Revenues from newspaper circulation in Canada rose 1.5 percent to $862 million in 2006, despite a rise in free daily newspapers and increasing free online news sources, which have cut into print circulation for paid dailies, according to a Statistics Canada report out Tuesday.

A large part of the increase, however is due to a change in accounting practices, in which a number of publishing houses reported gross circulation revenues instead of circulation revenues net of distribution expenses, Canwest News Service reported Tuesday.

The accounting switch “does limit our ability to accurately describe the trend for newspaper circulation revenues,” said Peter Kalhok, head of publishing and advertising industries at Statistics Canada, told Canwest News Service.

However, not counting the influence the change in accounting had, “circulation revenues for 2006 would have been flat,” he said.

Operating revenues for the Canadian newspaper industry were at $5.34 billion in 2006, a 2.6 percent increase from $5.21 billion in 2005, Canwest News Service reported.