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Bookseller Restrictions About Competition, Not Culture

Appeared in the Toronto Star on March 15, 2010 as bookstalls Rules About Competition, Not Culture

Eight years ago, the federal government faced a hot-button cultural policy issue as online retail giant, which was already selling millions of dollars of books to Canadians from its U.S.-based site, sought entry into the Canadian market.  Canadian investment regulations posed a significant barrier, however, since the law required government approval for foreign investment in the book publishing and distribution sectors.

Amazon was ultimately granted a form of non-entry entry.  The company established, but did not set up shop in Canada.  Instead, it outsourced distribution to Canada Post, enabling the government to rule that the company’s plans fell outside the book distribution restrictions. is now well-entrenched in the Canadian e-commerce landscape and seeks to create its own Canadian distribution channel.  The plan requires government approval, which recently led to predictable outcries from the Canadian Booksellers Association.  The CBA wrote to Canadian Heritage Minister James Moore – who must decide the issue – to urge him to reject Amazon’s application.  

It argued that Amazon’s entry would "detrimentally affect independent businesses and would raise serious concerns over the protection of our cultural industries. Individual Canadian booksellers have traditionally played a key role in ensuring the promotion of Canadian authors and Canadian culture. These are values that no American retailer could ever purport to understand or promote."

The CBA’s attempt to cloak the issue as a matter of Canadian culture is unsurprising, but Moore should recognize this for what it is – a transparent attempt to hamstring a tough competitor that ultimately hurts the Canadian culture sector.

Evidence of the benefits of major retailers to Canadian culture comes directly from a 2007 Turner-Riggs report commissioned by Canadian Heritage on the Canadian book retail sector.  It pointed to a Quill & Quire study that found that consumers were far more likely to find Canadian titles in the large chains than in smaller independent stores.  

Moreover, a second study of sales from eleven small Canadian literary presses found that online sellers represented the largest source of sales growth, while both chain and independent booksellers experienced relatively static sales.

Neither of these findings should come as much of a surprise.  The scarcity of space in brick and mortar bookstores has long been a key concern for Canadian authors and publishers, who fear that their titles might get squeezed off the shelves.  

Big chain retailers alleviated those concerns to some degree by offering up far more space for titles of all origins (though at a cost of greater reliance on those chains and a weaker bargaining position on commercial terms). Online sellers such as Amazon removed the scarcity concerns altogether, since the number of books the company can offer is unlimited.  

That undoubtedly means more competition, yet it also ensures that fears consumers will be unable to access Canadian titles have disappeared.  Indeed, the report concludes "the visibility of Canadian titles – and Canadians' access to them – in online book retail rose significantly with the launch of and its considerable selection of Canadian- sourced inventory."

In 2000, the Standing Committee on Canadian Heritage conducted hearings on the Canadian book market.  The resulting report – The Challenge of Change: A Consideration of the Canadian Book Industry – recommended that the government "ensure that no foreign investor is allowed to take over a Canadian firm in the book industry unless credible assurances are made that the investment will increase the availability of Canadian-authored books."

The experience of the past decade has demonstrated that greater retail competition does increase the availability of Canadian books. While the book industry may still require support to bring Canadian books to market, restrictions on who may sell or distribute those books represent a harmful barrier from a bygone era.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at or online at

One Comment

  1. Craig Riggs says:

    Those 11 literary presses
    Hi Michael,

    I always read your work with interest and certainly appreciate your attention to our market studies. But I thought I should clarify your reading of our 2007 book retail study on a couple of points.

    One of the questions we explored in our study was how the changing book retail landscape in Canada has affected the selection of books available to Canadian consumers.

    Along that line, our report notes:

    “There is a strong association between Canadian-owned publishing houses and the publication of Canadian-authored titles. Many of these titles have a local or regional interest element that is practically built-in because they are published, authored, or set within the region. A strong community of locally owned booksellers, who make their buying decisions in the local area, are on balance likely to be adaptable and open to such titles. For all these reasons, the health of the independent bookselling sector remains an area of enduring interest for Canadian book publishers.”

    This observation appears to be borne out by some of the data we were able to collect during the study. You say in your article that, “…a second study of sales from 11 small Canadian literary presses found that online sellers represented the largest source of sales growth, while both chain and independent booksellers experienced relatively static sales.”

    However, the point that we make in the report is that this sample of small presses has experienced a collective decline in sales. Their sales to indie bookstores held relatively steady, online sales–while small in absolute dollar terms–certainly had the largest percentage growth, but sales to chain bookstores fell dramatically.

    The complete report on book retail is freely available online: