Book Publishing in English Canada in the Context of Free Trade

Rowland Lorimer (Canadian Centre for Studies in Publishing: Simon Fraser University)

Abstract: Two anomalous clauses in the Free Trade Agreement are meant to stimulate development of book publishing in Canada. They exist against a history of an absence, followed by two decades of a presence of government supported, culturally oriented publishing. Because these clauses run against the basic principles of the FTA they are already being undermined. Their collapse will return the vast majority of firms in the Canadian-owned sector to economic marginality cutting off any slight chance there was of a general movement into such profitable and culturally significant market sectors such as educational publishing.

Résumé: L'Accord sur le Libre échange comporte deux clauses singulières dont le but est de stimuler l'édition des livres au Canada. Ces clauses émergent dans le cadre d'une période de deux décennies de soutien gouvernemental en faveur de la publication des livres à contenu culturel, période qui rompait avec une longue tradition d'absence d'intervention gouvernementale. Cependant, ces deux dispositions étant contraires aux principes fondamentaux qui governent l'Accord, elles se retrouvent déja amoindries. Leur abandon se traduira par un retour de la majeure partie des compagnies canadiennes à la marginalité économique, supprimant ainsi toutes possibilités d'un mouvement général vers des secteurs du marché qui sont à la fois profitables et culturellement importante comme l'édition d'ouvrages à caractère éducatif.


The Free Trade Agreement that Canada has signed with the U.S. has created a new economic, political and cultural reality in Canada. In the U.S. (with the exception of certain industries) the reaction has been negligible. Their economy has merely expanded.

From a cultural and communications perspective, the most noticeable elements in the agreement are two anomalies to be found in Articles 1607 and 2005. They are anomalies because, they are exclusions to the basic principle of the Agreement. For these articles or the principles they embody to survive over the long term requires that the activities they encompass continue to be seen and accepted not as economic activities but as cultural activities requiring special treatment. The Americans do not accept that premise. Therefore the adherence to those articles rests on the tenuous thread of the will of successive Canadian Ministers of Communication and their cabinet colleagues to respect and defend the articles.

The purpose of this paper is to explain the background against which Articles 1607 and 2005 were developed and why Canada's support for these articles, as they apply to book publishing, is likely to collapse.

The relevant Articles are as follows. Article 1607 paragraph 4 states:

4. In the event that Canada requires the divestiture of a business enterprise located in Canada in a cultural industry pursuant to its review of an indirect acquisition of such business enterprise by an investor of the United States of America, Canada shall offer to purchase the business enterprise from the investor of the United States of America at fair open market value, as determined by an independent, impartial assessment.

Article 2005 states:

1. Cultural industries are exempt from the provisions of this Agreement, except as specifically provided for in Article 401 (Tariff Elimination), paragraph 4 of Article 1607 (divestiture of an indirect acquisition) and Articles 2006 and 2007 of this Chapter.
2. Notwithstanding any other provision of this Agreement, a Party may take measures of equivalent commercial effect in response to actions that would be inconsistent with this Agreement but for paragraph 1.

Article 401 calls for elimination of tariffs. Currently a book tariff exists but it is set at zero. Article 2006 calls for remuneration for retransmission of a copyright holder's program. Article 2007 calls for the repeal of two sections of the Income Tax Act that define a Canadian issue of a newspaper or periodical for purposes of deduction from income of expenses of a taxpayer for advertising space, as one that is printed or typeset in Canada.

Canadian Book Publishing Pre-1965

Between the end of World War II and 1965 American branch plant publishers, that is to say, wholly-owned subsidiaries of American-owned corporations, established themselves as the dominant business form in the English-language book publishing market in Canada.1 They took over the dominant market share from Canadian-owned agency publishers who continued to have the second highest market share.2

A branch plant has three functions. The first is to import and sell the product of its parent in the market in which it is located. It is given the exclusive right to carry out this function. The second function is to respond to business opportunities with derivative products. The third function is to respond with independently developed products to business opportunities of little or no interest to its parent in the market in which the branch plant is located.

With regard to the first function, importing and selling the products of its parent, the branch plant is a "tied agent." It is the sole agent of a foreign company tied by ownership to that company. In competition with other potential agents it has a favoured, long-term position through common ownership, rather than a contract between two arm's length companies, in a bid to represent the parent. Following the Second World War, Canadian agents had considerable success marketing American materials along with British products and their own publications. Once they proved that a healthy and expanding market existed for these foreign publications, many exclusive agency contracts with Canadian firms were not renewed and branch plants were set up. This pattern was more common with American than with British firms. Such branch plants competed directly with Canadian companies. Their main function was to import the material of the U.S. owned and based parent corporations.

In its second function, responding with derivative products to local market opportunities, the branch plant attempts to maximize the portability of the products of its parent. However, if market realities constrain that portability then the door is open to active branch plant publishing, derivative from the publishing of the parent.

In schoolbook publishing in Canada, two market realities constrain the portability of the products of the parent companies. In most provinces, while importation is not forbidden, adapted books (amounting to the insertion of Canadian references, see Lorimer, 1980) have a greater chance of being selected for use in the schools. In the Ontario schools market, total importation and obvious adaptation is forbidden. In face of these realities in the schoolbook market, some branch plants set up a lucrative business adapting American texts and textbook series. For the Ontario market, they set to work importing successful models consisting of the publishing infrastructure.3 On this basis they published Canadian school texts for Ontario and other Canadian schools (Lorimer, 1984).

The third function of the branch plant is to respond to local market opportunities unseen, or of no real interest, to its parent. In this function, the branch plant must be careful not to compete with its parent in either the local or international market. In face of such a structural disincentive, across all sectors of publishing, a great amount of vigorous, independent publishing activity by branch plants was not to be found from the end of World War II and 1965.

The second characteristic business form of Canadian publishing pre-1965, the Canadian-owned agency publisher, turns out to be not as different as one might expect from the branch plant. Although ownership was clearly different, if publishing output is a valid measure, as surely in the end it must be, the constraints acting on their operations and the market opportunities to which they could respond were substantially the same.

Many Canadian-owned agency publishers survived in spite of the loss of some agency lines and increased competition. They did so on the basis of remaining smaller agency lines and publishing programs they had built up over the years, with products often modeled on British materials. Like the branch plants, the Canadian-owned agency publishers had exclusive agency contracts with foreign companies. They imported books and sold them in the Canadian market and made substantial amounts of money on their agency lines. The major difference between agency publishers and the branch plants was that they were not "tied" agents but were independently-owned.

The foundation of the agency business is exclusive contracts with foreign publishers to import and sell titles in the Canadian market, the first function of the branch plants. On the basis of this importing function, such publishers are able to pursue their own indigenous publishing. Prior to the 1970s, some agency-based publishers did cultivate Canadian authors for the Canadian market with a vigor that eclipsed their agency activities, most notably, Jack McClelland of McClelland and Stewart. Many others did so with less vigor and many did so not at all.

The similarity between exclusive agents and branch plants, is that both require an intimate and trusting relationship with the companies for whom they act as exclusive agents in the Canadian market. In founding one's business on a contract that has the possibility of termination, a vigorous pursuit of Canadian publishing activities could be seen to interfere with the requirements of a full and vigorous representation of agency lines. A vigorous pursuit of policies to lessen the presence of imported books on the shelves of Canadian bookstores and in Canadian classrooms would clearly be seen to interfere with agency publishing. Secondly, such activities often cut into one's profits. As a consequence, in the same way that indigenous publishing was undertaken by the branch plants in the context of the publishing program and general interests of their parents, so it was for the Canadian-owned houses in their relations with companies for which they were agents. No foreign publisher has an interest in providing the cash flow necessary to run a competitive publishing venture.

