SPECIAL REPORT

Publish and perish

Despite a healthy literary culture, Canada’s book industry struggles

BRIAN BERGMAN October 17 1994
SPECIAL REPORT

Publish and perish

Despite a healthy literary culture, Canada’s book industry struggles

BRIAN BERGMAN October 17 1994

Publish and perish

Despite a healthy literary culture, Canada’s book industry struggles

BRIAN BERGMAN

Like many a literature buff before him, Julian Ross decided he would like to get into the publishing business. So in the mid-1980s, Ross, who lives in the small West Kootenay community of Winlaw, 700 km east of Vancouver, founded Polestar Press and began cranking out collections of poetry and short fiction. But it was tough convincing booksellers to stock his high-minded products. “I realized that we’d have to diversify or we’d be toast,” he recalls. He then fell back on his other lifelong passion, hockey.

Since then, Polestar has produced about 20 hockey books, which sell, on average, five to 10 times more than its literary offerings. This fall, Polestar is bringing out eight new books, including a collection of short stories set in a fictional B.C. Doukhobor community and a new volume of poetry by Kootenay resident Tom Wayman. But, as usual, the small publishing house will be depending on Rocking the Pond: the Mighty Ducks of Anaheim— an account of the California-based, Disneyowned NHL franchise—and and a few other popular titles to keep itself afloat.

IStoddart: bottom lines continue to bleed red

Welcome to the wonderful world of Canadian book publishing. At a time when many people are showing a keen interest in the work of their own authors—and when several of those writers, including Alice Munro, are enjoying unprecedented international acclaim—the bottom line for many domestic publishers still bleeds red. According to the latest available Statistics Canada figures, 37 per cent of the 300 Canadian-owned publishing firms lost money in 1992-93, up from 27 per cent four years earlier. And even the most profitable ones remain dependent on government subsidies. As a result, Canadian publishers continue to swim against the prevailing free-market tide by lobbying Ottawa for greater protection for their market, for increased Canadian ownership of the industry and for new sources of financial support. Without such initiatives, they contend, the future of Canadian publishing is extremely bleak. ‘We have generated internationally recognized writers,” says Garry Neil, executive director of the 140-member Association of Canadian Publishers. “What’s really at stake is our ability to generate the next generation of those authors.”

In any country and at any time, book publishing is a risky business. But in Canada in the 1990s, it is a business that—according to its practitioners—almost defies logic. It begins with the nature of the country itself: with a relatively small reading audience spread out from St. John’s to Victoria, from Toronto to Tuktoyaktuk, the simple imperative of distributing books to retailers is both costly and time-consuming. As well, the country’s proximity to the much more populous United States means that Canadian consumers are presented with a dizzying array of American books from which to choose. And because of the economies of scale enjoyed by U.S. publishers (it costs much less, on a per-unit basis, to print 50,000 rather than 5,000 copies of a book), those American books can usually be sold at a lower price than similar Canadian fare.

In fact, fully 80 per cent of books sold in Canada are imports, most of them from the United States. The sheer volume threatens to overwhelm the work of even such popular writers as British Columbia’s William Deverell, a lawyer and author of several briskselling legal thrillers, including this fall’s Kill All the Lawyers. “My books are often buried under all the John Grisham ones coming in,” says Deverell, who is also chairman of the Writers’ Union of Canada. “As a result, Canadians learn a hell of a lot about the American legal system, but have to plow through the bookshelves to find something set in Canada.”

The open border between Canada and the United States plays havoc in other ways. Many Canadian publishers depend on their income from “agency sales”—the distribution of foreign books within Canada. But because of weak Canadian copyright laws, major book purchasers, including schools and libraries, can buy the same books directly from American wholesalers. The practice may mean lower prices for consumers, but publishers claim that it costs them millions of dollars annually. They are urging Ottawa to change the Copyright Act to ensure that they will have exclusive distribution rights for foreign books within Canada. Federal Heritage Minister Michel Dupuy last week told Maclean’s that he hopes to have a revised Copyright Act before Parliament sometime next year. But he declined to give specifics on what may be in that legislation.

Even if publishers get what they want, they will still have to grapple with some inescapable—at times, bizarre—realities of their business. As Anna Porter, president and publisher of Toronto-based Key Porter Books puts it, “Authors like to be paid in advance, printers want to be paid when the books are delivered, yet bookstores pay relatively slowly—90 days plus—and return a substantial amount of the product.” In fact, booksellers can return any books they don’t sell—and a return rate of 30 per cent is common. The practice, which inundates publishers with unwanted inventory, has inspired a favorite industry aphorism: “Gone today, here tomorrow.”

Publishers and authors alike must also deal with the picayune nature of the Canadian writing game. Poetry, even by acclaimed authors, will rarely sell more than 700 copies and almost never makes a profit. A hard-cover fiction or nonfiction title that sells 5,000 copies has a good chance of making it on to one of the national best-seller lists. But that same book, priced at $25, will net the author only about $12,000 in royalties—scant compensation for a year or more of hard work.

