There were not many of his old colleagues left in business when publisher Harold Fenn took his case to Ottawa last year, urging the government to support the embattled sector by upholding its long-standing ban on foreign investment in Canadian publishing – something Heritage Minister James Moore is now openly considering, with a new policy due as early as next month.
Permitting unrestricted foreign investment in book publishing, wholesaling and retailing would have potentially devastating consequences for an “already fragile” industry, declared Mr. Fenn, a widely admired pioneer of the independent industry that flourished after foreign takeovers were banned in the 1970s.
“We believe that Canadian content would diminish within the industry, fewer Canadian authors would be published and Canadians would read fewer Canadian books,” the company said in its submission to the minister.
That plea came too late to save H.B. Fenn & Co., which mothballed its premier imprint, Key Porter Books, soon after. A few months after that, the company entered bankruptcy, its founding family walking away with nothing from what was once a multi-million-dollar business with more than 200 employees.
But the lessons to be drawn from the Fenn drama are not as clear as they might have been in the last century, when independent Canadian publishers were seen as essential stewards of an emerging literary identity and the federal government banned foreign takeovers – requiring at the same time that already established subsidiaries, including such firms as Random House of Canada and Penguin Canada, undertake to deliver formal “benefits” to Canada as a condition of their continued existence. Coupled with direct subsidies to Canadian publishers, those restrictions helped produce a spectacular literary flowering, with dozens of new publishers emerging to compete with the incumbents and more Canadian writers cashing royalty cheques than an earlier generation could have imagined.
Forty years on, however, the independents continue to struggle commercially and disappear regularly. Just as unexpectedly, an extraordinary share of the trade they pioneered – Canadian literature as it is known to us and the world – is now controlled by the handful of multinational companies they struggle to compete against. Although the branch plants represent only 3.75 per cent of firms active in Canada, they generate 44 per cent of industry revenues. Independent Canadianpublishers pride themselves on discovering new talent and marketing risky work, but they can rarely afford to retain the talent they develop – let alone to introduce such writers to international markets.
Even the career of Margaret Atwood – the ultimate nationalist writer, still published by McClelland & Stewart, the ultimate nationalist publisher – proves the trend, with iconic M&S now reduced to a de facto imprint of Random House of Canada, a subsidiary of Bertelsmann AG., which owns 25 per cent of the company but manages it alone – including the profitable business of marketing Ms. Atwood.
With Canadian publishers weakening even as Canadian literature flowers, many observers – along with Canadian publishers of every stripe – are calling for major reforms of the old protectionist policies. Rather than strengthening Canadian publishers, they argue, the foreign ownership ban stifles them, forestalling the capital investment and international partnerships modern publishers need to grow. In that analysis, the best medicine for an ailing sector is a bracing dose of free trade.
The argument against foreign domination of Canadian publishing has clearly weakened in light of contemporary reality, with so many of the recognizable names in Canadian literature firmly and contentedly ensconced in branch-plant stables.
No serious policy maker today argues against the need to support a national literature – or the effectiveness of the $20-million worth of annual direct subsidies to Canadian-owned publishers. Butprotection carries its own cost, one that has opened new divisions in the nationalist camp. In the same forum where publishers such as Fenn and fiercely independent House of Anansi Press argued passionately for cultural protection, Lionel Koffler of equally independent Firefly Books registered a thoughtful plea for foreign investment.