Did these two business forms compete on a "level playing field"? The short answer is no. Once a significant level of importation was established by the agent, it made better sense for the foreign firm to establish a branch plant and capture the profits for itself. Similarly, the lucrative area of derivative publishing was difficult for the agent to pursue. Just as substantial profits attracted branch plants, so, significant opportunity for derivative publishing generally led to the founding of a branch plant--not licensing an agent to pursue that opportunity. As for independent publishing, while there was not an advantage to the Canadian-owned group but an equality between the branch plants and the agents, the opportunities for substantial profits were few.

The background that explains the favoured position of imported American educational learning materials, and hence the branch plants in the schoolbook market, is to be found in North American educational history. The post-war years saw a massive reorientation of education through curriculum revisions in the United States, Canada and elsewhere in the western world, based on the theories of the pragmatists, notably John Dewey (Lorimer and Keeney, 1989). It also saw the migration of bright young Canadian educators to the temples of pragmatism--Chicago, Columbia and Stanford--and their subsequent return to key positions in educational administration and faculties of education. During and subsequent to their American sojourn, they became familiar with publishers active in educational publishing in the U.S. Once returned and placed, they became valuable contacts for the branch plant offices as decision makers, authors, educational editors for Canadianized versions of American learning materials. In being experts in the new educational philosophy, and having been taught by example of the U.S. materials, the branch plants and these educators formed a solid partnership to capture the Canadian market.4

The companies these partnerships displaced were the independently-owned, Canadian companies and the British-linked branch plants who were less familiar with and often less enamoured by the new theory and practice.

A New Wave of Publishers

Two phenomena challenged this branch plant dominance: one was demographic, the other political.5 The demographic phenomenon was the baby boom. By the late 1960s and early 1970s, these baby boomers were beginning to finish their education. Having grown up in a dynamic and expanding society with its own distinctive culture, however understated, and having experienced the reorganization of an economy, social and political system that found it both necessary and advantageous to accommodate their numbers, needs and tastes, this privileged age cohort began to look for opportunities to express their ideas, perceptions, dreams, and sensibilities. They found little opportunity.

Their determination to find their individual and collective voices was strengthened by a rather sad, but not atypical, chapter in American foreign policy, the Vietnam war. For educated Canadians, and many other Canadians besides, the Vietnam war caused either an emergence or the transformation of political consciousness. In face of the spectacle of an imperial power attempting to impose its will on a small nation far away from its own borders, Canadians became increasingly self conscious about their country's tacit political identity as both parallel to and a satellite of that empire.6

The baby boom combined with reaction against the Vietnam war to challenge many values and institutions in Canadian society including the dominance of branch plant and agency-based publishing. With a great deal of education in their heads, at times a manuscript in their pockets, and a total lack of experience in business (let alone the nuance of business), the baby boomers came hard upon the blockage to the publication of Canadian creative writing and discussion of Canadian issues that the branch plant and agency system represented.

Their response was to take control of the printing presses themselves. For approximately $5,000 they became publishers of their colleagues and themselves. As they persuaded bookstores to accept their titles, and as the political and intellectual elite became aware of these titles and the quality of the content and writing they contained, only one conclusion could be reached. Far from being vanity publishers, this new wave of publishers was bringing forward issues, ideas and writing that had been silenced by the agency system and that deserved a hearing in Canadian society if not the world.

Although the publishers were deserving and were reaching a healthy percentage of their target audiences, difficulties were soon to ensue. In short, the market was not large enough to support this valuable cultural output. The problem presented itself in the following way. Whereas the barriers to entry into book publishing were almost non-existent, the economics of the business drove people into greater and greater debt. Successful books produce marginal profits in a market dominated by books priced to make profits in the U.S. market, a market ten times the size of Canada's. Successful and especially unsuccessful books also produce left-over stock or backlist. Storing an increasing backlist and servicing customers with copies of volumes from that backlist soon fills up basements, attics, spare rooms, closets, stairways, and so forth. It also takes time away from publishing new titles. Production of title after title slowly increases the publisher's costs and usually its debt--unless it lucks into spectacular successes.

