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(Anthony Jenkins/The Globe and Mail)
(Anthony Jenkins/The Globe and Mail)

Roy MacSkimming

Canada would be renting, not owning, its literary house Add to ...

Copious amounts of ink are being spilled over a seemingly innocuous question: Should the federal government permit Amazon, the giant Seattle-based Internet bookseller, to open a warehouse and distribution centre in Canada?

It seems such a trifle. Amazon already operates in Canada with a dot.ca address, providing Canadian customers with efficient service and big discounts on books and other goods. It fills online orders through a Canada Post subsidiary based in Toronto. But now Amazon wants to open its own fulfilment facility in this country, so it can reduce its costs and increase its profits.

What's the trouble with that? A lot, as it turns out. At stake isn't just Amazon's understandable desire to change its business model, but drastic consequences for a long-standing policy that has fostered a rich literary culture in Canada.

Since the early 1970s, the federal government has been committed to strengthening Canadian control of the book industry. Like other regulated cultural industries such as broadcasting, books are central to the nation's identity. As Hugh Faulkner, a Trudeau-era cabinet minister, put it, "Canadian books and magazines are too important to the cultural and intellectual life of this country to come completely under foreign control, however sympathetic and benign."

The federal government was then responding to a rash of American takeovers of Canadian publishing companies. In order to keep at least some of the industry in Canadian hands, the feds created regulations leaving existing foreign-controlled subsidiaries in place but requiring new publishing or bookselling ventures to be majority controlled by Canadians. The government also made financing available to Canadian-controlled firms publishing Canadian authors.

These measures have had the support of successive governments, Liberal and Conservative. And their combined effect has been prodigiously successful. Canadian authors from Margaret Atwood and Alice Munro to Anne Michaels and Yann Martel are celebrated around the world. The domestic publishing industry thrives creatively (if not financially), producing an impressive diversity of titles in all genres and operating from every province. The foreign-owned multinationals grandfathered under the foreign-investment policy, such as Random House, HarperCollins and Pearson, employ excellent Canadian staff and publish outstanding Canadian authors.

That's the story in publishing. In bookselling, another field where it's tough to make money as an independent, the landscape is dominated by Indigo Books & Music, which owns Chapters. Indigo is, in a sense, a creature of federal book policy. In 1996, Heather Reisman, the company's CEO, tried to partner with the U.S.-based chain Borders. But the venture was disallowed since it was de facto foreign-controlled, so Ms. Reisman worked within the policy's parameters. She started Indigo, acquired the rival Chapters chain five years later and became Canada's most successful bookseller.

Which brings us back to Amazon. It's already the major competition for Ms. Reisman and every other Canadian bookseller. Eight years ago, the government ruled that Amazon.ca didn't contravene the foreign-investment policy because it was operating from cyberspace, without a physical presence in Canada. But if the government were now to allow Amazon to incorporate in Canada and operate from its own physical plant, it would create a precedent that would shatter the policy.

Ms. Reisman would then be entirely within her rights to say, as she did recently in this newspaper: "Supposing I should decide three years from now that … I'd like to partner up with a foreign company? I do not want to be disadvantaged." Any bookseller or publisher would have the right to sell to non-Canadians, putting the commanding heights of the book industry in foreign hands. High-powered multinationals would move into both publishing and bookselling, driving companies specializing in Canadian authors further to the margins, or out of business altogether.

Decades of public investment in the industry would be lost. And for what?

Abandoning the book industry to the free play of market forces would result in Wal-Martization, the law of lowest cost, lowest common denominator. This would be portrayed as a victory for the consumer but would, in fact, be the very opposite. Readers would be able to buy all the imported bestsellers they wanted, very cheaply, but would be deprived of the current rich choice of Canadian and international titles.

And if the domestic publishing and bookselling sectors were decimated, there would be little incentive for foreign multinationals to assume their role by publishing and selling a wide range of Canadian authors. It simply wouldn't fit their business model.

The losers would be our writers and our readers - our country. Canadians would go from being owners of their own literary house to mere renters. And why would the government allow that? Everyone knows that, once the family home and furniture and silverware are sold, you can't get 'em back.

Roy MacSkimming is author of The Perilous Trade: Publishing Canada's Writers.

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