STANDING COMMITTEE ON CANADIAN HERITAGE

COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 10, 1998

• 1540

[English]

The Chairman (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)): I would like to open the meeting of the Standing Committee for Canadian Heritage, which is undergoing a study on Canadian culture, facing the next millennium.

I would like to apologize sincerely to our guests, especially those who have come a long way, for the delayed starting. The problem is, there was a debate in the House that required the presence of members in case there would be a vote or a quorum needed. That explains why we were delayed. We are hoping that other members will show up very shortly.

[Translation]

In the meantime, let me just say a few quick words about our procedure this afternoon. First of all, however, I would like to thank you for coming. We take great pleasure in welcoming you here today, and we thank you for the time you have taken to be here, in view of your eminent positions in the publishing industry.

Instead of the usual format where we hear witnesses and receive their briefs, we have decided on a round table. Members of the different political parties are mingled with our guests, and there will be no order of party precedence for questions. Members and guests will speak whenever they wish. This should make it possible for everyone to take part in a lively debate.

This study was initiated about a year ago, before the last election. The current committee, which replaced the former heritage committee, decided to pursue it.

The purpose of the study is to see how effective federal support measures for cultural programs and the culture industry will be meeting the challenges of the next century.

[English]

We decided to look at the challenges facing culture and cultural industries in three main areas: first of all, the advent of new technologies; secondly, the evolution of the global economy and global trade; and thirdly, the changing demographics of our country.

Some time ago we underwent a series of briefings from officials and experts on various aspects relating to those subjects, and this week we have started round tables. This morning we had two round tables, one on the sector of the arts and the other one on the heritage sector, museums and archives. We are now dealing with the round table on publishing. Later on, we have one on film and video and on broadcasting and sound recording.

Following that, we are going to receive witnesses from the federal cultural institutions, and to round it up, we are going to travel across Canada and meet cultural communities in their local environment, especially in the small communities of Canada.

You represent a prominent cross-section of your sector. You are the front-line actors in your sector. So we hope you can address some of the questions we have posed at the back of your program.

We have highlighted five main questions that speak for themselves. You don't have to speak to all of them. You can choose any of them that you feel are the most important as far as you're concerned. If you want to address the meeting, all you have to do is raise your hand and we'll take turns.

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You can of course speak

[Translation]

in either French or English, as you wish. To begin with, perhaps I could ask each of you to introduce yourselves briefly.

[English]

just the name and what position you occupy at the moment.

[Translation]

We might start with you, Ms. L'Espérance-Labelle.

Ms. Micheline L'Espérance-Labelle (shareholder, Québecor DIL Multimédia): I am a shareholder of Québecor DIL Multimédia. Since 1984, we have been engaged in the dissemination, distribution and publishing of multimedia products, as well as in electronic trade and info highway. I also designed educational and cultural software. And that's it.

Mr. Mark Muise (West Nova, PC): My name is Mark Muise. I am the member of Parliament for West Nova, Nova Scotia, and Heritage critic for the Conservative Party.

[English]

Mr. Larry Stevenson (President and Chief Executive Officer, Chapters Inc.): Mr. Chair, I'm Larry Stevenson. I'm the president of Chapters, a Canadian book retailer.

[Translation]

Ms. Suzanne Tremblay (Rimouski—Mitis, BQ): Suzanne Tremblay, member for Rimouski—Mitis, and Heritage critic for the Bloc Québécois.

[English]

Mr. Jack E. Stoddart (Chairman and Publisher, General Publishing Co. Ltd.): I'm Jack Stoddart, chairman and publisher of Stoddart Publishing.

Mr. Scott McIntyre (President and Publisher, Douglas & McIntyre Ltd.): I'm Scott McIntyre, president and publisher of Douglas & McIntyre, a Vancouver-based publishing house.

[Translation]

Mr. Jacques Saada (Brossard—La Prairie, Lib.): Jacques Sada, member for Brossard—La Prairie, Quebec.

[English]

Mr. Jim Abbott (Kootenay—Columbia, Ref.): I'm Jim Abbott, member of Parliament for Kootenay—Columbia, the Reform heritage critic, and that being my title, I wonder if that is why I have no one around me.

The Chairman: It's top billing, Jim.

Ms. Sylvia Fraser (Author): I'm Sylvia Fraser. I'm a writer. I've written 10 books, fiction and non-fiction, and children's literature. Also I write for magazines sometimes.

Mr. John Godfrey (Don Valley West, Lib.): I'm John Godfrey, and I'm the parliamentary secretary to the Minister for Canadian Heritage.

[Translation]

Mr. Hervé Foulon (president, Éditions Hurtubise HMH Ltée): Hervé Foulon, president of Éditions Hurtubise HMH, in Montreal.

[English]

Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Hello, I'm Sam Bulte. I'm the member from Parkdale—High Park, and I was in my former life and still continue to be a great, passionate advocate of the arts and cultural industries in Canada.

Mr. Sean Fordyce (Publisher, Voyageur Publishing): I'm Sean Fordyce, president and publisher of Voyageur Publishing.

Ms. Mary Joe Anderson (Owner of Frog Hollow Books, Halifax): I'm Mary Joe Anderson. I'm an owner of a small independent bookstore in Halifax, called Frog Hollow Books.

[Translation]

Mr. Mauril Bélanger (Ottawa—Vanier, Lib.): Mauril Bélanger, member for Ottawa—Vanier, Ontario.

[English]

The Chairman: So we are ready to start. The floor is open. Who will kick it off? Please don't be shy.

Mr. Stoddart.

Mr. Jack Stoddart: I don't quite know where to start, because there's quite a multitude of questions.

I guess the first thing I would say is that the publishing, or let's say the book industry—which I think is more important than saying the publishing industry because I think it is an industry that relates to the beginning, the idea, and taking it right through in a commercial sense, and the reading of the final book, or other types of media, in fact—is an important one in Canada.

Although sales in the English language are dominated by books from outside the country, approximately 30% of all the books sold in this country are Canadian-authored books. I think, as a starting point, that's a very important position because I'm not sure there's another cultural industry that controls 30% of the Canadian market from its own creative talent base. I think we should be happy about that and rejoice and feel comfortable that in fact a lot has been accomplished in the last 25 years.

I think the results, in fact, are even stronger in Quebec, and perhaps Hervé will talk about that.

I don't think it should be misunderstood that many people think government intervention in any industry is a bad thing. It is my belief that without government policy or regulation, or a whole variety of circumstances, we would be back to the good old days of the 1970s where we probably had 3% or 5% sales of Canadian-written books.

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I remember those days. We sold a lot of American and British books, but I think at that point we really did not have the writing base we have in this country now. As a starting point only, it is my belief that not only do we have a vital and important industry in this country, where the bookselling, the publishing, the writing are so strongly Canadian, but government policy, through a variety of governments and circumstances, has played a very important part in the development of that. Maybe that is what we could start from.

The Chairman: Thank you very much, Mr. Stoddart.

Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay: You are from the publishing industry, and I would like to take this opportunity to ask whether you have thought about the MAI. What impact would it have on your industry if Canada were to sign the MAI, an agreement between governments that would make it possible for statutes to be adopted and others repealed without our own government having a say in the matter? This may sound absurd, but I don't think I'm exaggerating. I would like to hear your industry's perspective on this.

Mr. Hervé Foulon: There is no doubt that the MAI would lead to serious problems for the publishing industry. This is almost in the same vein as what Jack Stoddart was saying when he gave you a brief overview of the industry.

With the help of governments, we have managed to nurture a small industry and make it what it is today—a publishing industry that has all important components in Canada, along with everything it means for the industry itself, for jobs, and for the cultural protection of our identity.

I always smile when I see the French acronym for MAI—it is AMI, which means "friend". I always feel like saying that we can't always choose our friends.

An Hon. member: Ah, ah!

Mr. Hervé Foulon: I would say that the best way of protecting this friendship would be through respect, by respecting your friend's personality and cultural identity. I am convinced that no one wants tomorrow's world to be standardized, with everyone thinking the same thing. That sort of world would be very boring indeed. Here I'm talking just about cultural identity.

From the economic standpoint, we have a problem. If tomorrow we were granted complete freedom, and we couldn't provide help for our people to get what they needed, I don't imagine that any company here—in distribution even more than in publishing—could face up to any of the major U.S. publishers or European multinationals, like Havas. They would be able to invest heavily in distribution.

We know full well that those who pull the distribution strings will come after us and tell us what to sell and how to sell it. I think it would be absolutely catastrophic for this industry, which was created at arm's length over the years and which is proving itself today. Sales are doing well, not only in Canada but also in the export market. Canadian authors are becoming increasingly well known abroad. We would be jeopardizing all these gains.

[English]

The Chairman: Mr. Fordyce.

Mr. Sean Fordyce: I have a major concern, and perhaps a solution for it as well. When I am talking to people about the publishing industry I use an example. Everybody is aware of how a corner store operates, how it buys and sells things, so I use that one. If you were to imagine owning a corner store and across the street from you was a Mac's milk store and the Mac's milk was being funded by the government to compete with you, you would find it very frustrating. That would be publicly the best description of how smaller publishers find themselves trying to grow a business and compete in a market that tends to care, more often than not, about trying to augment and preserve grants to publishers. Although I feel they are important, I think a lot of other things tend to get lost.

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I was a member of one of the trade associations two years ago, when in Ontario there was some discussion about the changes that were happening with respect to public funding. I said we needed to talk about changes such as the book rate: in 1993 we had a 700% to 800% increase in the cost of shipping books. I said we needed to sit down and talk with the retailers about greater cooperation with respect to marketing. A lot of the retailers find it's very frustrating to receive books and not have enough support for them.

All this time, every association I came across was just saying, “Look, right now our concerns are to maintain the grants and make sure they don't go away.”

My feeling is that we need to build an industry that is viable on the ground in the market, because the whole point of culture is communication. If we pay to produce books and they're not read, we haven't gained anything as a country.

Therefore the main reason for my being here is to say that we need to support marketing, distribution, and the demand for Canadian books as opposed to simply the production and the warehousing of them. As well we need to look at access to the industry. The barriers to entry are astounding for publishers like me. I don't qualify for most of the programs, such as the AECB, simply on the basis of size. I have a book coming out that we're going to market in the States; we'll do it alone. It's the same thing in Canada, because most of the grants are based on the size of support, and then these companies take the money and use it to support their own efforts, largely.

If we were to work with public funding, it would make sense to construct a market that would be viable and that everyone could have access to.

The Chairman: How do you propose to do this, according to your suggestion?

Mr. Sean Fordyce: One example is that the AECB is a program that is available only to larger publishers that are sponsoring the exportation of books. One would think that in a country like ours, perhaps we should be spending some money like that within Canada, with much greater access to all publishers.

Another thing is that in 1993, as I say, the book rate was removed and replaced with a program that was eight times more expensive. Since then, for a while, with the merger that was created with Chapters, the government held back and said they'd try to prevent them from opening and negotiating with publishers changes that had become necessary, because the market itself had changed so much, with the cost of shipping and their need to evaluate all those things. I believe that's freed. We're now able to do those kinds of negotiations.