The irony of the ensuing paradox was lost on few in the intellectual and political elite, least of all the publishers. On the one hand, the publishers were producing books that were the only discussions of social, political and economic phenomena available. They were also producing fiction, poetry and drama of recognizable value to everyone but the most prejudiced critic. Yet, as they were doing so, they were going into greater and greater debt.

The traditional shelter in agency importing was not available for three reasons. The most significant publishers were already well served in the Canadian market. Secondly, the books this new wave of publishers were publishing were displacing imported books from the shopping bags of book readers and gift givers and from the syllabi of universities. In addition, there was a certain resistance amongst the publishers to the idea of attempting to subsidize their publishing through the importation of the very books they were trying to displace from the market.

The analysis of the Canadian-owned industry was this (Aldana, 1980). It claimed that the government is responsible for the structure of the market. Through copyright law, the government creates an open market allowing easy importation of books published for foreign markets, especially that of the U.S. Because these books are in the majority, Canadian publishers have no choice but to price their books within the prevailing price range. Copyright law can, therefore, be seen as a price control mechanism that limits the profit level of Canadian publishers.

The Canadian-owned publishers called for structural intervention to allow them to achieve a reasonable return on their investment of capital and resources in bringing to Canadians books of cultural value and for which there were significant Canadian markets.

While the call for structural support was listened to, the government responded with welfare-style support, money for worthy projects to make up deficits thus bringing the publisher back to point zero after the publication of a cultural worthy book that was also a reasonable market success. Project grants evolved into block grants in 1972 based on the previous year's output.7 While the block grants provided greater predictability and longer term planning, they were still essentially maintenance programs and did little to assist publishers to build their companies.

In 1979 the Secretary of State brought forward its first attempt at a structural grant. In a major shift of responsibility for culture, the program was later transferred to Department of Communications. Subsidies were given to companies based on sales. What happened was predictable. The large got larger and, in at least one major case Gage (a large firm) bought out a slightly smaller firm, Macmillan Canada. The many small, culturally oriented publishers benefitted little more than from block grants. Therefore, a set of formulae based on size of output and location were devised to stem industry concentration. Once revised and in combination with the level of funding provided, this program slid into a maintenance program like its predecessors.

The next and most recent round of federal grant programs came in 1986. Noting the inadequate level of funding, the government increased grant funds for culturally worthy books, to ensure the continued publication of culturally significant titles. On the other side, it developed a set of project grants designed not only to increase the business strength of companies but to entice or assist them to enter profitable market sectors, specifically educational publishing.8

The government combined these two kinds of grants with a third measure. It adopted what has become known as the Baie Comeau policy for use within the Investment Canada Act. That policy is now enshrined as Article 1607 in the Free Trade Agreement, requiring that foreign purchasers divest themselves of indirectly acquired Canadian book publishing companies within two years of their acquisition. Direct purchases were not to be approved by Investment Canada.

Canadian Writers and Canadian Writing
in a Contemporary Context

Before considering the impact and significance of those programs it is important to provide a capsule summary of what happened to Canadian writers between the beginning of the new wave of publishers and the present time. The new wave of Canadian publishers, following in the footsteps of Jack McClelland, fostered the flowering of Canadian poetry, fiction and non-fiction writing on Canadian issues. Over the next decade and into the middle 1980s, Canadian voices emerged as predominant to intellectual discourse within Canada. They also emerged as an identifiable voice outside our boundaries. Assisted by an aggressive cultural foreign policy courtesy of the Department of External Affairs, Canadian writers began to find expanding markets for their works within and outside the country. By the end of the 80's we had a number of internationally significant writers who were recognised as members of a Canadian writing community. We also had produced at least two international literary stars in the persons of Margaret Atwood and Robertson Davies--a far cry from only two decades previous.

