Good morning. My name is Chris Tabor. I'm here as a representative of Campus Stores Canada. I am also the manager of the Queen's University campus bookstore. I'd like to thank the industry committee for giving me the chance to speak today.
Campus Stores Canada is the national trade association dedicated to providing a unified voice for Canadian post-secondary institutionally owned and operated campus stores and, by doing so, enabling them to serve their institutions in the most effective manner.
Campus Stores Canada has more than 100 member stores nationwide, meaning that if you are one of Canada's million post-secondary students, you are likely served by one of our members.
Campus bookstores are an integral part of university life. They are as diverse in size as ordinary bookstores, yet they also serve as a cultural centrepoint to which all current and returning students and faculty gravitate.
Mr. Chairman, your committee has convened these hearings to conduct a review of the issues facing the Canadian service sector. No issue is more prominent than the effect of the high dollar on the cost of consumer goods. However, there are examples of where government regulations are adversely affecting the availability of lower-cost reading materials.
As you are no doubt aware, our industry has been assailed in the media for an inexplicable difference between the price of a book in America and the price of that same book in Canada. I'm sure many of you have had similar questions raised in your respective ridings. However, what most people don't know is that 10% to 15% of book prices is a regulated royalty paid to multinational publishers. A book that costs $50 could cost $5 to $7 less if the government were to eliminate a regulatory protection that does nothing for authors or consumers. We could see book prices drop by 10% or 15% overnight. Let me explain how.
The Copyright Act is a very broad statute that governs the protection and distribution of intellectual property. In the case of printed materials, the act allows for publishers to establish import monopolies on the works of artists from around the world. Minister Flaherty has recently used the example of the Harry Potter books authored by J.K. Rowling, noting that these books have different costs in America.
Let me explain a very significant element of that cost differential and how campus stores, other booksellers, students, and customers are beholden to foreign-owned publishers, also known as exclusive distributors.
Section 27.1 of the act makes it an offence to import new books from any source other than an exclusive distributor of those books, provided that those distributors adhere to the regulations promulgated under the act. These regulations stipulate that an importer can charge a bookseller the price of the book in the country of origin--in this case the U.S. or U.K.--and the difference in exchange rates between the two countries, and add either 10% or 15%, depending on the country of origin. That means that non-Canadian publishers can tack on an additional 10% or 15% of pure profit to their products before they risk losing the sale to parallel importers.
Mr. Chair, that pure profit comes directly out of the pockets of Canadian students, with no appreciable benefit going to them or accruing to the artists or the authors who created the work in question. This regulation was promulgated in 1999, and as you can imagine, the world of cross-border shipping and shopping has changed significantly since then.
Ironically, since the advent of the Internet, Canadian customers can get some books cheaper abroad than a Canadian reseller can. These booksellers and campus stores, the same ones that operate in your communities, have their hands tied by the act, while larger, non-Canadian entities use the act as a sword to carve out additional profits. With a wave of its wand, the Governor in Council can remedy this situation by removing the tariff. Removing the levy does not have an adverse impact to Canadians. In fact, it will provide Canadians with more options through which they can obtain their books.
The section 27.1 protections are outdated in a universe with the dollar at par or higher. The tariff protections actually compound the direct pocketbook impact the levy has on individual booksellers and purchasers. Eliminating the levy will not affect the primary function of the Copyright Act--to provide creators with the ability to protect their art and earn a royalty from producing it. Further, nothing in our proposal would impinge on a publisher's exclusive rights to distribute in Canada, provided they do not charge more for the work in question than they would at home.
Why should Canadian students have to pay more than their peers in the United Kingdom and the United States? It doesn't take a wizard to understand that it isn't fair.
The 1999 amendments to the Copyright Act and the related Book Importation Regulations were flawed public policy at the time. They make even less sense now. These changes were treated as cultural protection steps, when they actually constituted commercial regulation.
We respectfully request that this committee and others with influence move to amend item 5(1)(a)(iii)(A) of the Book Importation Regulations by deleting the “plus 10% after conversion”, and item 5(1)(a)(iii)(B) by deleting “plus 15% after the price conversion”.
With that, thank you for your time and your attention.