Another example is to use the Internet in a way it hasn't been used. There should be a central place with links for all publishers so all books being produced can get on there and readers can go there, such as what happens at the retail level with Amazon.com, Inc. in the States. We don't have anything like that here.

The Chairman: After a sort of silent start, it seems to be getting livelier. I have requests from, in this order, Mrs. Bulte, Ms. Anderson, Mr. Bélanger, Mr. Abbott, Mr. McIntyre, Mr. Muise, and Mr. Godfrey.

The fun begins. Mrs. Bulte.

Ms. Sarmite Bulte: Thank you, Mr. Chairman.

I'd like to address the issue of the MAI. For those of you who haven't read about the devastating effect it would have on culture if it were signed and culture were at the table, you must read Garry Neil's report on the Canadian Conference of the Arts.

I sat on the subcommittee on international trade, trade disputes, and investment, which dealt with reviewing the draft agreement. The representations we had at that committee, especially from the culture side, including a number that Mr. Stoddart was at, said it would be quite devastating, not just to the publishing industry, but to Canadian culture as such.

We were questioning whether we should have grants, but if culture were part of the agreement, many of the grants, the subsidies, and the tax credits would be drastically affected.

As a result of that and the recommendations the committee made, Canada, if it should sign an agreement.... The Minister for International Trade has said there is no time limit, there is no deadline right now, and it will not be signed imminently in any event, whether whether we sign or not. But he has made it clear to me in the House and to the Canadian public that he will not sign a deal where culture is at the table. He has also said that Canada, along with other countries that support an all-out exception in the line of the French principle, will go that way first, and if not, if that is not possible, then the very least Canada would accept is an unbound country-specific reservation on culture.

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I think it should be made clear that the government will walk away from the table if that is the case, that culture comes on the table.

Now I'd like to go on to the part about grants and then move on to something else, to marketing and distributing. This morning we had the performing arts here, and one of the things we talked about was audiences and how we develop our audiences and, I'm hearing here, how we develop our readership. I'd be interested to hear from the industry how the government can assist in developing those markets, in developing those audiences or readership.

The Chairman: We'll ask the people who are listed to take it up and then we'll get back to you, Mr. Fordyce.

Maybe you can address that as you speak, Ms. Anderson, after you've made your remarks.

Ms. Mary Joe Anderson: It was in fact my intent to address that. I came in part to answer these questions and ask some of my own, but also to commend Heritage Canada for the work I have seen done and to urge them to continue it. Specifically, I would like to say that as a bookseller I'm a very practical person. I like something in my hand, and I appreciate this opportunity to address some of these very issues.

What I want most to say is thank you very much for the publication and distribution assistance program, which very much made it possible for me as a bookseller to market and to match the funds given me by the government to market Canadian books. I'm very distressed that the program was suspended last year. I would like to see it put back into place with perhaps even more funding.

The distribution assistance speaks to the issue that Sean brought up about the freight. Freight's a critical issue in the book industry. I think the publishers would agree. The publishers should be subsidized, but certainly the booksellers again need that postal book rate we lost.

Again, as a bookseller, I want to say thank you for the Canada Council touring money, which given to the publisher supports my getting authors on the east coast who I wouldn't get otherwise. I also participate in organizational readings with libraries and other associations. I need that more and more. I came really to urge that what is in place be continued and what has lapsed be reintroduced, either in the form it was in or in a newer and more well-funded form.

I do have to say that it is very difficult for me to sit here and not discuss the GST. I think it's indefensible that we have a tax on books. I think that absolutely is the critical issue in the book industry and has to be addressed. For example, in Ottawa, I know that Heritage Canada was very instrumental in funding a terrific program whereby independent booksellers were allowed to do a phenomenal marketing campaign for two years running; there was upwards of $70,000 in funds from Heritage Canada. I think that's just a phenomenal program and must be applauded, and I ask that it be spread to a national program.

We have publications that are funded specifically by Heritage Canada for the regional publishers; these are Christmas flyers, which are critical to our sales. For example, for Atlantic Books Today, which is a publication that comes out specifically for and about Atlantic books, that funding is critical.

Also, our Word on the Street Book Fair, which is I believe to start here in Ottawa this year, is a huge literacy festival that is given seed money every year by Heritage Canada and the literacy secretariat. Unfortunately, we're in our fourth year and deemed to be financially viable. We're not in Halifax. We have no corporate sponsors of any sizeable donations. We would like some base money there.

I don't want to go on and on, but I am specifically grateful for the programs that are in existence and just request that more practical programs like this continue to be funded and increased.

The Chairman: Thank you.

Mr. Bélanger.

Mr. Mauril Bélanger: As an aside, Mr. Chairman, I must commend Madam Anderson's choice of earrings, in case anybody has not noticed.

[Translation]

Ms. Mary Joe Anderson: Thank you.

Mr. Mauril Bélanger: You're welcome.

[English]

The Chairman: The books are hidden, though, on the one side.

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Mr. Mauril Bélanger: Well, this is the new kind of book you listen to.

Anyhow, I would like to raise two things, Mr. Chairman. One is on technology. I want to probe the industry a bit here.

I'm hearing that this is an industry that's doing fairly well. In the sixties we might have been in control of about 5% of the sales of books in Canada. We're now around 30%, so it's an industry that's doing well. I'd like to know if any research is being done by the industry on the future of books.

I'm going to get a little bit of science fiction this year, and that is another thing I'd like to know about. Why don't we have as good a science fiction industry in this country as in the States? But that's another story.

I can easily envisage that 10 years from now I will be going into a bookstore and buying a well-bound book that will last me forever. I'll then able to input into that particular book any novel, or anything I may be buying from whatever publisher. I'm not certain whether I'll be able to put it in once, and it will self-destruct so you can protect copyright or not. I don't know how far along that we are in that sense.

Is there any research being done by the Canadian industry on where the future of the book lies in this country, or in the world for that matter? If so, what type is it? If not, isn't it about time we do? That's the first thing I'd like to ask about, as I'm curious.

[Translation]

Secondly, Mr. Chairman, I'll come back to the notion that the publishing industry is doing better and some 30% of books sold in Canada are canadian. I am just wondering if there is not some sort of optimal level. At some point, we might reach a level that we would consider sufficient, because going higher might mean promoting insularity?

Is there such an optimal level? Has there been any research or reflection about this in the industry or elsewhere? For our ideal mental health as a nation, how much of our reading should come from here and how much of it from elsewhere, so that we keep our window on the world open?

I'll come back to my first question, because I would like to hear from Ms. L'Espérance-Labelle. What is the role of multimedia in the virtual book of the future? What sort of legislation or regulations can the Canadian government put in place to help Canada achieve a significant position in this future industry?

Thank you.

The Chairman: Let's just be clear on this, Mr. Bélanger. When you talk about the book of the future, do you mean just a virtual book or...

Mr. Mauril Bélanger: I'm a romantic. Nobody is ever going to prevent me from reading a book made of paper, but I imagine such books will become increasingly expensive as we try to protect trees and save paper. So I imagine fewer and fewer of them might be produced. If that happens, what will replace the paper book? That is what I am trying to find out.

The Chairman: Ms. L'Espérance-Labelle, you can answer when we get to you. I'll put you on my list of speakers.

Ms. Micheline L'Espérance-Labelle: Thank you.

The Chairman: That is a very interesting question, and we are eager to hear the answer. We would also like to know what Mr. Stoddart will say on the future of traditional books in these circumstances.

Ms. Micheline L'Espérance-Labelle: Could you please explain your second question? What could the government do to encourage...

Mr. Mauril Bélanger: ... Canada to assume a leadership role in integrating the multimedia industry with the publishing and other industries. As a government, what can we do to help bring that about?

[English]

The Chairman: We have two important questions that maybe I'll ask you to address when you intervene. What type of book do you see in the future? How does it impact on you? If you're not in the virtual book publishing multimedia, what do you do? Also, what do you see as the optimal percentage of Canadian content or Canadian publishing?

Mr. Abbott.

Mr. Jim Abbott: Thank you, Mr. Chairman. This morning when we had other witnesses, we got to talking about audience. I think it was very interesting to bring up the topic of marketing and distribution, because indeed that falls into the same area of audience.

I am of the school of thought that one can't just turn around and mandate that there is going to be marketing and distribution, or that there are going to be people buying tickets, or indeed that there is going to be an audience.

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With that in mind, and at the risk of putting the one retailer I see on our list on the spot, I wonder if Mr. Stevenson could help us understand....

Prior to the approval of the amalgamation that led to Chapters, there was some concern about the domination of Chapters in the retail marketplace. In terms of the area of marketing and distribution, and particularly in light of the very good question by Mr. Bélanger about the book of the future—you see where I'm driving with this—I wonder if Mr. Stevenson could help us understand what would, could or should the government be doing. In Mr. Stevenson's opinion, what is the responsibility of the government? I'm sure the publishers may have a slightly different point of view. What would, could, or should the government be doing in terms of taking a look at how the audience is served, how the audience is promoted? In other words, how should the product be promoted?

What function does a very large corporation with many-thousand-square-feet stores have in this mix? Where are we going in the future, and how can the government really address this issue so that we get more product out and available to an audience that may choose to make a purchase?

The Chairman: Excuse me, Mr. Abbott, you do realize that we have another retailer of a small store here? I suppose you are posing the question specifically to—

Mr. Jim Abbott: Well, I'd be very interested in the small retailer's perspective, to see if there's a match.

The Chairman: Sure, because this is the idea of having the two perspectives.

Go ahead, Mr. Stevenson.

Mr. Larry Stevenson: As a retailer, I could say there are two things the government could do to help. Let me defer to the question of the future of the book.

I tend also to be a romantic, and believe it will be here 50 years from now. In some categories, such as reference, something like the Encyclopedia Britannica is obviously already more in multimedia form than they are in hard copy. Arguably this is also the case with cookbooks and atlases. There are many genres of books that clearly, by virtue of boundaries of countries, are changing on daily basis. It's kind of hard to have a hard-copy atlas today, for example.

But I'm not in the Negroponte school, which holds that the book is about to disappear, that we're going to have one book and we'll download it. I think there's something about owning the book. There's something about the user-friendliness of being in a bathtub and not being electrocuted.

Voices: Oh, oh.

Mr. Larry Stevenson: There are a zillion reasons for why I actually believe the book is here to stay. Having said that, I should add that there's going to be an explosive growth of multimedia, however that is defined, on the Internet, and other ways of getting access to information.

As a retailer, thinking of it from the market end, I'd say there are two things the government can do to help the book industry. One is incentives to readership.

I guess the question is how do you get a bigger audience? Sitting on the board of the Shaw Festival, I know that we watch each year how we can get more and more people to come down to Niagara-on-the-Lake. I'd say the same thing is true in the book industry.

I think we actually have a disincentive to readership, and I'd agree with Ms. Anderson. If you think of the GST, it is the exact opposite of an incentive to read. It is a disincentive to read. So that's a fairly easy one, if you ask me. I think the entire industry would believe that, rather than trying to figure out new incentives, we should at least remove one of the disincentives already there.

And if for reasons of fiscal prudence the government.... I'm obviously not privy to a lot of the reasons why that may or may not be doable. I would at least say that some form of a rebate to Canadian-authored titles of that portion of the GST....

Again, I don't know whether that will be allowed under the MAI. I think, however, there should be incentives to the people who can make a difference—by and large, our book sellers and the publishers—actually to support especially the emerging Canadian authors.

The second thing is just mass awareness. Clearly there have been examples in the Canadian book industry, with Canada Book Day started here in Ottawa by Lawrence Martin. Those kinds of initiatives raise the awareness of books that could be funded by government, whether that is in promotion dollars for the industry as a whole, as opposed to any one organization.

If you think of the Governor General's Awards and what Jack Rabinovitch has been able to do with the Giller Prize, that's helped everybody in the book business. Anything that brings great books out with mass awareness is a good thing.

So I'd say use some of the funds—and that isn't directed then to any particular publisher. In fact it's rewarding publishers who do a great job of producing great books. For example, I would have said that pouring some promotion funds into things like the Governor General's Awards, into the Gillers, into Canada Book Day, is the kind of thing that does help. Retailers help the publishers and help authors as well.

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The Chairman: Thank you.

Ms. Anderson, could you respond briefly, because I sidetracked Mr. McIntyre, and I don't want to do that. Maybe you could respond to Mr. Abbott very briefly.

Ms. Mary Joe Anderson: Well, I agree with what Mr. Stevenson said. I think there's a very big difference between the perspective of an independent bookstore and a large chain superstore. I don't think we have time for me to address that issue.

As I said earlier, the government can continue funding in the way it did for the marketing and distribution.

There are so many issues that face me as a retailer. Customers now can come into the store with knowledge of books from all over the world, because they are on the Internet. Yet those books are basically unavailable to me because of distribution problems.

So to me there are ways in which every level of the industry has to be addressed. There are problems at every level for the retailer, and I'm only speaking as a retailer. It's service and distribution, it's marketing and promotion, it's funding for the writers, it's everything.

So that's a very quick and global answer.

The Chairman: Mr. McIntyre, you've been very patient.

Mr. Scott McIntyre: Thank you, Mr. Chairman. The joy of a round table is obviously that the things you wanted to say eight speakers ago.... The notes have become blurred as you run over them. I'm going to try to deal with the various things that came on the table without hogging more than my share of time.

I want to start by going back to the MAI. For my sins I've been chair, and I'm now past chair, of the Cultural Industries Sectoral Advisory Group reporting to Minister Marchi. In one way or another, I have been involved with every free trade negotiation since the FTA. Why anyone would have the patience to do that, I don't know.

With respect to the MAI, the critical issue in my mind with respect to the cultural industries is the ownership implications. It seems to me that, particularly in book publishing, the case can be made overwhelmingly that there has been a direct linkage between ownership and the creation of content.

Now, I know that Minister Marchi is adamant that there will be a complete carve-out or nothing.

There are other possibilities going forward, one of which could be much more interesting. This would allow Canada perhaps to become a little more proactive in this whole notion of creating a cultural regime whereby the mouse can at least hold its own with the elephant.

I think we lose sight of the fact that as a country we have been quite remarkably successful in balancing these issues.

In terms of the MAI, there are two things. First, I think it is absolutely essential that Heritage and DFAIT work together, because whatever the ministers say, the endgame is going to go on in Geneva behind closed doors, and the negotiators are going to be confronted with some tough horse-trades. That kind of conviction has to be on the table. It's tough when it's the endgame, it's 4 a.m., and something has to happen.

The other thing is that with respect to the international trade environment generally, these agreements, of course, are hugely complex. They're full of appendices, and they are not necessarily consistent one with the other.

As we found out with the WTO magazine decisions, and may find out with the Polygram decision, at the end the alligators in the swamp are going to get you in the appendix, because someone wasn't quite looking at what the implications were. So all I would ask and urge is that this level of conviction apply with the partnership between DFAIT and Heritage.

I didn't come here to be a trade negotiator. I think there were some comments made earlier about the fairness of entry levels into existing government programs, be it the Canada Council or Heritage. Let me tell you, I think some of these are the most democratic, reasonable sets of criteria ever devised by man. They're regionally sensitive, and they ask only a basic demonstration of professional competence. Having been in some of them, I can tell you that in the debates that have gone on to try to ensure equity between Quebec and English Canada, equity amongst the regions, the level of sensitivity and, in my view, modulation have actually been quite remarkable.

In terms of where the books are going and what the threshold is, I don't think you can ever have too many books from anywhere. We are in fact—and we are inclined to forget this—the most open nation in the world when it comes to the importation of knowledge. I think the marketplace—particularly for books, where Canada is virtually the only country in the English-speaking world where almost everything done in English is available in the country—is probably the most competitive marketplace you could ever find. I don't think there's any great danger of the public being overwhelmed by Canadian content. I can't imagine a limit. I think the only answer is wonderful writers and more aggressive publishing.

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As to where the book goes, I'm not only a romantic, I'm a Luddite. I'm a defiant Luddite. I see publishing perhaps in the broader context, because publishing indeed only means “to make public”. So in a digital world, what we really do, one hopes, is add some value, edit, license, and disseminate. Since everything now is digital to begin with, there's no reason at all why a publisher cannot look at a multiplicity of ways to deliver that content.

Ownership is a big issue. The protection of copyright is a big issue. The antiquity of many publishers' contracts is a big issue.

I do think that, first, the book is going to survive. About 25 years ago, Marshall McLuhan said it would die within 5 years; he was certain of that. I do think, in conversations about the book dying, that we're inclined to forget that the book is arguably the most effective and cost-effective delivery mechanism ever invented, and all of the things we're seeing happen right now on the Internet are first world phenomena. Let's look at the rest of the world, the third world, and realize that the magic of the book has enormous currency, in my view, for a long time to come.

It will change. Database publishing will be huge. If you want current information, you'll call it up on the Internet, but the magic of a book as an artifact, as a story, has plenty of legs in it.

What might the government do in the future with policy? On the whole, in fact, in this country we've done quite well. I would argue, if you wanted to summarize it, that it would be to nurture the creation of content and ensure that Canadian voices actually can get to their audience.

I think that's enough for round one, Mr. Chairman.

The Chairman: Thank you very much. I will recognize Mr. Muise, Mr. Godfrey, and Ms. Fraser.

Mr. Mark Muise: I think the comment made earlier about being the seventh or eighth to comment or make a point is valid.

I'd like to touch a little bit on what Mr. Bélanger said and maybe go one step further. I'm wondering what the Internet or other emerging technologies—I listened to what you've said—are going to do in terms of copyright or distribution. Let's maybe throw in demographics as well. That's something we sometimes don't study a whole lot, but they certainly do have a huge impact. We've just started to see what that is going to do. I'm wondering if maybe someone would comment on that.

Thank you.

The Chairman: You go ahead, Jack. I think they're signalling that they would be patient.

Mr. Jack Stoddart: Demographics are important. Since we own the publishing company that did Boom, Bust, and Echo, we have more than a passing interest in the subject.

First of all, reading is more essential today than it has ever been. You can't do anything in life today unless you can read well. Whether it's in book form or electronic, it really doesn't matter. I don't care whether the book, as we know it today, survives. Publishing and book retailing will continue. The format may change. We've gone through 78s to 33s to 45s to tapes to digital tapes to CDs in the music business. We're still in books primarily in the information and entertainment business we're involved in.

I suspect that will change. But where technology has really changed our industry is in the technology to make books. That means the ability to typeset and to scan certain things so you can make books cheaper than we used to do by comparison. We can make books in two weeks, or two days actually, if we really need to. So the technology has worked presently to upgrade the ability of the publishing industry to bring forward the books.

The technology is changing so that we can transport books across this country faster. When you open a carton, you scan the outside and you know everything that's in it. So you don't have to count every book. The old systems of distribution are quickly disappearing, and that's an important part of it.

• 1625

I think that in the long run we shouldn't be concerned about the format of the book, but rather about whether we are doing things to ensure that the children who are growing up now have reading skills, whatever the format may be.

I think the other thing that's important is for us to continue to have access to that reading material, again in whatever format. We're very concerned right now, for instance, that the libraries are buying primarily foreign books, in particular, American ones as opposed to Canadian books. Collections of Canadian material seem to be going down dramatically. Why should Canadians be paying to buy Danielle Steel instead of Margaret Atwood or many others?

From a bookstore's point of view, this government—the last government, I guess—took a very important step when it ruled on the entry of Borders into this country. It's not a matter of whether we should have large-format stores or not; it was Borders as a foreign entry into the country.

The reason it's very important is that, talking about demographics, in their sales reporting as a retailer Canada didn't exist. Toronto was part of Buffalo, Rochester, Cleveland, etc., and Vancouver was part of Portland, etc. As a retailer, if you don't know that the country buys X, I don't know how you can buy.

I think that technology allows us to do many things. It can also destroy many things. The technology that's used today in retailing can give you wonderful information, but if you misuse it or if you want to use it because it's just part of a larger issue, which means selling more books anywhere in the world, then we're going to lose this country. We have to understand that we also have to make sure our people have access. That's why we have radio and television that have Canadian content regulations, etc.

If I could just get back to Jim's questions as far as marketing is concerned, the Department of Canadian Heritage and the industries are reviewing the new BPIDP program, which is the publishing programs they're responsible for.

One of the recommendations made by the industry that I believe will be accepted is that 20% of all those grants has to be spent on marketing, not on the production or development of books.

I don't know if we're producing enough. I don't know if we reached that maximum that we can reach. If we were at 70%, we'd be too far. I know that, but I don't know where it is in between.

I think that the objective in the next period of time has to be to sell more of our books to develop the work of our writers for the general public as opposed to producing maybe more titles. We have a huge production of books right now.

I think the publishing industry has taken that step of suggesting that the new program would have a component that's at least 20%, which was not a mandated situation in the past. So I think we're moving from within the industry to try to support the notion that marketing is a very important part of the production and sale of books.

The Chairman: Thank you, Mr. Stoddart. Mr. Godfrey.

Mr. John Godfrey: I want to pursue the demographic point, because it's obvious that of all the cultural sectors we're going to be interviewing, this has certainly been one of the great success stories. To go from such a low percentage 30 years ago to such a high percentage today is just remarkable. Clearly, whatever the combination of forces was—it was the market plus government policy—we got it right somehow or other, and we have to keep getting it right.

That said, I guess the question I have is what's the reading base? What has happened to readership and buying patterns over the last 30 years? We're talking about percentages of that when we talk of 30% or 3%. I'm curious to know, first of all, what the facts are in terms of adjusting for inflation and population in terms of how we can document whether we're reading more or less or buying more or less. It seems to be a very important question because it does relate to these marketing issues.