And even those few books that, by Canadian standards, become runaway best-sellers rarely sell enough copies to bail out a company’s losses on the rest of its list. Last year, McClelland & Stewart, Canada’s largest domestically owned, general-interest publishing house, brought out an undisputed blockbuster—Pierre Trudeau’s Memoirs, with 150,000 sales in hard-cover, and counting. Yet according to company sources, overall M&S still lost money—losses that were in large part underwritten by its owner, Avie Bennett. A former real estate mogul who bought the financially strapped enterprise in 1985, Bennett declines to discuss M&S’s balance sheets. (“It’s a private company.”) But he readily acknowledges that his previous dealings did little to prepare him for the vagaries of the book trade. “Every book is a gamble,” he says. “That makes it an almost impossible undertaking at a business level.”

Several recent developments have only added to the uncertainty facing the industry. The federal goods and services tax, introduced in 1991, increased the purchase price of books by seven per cent, and sales suffered. Publishers are now insisting that the federal Liberals honor their promise while in opposition to eliminate the tax—so far to no avail. Meanwhile, the proposed merger of Canada’s two largest book retailers, Coles and SmithBooks, announced last month, is giving many publishers and writers the jitters. Depending on who is counting and what sales are included, the new retail giant would control anywhere from one-sixth to one-third of the Canadian book-selling trade. Some observers have cautiously welcomed the proposed merger, saying that it could benefit both small publishers and consumers. Others are skeptical. “What we will have,” says Patsy Aldana, of Toronto publisher Groundwood Books, “is one incredibly powerful customer who can decide by a single buying decision whether a book will work or not.” Canadian-owned publishers are also keeping a wary eye on Ottawa’s deficit-reduction efforts, fearing that their long-established subsidies may get slashed. Industry grants, which reward firms for their net sales of Canadian titles, totalled $18.3 million in 1993-1994. Another $7 million came through the Canada Council to offset deficits incurred by “culturally significant” but commercially unviable books such as first novels and poetry.

Most publishers say that government subsidies allow them to take risks on books that would otherwise never see the light of day. It also means that they can bring along obscure authors who could develop into the next Alice Munro or Pierre Berton. “If grants were eliminated, I could probably still be profitable as a Canadian publisher,” says Jack Stoddart, chairman of Toronto’s Stoddart Publishing Co. Ltd., which publishes about 150 titles a year. “But I would have to lose half of my list overnight”

Stoddart is one of many nationalist-minded publishers who maintain that the survival of the industry depends, in large part, on increased Canadian ownership. The Association of Canadian Publishers is pressing Ottawa for a policy to ensure that any company wishing to purchase a publishing firm currently operating in Canada would have to be at least 75 per cent Canadian-owned. That is similar, in principle, to the so-called Baie Comeau policy that the former Conservative government adopted in 1985—although the threshold for Canadian ownership was then set at 51 per cent. However, various aspects of the Baie Comeau policy have been circumvented—most recently by the sale of two textbook publishers, Ginn Publishing Canada and Maxwell Macmillan Canada, to the U.S. giant Paramount Communications. Nationalists were outraged last February when the new Liberal government rubber-stamped the sale to Paramount, which had been negotiated under the Tories.

The push for tougher Canadian ownership requirements springs from at least two sources. Many Canadian publishers would dearly love to tap into such lucrative fields as educational publishing and book clubs, most of which are now controlled by foreigners. And they clearly resent the fact that the two dozen foreign-owned publishers operating in Canada, bankrolled by their much larger parent companies, are often able to lure away star authors from Canadian houses.

David Kent, president and publisher of Random House of Canada, the Canadian offshoot of New York-based Random House, finds those arguments unconvincing. He says that companies such as Random Canada must compete in the same market as Canadian publishers, but without the benefit of government grants. And, he adds, they are accountable for any money they get from their parent company. Kent proudly points to the author portraits covering one wall of Random Canada’s downtown Toronto offices, which includes such prominent Canadians as Mordecai Richler and William Deverell. They came to Random from other publishers, he says, not just for the money, but because his company does a better job of promoting their work. “Ownership is not the issue,” says Kent, who has worked for Canadian-owned and British publishers in the past. “It’s what these companies actually do and contribute that they should be judged upon.”

Ironically, though, Writers’ Union chairman Deverell sounds almost sheepish when asked why Random Canada, rather than his previous publisher, McClelland & Stewart, is bringing out his latest novel. “Money,” is the one-word reply, before he elaborates—

‘You know, it feels a little bit like selling out. But on the other hand, writers have to make a living.” Deverell says that if Canadian publishers were more profitable they could afford to pay American-style advances. But that won’t happen, he adds, unless Ottawa provides financial support and legislative protection for the industry. And without a viable publishing industry, says Deverell, “Canadian culture is down the tubes even more than it is already.”

Writers and publishers may have to wait some time before learning what Ottawa has in store for them. Dupuy’s ministry has embarked on a broad review of policy towards the arts. But until it is complete, Dupuy is reluctant to affirm anything beyond the government’s desire to “protect and develop book publishing.” While few publishers question the minister’s good intentions, some are skeptical that he can convince his cabinet colleagues to take any dramatic steps. “We’ve got a Liberal government that doesn’t believe in the country any more,” asserts Stoddart. “Instead they believe in eontinentalism and globalization. Maybe that’s OK in the manufacture of cars. But it doesn’t make sense for cultural industries.” For Canada’s anxious publishers and writers, the proof, as always, will be in the fine print.