The debate over whether Amazon should be allowed to establish a distribution center in Canada (Amazon has gained approval) has given rise to a new controversy between Canadian publishers and booksellers over "parallel imports." Earlier this month, CBA representatives met with Canadian Heritage Minister James Moore to ask him to consider repealing regulations established in 1999 that require Canadian booksellers to buy books from the Canadian branches of multinational publishers such as Random House of Canada or Penguin Group (Canada) or from a Canadian-owned distributor. They are not permitted to buy from a U.S. company unless the book is not available from a Canadian company or if the Canadian company’s price exceeds the guidelines set for a Canadian price differential, which is the exchange rate plus 10%.
Doing away with the parallel importation rules would "pull the rug out from under the publishing industry," said Jacqueline Hushion, the executive director for external relations of the Canadian Publishers’ Council. The 10% cushion is often seen as a bonus for the publishers, she said, but it was built into the guidelines "in recognition of the investment that publishers make in getting the books into this country and moving them around to all of their customers." There is added expense in shipping books throughout a vast land with a small population, she said, not to mention sending authors out for bookstore signings and doing a variety of co-op projects. She argued that, especially with increased transportation costs, "That cushion is anything but a bonus. It’s a requirement and if it were lost, it would be serious," she said, especially if the Canadian dollar drops back down again.
Canadian booksellers are particularly sensitive to differences in U.S. and Canadian prices printed on books because the Canadian dollar has been hovering close to par with the American dollar. When the Canadian dollar reached par in 2007, books were used in the media and by the federal finance minister as an example of a product for which prices were not in line with the newly par Canadian dollar, and there was tremendous pressure to lower book prices. This year, booksellers say they are not hearing as many complaints from consumers, but they worry that their customers are quietly going online to buy their books for a cheaper price.
These concerns brought the CBA to Moore. "We got the meeting because of the whole Amazon fiasco," said CBA vice president Mark Lefebvre. "We knew that there was no way that Amazon wasn’t going to be allowed in Canada, but we still had to speak out on behalf of our members." He said the CBA suggested other changes thought to benefit independent booksellers in Canada. One idea was repealing the parallel importation rules. "Okay, you’re going to let American companies come in and set up shop in Canada? We understand that. We understand the economy and what you are doing here, so let’s even the playing field. If a foreign company is going to be coming in and have access to things that we are restricted from having access to, that’s not fair," he argued.
There are independent booksellers who disagree with the CBA’s decision to ask the government to change the importation regulations. Prominent Toronto bookseller Ben McNally vehemently rejected the strategy and distanced himself from the CBA in a letter published by Quill & Quire. He wrote that the Canadian publishing industry is fragile, and publishers and booksellers need to work together.
Lefebvre agreed that booksellers and publishers need to work together, but added, "When a consumer can buy [a book] themselves directly from the States better than what the Canadian supply chain can provide it for, there’s something wrong with the Canadian supply chain. I look at this as a death of a thousand cuts, and we need to look at this in terms of getting books to consumers in the best, most economic, most efficient way possible. I want it to come through the Canadian channel. I don’t want to buy around," he said.
Hushion said the CPC has not met to discuss the issue yet, but she said representatives meet with the government on a regular basis and will be putting the council’s position forward.