We had a cultural demographer in the person of Terry Cheney come before us. He said that if you wanted to project into the future against two lines, one being age and the other being education, one could see a falling off of television audiences and an increase of reading audiences, which sounds good for you guys, basically.

My second point is that—this is your perception as well—the demographics are working in your favour.

Third—and this relates to a question called the mischief question, because it was put this morning by two of the authors who appeared, Myrna Kostash and Carol Shields—about the distribution issue. This is where Mr. Stevenson gets to do his stuff, or Ms. Anderson.

• 1630

When you create a new kind of cultural phenomenon such as these mega-bookstores, is it provable yet, or is it knowable ever, that you will actually increase the audience because you've created a new kind of phenomenon which involves coffee and books and singles dating or God knows what else that happens inside your store, Mr. Stevenson? Do you grow the market? Can you prove you grow the market? Will we ever be able to make a definitive version of focus groups? How do we know these things?

Those are three semi-related questions, all to do with audience.

The Chairman: We'll leave these questions to be answered later on.

Ms. Fraser, you've been very patient.

Ms. Sylvia Fraser: I would like to make two points. The first is obvious to everyone here, but I don't think it hurts to say. When we talk about protecting Canadian culture, we're not protecting ourselves against the best that's out there. What we're protecting ourselves against is essentially the dumbing down of culture, and specifically the dumbing down of publishing. One has only to look to the States to see what is happening there with the pop everything. Publishing is really simply a branch of the entertainment business—and the entertainment business is busily dumbing itself down. That essentially is what we all face.

So it isn't as if it's some precious little market we're trying to protect. Very major things are at stake here in terms of literacy and anything else you might suggest.

The other point is a very specific one. That is, about technology, this conference was at one point mentioned as “books and magazines”. There's an example in the magazine world which is extremely important from the point of view of authors. There was a time when a freelance writer would sell first territorial rights to a magazine and would own the copyright on the work. Now what is happening is that you are given a paper to sign and for $10 or something you sell off on electronic rights. Essentially you are giving up worldwide rights and copyright on the piece you wrote.

There's no way an individual writer can fight this. It's not possible. You're not even dealing with a publisher or an editor. More and more you're dealing with a conglomerate, a multinational that owns many chains of newspapers or magazines. It really isn't fightable on the level of the individual. I think it's extremely important that the government step in and take a role in establishing what is fair policy not just for the author but for the publisher.

When we look at the future of books, we do not know what that will be, but there is an object lesson in what is happening with periodicals. Essentially what they do is sell the current content of the magazine or the newspaper to some database, and the database sells downloading rights to individuals who are subscribers. While you find the periodical market is getting smaller and smaller, there's this huge electronic market, which is growing very rapidly and to which the writer has no access and in which the writer has no credit.

For statistical purposes, the typical freelance writer is 45, has two post-secondary degrees, has 10 years of experience, and earns $26,100 a year. It's really an important and very.... Well, I've said it.

The Chairman: The average writer?

Ms. Sylvia Fraser: According to PWA, the Periodical Writers Association: age 45, two post-secondary degrees, 10 years of experience, $26,100; and they referred to this person as “she”. I don't know whether they were just being gender-inclusive or it tends to be a woman, but there we are.

The Chairman: Thank you.

Madame L'Espérance-Labelle, I think it would be really interesting to hear from you, because there have been questions from Mr. Abbott and especially Mr. Bélanger about the book of the future. Maybe you could tell us how you see the book of the future and where it fits in your world.

• 1635

I think it would be really interesting to hear from you, because there have been questions from Mr. Abbott and others, especially Mr. Bélanger, about the book of the future. So maybe you could tell us how you see the book of the future and where it fits in your world.

[Translation]

Ms. Micheline L'Espérance-Labelle: May I take this opportunity to raise some other points?

The Chairman: Of course. Please feel free to do so, the floor is yours.

Ms. Micheline L'Espérance-Labelle: Thank you. I'd like to raise a couple of other points. At the same time, I think I can answer your specific question, Mr. Bélanger.

In my opinion, all these industries, including publishing, music, video, film and magazines, are undoubtedly converging on multimedia. Multimedia draws on all of them to generate its content.

So, in the circumstances, I feel the government should encourage these industries to work together so that each of them can benefit from partnerships in the future. To protect culture, we need the economic base. We have to find the means to protect culture, and to find the means, we have to sell it. So we also have to ensure content quality. To my mind, content is key, be it the content of a book or a multimedia product, such as an Internet website or CD-ROM—there is the perfect vehicle that can get your content out to the whole world in a split second.

But we do have to ask the following questions. Government intervention is extremely important in two areas.

First, we have to think in terms of content quality. Just taking a book and putting it on the Internet or on a CD-ROM is not enough. The competition is forcing us to think in terms of interactive content. This means that you have to put your traditional content on to multimedia. And you have to make sure not only that your content is on the new media, but that it is also high quality and interactive. That is the main object of the multimedia product.

There is also another challenge the government will have to take up: the new media simultaneously provides us with access to the world and gives the world access to us. Here in Canada, our citizens—be they immigrants, francophones or anglophones—can give the world access to French-language or English-language content, which can be instantly translated into the other language. Right now, we have to look at the quality of tools that will be used for instantly translating content. If they are inadequate, we will be losing a great deal of content in translation—and here I mean both linguistic and cultural content.

You were asking what you could do to ensure that Canada takes the lead and facilitates the dissemination of books in a variety of formats through multimedia. At this time, there is still a very wide gap between the developers of multimedia content, which requires editing, and the distribution network. We have a traditional distribution network, and we have developers. In Canada, there is no...

The Chairman: Just a moment please.

Ms. Micheline L'Espérance-Labelle: Yes?

The Chairman: Who are those developers?

Ms. Micheline L'Espérance-Labelle: Developers are those who develop multimedia content using a given technology, be it on the Internet, CD-ROM, or DVD. The developer develops content. After that, the product obviously needs to be edited, marketed and distributed. In the multimedia industry and present, English-language content is established by developers and edited by US firms. French-language content is almost always—in 99% of cases—edited by major French firms. I mean French firms from France.

There is a huge defficiency there, a wide gaf. It is essential that the government encourage and help editing firms to edit Canadian content for dissemination abroad. This is extremely important.

• 1640

Since in Canada there are no real multimedia content editors working in either French or English, what we end up with is obviously content from elsewhere adapted for us. This means we are importing more than we are exporting. So if we want to protect our culture, our editors have to be able to edit our own content, then export it. We have to restore that balance.

I would add one more thing: it's all very well to provide support for content development, but if we don't get any assistance in marketing and commercializing that content, we will never be able to sell it. I said earlier that the best way of protecting culture was to be in a position to sell it. So I feel that support for marketing efforts is very important. When the government provides assistance for product development, regardless of what the product is, it should also be thinking about support for marketing that product.

One thing I have been very happy to see is all the initiatives in the field of education. If we want to preserve our culture, we have to start by thinking about children, our children.

At present, it seems that both the Department of Industry and the Department of Heritage Canada are concerned with education. Initiatives include networks like SchoolNet, Rescol and others, that in my view are extremely important. We have to focus on education. In other words, everything has to be funnelled through schools. School is where it starts.

It's important to bring together companies as well and to work very closely with relevant organizations and to be everywhere in the field. If we are serious about preserving our culture, people who are active in its development or dissemination need help, help in the field, help in management, assistance in setting up partnerships, arranging for exports etc.

I think I've given you an overview. I believe I've answered the question, either directly or indirectly.

The Chairman: Mr. Bélanger, it's your turn.

Mr. Mauril Bélanger: At another meeting, about a month or two ago, I brought up this matter of immediate translation or interpretation with respect to Internet and the importance that this can have for Canada. I was told at the time that it was still at the theoretical stage and no actual work had been done. That at least was the answer I got. I gather that isn't quite the case.

Ms. Micheline L'Espérance-Labelle: It's very advanced.

Mr. Mauril Bélanger: I'd like to discuss this matter with you some time, if I may, Ma'am.

Ms. Micheline L'Espérance-Labelle: It's already on the Net.

Mr. Mauril Bélanger: I see. Mr. Chairman,

[English]

I just wanted to very gently admonish one of our—

The Chairman: How about Mr. McIntyre?

Mr. Mauril Bélanger: I agree with 99% of what you said, sir, but there's one expression that just bugs me—“Quebec and English Canada”. I don't fit in there anywhere, sir, with all due respect. I'm a francophone, a Canadien français from Ontario, representing a riding that has 40% French Canadians. There are hundreds of thousands of francophones in Canada who do not reside in Quebec. There's one province, only one, that's officially bilingual—New Brunswick. Where do those people fit in that definition or that expression?

Thank you.

The Chairman: Ms. Anderson.

Ms. Mary Joe Anderson: By way of addressing some of the very specific issues, I would like to raise some again and some for the first time. I would like to suggest that the question is not whether the book is dying. The question is which publishers and which booksellers will die.

Off the top of my head, I can say that 15 to 20 independent booksellers across the country have closed within the last 12 months. I believe it is the beginning of a wave that we will see increase dramatically in the next five years. I may not be a bookseller in two years. There are many nails in my coffin.

As a retailer, as a businesswoman, I understand that it's a competitive marketplace. I am willing to accept responsibility for a lot of how I fare in the business world, but there are some potential nails that can be put into my coffin. And the question I have to ask is this: is the government wielding the hammer? And the answer is yes, in very many instances it is.

• 1645

The GST is one nail. The monopoly that's being allowed in certain large chains, where pricing is totally different from what it is for me, is another nail. Technology is the third nail of many, and I probably won't even think of all of them. We need to be computerized to survive in the next decade in this industry, and most independent bookstores are struggling to have computer systems or to try to develop more extensive ones.

I know the industry should be standardized so we're all using the same system and the ordering is comparable. Telebook, the Canadian ordering system, is a fiasco and has been for many years. Jack mentioned that libraries aren't even buying within the country, let alone trying to have them buy within the province, as they do in Quebec.

But perhaps all of these are moot points when we consider the very big nail of the MAI. That is hanging over us as we discuss all of these issues.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mrs. Anderson.

[Translation]

Mr. Foulon and Mr. Saada.

[English]

and then Mr. Abbott.

[Translation]

Mr. Hervé Foulon: Thank you, Mr. Chairman.

Allow me to come back to a few points. Reference was made to books and multimedia. This is something that is discussed every day and people are asking questions about the future of print media as opposed to multimedia. Contrary to some, I don't think that this will be a threat to the future of books but rather I see a complementary relationship emerging.

I was discussing this with someone at noon—it was quite à propos since we are launching one of our books, a reference book— who put this very question to me. It was a journalist and I asked her what the situation was for her. She told me she consults our book regularly. I told her that I was reassured. She also realizes it is very convenient for rapid consultation.

It's excellent to be able to work, today in any case, with multimedia when you are doing some research. If we're discussing a matter around the table and we need to define a word or a problem, it's much quicker for me to look something up in my traditional dictionary or encyclopaedia.

