to provide opportunity for healthy competition in the book
publishing, distribution and retail industries; and
to contribute to the broader government objective of ensuring
that Canadian cultural content is created and accessible in Canada
To initiate the review process, the Department of Canadian
Heritage released a discussion paper in July entitled Investing in the Future of Canadian
Books. The paper outlined the motivations for the
review, described the structure of the Canadian book industry and
discussed the impact of existing foreign investment policies on a
variety of cultural industries. The Department accepted responses
to a questionnaire included in the discussion paper until
mid-September 2010, and these submissions will be posted on the Canadian Heritage website for
public comment throughout the month of October. The final
consultation phase will involve roundtable discussions to be held
in late 2010.
The Book Policy Framework
The three main sectors of the Canadian book industry affected by
the Book Policy involve publishing, distribution and wholesale, and
retail. In order to promote the creation of diverse Canadian
cultural products in both official languages, the Government has
created a federal policy framework composed of complementary
programs, regulations and policies designed to support the
Canadian-owned book publishing industry. Any changes to the current
Book Policy will also have to maintain compatibility with a variety
of other instruments, including the Competition Act, the
Copyright Act and a
number of international trade agreements.
The cultural provisions of the Investment Canada
Act apply to transactions in which
foreign investors wish to establish or acquire control of cultural
businesses. Under the ICA, monetary thresholds trigger the
automatic review of foreign acquisitions. For all other
investments, non-Canadians must comply with statutory notification
requirements. Upon review, investments are subject to the net
benefit test, which evaluates the compatibility of an investment
with national and provincial policies, including cultural policies,
and may require an investor to agree to undertakings furthering
cultural and economic objectives.
Under the current policy framework, the book industry has
remained primarily Canadian-owned and undertakings negotiated with
foreign investors under the ICA’s net benefit test have
helped to promote Canadian authors at home and abroad, support
distribution infrastructure, implement new technologies in Canada
and secure contributions to education and research.
Motivations for Review
Since the last revision of the Book Policy, the book industry
has evolved significantly in response to technological change,
consolidation of ownership and globalization. In addition, as part
of an effort to increase foreign investment in Canada while
retaining the ability to protect national interests, the Government
created the Competition Policy Review
Panel under its 2006 Advantage Canada plan and made
a commitment to act on the Panel’s recommendations. The
independent Panel, which was mandated to review Canada’s
competition and foreign investment policies in order to improve
productivity and competitiveness, ultimately focused on foreign
ownership restrictions and the net benefit test under the
Investment Canada Act. With respect to cultural
businesses, it found that while current policies have played a
significant role in protecting and nurturing Canadian culture, the
policy framework should be updated to reflect advances in
technology and to better facilitate opportunities for Canadian
businesses in international markets.
As such the review process should allow the Department of
Canadian Heritage to evaluate the effectiveness of its Book Policy
in light of the new challenges and opportunities arising in the
Canadian book industry.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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