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Smaller publishers who are seeding the literary field sometimes argue that international competitors with deep pockets then come along and cherry-pick the more profitable authors. (Fred Lum/The Globe and Mail)
Smaller publishers who are seeding the literary field sometimes argue that international competitors with deep pockets then come along and cherry-pick the more profitable authors. (Fred Lum/The Globe and Mail)

Opinion

Does national ownership matter in the publishing industry? Add to ...

Here is something that Canada’s upstanding and right-thinking cultural and political elites don’t do: play video games. My evidence? Nobody has ever fretted about national ownership of the spunky game industry located in Montreal, Toronto and Vancouver. Canadian game companies tend to be small independents and can find it difficult to access capital if they do want to expand; sometimes, they just sell out to bigger foreign players, and there’s seldom any public hand-wringing.

But lawmakers and opinion-makers do take planes and read books, so you can persuade them to prop up Bombardier and maintain laws stipulating Canadian publishers and bookstores must be controlled by Canadians. In the case of cultural industries, the ostensible reason is that Canadian ownership nurtures Canadian culture, but the evidence is mixed. Foreign music labels cheerfully produce Canadian recordings while Canadian broadcasters are browbeaten into meeting their Canadian content quotas.

I’ve been thinking about national ownership since reading Elaine Dewar’s The Handover: How Bigwigs and Bureaucrats Transferred Canada’s Best Publisher and the Best Part of Our Literary Heritage to a Foreign Multinational. In a deep dive into the transfer of Canadian publisher McClelland & Stewart to Random House of Canada (RHC) via the University of Toronto, Dewar charges that the late Avie Bennett, who had rescued M&S in the 1980s, recouped his investment by circumventing national ownership rules.

In 2001, Bennett donated 75 per cent of the company to U of T, thus maintaining the all-important Canadian ownership, and sold the remaining 25 per cent to RHC for $5.3-million. RHC, a multinational, was supposed to only be providing administrative support, but Dewar has uncovered internal memos that show university administrators believed they never effectively controlled the publisher and saw no monetary value in the gift for which Bennett received a tax credit of $15.9-million. In 2011, RHC bought the 75 per cent it did not already own for a dollar and M&S was now acknowledged as just another imprint at a multinational publisher.

Dewar’s book makes the Canadian establishment look shockingly cozy – her best line: “For my friends, anything: for my enemies, the Investment Canada Act” – but it doesn’t address the larger issue of whether national ownership matters.

Rules that limit who can buy or invest in a Canadian company depress the value of cultural industries – that was precisely Bennett’s problem. The trade-off is supposed to be that Canadian-controlled companies are more likely to produce Canadian content, but that’s not always the case. Noting the foot-dragging of certain regulated Canadian broadcasters and the amount of Canadian music produced by international record labels that aren’t regulated, I’ve concluded that enthusiasm for the local culture depends more on a profitable market than on national ownership.

Like many who write on this topic, I have my own conflict of interest: I have published three novels with Doubleday Canada, an imprint of what is now Penguin Random House Canada (PRHC), and have worked there with editors, designers, publicists and salespeople, all of them Canadians dedicated to making the titles succeed. If a malevolent Bertelsmann (the ultimate owner of all those merged houses) was hovering over their shoulders, I never spotted it.

From my perspective, the bigger problem in publishing is not the nationality of ownership but its concentration: Dewar is rightly concerned about the way RHC was allowed to acquire a major competitor, especially since the company has made it clear that its many imprints no longer compete against one another for authors. In this instance, foreign ownership did further concentrate the industry, but national ownership rules can be just as bad: Look at the oligopolies in both Canadian book retailing (Chapters/Indigo) and in the cable and satellite industry.

Smaller publishers who are seeding the literary field sometimes argue that international competitors with deep pockets then come along and cherry-pick the more profitable authors. Still, the Canadian independents have access to public grants that the multinationals don’t. (Perhaps Dewar’s most serious accusation is that M&S received at least $7-million in publishing grants during a decade when it was not effectively controlled by Canadians.)

Interestingly, governments make little fuss about nationality when they hand out money to the interactive industries: various federal and provincial tax credits – and even some grants – are available to any company as long as the jobs go to Canadian workers and Canadian consumers have access to the content thus created. There it’s all about employment; on the publishing side, it’s all about “telling Canadian stories to Canadians.” One thing Dewar’s book implies is that the government bent its own rules because it couldn’t risk Bennett, or later RHC, closing down the venerable publisher of Alice Munro, Margaret Atwood and Michael Ondaatje.

Ottawa was snared in a Catch-22 of its own devising, a system established by protectionist Liberals in the 1970s and refined by free-trade Tories in the ’80s. The government has been promising a review of these unevenly applied rules since Stephen Harper was in power; maybe the Liberals will finally deliver when Minister of Canadian Heritage Mélanie Joly unveils her cultural policy review expected in September. In the meantime, Canadians need to treasure the independent publishers we do have left, ones such as Biblioasis, the Windsor, Ont., company that had the courage to publish Dewar’s unsettling book.

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