So I think it depends on the way you may be working and the particular situation you may be in. That is why I talk about a complementary relationship today. I don't know whether 10 or 20 years from now they'll come up with a virtual book whose pages I can turn. If that happens, we can sit down and have another look at things.

You also asked whether things were improving in the industry and to what extent they can improve.

First of all, things are improving in the industry, yes, but it depends on the particular area. When we talk about the book industry, it includes literature, children's books and school books. These are very diversified areas. Although certain sectors may be doing better than they once were, there are others where things are deteriorating.

In the case of French-language books, and I mean French language and not just books published in Quebec, publishers of school books are going through a more difficult phase for different reasons and this creates problems because school publishers are perceived as large companies with a strong financial footing.

You also have to have some idea of the investment involved in developing a text book. You can publish a novel with $10,000 but you cannot bring out a text book with the same amount. In the latter case you're talking about an investment of 300 to $400,000. So it's a totally different problem. That is why we have to be careful when we talk about the health of the industry. We have to clarify which sectors we are referring to and also take into account the specific situation in Quebec, quite similar to that described by Jack Stoddart with respect to general literature, namely the fact that approximately 30% of the market was reoccupied, so to speak, by the domestic industry with imports accounting for the remaining 70%. As far as the publishing of school texts is concerned, generally speaking 80 to 85% of these texts are published by local publishers and I stress local, and not necessarily Canadian. That is where there is a difference and it boils down to the problem of investment.

Large textbook publishers, because it is a big market, are foreign owned and, strangely enough, happen to be the most important publishers. So we have to take them into account when we talk about the health of the industry and that has always been part of our policy to attempt to help Canadian interests take charge of their own industry.

• 1650

Mr. Stevenson talked about encouraging reading. I would like to see something done about this because it is indeed very important.

We know what the present birth rate is. I don't think we can do much to change this in the short term and we can't expect families to suddenly have four or five children and

[Editor's Note: Inaudible]... as a matter of fact.

On the other hand, there are opportunities to increase the market for the industry. Ninety percent of the population are not readers, unfortunately we're far from that mark. I think a great deal of work is to be done promoting books and reading. Why both books and reading? Well, books can be promoted as objects in themselves. Books are not always given sufficient consideration. How many times do we hear the claim that books are too expensive? We hear that almost every day but it's something I never hear about other products.

Parents with children at school have to spent $5 or $10 for a book and they complain about the price. But they don't have the same reaction when they have to equip their kids to play hockey when a pair of skates costs $200.

This involves changing a whole mindset in which we are involved just like everyone else. I refer to schools because this is the place where children have their first contact with books. At the present time, in the present state of affairs this contact is not a very fortunate one because of the shortage of books. I'm not talking about school books but also about the reading provided by the school library. We've all heard about libraries that still have books where they talk about the day we'll be able to send a man to the moon. When this is the kind of first contact, along with the lack of books and their poor condition, how can we ever expect to encourage the love of reading? I was always told that you have to have good tools to do a good job.

So I think a lot of work has to be done on promotion both with respect to the book as an object as well as the promoting of reading. It's not at all a matter of competing with the new tools that are at people's disposal. At one time it was claimed that television would put an end to books. Television has been in existence for a long time now and we still have books. Television can even have a beneficial effect on the demand for books. There are certain literary programs that have an immediate impact on the sale of books and when television series are based on a book, there's an almost immediate surge of interest in the book.

I'm sure that studies can show that new technologies like multimedia or Internet can have a favourable impact on reading and books in general. That is why I see this as a complementary relationship rather than a matter of replacement.

Reference has also been made to the GST in connection with the promotion of reading. That is a very important point. We often hear speeches about the need to ensure the free circulation of books at the lowest possible cost in other countries, including southern countries. In Canada we didn't have a tax on books but this oversight was immediately rectified. There seems to be something paradoxical in our position. We have added a further obstacle to accessible reading. So I think it is important for us to review these policies.

We also talked about the problem of bookstores. It's a topical problem throughout the country. We are certainly not ready to say that there is only room for a single kind of bookstore in the country tomorrow. Are superstores the only kind of stores we should have? I think everyone is happy to be able to increase the number of points of sale in order to make books more accessible.

At the same time, we have to be careful to retain the same diversity in titles. In the case of superstores, and this is quite a controversial debate in Quebec at the present time because of Price Club, to mention only one, they distribute only 150 to 200 titles. Naturally they choose best-sellers.

• 1655

That means that these sales will not be made by a traditional book store, sales that they used to be able to rely on for a sufficient profit margin to be able to offer a full range of titles to their customers, books that did not sell in large quantities but that are part of our general culture and diversity. They would include essays and a great range of other kinds of books. It would be dangerous if we no longer had this kind of distribution because we can certainly not expect stores like Price Club to start selling these kinds of books, like the dictionary I published on slaves in North America, for example.

Those are the points I wanted to draw to your attention.

The Chairman: Thank you, Mr. Foulon.

Mr. Jacques Saada: My first remark is in reference to something said by Mr. Foulon at the beginning of his presentation. He said that we can't always choose our friends (AMI in French) and I wondered how the interpreters were able to translate the play on words.

Some Honourable Members: Oh, oh!

Mr. Jacques Saada: I have several questions but I'll only put two or three. Are there any differences in the trends relating to French-language publishing in Canada as opposed to English-language publishing? Have you noticed any differences in market trends and so forth? I'd be curious to know.

My second question related to a comment by Mr. Foulon about the role of television in promoting reading. Unless I am mistaken or absolutely ignorant about television programs in Canada, particularly in Quebec, it seems to me that there are very few quality programs about literature. Would you not consider that this scarcity of television programs is a handicap for the development of publishing?

Third, it is obvious that everyone is in this to make a profit. We know, for example, that the reading public has a strong preference for lower quality books, of very easy biographies, etc. By publishing and encouraging the production of this type of books, are publishers not aggravating the problem of the lack of quality?

Lastly, I've heard lots of remarks about the GST. I won't refer to all those who raised the point but there were many of them. Are there any other financial measures? I'm thinking particularly of...

[English]

Ms. Anderson referred to a number of programs that we have set up and that are valuable. I think you referred to their maintenance and expansion. Are there non-financial measures—in other words, measures of purely political matters—that you find would be very necessary to help you within the next five to ten years, apart from the financial considerations, in terms of policies?

I'm sorry, I have many more, but I will stop here.

[Translation]

The Chairman: Thank you Mr. Saada. We'll continue our round-table presentation and

[English]

we'll come back to you.

[Translation]

I think that you've asked some very relevant questions.

[English]

Mr. Abbott.

Mr. Jim Abbott: Thank you.

Very quickly, before I make the comments that I wanted to, I want to suggest that I find myself in general agreement with the direction that Mr. McIntyre was suggesting with respect to the MAI. Indeed, it does offer some unique opportunities. So frequently we see ourselves, as Canadians, as being the drawers of water and hewers of wood and not competent in the world market, and I think that is such a crime. We are the best, doggone it, and when we set our minds to what we're going to be doing in the international marketplace, we come out on top. Let's take a look at that and be serious about that.

I am scared of walls. If anybody believes that we can have a national exemption that would not be met with national exemptions in the other 28 countries in the OECD, I don't know what they're smoking but it doesn't smell right.

• 1700

I'd like to get to the difference between the independent stores and the large, terrible Chapters monopoly. I'm wondering what role the government should take. We look at the very harsh reality that the outports in Newfoundland are probably not going to survive. We look at the prairies and see the dissolving of the family farm to agribusiness. We see the majority of Canada's corner stores being replaced by 7-Eleven and Mac's stores.

In another life many years ago—too far back to remember—I had an independent men's wear store. I don't know how many independent men's wear stores there are today, but is the small independent book seller an important enough function in our society that the government should be doing things, mandating things and taking action to support them any more than it should be supporting the family farm, the corner store or the independent men's wear store?

Following along on Mr. Godfrey's practice of putting in mischief questions, why don't we perhaps take a look at opening up to Borders and Barnes & Noble to really get a plethora of books on the market? Chapters has a giant market share and I would be interested in finding out what that percentage is.

The Chairman: Mr. Abbott, I must say you make the debate much livelier.

Mr. Stevenson, you have a response.

Mr. Larry Stevenson: Mr. Chairman, I appreciate the chance to answer Mr. Abbott's questions. I always, obviously, take offence to the pejorative monopoly, given that this government has plenty of statistics on the size of the book industry. We're a public company and therefore our sales are a matter of public record.

Just in case you don't have the public records, we sell less than $400 million worth of books in a market of $2 billion. We have four different studies done by economists here in Ottawa and will send you some of them. It is a very fragmented market, and therefore it's pretty easy to use that term and misuse that term when we sell fewer than one in five books in this country. I'm more than happy to talk about any of those issues off-line.

I do think there is a role for the independent book store, just as I think there is a role for the independent men's wear and independent everything. If you look at the comeback in retail, by and large the two winners have been those that are very small and offer something truly specialized and those that are very large. The people who have been hurt are those who were somewhere in between those two extremes. I think there is a role to be played, and if you look at the emergence of many great authors, frankly the Canadian book industry has the independents to thank for that.

Some of the greatest bookstores being built right now in this country are not being built only by Chapters. Some of the finest large-format bookstores are McNally Robinson in Winnipeg, Mel Bolen's store in Victoria and Celia Duthie in Vancouver. It is not a question of big versus small stores; they are different.

I go back to some of the issues around what kind of books you are selling. When you take a large book store like the one here at Rideau and Sussex, with 42,000 square feet and 127,000 titles, by definition you are exposing a whole range of authors and titles that frankly would not have seen shelf space. Less than 5% of the books sold there are best sellers by such authors as Danielle Steel, Grisham or Clancy. So I think that is a good thing.

If I go back to Mr. Godfrey's question of whether that grows the market, I would answer that question at a macro level and a micro level.

At the macro level I only have access to our sales, obviously. I can tell you if you look at our 1997 figures over our 1996 figures, our net purchases from publishers were up 22%. That is the first time in the 16 years of data I have available from the predecessor companies that we had double-digit increases. So in a total sense there has been an increase.

More importantly, we attract 35 small Canadian publishers and our net purchases from them in 1997 over 1996 were up 102%. That would substantiate that by and large what you're seeing is an explosion of books that may not have had market access before.

• 1705

On the last one—and I jump down to a micro from the macro, because that says what the entire company has done—I obviously don't have access to what the market per se has been able to do, nor to what everybody else who sells books has been able to do. The closest I can come is to use Burlington as the example. It's the first of the large stores that we built.

To the best of our knowledge, $4 million worth of books were sold in Burlington in 1994. That was before we opened the first large store in November 1995. We sell in excess of $6 million worth of books from the Burlington store that we opened. To the best of our knowledge about our building, we know what our sales in our existing Coles and SmithBooks stores were. They went down by $600,000, so our sales went down by $600,000, but we built a store that went up by $6 million.

