CHICAGO • Hollinger International of Chicago announced today that it is launching a challenge of Canadian newspaper ownership rules under NAFTA. "We feel that Canada's restrictive ownership provisions amount to an unfair trade practice, and so NAFTA is the correct forum for a challenge," said Hollinger director Peter White.

Industry experts conclude that the move was prompted by Thomson Corp.'s recent announcement that it is selling all but one of its newspapers in order to concentrate on the Internet. At its peak in 1989, Thomson owned 170 newspapers in North America including 40 daily papers in Canada. The 129 daily and community newspapers for sale include the Winnipeg Free Press and Brandon Sun in Manitoba; the Lethbridge Herald and Medicine Hat News; and The Chronicle-Journal in Thunder Bay.

Although Hollinger's current control of 58 per cent of Canadian daily newspapers (including the National Post) is comfortably within the regulatory cap, a major purchase from the Thomson sell-off could take them to the limit faster than anyone anticipated.

"Canada's current 100 per cent newspaper ownership ceiling is archaic and unprofessional," said Hollinger's White. He noted that 110 per cent is the current standard in most professional sports and other entertainment industries.

"Canada is such a small news market that even with control of 100 per cent of the newspapers, I would not have sufficient economies of scale to compete in the global marketplace," said White.

White claimed that his motives were patriotic as well as economic. Hollinger is preparing the ground for other Canadian industrial sectors, such as telecommunications and financial services, that will also require greater than 100 per cent concentration in order to survive into the new millennium.