8EC × PREPOSTAdjusted R2 = .791, Mean-Square (8, 40) = 31,983.232, F = 23.767, p < .001

1998 56.854 17.561 .289 3.238*1999 56.479 17.561 .287 3.216*2000 64.260 15.437 .327 4.163**2001 61.010 15.437 .310 3.952**2002 67.635 15.437 .344 4.381**2003 61.760 15.437 .314 4.001**EC 14.833 18.943 .146 .783EC × PREPOST 4.150 23.201 .033 .179

ADSIZE = β11998 + β21999 + β32000 + β42001 + β52002 + β62003 + β7EC + β8EC × PREPOSTAdjusted R2 = .786, Mean-Square (8, 3440) = 524.620, F = 1580.580, p < .001

1998 1.121 .036 .350 31.432**1999 1.131 .036 .355 31.151**2000 1.180 .029 .398 41.087**2001 1.118 .030 .366 37.258**2002 1.054 .028 .363 37.145**2003 1.130 .030 .375 38.210**EC –.023 .038 –.016 –.624EC × PREPOST –.006 .046 –.003 –.128

COSTMORE = β11998 + β21999 + β32000 + β42001 + β52002 + β62003 + β7EC + β8EC × PREPOSTAdjusted R2 = .946, Mean-Square (8, 3440) = 1524.155, F = 7602.946, p < .001

1998 1.885 .028 .376 67.597**1999 1.831 .028 .367 64.528**2000 1.895 .022 .410 84.417**2001 1.886 .023 .395 80.392**2002 1.926 .022 .425 86.884**2003 1.963 .023 .417 84.920**EC .005 .030 .002 .169EC × PREPOST –.025 .036 –.009 –.691

*p < .01.**p < .001.

dicts that ending cultural protectionist public policies bene-fits both consumers (through increased market informationavailability) and domestic advertisers (through increasednumbers of and more precisely targeted marketing commu-nication vehicles). Although change may be painful, accord-ing to this view, eliminating anticompetitive public policiesshould benefit consumers and the economy in the long run.

Conversely, the views of the Canadian publishers andother proponents of cultural protectionist public policiesreflect the theoretical belief in cultural protectionism as anecessary barrier to entry, which preserves marketing com-munication channels for domestic advertisers and con-sumers as well as the cultural identity of smaller nationalmarkets that can never achieve the economies of scale real-ized by competitors from larger national markets (e.g., Hes-mondhalgh and Pratt 2005; Nordenstreng and Varis 1974;Preston and Kerr 2001; Tunstall 1977).

Three studies provide mixed results with regard to thevalue of public policies of cultural protectionism. In all threestudies, we used FC magazines as a counterfactual to

account for the influence of other economic, industry, mar-ket, regulatory, and “historical” factors. Study 1 found thatthe end of protectionism hurt the paid circulation of leadingEC magazines compared with that of FC magazines (i.e.,compared with what would likely have happened had BillC-55 not been enacted). Average circulation per millionCanadians for these domestic market leaders has declined18% after Bill C-55. Although circulation dropped for most(72.3%) EC magazines, this did not necessarily translateinto lower ad rates overall. Although circulation adjusted forpopulation was strongly correlated with ad rates in constantdollars, only half of the EC magazines lowered their adrates. Notably, EC magazines that lowered their ad ratesafter Bill C-55’s passage were more likely to have large cir-culations. Study 2 found that the market share of EC maga-zines also declined after Bill C-55. In comparison, the cir-culation and market share of leading U.S. magazines sold inCanada remained steady. The strong market position of U.S.imports before Bill C-55 may have made significant circu-lation or market share gains difficult. However, SC maga-

Journal of Public Policy & Marketing 85

Table 7. Bill C-55’s Effect on the Number of Advertisements, Ad Size, and Cost-Increasing Formats for Leading U.S.Magazines Sold in Canada, with Leading FC Magazines as a Counterfactual

Independent Regression Standard ErrorVariable Coefficient of Coefficient Standardized b t-Value

ADPAGES = β11998 + β21999 + β32000 + β42001 + β52002 + β62003 + β7US + β8US × PREPOSTAdjusted R2 = .747, Mean-Square (8, 40) = 29749.150, F = 18.754, p < .001

1998 53.792 19.066 .277 2.821*1999 59.542 19.066 .307 3.123*2000 69.292 16.760 .357 4.134**2001 55.167 16.760 .284 3.292*2002 71.417 16.760 .368 4.261**2003 58.792 16.760 .303 3.508*US 18.533 20.567 .185 .901US × PREPOST –7.400 25.189 –.060 –.294

ADSIZE = β11998 + β21999 + β32000 + β42001 + β52002 + β62003 + β7US + β8US × PREPOSTAdjusted R2 = .776, Mean-Square (8, 3368) = 503.600, F = 1460.110, p < .001

1998 1.148 .036 .364 31.728**1999 1.102 .037 .365 29.932**2000 1.140 .029 .390 38.770**2001 1.093 .031 .347 35.038**2002 1.092 .029 .379 37.544**2003 1.154 .031 .367 37.371**US –.014 .038 –.009 –.358US × PREPOST –.044 .046 –.024 –.941