Now, even if everybody else who had ever sold books in Burlington lost all of their sales—which I do not understand to be the case after talking to people at stores like Wal-Mart, Price Costco, and others who are present in the Burlington market—there clearly has been an expansion in the market. I think part of the reason for that is time, because we're open for very long hours. But it also is partly the fact that the more time people spend around books, the more apt they are to buy books. If you can make a community centre that has seating and a cafe, events and continued education, like we do in the Burlington store, people may not come there to buy a book. By virtue of having spent 45 to 60 minutes in the store, though, they will in fact buy one.

The second thing is, I think, very different from what is true in other sectors of retail. There are so many books in print that if you think of other categories of retailing, you don't go to a selection down at a retailer such as Home Depot and say you were unaware they had hammers. Obviously they have hammers. All they have is fifteen different types of hammers. The difference with a bookstore is that when you go in and see 127,000 titles, you are going to run into a lot of titles that you were not even aware had been printed, that were there and available. I therefore think large bookstores are a complement to the small bookstores, but they also do overall market growth.

The Chairman: Briefly, there's another question I think Mr. Abbott posed that I think is worth looking into. He asked if we should have Barnes & Noble and the big American stores. Secondly, in Burlington, for instance, could you tell us if you know whether small bookstores died or survived along the way as you increased to $6 million?

Mr. Larry Stevenson: I can't answer in terms of exactly what has happened to their sales. What I do know is that none of the Burlington area ones have gone out of business. I think there is one that is just going out of business, but the timing may be wrong. It is in Waterdown, which is just north of Burlington, and it may have been impacted by the Chapters store.

My understanding is that everybody is down somewhat. From knowing folks who are non-traditional book sellers and who are in the Burlington market, they have seen a dip, with some of them experiencing as much as a 15% drop in sales. But I don't know about the smaller book stores and what they have done in Burlington.

On the question of U.S. entry, I think Mr. Abbott was here when I got to appear before a similar committee a few years back, and my answer now would be the same one. As long as we all play by the same rules, I think they should be allowed in, I think their entry would be fair. If they are going to have to distribute and get their books from the Canadian distributors, I think it's actually a fair playing field. If what you're telling me is that they're going to get to buy U.S. prices and send books from Ann Arbor to a Canadian store, then that is unfair competition. At the time—and obviously I wasn't privy to some of the detailed discussions, other than what I was hearing third-hand—that was not the intent, so I completely disagree if we can't play a level playing field. Do I think we can play head-on with them? Sure.

Similarly, I would say the same thing about ownership—as long as the ownership is the same for everybody. What I do not agree with—and I said so at the time—is that we have to maintain some Canadian ownership, but somebody else does not have to. We either all play by the same rules—meaning that there are no ownership rules, there are no distribution rules and we all get to compete—or we all play by the exact same set of rules.

The Chairman: Mr. Fordyce, and then Mr. Stoddart.

Mr. Sean Fordyce: Again with respect to this discussion that went back to Chapters, I wouldn't feel nearly as comfortable as Mr. Stevenson about Borders or Barnes & Noble or anything else coming here, because we have a history. That is, I have confidence that as a small publisher, I can call this chain that is very big, and they will still talk to me. I don't have that confidence at all with the others, whether they buy locally at all or not, or whether they buy through a distributor perched on the border or not.

There's a commitment to Canadian books that I see every time I go into a Chapters store. I wouldn't really trust seeing or expecting that to come out of an American store. As we've already said, they barely understand that there's a border between the countries, so I would have a lot of trouble with that.

• 1710

With respect to the small stores vis-à-vis the large stores in competition, I agree again with Mr. Stevenson over the issue of the depth of titles. It has affected my company very directly in terms of books that I haven't sold in years. Backlist titles are being brought out again and made available because of the type of stores, so I would agree with that as well.

The playing field isn't level between small stores and large stores. It's partly the cost of doing business—the cost of shipping a box out—and this is where shipping rates come in. It isn't much more expensive to send a 10-kilogram box than it is to send a 1-kilogram box, so a large store is able to buy at a much lower cost of shipping.

I didn't know the percentage of sales that Chapters had in this country, but the percentage of my sales that go to Chapters is very, very high, and one of the reasons is that a lot of the smaller stores are finding they can't afford to pay the shipping. That's even with the 40% discount we have, which is only 5 points lower than Chapters. So it isn't the discount; it's the shipping that's making it difficult.

I think we really need to look at that. The GST is an issue. I really hate the GST, and I think most people here do, but I was shocked that the shipping rate increase between 1993 and now has been over 1,000% in the cost of shipping books. That didn't make one headline anywhere. The GST has become almost a red herring. That's only a 7% difference.

One problem related to the GST that hasn't really been acknowledged is the fact that these are conditional sales. These sales are done on credit and they're going to be returned. This means that.... This may be a surprise to Mr. Stevenson, but I had an order from Chapters in August that I received on August 12, and I had to delay shipping it until September 1, because otherwise I'd have faced a GST bill on September 15, or penalties, based on money that I may never receive because they're conditional, returnable.

Accounts receivable: if you look at my entire accounts receivable, I can't pressure these people when they have returnable product. If you pressure people on the sixtieth day—bang, your books come back.

At the very least, if we can't remove the GST altogether, it would be good to recognize that these are conditional sales. Until the conditions are met, the government shouldn't be collecting that, and shouldn't be saying they're going to treat those sales the same as a cash sale. They're conditional credit—no ability to force payment and no...

[Editor's Note: Inaudible] ...in process very long.

With respect to the grants, the democratic grants, I want to make one specific point on that. That is, the BPIDP—which is recognized as the senior grant program, and is the major one, and got the bulk of the new money that was announced last fall—has floor limits for sales close to $250,000. I don't call that democratic.

What has happened over the last number of years is that in order to create policy to support large publishers—which I agree should be supported—what we've done is categorize small publishers, of which there are very many. All you have to do is ask the National Library. They will tell you when they give out ISBN numbers how many small publishers there actually are out there.

We're categorized out of existence. We're just told, “We're supporting small publishers”. “Small publisher” means that you have $200,000 to $400,000 worth of sales. Under that you're not a publisher.

I also would have to say that in terms of saying that it's a question of quality—that they support people based on quality—it's almost an offensive comment, given what really happens.

At the Canada Council they put all the publishers down on the table, and then support those that produce the best. If any major publisher here were asked, “Do you need this money?” they'd say,“Yes. We couldn't produce the quality and the type of books that we're doing without this money”.

How can I compete with them, produce the same quality that they're doing, for which they insist they need this money despite all the other advantages they have—better-known name, size, efficiencies, all kinds of things? I have to outperform them to be able to get this money.

• 1715

These particular grants, because they are grants, there is no legal requirement, even.... We actually looked into asking the Canada Council, and saying, “Could I ask Canada Council if we could mandate them to have to ask the question of value for money?” The answer was no.

The Chairman: Mr. Fordyce, I don't want to interrupt you, but we have fifteen minutes left. It would be nice to have some reaction to what you have said, because I think you have raised an issue that I'm sure is two-sided, so I would like to hear from the others as well.

Mr. Sean Fordyce: Can I just say two more sentences?

The Chairman: Yes.

Mr. Sean Fordyce: I don't understand why we don't receive our orders by e-mail. We were talking about technology. I don't get any orders via e-mail, particularly with Chapters, but that's something we should look into in the small stores as well. That would certainly make it easier to do business.

The other thing is, with respect to a specific thing that we could do marketing-wise, we have to look at the stores not as customers but as helping us get customers, because they return the books if they don't sell. If we could get the consumer directly through catalogues.... I think it would be wonderful, if the government wanted to support the industry and get a lot of bang for its money, if they sponsored catalogues that went direct to households, that had the books being produced in Canada. I think there would be more money produced out of that, generated in real sales and the demand for Canadian culture, than we would have in just sponsoring publishers directly.

The Chairman: I have just been informed that we can keep the room beyond 5.30 p.m., so let's keep the debate going. I think it's getting extremely interesting.

When I was listening to you with regard to small publishers against big publishers—

Mr. Sean Fordyce: Against?

The Chairman: No, not against—

Mr. Sean Fordyce: When it comes down to money, yes, I'm asking for money out of his back pocket, so yes....

The Chairman: No, no, sorry—small publishers in relation to big publishers. I was relating what you said to small bookstores in relation to larger bookstores, and I was wondering what Ms. Anderson was thinking when you were speaking, but this will make it interesting.

Let me see who I have—Mr. Stoddart, followed by Mr. Muise and Mr. McIntyre for now, and then Ms. Anderson, Madame L'Espérance-Labelle, and Ms. Fraser.

Mr. Jack Stoddart: Just to pick up on Sean's point, the BPIDP program did have a floor of $250,000 at one point in time. It still does in one aspect, but because a lot of publishers in this industry are quite small—I'm the president of the publishing association, so I am aware of them—there's another guideline, and that is the sales-to-inventory ratio. We have publishers that do $50,000 a year that are part of the BPIDP program. The industry and the department worked very hard in the last three years to get that kind of ratio as well as a floor number—both, either/or. So today that is not the case. You can be doing $50,000 a year and still be part of the BPIDP program.

Mr. Sean Fordyce: You're asking us to be more efficient than you are in inventory to sales, or to spend more money—

Mr. Jack Stoddart: I'm not asking you to be anything. I'm saying what the Department of Canadian Heritage has set up here as an independent thing.

Of 120 members, we probably have over 100 that are below $1.5 million that are in the program, and most of them are down in the $50,000 to $250,000 a year basis. So there's good access, and Hervé will tell you the same thing with the ANEL members—it's the same situation. So there is good access, and it has nothing to do with large or small. It has to do with how people control their inventories.

Mr. Sean Fordyce: But of all publishers in Canada...you're only talking about something like 10% of them. The other ones are defined out of existence systematically by—

Mr. Jack Stoddart: Could I get back to a point that Jim Abbott was making about Borders and Barnes & Noble? You were nodding your head when I think Larry said “Well, if the rules are the same...”.

The bottom line is that Borders were rejected because the rules weren't the same. It wasn't ownership. They had more than 50% Canadian ownership, but when Investment Canada reviewed it.... Investment Canada for the last ten to fifteen years has been very open as far as inviting new investment into this country goes. It has been a positive kind of aspect from that point of view. It was deemed that in fact Borders had no intention of changing and using a Canadian buying system. Their system was so dominated by a computer buying system that they couldn't change, nor did they want to. That's why it was turned down.

• 1720

So we have some agreement, but the other thing is that although we have changed the copyright act recently—or it's about to come into play—it still does not stop the flow of books published elsewhere from coming into this country if the foreign publisher decides he is going to support somebody else and not have an agent here. That means that Random House of New York can say that Borders can buy at such a rate but Chapters has to buy in Canada so it has to buy at another rate. They can literally do it under the Copyright Act.

If the Copyright Act were slightly different it might make it easier to have an even playing field. But as it is today...and if there is a way to do it we would love to hear about it, because that is all we ever asked for.

