Canadian papers square off. Montreal gets a second English newspaper

English Montreal is about to become a two-newspaper town for the first time since 1979. The Montreal Daily News expects to put out its first edition on March 1 or March 7, depending on when computer and telephone problems sort themselves out. The paper is going into competition against the Montreal Gazette, the only English-language daily published in the French-speaking province of Quebec.

It is expected to be some newspaper fight. ``The Gazette is a big, fat paper where some reporters don't file a story from one week to the next,'' says Daily News editor Jim Duff, who was a police reporter for the Gazette 20 years ago. ``We're not going to run that kind of newsroom.''

The Montreal Gazette plans to fight back by getting fatter. It will launch a Sunday newspaper. The paper is owned by Southam, the second-largest newspaper chain in Canada. The Gazette has had the English-language market to itself since the Montreal Star folded in 1979.

``I think Southam is going to get its hat handed to them,'' says Peter Legault, a communications analyst with the brokerage house Thomson Kernaghan. The Gazette, he says, ``could do with some stiff competition.''

There is already lots of competition, but not in the English-language market. Montreal has three French-language newspapers serving the 1.9 million French-speaking people in the city. There are more than half a million people here who are English speaking and as many as a quarter of a million ``ethnic'' groups, made up of immigrants and first-generation Canadians. The Italian community numbers 220,000. ``And 76 percent of them speak English,'' says Mr. Duff.

The man behind Montreal's new English-language paper is French Canada's most successful newspaper owner, Pierre Peladeau, who publishes the tabloid Journal de Montr'eal, the largest-circulation French-language daily newspaper outside France.

This paper is the base for a chain of newspapers owned by Mr. Peladeau, who also owns printing plants in Canada and the United States. One of his partners and financial backers is Robert Maxwell, the British newspaper tycoon. Mr. Maxwell is taking a minority stake in the new paper and will spend $25 million on it over the next five years.

The Montreal Daily News will be a tabloid of 48 to 64 pages. It will use the latest computer technology, bypassing typesetters, and will use lots of color photography.

``It's exciting being at the birth of a new paper,'' says Nick au du Maur, a columnist hired away from the Gazette. ``A lot of the people here, I started working with in the '60s at the Gazette.''

Toronto is in a newspaper war of its own. The Financial Post went daily this month to compete with the Toronto Globe and Mail's Report on Business. The new daily business tabloid is published by the Toronto Sun, a successful publisher of tabloids in Toronto, Calgary and Edmonton, Alberta; by the Financial Times of London; and by Conrad Black, publisher of the Daily Telegraph in London.

The Globe is owned by Thomson newspapers, the largest newspaper chain in Canada.

``It's too early to tell how they're doing,'' says analyst Peter Legault. ``But I don't think the Post is competing with the Globe. Seventy percent of the Post's readers are going to be people who are new to a business daily. The Post is easier to read than the Globe.''

Canada's two largest cities, Toronto and Montreal, have the healthiest newspaper climates in North America - nine daily newspapers between the two. This is in a day when the two-newspaper town seemed a thing of the past.