This week’s one-page announcement by the federal government allowing the world’s largest online retailer, U.S.-based Amazon.com, to wholly own and operate a distribution centre in Canada represents the sort of hair-splitting, ultra-nuanced issue beloved by culture vultures, policy wonks and fans of medieval Scholasticism.
But for the rest of us? Perhaps not so much.
Still, the decision, announced Monday, is important, momentous even. It may be the case that the Conservatives were bowing to the reality that Amazon was already in Canada as an e-tailer (albeit working through a subsidiary of Canada Post, a Crown agency, rather than a retailer with hundreds of physical locations). But some are arguing the decision is nothing less than a reversal of the cultural protection policy that’s been in place since the Trudeau era. For Heather Reisman, CEO of Indigo Books & Music, the situation is pretty clear. This week’s decision “signals . . . a policy change,” she said in an e-mail. “[It confirms] that a company no longer need to be Canadian-owned to sell books in Canada.”
A change in culture policy?
She’s not so much complaining or wrapping herself in the flag as insisting that the government own up to what it’s done and get real about the consequences. Perhaps Reisman herself, whose company is Amazon’s main competitor, will be among the first to test this new world, by seeking a buyer or accepting an offer from a foreign firm for all or parts of Indigo. Indigo, ironically, was the end result of the Chrétien Liberal government nixing Reisman’s plan to partner with Borders USA back in 1996.
Tim Warmington, communications adviser for Canadian Heritage, insisted in an e-mail this week that the Amazon decision “is not a change in policy” because “the overarching objective of the book policy, and of all policies in the cultural industries, is to ensure Canadians have access to Canadian cultural products.” Amazon, he noted, “has made commitments that support this objective,” among them “an investment of more than $20-million, including $1.5-million in culture events and awards in Canada” and the creation of a “dedicated staff” to help Canadian publishers and “other suppliers of cultural products.”
The government also says it followed the “net-benefit-to-Canada” concept introduced more than 35 years ago to handle foreign investment and ownership. Currently six net benefit “factors” are supposedly considered in any review. But the wording of these factors is vague and broad . Moreover, what is unclear is whether the book policy stating “foreign investment in new business enterprises is limited to Canadian-controlled joint ventures” will be affected.
Earth’s biggest selection coming to Canada?
From a consumer point of view, the decision represents “no big change,” at least for the time being, acknowledges Reisman. After all, for the last six years, Seattle-based Amazon.com has been operating in Canada as Amazon.ca, fulfilling orders from a warehouse in Mississauga west of Toronto owned by SCI Group, an entity 98.34 per cent owned by Canada Post.
Just how that deal is structured or how the operation works, neither SCI nor Amazon is willing to explain. (It’s a “fascinating story,” an SCI representative admitted the other day, but “there are confidentiality issues.”)
Amazon declined this week to say if it wanted to buy this facility from SCI or if it preferred to start from scratch. About all that Canadian Heritage Minister James Moore would allow, during Question Period in the House of Commons, was: “We will create new Canadian jobs in Mississauga.” The same went for Paul Misener, Amazon’s vice-president for global public policy: “We believe that a local fulfilment center