I would also like to comment on two different things, textbooks and university bookstores. Chapters has announced that it is taking on the management of the McGill University bookstore. Again, that was under siege from U.S. retailers who wanted to take it over. We were happy to see that Chapters was going to do it, or to be more precise, that a Canadian company was going to do it.

However, for this committee I think it is a real worry that at least half of the university bookstores in this country are right now actively shopping for management contracts. A lot of those will go to the U.S. unless something happens.

I know that this committee and the chair had a feeling about the McGill situation previously, and I would just like to alert this committee to the fact that there is a major problem out there. University bookstores, like the University of Toronto and York University stores and virtually all the east coast universities stores, are all shopping for U.S. management companies now. I think it is a situation of great concern.

Education is not a federal mandate, but as Hervé was saying, educational publishing is a very important part of it, not just in our business and for our authors who write those books, but also in the education of the children of Canada.

Ontario is presently reviewing its curriculum. Until it got shut down by some concerns, it had actually hired American companies to rewrite its curriculum for Ontario. You can be sure that since those people who were supposed to be doing this writing were also the American textbook companies who were actually giving the input, what we were going to end up with...just as Quebec has about 80%, I think you said earlier, of indigenous educational materials, Ontario—and to a lesser degree all the other provinces—still has very strongly Canadian written textbooks.

We are about to lose that, and what we're going to start having is American textbooks everywhere in this country. I defy anybody to prove to me that if you bring up children with American textbooks as their learning material that you are going to have anything but a different type of society 20 years from now. This may not be this committee's mandate, but it is truly something that concerns us very much, and I think it should be part of the heritage department's sense of what culture and heritage is in this country.

Sarmite Bulte has left, unfortunately, and I am not sure I heard her absolutely correctly, but I wanted to put something on record. I thought she said that the first exemption for the MAI negotiation was the French exemption. That's number three or four from the cultural industry's position. The first one is a complete carve-out, and that's really the only one—

Mr. Mauril Bélanger:

[Editor's Note: Inaudible]

Mr. Jack Stoddart: Oh. Okay. Why did she say the French position, then?

Mr. Scott McIntyre: That is the French position.

Mr. Jack Stoddart: No, but—

Mr. Mauril Bélanger: Carve it out of the agreement, period.

Mr. Jack Stoddart: I just don't want...the words, maybe. The difference is the position, and the wording of the French exception doesn't do that. It's a statement of philosophy, not of action.

Mr. Jacques Saada:

[Editor's Note: Inaudible] ...she was referring to.

Mr. Jack Stoddart: Good. That makes me feel a lot better, because it really is important. In another committee hearing on the MAI with the heritage committee she asked a very good question. She read from Garry Neil's report and said if the complete carve-out wasn't accessible, the country-specific exemption was good enough.

• 1725

Garry was talking on behalf of the Canadian Conference of the Arts, which is an arts group and does not speak for the cultural industries. I want to be very clear on the record that the cultural industries do not feel that a country-specific exemption is what we need. He did a very fine report, but he was addressing the arts community, not the industries that bring forward the cultural product in hard form. That's just a clarification on that.

Thank you.

The Chairman: We're going to close with the following speakers: Mr. Muise, Mr. McIntyre, Ms. Anderson, Madame L'Espérance-Labelle, and finally, the last word from Mrs. Fraser.

Mr. Muise.

Mr. Mark Muise: I'd just like a point of clarification from Ms. Anderson.

You mentioned earlier that you feel the MAI would be the last nail in your coffin. I assume by that you meant an MAI without a cultural carve-out.

Ms. Mary Joe Anderson: Yes.

Mr. Mark Muise: Okay, thank you.

The Chairman: Mr. McIntyre.

Mr. Scott McIntyre: To drag the MAI back on the table again, I just wanted to say two things to Mr. Abbott.

One is, I hope there's no misunderstanding that if we cannot do something better, a complete cultural carve-out would be my choice. It's perfectly responsible to think of culture and identity up there with health and defence. From the first negotiation on, we tried to get that language up there, and of course we've never been able to sell it.

I just think there might be—and I stress “might”—some more inventive way to take what has been quite a remarkably sophisticated balancing act with public policy, which Canada has always done.... For instance, the CanCon rules in music have just been copied, but toughened, by France.

I want to come to your point about export. I think we are inclined to look at ourselves through other people's eyes and think somehow we really could be better if only we tried.

Much of the cultural regime we have built in 50 years of public policy is being discovered by the rest of the world. As American popular culture becomes the juggernaut.... Let's remember the only trade war the Americans are going to win is popular culture, and they know—forgive an American metaphor—we're one of the burrs under their saddle, particularly with respect to the EU and very quickly with the Muslim world. We have a card to play there. God knows I've made this speech often enough, and I think the ministers understand that and are taking up the cudgel.

To come back to export, the export of Canadian books has tripled in the last four years, and if you add in rights and finished goods now with the Canadian dollar, printing, and other things, we're at about $350 million in export. I'll tell you, I'll go up against an American publisher or a German publisher any day, because we have such a small and cursed domestic market that we have to be leaner and meaner. That's not the Canadian psyche, but I'll tell you, as but one example, the entire Sierra Club illustrated book program is created by my company in Vancouver. It's manufactured in Asia, mind you.

The success story of Canadian writers, children's books, and illustrated books from publishers driven by the creative side of the business rather than by accountants is quite a remarkable one. And again, there has been a direct—bad word—synergy between public policy and this kind of effect.

Very briefly, I'd like to come back and try to answer Mr. Saada's question. What, inexpensively, could one do with public policy over the next decade that would help the cultural industries broadly and book publishing specifically? Never one to be shy, it seems to me clearly there are the structural issues.

There's copyright, where I would hope the priority would be creator first, producer second, consumer third, but we would fight to maintain a sovereign market, which is a tough thing to do with the digital revolution, but doable.

Trade policy becomes essential. I'm not going to use the word “protection”, because I hate it, but we need balancing measures that will nurture and ensure that we have a functioning domestic market. If you look at film, where we have 5% of screen time, or books, where we have 35% of our market, that's a function of looking at nurturing a market, which does not mean closing doors. Whenever we use the word “protection”, it gets turned back on us. We should just strike it from our vocabulary.

I'd like to see something simple like ensuring free trade amongst the provinces.

Some hon. members: Oh, oh!

Mr. Scott McIntyre: I would personally like to see a national core curriculum. I realize this is provincial turf and these are sensitive issues. Finally, of course, I would like to see DFAIT go back and reinstall culture as the third pillar of our foreign policy that got initiated but was very quickly stillborn.

• 1730

I think I'll stop there. I've had my turn. Thank you.

The Chairman: Thank you. Ms. Anderson.

Ms. Mary Joe Anderson: I'll try to be very brief. I would like to address Mr. Abbott's comment on why the independent booksellers or bookstores should be protected when the dairy farmer isn't.

Well, yes, I think that's a very good question if it were only my livelihood that I was trying to protect. Think of me not as an individual bookseller, but as one piece of the cultural industry.

I think it's very fitting, as Scott says, that Ms. Fraser is going to be the last speaker on this. At the heart of all of this is the work of the artist; I'm only a conveyer of that material to my reader. All I'm asking is for a chance to do what I do extremely well, which is to get Canadian books in the hands of Canadian readers. For me to receive a shipment in Halifax from a publisher in Vancouver—not Scott—takes six weeks. To me, that's absolutely unforgivable in this country. For me to get a book from Toronto costs $7.

Sean mentioned something about the cost. That cost isn't passed on to the consumer; that's absorbed by me, the bookseller. I have absolutely no way to do anything but absorb that cost. The average independent bookseller's final profit is less than 2%. We're not talking about a lot of money here. I do truly—I'm a romantic, as many people have said at this table—see myself as only a very small cog in the wheel of Canadian culture.

I do believe that dairy farmers should have been protected, and those in other industries. Look at the fishing industry and all of that. That doesn't mean we shouldn't be protected.

Thank you, Mr. Chairman.

[Translation]

The Chairman: Ms. L'Espérance-Labelle.

Ms. Micheline L'Espérance-Labelle: I'd like to come back to the point relating to the protection of our culture and the concrete steps that can be taken. I've already said that protecting our culture in my view means making it accessible and making it known, in other words creating a demand. In 1984 I was involved in a multimedia experience. When I was asked by people from the government what could be done to promote multimedia, I told them that they had to help us inform the public about what use multimedia could be put to and how they could benefit from it. At the time we were talking about software and I felt that what I was saying was all Chinese to them.

Nevertheless, over the years, with hindsight, the multimedia explosion happened because people were told how they could use it concretely, how it could be useful to them. That's an important role, I think, that the government could play which would be to promote culture, explain what its use is and why it should be protected and preserved.

Also, just to show how important it is to make this known, I would like to give you a bit of brief data. I'm repeating myself: culture, education, they can be bought and sold. When you look at the figures, you'll see that 43% buy to give as gifts, the 38% buy to use the product themselves and that 11% borrow. But what is the content? There is the rub. Is it Canadian content? Is it Quebec content?

I don't have the answer to that. However, I could make a comparison based on experience. In 1996, 2% of Quebecor DIL Multimedia's sales were Quebec sales, Quebec software. How is it then, that in 1997 25% of our business was made up of Quebec software sales? We simply put up a Qualité Québec logo at our points of sale to give it exposure, right in front of the CD-ROM box with Quebec content. That gave us a 23% increase.

I think it's worth mentioning. It show how much it can be profitable to publicize how important the content is and make our culture known.

Another point, about export, this time, is that the government must encourage the cooperation of strategic alliances with foreign interests because the development costs of a quality multimedia product require the product to be sold on international markets to be viable.

• 1735

By entering into an association with a major European or US foreign company you not only make sure you have mainly Canadian content, which is our priority for our market, but also that you can export the product. At the outset, you can see that it will probably be easily accepted for export. I think it's extremely important to encourage that aspect.

Finally, I have a question for Mr. Stevenson. I'd like to know what the evolution of the CD-Rom is on the retail market side.

[English]

I would like to know the evolution of CD-ROMs. In this case, do you have an idea of the percentage of your CD-ROM sales in 1996 compared with 1997, and also the space for the CD-ROMs you have in your stores compared with the space you have for your books?

Mr. Larry Stevenson: I will give you the exact numbers when I get back to the office. They are up substantially in CD-ROM, but we have obviously added 18 large stores. Only the large stores carry CD-ROMs. We have definitely increased our sales of CD-ROMs in 1997 versus 1996, by more than a factor of 3, but a lot of that is function space.

About the amount of space, CD-ROM sales in our largest store would be 8%. It averages more like 4% to 6% of the sales and of the space of an individual store.

The Chairman: Mr. Stevenson—and that goes for anybody here who will send information in to the committee—you could send it to the clerk, so it is distributed to all the members, regardless of party.

Mrs. Fraser, what a patient person you are.