COSTMORE = β11998 + β21999 + β32000 + β42001 + β52002 + β62003 + β7US + β8US × PREPOSTAdjusted R2 = .925, Mean-Square (8, 3368) = 1417.362, F = 5182.553, p < .001

1998 1.854 .032 .383 57.519**1999 1.864 .033 .402 56.890**2000 1.885 .026 .420 72.025**2001 1.915 .028 .396 68.943**2002 1.913 .026 .432 73.830**2003 1.963 .027 .407 71.426**US –.093 .034 –.040 –2.731*US × PREPOST –.009 .041 –.003 –.216

*p < .01.**p < .001.

zines have gained market share (and, thus, circulation)apparently at the expense of leading EC magazines. Study 2also found that the number of competitors (i.e., magazinetitles) increased for SC magazines but remained the samefor EC and U.S. magazines sold in Canada. Study 3 foundno impact of Bill C-55 on the number of ad pages, the sizeof advertisements, or the use of cost-increasing formats forEC or U.S. magazines sold in Canada. Thus, it appears thatBill C-55 has negatively affected larger EC magazinessomewhat but has benefited SC magazines and has allowedU.S. magazines sold in Canada to maintain their marketposition.

The use of FC magazines as the counterfactual assumesthat (1) Bill C-55 did not affect FC magazines but that (2)changes in factors other than Bill C-55 affected FC, EC, andU.S. magazines sold in Canada identically. As we previ-ously discussed, the first assumption holds because FCmagazines target a different audience than U.S. and ECmagazines. The second assumption should also holdbecause all the magazines are subject to the same economic,

social, and other changes within Canada, but to verify thisassumption’s validity and to negate the possibility that theEC magazine decline might reflect a larger time trend ofdeclining general-audience magazines or an ongoing declinecompared with FC magazines, we conducted alternativeanalyses using leading U.S. magazines in the United Satesas the counterfactual. The assumptions for the alternativecounterfactual were that magazines in the United Stateswould not be affected by Bill C-55, which is reasonable, andthat larger North American magazine industry trends wouldsimilarly affect all magazines studied. The alternative analy-ses changed only one result (the number of leading U.S.magazines in Canada increased compared with leading U.S.magazines in the United States but not with FC magazines).The similar results suggest that the second assumption islikely valid and that the EC magazine decline is attributableto Bill C-55, not just compared with FC magazines or reflec-tive of an overall decline in general-audience magazines.Furthermore, employing alternative counterfactualsincreases our confidence in the results.

86 Public Policies of Cultural Protectionism

The presence of some adverse effects of trade liberaliza-tion on EC magazines is consistent with the economic lit-erature. Although economic studies of trade liberalizationhave found that the net effect on the economy of a countrythat removes its protectionist public policies is positive,there is typically a redistribution of resources away frompreviously protected sectors into other sectors of the econ-omy (e.g., Eastman and Stykolt 1967; Feenstra and Hanson2003; Harris and Lemieux 2005). In other words, resourcesin a market are often shifted from organizations and prod-ucts that most enjoyed the benefits of protectionism, whichwere clearly the EC magazines with respect to Canada’spublic policies of cultural protectionism in the magazineindustry because their main foreign competitors, leadingU.S. magazines, were barred from the profitable advertisingmarket.

The growth of SC magazines appears to be further evi-dence of redistribution; however, it is impossible to test thisbecause the Canadian government instituted subsidies to theCanadian publishing industry (i.e., Canada Magazine Fundand Publications Assistance Program) immediately uponopening the magazine advertising market to foreign compe-tition. These subsidies appear to have reduced the risk ofstarting new magazines aimed at smaller, special-interesttarget markets and language minorities. Since the inceptionof both government subsidies, the Minister of CanadianHeritage has taken steps to increase funding for language-minority publications by reserving an additional allocationof $4 million for them (St. Julien 2003). Furthermore, partof the Canada Magazine Fund is earmarked as businessdevelopment funds for small magazine publishers. In 2004–2005, for example, 64 requests for small magazine publisherbusiness development funds were granted. These rangedfrom $5,381 to increase the promotion and distribution of anew children’s science magazine, La Culbute, to 12 separaterequests, each funded at a $40,000 level.

The Canada Magazine Fund has also supported a multi-year National Circulation and Promotions Project in collab-oration with a trade organization, the Canadian MagazinePublishers Association. This $4.7 million national multi-media campaign’s objective was to help Canadians distin-guish between Canadian and U.S. magazines and to makepatriotic appeals to support Canadian magazines. Televisionadvertisements asked consumers to look for stickers thatread “Genuine Canadian Magazine” before purchasing amagazine. The Canadian Magazine Publishers Associationfound that stickers were needed because 40% of Canadianscould not identify which magazines were published inCanada or the United States (Wentz 2003). As part of theprint ad campaign, approximately 185 magazines publishedby Canadian Magazine Publishers Association members rana series of advertisements between January and November2002 to alert readers, “It’s not the same if it’s not Canadian.Get the genuine article. Read a Canadian magazine. Forhundreds of titles visit genuine-article.ca.”