With Canadian writers commanding sales worthy of attention, the branch plants awoke. During the 1970s, the branch plants bided their time with a strong hold and spirited defences of that hold on the educational and mass paperback markets. In addition, several branch plants encouraged a modicum of Canadian writing that measured up to "international standards." But they had not been promoting Canadian writers internationally as hot property nor cultivating promising new writers.

Two phenomena have changed their attitude. On the one hand is a new localism. On the other, a new globalism encompassing that localism. As a shift in literary and intellectual fashion the localism looked like this. The days of universal structures are fading into post-modernism, that is the particularities identified by deconstructionist analysis and cultural studies. The universalizable American dream is tired and, after endless repetition, is wanting of nuance. Distinctive communities and cultures are coming into vogue in intellectual discourse.

Secondly, as the 1980s draw to a close, we are seeing, in the publishing business, a new globalism. Until the late 1980s a variety of communications conglomerates such as Gulf and Western and press barons such as Rupert Murdoch had been quietly working at creating global publishing/communications conglomerates. By forming global operations, following the lead of Harlequin, the conglomerates were capable of taking any book written by an author anywhere in their empire and marketing it around the world. By integrating book publishing with periodical and newspaper publishing, and sometimes television and movie production, they were capable of maximal promotion and exploitation of their acquired properties.

Penguin appears to have responded most sensitively to the change in intellectual fashion. It has demonstrated a renewed interest in its writers in far-flung (Commonwealth) hinterland countries including Canada. In Canada, it has mounted a bidding war of royalty advances for Canadian writers of any note or promise against Canadian-owned and other branch plant publishers. Already a small but global player, Penguin has been able to respond to intellectual fashion. It is playing out the new globalism in its title and author acquisitions, thus making itself ripe as a takeover target.

Focussed on the same type of global operations, but playing for much higher stakes, are such companies as Gulf and Western, Bertelsmann, Maxwell, Murdoch, Thomson and Time/Warner. The man keeping this emergent globalism in the public eye is Robert Maxwell. Keen to be one of the ten global communications conglomerates in the next decade, Maxwell's moves awakened at least three sleeping giants, International Thomson, Time Inc. and Warner. Thomson, in two swift moves, divested itself of its oil holdings, merged International Thomson with Thomson Newspapers and brought itself up parallel and ready to maintain its position in the group of ten (Hubbard, 1989). Time and Warner also made their move, fought off some unwanted intruders and began working toward a merger of the two operations into Time/Warner.

In short, Penguin, as a small global was able to reshape its operations to respond to new intellectual and information fashion, thereby providing itself with great potential for growth. The larger conglomerates are globalizing their operations to catch up with Penguin in order to take advantage of intellectual fashion. Moreover, they intend to go a further step. Rather than merely market books globally, they intend to milk the work of authors for every penny of profit they can extract. They can serialize in magazines and newspapers, promote their books in these same publications, turn some into television or movie properties, use the authors to create cheap radio and television programming, charge monopoly prices for scientific information, engage in textbook production derivative from their acquired properties, and so forth. This process of rationalization is taking time but as each learns from the other, under the pressure of the bottom line, maximization of intellectual property is high on the agenda of the globals.9

Canadian Publishing in this New World

What is the significance of these shifts for Canadian publishing? First, Baie Comeau (Article 1607) becomes a more major irritant than expected for integrated multimedia global operations. The significance of the irritant is that it can be a significant barrier to the realization of the above scenario, especially if other countries follow suit. Secondly, the new globalism represents a fresh assault on cultural industries as cultural institutions first and businesses second rather than businesses first and cultural institutions second as Article 2005 treats them.