Ms. Sylvia Fraser: I just wanted to say that when somebody comes into publishing from the outside—and when I say “the outside”, it could be across a border, such as Barnes & Noble, or it could be from selling soap flakes into the publishing business; and I am talking about a major player—usually they will start making pretty arrogant statements in the papers and they will be pretty annoyed about the rules that are in place. But as they begin to learn these rules and why they are in place, it is interesting, a whole process takes place. They begin to understand why they are there. You often then begin to see these people, who really didn't know what it was all about, didn't care what it was all about, becoming extremely good and caring citizens of the publishing business. I think it's too bad if large players, such as Barnes & Noble, who can so disastrously affect the whole ecology, are allowed to come in without going through that learning process and an opportunity to understand what it is they are potentially endangering if they do not respect what is already there and what we all, on good days, have a lot of pride and pleasure in.

[Translation]

The Chairman: Mr. Saada, you asked me...

[English]

Mr. Jacques Saada: Mr. McIntyre has partly answered one of the questions I raised. I'm impressed by the way it took an hour and 45 minutes before we addressed something that had to do with the Constitution of the country, when we referred to core curricula.

The Chairman: That's pretty refreshing.

Mr. Jacques Saada: Yes, it is, especially in Ottawa.

I'm concerned because out of the three or four questions I have raised I haven't had one answer. I suppose the comment I made on the role of television was approved of, because nobody picked up on it; the impact television can have on sustaining the book and publishing industry as a whole.

I'm also concerned that no one picked up on the fact that profit dictates actions and has allowed publishers to publish books of lesser quality on a large scale. After that it is a vicious circle. The more you publish these books to fit the needs of the public and the more the public reads that, the less they're inclined to reach for higher-quality texts.

• 1740

No comment has been made on that. I would really like to hear about it. Am I wrong in my interpretation? I have one simple question: what is a comparison of the evolution of the situation

[Translation]

all across Canada? From 5 to 30% in a few years was mentioned. Is that situation comparable to Quebec's? I'm raising these questions again because I'd really like to get the answers, if at all possible.

The Chairman: Mr. Foulon, maybe you could give a brief answer to the last question and I'll let Mr. Stoddart answer the others.

Mr. Hervé Foulon: As I was saying before, in the case of books published for the bookstore market, the comparison is tenable because the estimate is that, today, books put out by national publishers account for 30% of the Quebec market. Roughly speaking, square one was anywhere from 5 to 10%. So, essentially, 70% of the market is imported from France.

You raised the matter of television and its role in promoting books. That's a question that we actually ask ourselves very often. We're a bit astonished because there are programs on literature but they're often relegated to the less interesting periods of the schedule because of their low ratings. We're in a bit of a dicey position. Prime time shows very rarely, if ever, talk about books.

I've always wondered why we couldn't do like so many other countries and mention books on topical subjects during the TV news or other information-type programs. Why can't we just take 10 or 20 seconds just to mention it and make people aware of its existence? I think that would be easy and interesting publicity. You could broadcast information concerning and dealing directly with books. That would be relatively easy to do except that there you run into a problem with TV stations who are afraid of promoting a given author's book. But this isn't promoting, anymore; you have to make a distinction between promoting and information.

The Chairman: Do you have television programs like the French program devoted to the discussion of books?

Mr. Hervé Foulon: There are programs on literature, but unfortunately they tend not to be broadcast during peak viewing hours, since there is always this problem of ratings. In comparison with a talk-show, a program on literature doesn't measure up. Ratings have to be taken into account.

Mr. Jacques Saada: I would like to add one comment, if I may Mr. Chairman. This raises a serious question of the role of state-run television as compared with private television, and the educational mission of the former compared with the latter. That is essentially why I asked that question.

We don't have time to go into that in detail now and it is perhaps an issue which transcends the world of publishing, but it is the real question we should be asking. When we talk about a private corporation, we are talking once again about profits. That is of course to be expected and I understand that.

That means therefore that if it is not of interest to the public, we tend to be indifferent to it. But we are missing the point here and I believe that television has an educational purpose which is part of its broader role and something we tend to underestimate. I'd like to come back to that a little later.

The Chairman: Would you like to conclude briefly, Mr. Bélanger?

Mr. Mauril Bélanger: Mr. Chairman, in the context of this debate we must be very careful not to overlook the role of radio as compared with television. Radio is far better suited to this.

On the national network in the corner—and won't mention it by name—, there are regular discussions about books, the most recent best-sellers or particularly books which are not necessarily best- sellers. Listeners are asked to call in to win a book. That is done regularly, all the time, almost every day. I think it works very well. I imagine they have the same thing on the national English-language radio network. To the degree that books are absent from television, they're present on radio. That shouldn't be overlooked.

[English]

The Chairman: Mr. Stoddart, you carry on. I think Mr. Fordyce has asked me for a brief intervention. You guaranteed that, did you?

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Mr. Stoddart.

Mr. Jack Stoddart: I don't think I can get into the debate of public and private broadcasting quite at this time.

I'm sorry if we didn't get back on the questions raised. I think it's the format where you tend to....

If I can just comment on a couple of things you raised, though, on the role of TV programming and books, I think we're into a very exciting period. I think the CRTC is doing a good job in many ways on this. The specialty channels have to have Canadian programming because that's what they're all about and they are shopping for products all the time now, “products” meaning they want manuscripts; they want books we published in the past. What you're starting to see is not necessarily a literary program in the sense of on literary subjects, but programs made on 101 subjects, whether it be religion or nature or history.

But as for the work our authors have done in the past, a lot of those are coming home in the next two to three years in television programming because of the specialty channels, which are private, I guess, as opposed to the public question. Some of the programming on places like TVO has been very instrumental in bringing forward an awful lot of good work by authors in our country.

So I think as long as we keep an eye on the fact that the broadcast industries have to maintain a Canadian position on some kind on an ongoing basis, it's going to help build the writing community, and the cultural industries will cross over.

On the question of quality, I think that question came from a statement having to do with what American publishers are doing to fill the bottom line; that is, the American industry consolidated and became huge corporate entities and global corporations. But the role of the quality book definitely decreased in their positioning, and the question of best sellers all the time became a much more important issue.

I don't think that was said as far as the Canadian aspect in both English- and French-language publishing is concerned. I think there's more good-quality publishing done in Canada today in both languages than there has ever been done before, and I think it has been a building program over the last 10 years.

So I don't know who made the point about quality, but I don't think the comment was intended to reflect on the Canadian writing and publishing industry; I think it had to do with what's happening in the U.S. and the consolidation of so many companies.

The other thing I would like do is clarify something I said earlier. Apparently the Canadian Conference of the Arts, CCA, officially called for a complete carve-out and no longer supports the country-specific reserve. I don't know if it was put on public record today and I don't know if it was in this committee, but again it's what I was talking about earlier. They have now changed their position and said it is a complete carve-out. So that's an important thing.

The Chairman: It's the same thing we had as well when they appeared before us. They wanted a complete carve-out.

Mr. Jack Stoddart: It has just been because of the Garry Neil report, and I want to clarify that because I was incorrect when I said that may be their position.

Mr. Mauril Bélanger: We knew that from the start.

Mr. Jack Stoddart: Good. Thank you very much.

The Chairman: Briefly then, Mr. Fordyce.

Mr. Sean Fordyce: I want to put the whole context of all this in perhaps a slightly different light, which is to say, on the support of culture, we're talking about whether we should bail out this or not bail out that, and we're talking about small bookstores, or small publishers, or large publishers, or the overall industry. In a country where for the majority of Canadians, when they define themselves as Canadians, the only thing they can come up with, very often, is medicare, we have to consider that the support of culture is a national unity issue, and that has to be part of the debate over whether these funds are worth spending on this or that or the other.

The particular format you had today is wonderful in terms of the type of cross-section you had and the type of debate. I want to thank you for that.

The Chairman: Thank you very much, Mr. Fordyce.

To wrap up and to make a summary of the notes I took and what we've heard today, it seems as if people agree here that there should be government involvement, whatever that type of involvement is, whether it's through subsidies or tax incentives or other. We may differ here amongst the guests as to what type of distribution this involvement should take, what type of priorities there should be, but I think we agree on the principle that the government should definitely be involved in culture.

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I detected a very strong feeling on all sides that the GST on books should go. I hope this feeling will translate itself and we'll pass it on to our Minister of Finance.

There were other suggestions made on the shipping rates and so forth that would be far more difficult in view of the rulings of the WTO and so forth, but anyway all this will be registered.

Certainly with regard to the MAI, I got the strong feeling that members said the Minister of Foreign Affairs and the Minister of Canadian Heritage should work much more closely together. I reiterate what we heard before, Mr. Stoddart, that this committee heard very strongly—and I think it's the feeling of the majority of the members here who I've heard—that if we were to get into it at all, which would be a second choice for the members, we should look at a complete carve-out of culture.

I really was very impressed by the statement from Mrs. Fraser that protection of culture shouldn't be and is not meant to be against the best common denominator but against the lowest common denominator. I think that is a very strong point to retain.

I was struck by the feeling you conveyed of how today a lot of rights you have as authors are ceded back to databases, which in turn cede to other media for world rights. Certainly this should be a point to carry forward when we look at copyright in the third phase.

The question of quality came up. The point was raised by many people besides Mr. Saada, Madame L'Espérance-Labelle and Mr. Stoddart that quality must be the guiding light among us, whatever our various sectors of the cultural industry.

There was also a discussion about the whole relationship between small book sellers and larger ones, and small publishers versus larger ones, which are really questions we're all wrestling with. You could say these questions touch many of the other sectors in Canadian life today. But I think it's very important that on both sides here the issues on either side were conveyed to us so we know what you face, Mr. Fordyce and Mrs. Anderson, and also what the criteria are of Mr. Stevenson, Mr. Stoddart and the others, who also have their own challenges they must carry out, because the marketplace allows them to do it and this is, after all, a free society and a free market.

At the same time, we realize there are constraints on either side, and it's good for us to know so when we study what recommendations we should make, we will look at possible instruments that might give a fairer share to all of you.

It seems to us that, for instance, the point made that

[Translation]

the promotion not only of books but also of reading itself is a very important point. We have to educate young people and change attitudes. To do that in fact everyone has to be involved and contribute. I think that this whole issue of educating people to the changing face and demographic structure of Canada is a very important one. If Canadians are not sensitized to the challenges faced by culture, and if we do not in fact manage to promote reading and an awareness of culture, I believe that we will be facing increasingly serious challenges.

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[English]

In fact, among the other challenges that you mention, Mr. Stoddart, the whole question of university bookstores has come up again, where you say that unless we watch out our universities will look more and more to American management, which is certainly a large worry.

All this is to say, finally, that I think this has been an extremely useful exercise. At the time it happens, it seems as if a million statements are made and it's hard to see the thread sometimes. But when we look at the record, all of this gives us a sense of direction, of broad directions, which we find in one round table after another, in one hearing after another. It really helps us that you have come out, taken the time and trouble to be here with us. We really appreciate it.

We'd like to thank you very much and say that we hope this is not the final meeting. If you have any thoughts, if you want to write to us, please feel free to do so. Keep in touch. Thank you very much for coming.

[Translation]

Thank you very much for your participation.

The meeting is adjourned.