OTTAWA, June 16 /CNW Telbec/ - Canada's largest media union is considering a challenge to the sale of Canwest's newspapers to an ad hoc committee of bondholders, mostly based in the USA.
"We believe this sale will require a review under the Investment Canada Act," said Peter Murdoch, Vice-President, Media, for Communications, Energy and Paperworkers Union of Canada.
"Parliament should be acting now to ensure these newspapers remain under Canadian control and ownership.
"And even if the government chooses to allow this sale to proceed, the level of foreign ownership could trigger provisions of the Income Tax Act that would negatively impact advertisers."
Murdoch noted that the Income Tax Act requires a publication to be 75% Canadian-owned in order for the expense of an ad to be deducted from income. Under the terms of the proposed Canwest newspaper sale the so-called Ad Hoc Committee of 9.25% Bondholders will exchange their bonds for 67.5% of the new company's equity and, according to media reports, the holders of 90% of these bonds are U.S. based.
"The CEP and the 1,700 Canwest newspaper employees we represent will do everything in our power to defend Canadian ownership of this country's newspapers," said Murdoch. "Our newspapers are a cornerstone of Canadian democracy and we cannot allow them to become foreign-owned."
On Friday, Canwest and the bondholders will seek court sanction of the planned sale.
SOURCE Communications, Energy and Paperworkers Union of Canada
For further information: For further information: Peter Murdoch, 905 516-5720 (cell)