Overall, ad spending in Canadian magazines has beenincreasing. According to the Television Bureau of Canada(2005), the share of advertising dollars dedicated to Cana-dian magazines has increased from 6.05% of major mediaspending (or 3.91% of total Canadian ad spending) in 1996(i.e., three years before the passage of Bill C-55) to 8.36%

of major media spending (or 5.39% of total Canadian adspending) in 2004 (i.e., more than five years after the pas-sage of Bill C-55). From Studies 1 and 3, we conclude thatthe bulk of this increased ad spending is not going to ECmagazines; nor does it appear to be flowing into split-runU.S. magazines. Instead, a good portion of increased adspending appears to be supporting the growing number ofSC magazines.

Limitations and Further ResearchFurther research should investigate the effect of lifting pub-lic policies of cultural protectionism as other cultural indus-tries are opened to foreign competition to determine the gen-eralizability of the findings. Research should also determinethe effect of introducing protectionist policies into previ-ously unfettered cultural industries; the Minister of Cana-dian Heritage asserted that the introduction of policies pro-tecting the Canadian magazine industry in the 1960s led toa proliferation of Canadian magazines (Thirty-Sixth Parlia-ment, 1st Session 1998). However, it is unclear whether thecultural protectionist policies are responsible; the number ofmagazine titles in the United States has also proliferatedsince the 1960s as audience interests have fragmented. Fur-ther research will need to document whether the Canadianmagazine industry will continue to be competitive within itsown domestic circulation and advertising markets andwhether magazines targeting niche interest groups and lan-guage minorities will continue their success if the level ofgovernment support decreases.

An additional limitation of the current research is the pos-sible anticipatory reactions of Canadian publishers to theend of cultural protection policies for the Canadian maga-zine industry. Their reactions certainly could have affectedcirculation or ad revenues and might have obscured changesto the dependent variables studied. Canadian publishersreacted following the passage of Bill C-55 by starting theNational Circulation and Promotions Project campaign. Per-haps, the awareness and Canadian magazine loyalty goals ofthis campaign were successful in staving off a more precip-itous decline for EC magazines than that documented in thecurrent studies. This campaign may also be responsible forpreventing leading U.S. magazines sold in Canada fromimproving their market position. Another limitation of thecurrent studies is the inability to test the impact of theNational Circulation and Promotions Project because itsgenesis was concomitant with the end of cultural protec-tionist public policies.

ConclusionsUnlike many studies of protectionist public policy changesin the economics literature that have focused on economicvariables (e.g., returns to scale, dollar volume of imports/exports, numbers of jobs lost/gained), the three studies wepresent here focused on variables of interest to marketers(i.e., ad rates, advertising volume, circulation/sales, andmarket share). These studies also examined an industry ofinterest to marketers (i.e., the magazine advertising indus-try). As such, this article is one step in addressing Young’s(2001) call for studies of trade liberalization and protection-

Journal of Public Policy & Marketing 87

ist public policy from a marketing viewpoint to supplementstudies from economics, law, and political science.

Three studies document the effect of eliminating protec-tionist public policies on a cultural industry that serves as animportant medium for advertisers to communicate with theirtarget markets. Advertiser-supported cultural industries arealso sources of information for consumers about trends,news, products, and services related to their interests. Elimi-nating the public policies protecting a cultural industry (i.e.,the Canadian magazine industry) has had mixed results forpublishers, advertisers, and consumers. Although U.S. pub-lishers have not experienced increased market share or cir-culation, their strong market position before Bill C-55 mayhave made significant gains unrealistic. However, the num-ber of leading U.S. magazine competitors in the Canadianmarket has increased compared with the number of leadingU.S. magazines in the United States. Unlike imported U.S.magazines, Canadian publishers have experienced declinesin the circulation/market share of and stagnant growth in thenumber of leading EC magazine brands, but there has beenan increase in the number of niche magazines. Thus, fordomestic advertisers, the end of cultural protectionism hasled to more vehicles available for better precision in reach-ing niche target markets and the freedom to reach nationaltarget markets through advertisements run in split-run edi-tions of leading U.S. magazines. Although Canadian con-sumers may slowly lose a valuable source of broaderdomestic product and availability information as the numberof leading EC magazines titles declines, Canadian con-sumers have benefited through greater numbers of informa-tion sources tailored to specialized interests and languageminorities as more niche competitors have begun publica-tion. The more homogeneous sources of national culturalidentity (i.e., leading EC magazines) are being replaced bymore fragmented voices as Canadian public policies shiftfrom cultural protectionism to subsidizing new start-upmagazines and promotional campaigns for the industry as awhole and individual publications. The long-term impact ofpublic policies that encourage fragmentation of the maga-zine industry at the expense of unified, mass-market sourcesof cultural identity on Canadian identity and Canadian unityhas yet to be determined.

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