"I can confirm though that a letter was written to the Canadian race promoter following a meeting I had with him when I informed him the Canadian round of the FIA Formula One World Championship would not be included in the 2004 calendar," Ecclestone said in a statement posted on the F1 website.
"The reason for this is that the Canadian government has brought into effect a total prohibition on tobacco-related sponsorship," it continued. "There is a provision in our contract with the race promoter that should this become effective, we have the right not to include their event in the calendar for the relevant year."
Canada had held a Formula One race since 1967 and Montreal has hosted the race since 1978 on an circuit named after the late Gilles Villeneuve, father of 1997 world champion and hometown favourite Jacques Villeneuve.
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The event, one of the city's biggest tourist attractions with an estimated windfall of more than $36 million, packs over 100.000 fans around the circuit and is one of the few races to draw sell-out crowds.
The Belgian Grand Prix at Spa, widely viewed as the world's ultimate racing venue for its countryside surroundings and technical difficulty, was cancelled this season because of similar legislation.
A leading Belgian politician said this week the race would be on again next year after a ban on tobacco advertising was postponed.
"Our problem is quite simple. The Formula One teams with tobacco-related sponsorship lose part of their revenue when a certain percentage of the events ban tobacco sponsorship. This was the reason the Belgium Grand Prix was not included in the 2003 calendar," Ecclestone said.
The A1 Ring in Austria also bade farewell to Formula One this year as Ecclestone last month terminated his contract for next season due to the country's backing of EU legislation against tobacco advertising, which takes effect in 2005.
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