The seriousness of the irritation that Baie Comeau represents to the new globals can be seen in the efforts various companies have made and are making to circumvent it. They have been as follows:

1. First has been the bullying of Gulf and Western. It threatened a "scorched earth" policy if forced to divest itself of all its Canadian acquisitions.

2. After agreeing to sell Ginn Canada, Gulf and Western put off potential buyers for far longer than the two-year limit provided for in the legislation. It even managed to put off a proposed government purchase for fair market value for nearly one year apparently hoping that the government would lose its nerve. Finally, following the reappointment of the minister who had brought forward the legislation, it agreed to sell 51% of Ginn and its other acquisition (that was never approved), GLC, to the government. At the time of acquisition it appeared to be the intent of the government to sell to Canadians. However, Gulf and Western has managed to retain the right to approve the purchaser. And the silence surrounding the search for purchasers is deafening.

3. Penguin has brought a new business sense to the scene in face of possible forced divestiture. Pursuant to its new globalism, but also currying the favour of the government in publishing Canadian writers, Penguin has actively sought out and published (and re-published) Canadian writers. Apparently, for its good corporate citizenship, and to the consternation of Marcel Masse, the present and former minister who brought forward the legislation, it was allowed to keep the New American Library (NAL) when it acquired NAL indirectly. Penguin argued that NAL was only a distribution operation and not a publisher (i.e., a tied agent with no publishing program). These events took place between Marcel Masse's first and second term as Minister of Communication.

4. More recently, Robert Maxwell has played the strongest political card one can play in Canada. In acquiring Macmillan Inc. (USA) Maxwell indirectly acquired Collier Macmillan (Canada). Faced with possible divestiture, Maxwell offered to move the company from Ontario to Quebec praising Quebec Premier Bourassa's language laws as he made the offer and contradicting would-be press lord, Conrad Black, in so praising.

5. Rupert Murdoch has also been active. In his recent purchase of Collins, Murdoch divided the distribution operation from the publishing arm and sold off control of the publishing arm to a family firm of literary agents transforming them into publishers. In doing so, Murdoch could then and did ask for the same deal as Penguin. As of this writing, the issue has yet to be resolved. The statements the minister has made to the press make it look unlikely.10

6. The U.S. Congress has also gotten into the act. Barely had the ink dried on the Free Trade Agreement, than Michigan Congressman John Dingell was inserting into the written record a ten-page denunciation of Baie Comeau (Lewington, 1989). At times it is difficult for Canadians to understand how the U.S. government can sign international agreements and then immediately begin to undermine them.

Actually, this is the first of a series of responses derivative from a White House document called "Statement of Administrative Action." It notes: "the Administration would be mindful of the importance of discouraging if at all possible the exercise and reliance on 2005.1 by the Government of Canada" (Crooks, 1989). More recently (November 1989), both countries have appointed negotiators to address the issues raised in the statement of administrative action (Globe and Mail, 1989: B5).

7. The Thomson organization has been officially silent. But various of its employees have argued what would make sense as the Thomson position. How can Thomson expect to be allowed to expand in the U.S. without the quid pro quo in Canada for U.S. companies?

8. For the federal government's part, the Minister who brought forward Baie Comeau, Marcel Masse, has been reappointed to the portfolio. From that appointment we can expect a staunch defence. Indeed, the minister discussed one early in his term (Portman, 1989). As part of the evaluation of the success of the support program for publishers, it appears that the Ministry will be comparing the performance of the branch plants and the Canadian-owned sector in publishing and selling Canadian writers. The premise of Baie Comeau was that Canadian publishers should have "a normal market share" for domestic companies. If it turns out that foreign publishers are performing well in placing Canadian writers on the Canadian and international stage, there are two possible interpretations. A perspective that takes no account of history might argue that the Canadian-owned sector does not warrant special support because it does not outperform the foreign-owned sector in bringing forward Canadian authors. An historical perspective would take into account the development of the industry, its historic pattern of bringing forward new authors and the continued maintenance of the infrastructure required to keep Canadian authors at the forefront of the Canadian market and as a presence in the global market.

