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By rights, Clive Tanner and Cliff McNeil-Smith should be bitter business rivals. Instead, sitting in their respective bookstores just a stone's throw apart, they are plotting together to lure more competition to this small town.

Mr. Tanner, 73, has been in the book trade for 37 years. Mr. McNeil-Smith walked into Tanner's Books almost 20 years ago asking for a job. "He said, 'Go away,' " Mr. McNeil-Smith recalled yesterday, without a trace of rancour.

A decade later, the persistent Mr. McNeil-Smith bought Tanner's Books. Between the two of them, they now own seven of Sidney's nine bookshops.

With a population of just 12,000 in this seaside town, the ratio of bookstores to residents makes it the bookstore capital of Canada.

"Cliff, what a find he was," Mr. Tanner now says of his fellow bookseller. "I hate to say it, but he's been more successful than we were."

It's all part of Mr. Tanner's grand scheme to recreate a local version of Hay-on-Wye in Wales, the world's first destination book town. There are now about three dozen self-proclaimed book towns around the globe, but Sidney is Canada's first. (St. Martins in New Brunswick launched one last year.)

For the past 12 years, Mr. Tanner has been encouraging booksellers to set up in Sidney, offering to scout locations, even helping with startup inventory. He expects at least one new bookstore to open this year, but his goal is to have 25 bookshops lining the seaside community's short commercial strip.

Confronted with a new Ipsos-Reid survey showing that 31 per cent of Canadians didn't read a single book for pleasure last year, Mr. Tanner could only shake his head.

"I guess there are people who don't read," he said, doubtfully. "But who would admit they haven't read a book?"

Mr. Tanner doesn't have any idea of how to reach out to those adults who haven't formed the habit, either.

"You can't get to a person who doesn't read. Frankly, I don't know what they do with their time."

But children, that's another story. The Harry Potter series by J.K. Rowling has been fabulous for the future of books, Mr. Tanner noted. During the launch of the final Potter book last summer, he marvelled to see children "clinging on to their book like a prize - this is super stuff."

Tricia Kearns at the Children's Bookstore - another of Sidney's niche bookshops - is in the business of hooking the next generation of readers.

"You have to read, read, read to them," she said. "Three stories a day - that would be the end of illiteracy."

A children's librarian by training, Ms. Kearns also coaches her grownup customers to let kids indulge their interests.

"Sometimes you have to talk parents into letting kids read what they want," she confides. Her voice dropping so as not to offend any potential shoppers, she warns against the overachieving parents who try to push their youngsters to read beyond their emotional level. "The key is finding a book that turns the kids on."

Regan Gellatly, 7, has her nose buried in a book in one corner of the shop. She can barely tear herself away to talk about books. Her favourite? "Captain Underpants. He's funny and he fights crime wearing underpants on his head," she explains.

Her father is patiently waiting for Regan to make a selection. Mark Gellatly doesn't object to her choice, noting that his daughter consistently reads ahead of her grade level. Why mess with what works?

While residents of Sidney boast one of the highest readership rates in the country, the town also attracts visitors on a year-round basis. Just 25 kilometres north of Victoria, day trippers can easily spend the day wandering between the bookstores, boutiques and coffee shops that line Beacon Ave.

Mr. McNeil-Smith sees more competition as part of a winning formula. "One thing you learn in the book business, your customers may be loyal but they'll also shop everywhere else, because they love books."