One of the last bastions of 20th-century cultural nationalism in Canada slipped into history when international publishing conglomerate Bertelsmann AG, owner of Random House and its Canadian subsidiaries, absorbed the final semi-independent remnant of iconic publisher McClelland & Stewart.
Under the direction of publisher Jack McClelland, the company broke new ground in the 1960s by proving that Canadian readers were eager to read Canadian writers – and, in the process, developed a list of authors whose names remain synonymous with the country’s literature around the world, including Margaret Atwood, Michael Ondaatje and Farley Mowat.
M&S flourished under still-extant legislation that bans foreign takeovers of Canadian publishers. And while it will continue to publish under its own imprint, its federally approved disappearance as an independent company brings to a head widespread industry concern about the survival of that law and other policies that have historically supported Canadian publishers and authors.
Already a 25-per-cent owner of the company, Random House Canada announced Tuesday that it has taken sole ownership of McClelland & Stewart by acquiring the 75-per-cent share formerly held by the University of Toronto, which acquired it as a donation from former M&S owner Avie Bennett 11 years ago.
Despite its minority stake, Random House had gradually taken over more of the Canadian company’s operations in recent years. The firm declined to reveal whether there was a cash consideration in the latest transaction, styling the takeover as a means of helping the Canadian company withstand ongoing financial challenges.
“It’s a very difficult environment right now for Canadian publishers – for all publishers, quite frankly,” Random Canada president Brad Martin said in an interview. “I think this was the best solution.”
Before announcing the transaction, Random Canada quietly approached the office of Minister of Canadian Heritage and Official Languages James Moore to seek an exemption from long-established provisions of the Investment Canada Act, which specifically outlaw such takeovers. The company reported that Mr. Moore granted the approval “on the basis of the commitments we made that demonstrated that this investment is likely to be of net benefit to Canada.”
Among those commitments, Random has promised to maintain the separate identity of the M&S imprint, to continue its poetry program and to establish an annual McClelland & Stewart Lecture at the University of Toronto. Representatives of the minister’s office were unable to confirm details of the arrangement Tuesday afternoon.
The M&S decision follows earlier ministerial decisions that allowed companies such as Amazon and Apple to bypass Canadian distribution channels in apparent contravention of the act, leaving publishers with the impression that the law has become a dead letter.
“Having this happen without a change in policy is an indicator of where the policy is going to go,” said House of Anansi publisher Sarah MacLachlan. “The big questions for independents that still exist is, will the policy still allow for us to exist?”
The takeover is “not a big surprise,” said long-time M&S author Michael Ondaatje, reflecting a common view among many insiders, who reacted more with resignation than dismay at the news. “I guess the reality is it’s pretty tough to survive as a publisher nowadays,” he added. “It’s not like the days of Jack McClelland any more.”
Calling the takeover “regrettable,” Association of Canadian Publishers director Carolyn Wood faulted the government for allowing existing protections for Canadian publishers to lapse.
“These policies have served Canadian writers and readers well and they would continue to do so if they were enforced,” she said. “They have allowed the creation of an industry that has achieved great success with relatively modest investment.”
But other observers saw little alternative to the eventual takeover. “As a Canadian publisher I’m thrilled that Random House has stepped up,” said Kim McArthur of McArthur & Company. “We are facing almost insurmountable challenges, including the competition from multinationals combined with the economy and the move to digital. The fact remains in this market you do need investment.”
The takeover of M&S is not “the end of a dream,” Ms. McArthur said. “It’s the end of an era.”