The shift in market fashion to localism and beyond the universalizable American Dream, together with the new globalism, is transforming book publishing in Canada, and specifically the publishing of good Canadian authors, from a marginal enterprise into something that, implanted in the right corporate culture, is a significant property. As Murdoch is purported to have said when taking over Collins amid expressions of consternation by several authors of Collins: "I don't know what these authors are complaining about. I'll sell more books for them."

How the government and Canadians respond to these changes remains to be seen. It would appear that in addition to defending a normal share of the domestic market, Canadian publishers must find mechanisms to participate in global markets themselves. They certainly have the publishing skills. What they need is venture capital and global marketing mechanisms.


On the pessimistic side, where profits are demonstrable there is no lasting protection in the FTA for cultural industries. It is simple arithmetic, the Americans have ten times the resources Canadians have to protect their preferences and their allies in global publishing. Moreover, as they demonstrate profitability they will argue unceasingly for a business perspective on such matters over a cultural one. By demonstrating that they can bring Canadian writers to market, that, overall, they can make a profit from Canadian writing, and that they can do an equal or better job in getting Canadian writers into international markets at this point in history, the past 20 years of Canadian publishing history may be forgotten. With the departure of Marcel Masse as Minister of Communications, Baie Comeau may be withdrawn or exceptioned to death.11 If it is, the movement of Canadian publishers into profitable educational markets will fail, and Canadian publishing will increasingly revert to a structure now characteristic of the film and recording industries.

Such a reversion, and it is already taking place aided by author's agents, means that Canadian-owned companies will become the farm teams. Once writers reach any degree of marketability they will be swept up by the globals with substantial advances and promises of international fame and fortune.12

An interesting element in the farm team metaphor is that, in sport, farm teams are bankrolled as talent developers by the major league teams. Also contracts for players are bought, sold and traded. Not so in book publishing.

Secondly, overproduction will increase and become much more obvious as a market control mechanism. An excess in releases will lead to certain properties being highly promoted, chosen partly on the basis of proven formula, partly on promise, and partly on the basis of the investment behind them. This effort will carry most through to blockbuster status. The author will then become a valuable vehicle for a succession of "in character" releases. Choice and originality will narrow in the mass market and the knowledge and insight produced and published in national markets by national publishers will languish in those markets unable to achieve regular exposure in more than one country. Above all, much greater control will be in the hands of producers rather than authors. We will see a highly managed market.

The regret is that such market realities will affect the character and quality of literature and knowledge production fundamentally.

There are, of course, some safeguards. The survival and strengthening of Baie Comeau will signal a great deal. Libraries and review journals also play a fundamental role that exists outside the market in the dissemination of books. But libraries are threatened by cutbacks and information economics and review journals are threatened by acquisitions by globals with a vested interest in promoting their own books.

If Canadians and their governments have tired of their flirtations with the U.S., and are committed to cultural sovereignty and the encouragement of a distinct culture, that may lead to the support of the necessary domestic publishing infrastructure to support a vibrant community of Canadian writing. There even may be some deals that can be worked out with certain global players with a sensitivity and interest in a culturally plural world community.


