Funding shortages threaten Canadian book industry

Canadian book publishers are facing financial difficulties that could threaten their survival without sustained federal support, according to a Department of Canadian Heritage report.

Blaclock's Reporter says despite 46 years of subsidies, the industry still struggles to secure sufficient funding for long-term spending.

The report, Evaluation Of The Canada Book Fund 2018 To 2023, warns that without government assistance, Canadian publishers may find it increasingly difficult to compete with foreign-owned firms, potentially leading to a decline in Canadian-owned publishers.

The Canada Book Fund distributes an average of $37 million annually to approximately 260 publishers, providing crucial support to the industry.

“While the Fund meets important financial needs, its budget has not increased in over 20 years,” the report stated.

“Some stakeholders noted that due to inflation, the real value of the funding has decreased by about 60%, making it difficult to support existing recipients and nearly impossible to include new ones.”

The Canada Book Fund, established in 1979, remains vital to the publishing sector, helping industry organizations and booksellers compete domestically and internationally while promoting Canadian literature.

However, challenges such as rising costs, inflation, and the need for technology adoption continue to put pressure on the sector.

Independent Canadian publishers, particularly those focusing on Canadian-authored books, face intense competition from foreign-owned companies that dominate the market.

The report found that Canadian books perform best in traditional bookstores, especially in Québec, where they account for 50% of sales in independent shops. However, in the English-language market, Canadian books represent only 20% of sales in independent stores, due in part to the overwhelming presence of foreign-owned online retailers.

Financial constraints limit Canadian publishers’ ability to spend on growth areas such as marketing and technology, reducing their competitiveness against larger international firms.

Additionally, rising costs and inflation make it harder for publishers to print books and manage inventory, especially following the closure of paper mills.

Each year, Canadian publishers produce approximately 6,500 titles. The report highlighted the lasting effects of the Covid-19 pandemic, which significantly disrupted the supply chain and altered consumer book-buying habits.

“Bookstore sales in Canada fell by 75% at the height of the crisis compared to the same period the previous year,” the report stated.

“Although a surge in online sales helped stabilize the market in 2020, inflation and other rising costs have reduced profit margins, forcing booksellers to offer free or discounted shipping to remain competitive with major e-commerce players like Amazon.”