Throughout this paper when speaking of the Canadian market I mean the English-language Canadian market.
A delightful exploration of the immigrant Irishman coming to Canada to make his fortune as an agent for British manufacturers is told by Brian Moore in The Luck of Ginger Coffey (Toronto: Little Brown, 1960).
The estimated value of this infrastructure is at least $US10 million. That figure is derived from estimates provided by two representatives of Ginn. In the mid-eighties in Canada, Richard Lee, estimated the development costs of a reading series to be $3 to $4 million. About the same time, an American Ginn representative estimated the costs of the same enterprise to be $13-14 million. Adaptations are even greater money savers.
The pragmatist movement was as much a social ideology and educational theory. Thus the influence of this manner of thinking also affected trade book sales, as of course did the familiarity with American authors and realities that the schoolbooks taught.
I am not claiming here that this population bubble and the Vietnam war were the only factors that contributed to the phenomena discussed. Rather they are two major factors.
I realize in making this statement I am not citing a body of supporting social scientific literature. Some would claim the statement should therefore not be made. My view is that the issue is almost too large for social science, however, in due course the historians will take up investigating the transformation of life in Canada associated with this event.
Block grants are grants given as a block, rather than project by project, meant to subsidize a number of projects. They are based on the previous year's output but meant to subsidize the coming year's books.
It would appear that this program has not been terribly successful on either aspect of its program. In the space of four years cultural funding has diminished from funding close to 90% of the per-title deficits to less than 50%. On the other hand, a significant increase in the educational publishing activities of the Canadian-owned sector as a whole is not immediately apparent.
This is not a new scenario but at this juncture various players are just beginning to realize how to do it.
To give credit where it is due, the determination to maintain ownership and control in face of government policy to place it in the hands of Canadians has apparently been respected by Bertelsmann. In its acquisition of Doubleday, it came to an arrangement with Anna Porter of Key Porter Books, giving her 51% ownership of Doubleday Canada. It is interesting to speculate why a German company found it so easy to abide by the regulations whereas American companies have led the resistance to the policy.
The demise of Baie Comeau in its present form is already in the works. Just prior to the final submission of this article the author learned that the Department of Communications was exploring with the Canadian-owned publishers significant revisions to Baie Comeau. The proposal is said to be that all presently operating branch plants would be allowed to continue to operate and potentially be sold.
Two extremely interesting ads appeared in the Globe and Mail during the Free Trade Debate leading into the November 1988 general election. One, placed by "Artists and Writers for Free Trade," a group subsidized by business interests and signed by 63, contained the following text (without apology to the opening of the U.S. constitution). We, the undersigned artists and writers, want the people of Canada to know we are in favour of the Canada-United States Free Trade Agreement. There is no threat to our national identity anywhere in the Agreement. Nor is there a threat to any form of Canadian cultural expression. As artists and writers, we reject the suggestion that our ability to create depends upon the denial of economic opportunities to our fellow citizens. What we make is to be seen and read by the whole world. The spirit of protectionism is the enemy of art and of thought. The other ad was placed by 32 artists and writers who did not give themselves a group name. The text read: The Mulroney-Reagan Trade Deal is a hastily-concluded agreement that was made for political reasons, and not for the welfare of our country. It will irrevocably damage the Canada we care about. We urge you to vote for the party in your riding that will help defeat this FREE TRADE BILL.


Aldana, P. (1980, February). Canadian publishing: An industrial strategy for the eighties. Toronto: Association of Canadian Publishers.

Crooks, H. (March, 1989). Vacuuming the crumbs: The politics of film production. Canadian Forum, p. 28.

Globe and Mail. (1989, November 15), p. B5.

Hubbard, J. (1989, March 18-20). A new force in media. The Financial Post, p. 1.

Lewington, J. (1989, March 18). Ottawa book policy target of quiet attack by Congress veteran. Globe and Mail, p. A7.

Lorimer, R. (1984). The nation in the schools: Wanted a Canadian education. Toronto: OISE Press.

Lorimer, R. (1980). Your Canadian reader. Lighthouse, 2(3), 6-16.

Lorimer, R., & Keeney, P. (1988). Defining the curriculum: The role of the multinational textbook in Canada. In S. De Castell, A. Luke, & C. Luke (Eds.), Language, authority and criticism: Readings on the school textbook. (London/Philadelphia: Falmer Press), pp. 171-183.

Portman, J. (1989, March 25). Masse ponders new legislation to protect Canadian culture. Vancouver Sun, p. D6.

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