Thank you.
First, I too would like to acknowledge that we're meeting on the unceded lands of the territory of the Mi'kmaq, in Mi’gma’gi.
I'm the co-owner of Nimbus Publishing, the largest English-language publisher east of Toronto. We publish approximately 50 new titles a year. We focus mainly on books that are for and about Atlantic Canadians.
I'd like to begin by stating that Canadian publishers have been significantly impacted by the 2012 changes to the Copyright Act—namely, fair dealing. In a recent study completed by PricewaterhouseCoopers, it was found that the royalties received have decreased by almost 90% since 2012, representing a loss of $30 million per year in licensing revenue for Canadian publishers. As I'm sure you're aware, the impact of this has been proven in the Federal Court of Canada, which recently found that York University's copying policies have caused economic harm to the sector. These policies are identical to those adopted across the education sector. However, the court found that the policies are arbitrary and unfair, and have resulted in a wealth transfer from the creators to the educational institutions. These policies have also led to systemic copying of copyright-protected works.
I've heard it stated at some of these that Canadian publishers have a healthy operating margin. While that might be true, the reality is that the operating revenue of Canadian book publishers is down. According to Stats Canada, the book publishing industry's operating revenue was down by 0.6% from 2014 to 2016. Therefore, in order to achieve these profit margins, operating expenses have had to decrease. This means that salaries, wages, commissions, and benefits have decreased as well, by $7.4 million, or 2%. As I'm sure you can imagine, this represents a significant decrease in jobs for the creative economy.
There is also a direct correlation between sales and royalties paid to authors. A decrease in sales for a publisher means that less money goes into the pockets of our Canadian authors. Speaking from our own experience, last year we received a licensing cheque of approximately $3,000 from Access Copyright. As a publisher, we've published over 1,200 books in the 40 years we've been publishing. For a publisher like us, we should be receiving about eight to ten times that amount. Unless we make up that amount by selling to other markets, at least one job loss is necessary. I can't even imagine how this would be impacting Canadian academic publishers—surely much more.
Publishers like us have been able to increase earnings by doing distribution for other publishers. In 2016 it was found that 52% of book companies were involved in publishing only. This is a decrease of 5% from the previous year. The number of publishers who both publish and distribute for other publishers increased by 7% since last year. These stats prove that it's necessary for publishers to diversify their revenue. However, doing so takes staff time away from producing and selling our own in-house books. At the same time, it increases the competition for our own books.
Stats Canada also reports that export sales have increased by 11.8% since 2014. While this might sound like a positive thing, it means that publishers have had to adapt their book publishing programs in order to sell to markets outside of Canada. Regionally specific books won't sell to export markets. Therefore, books that are uniquely Canadian or reflect our Canadian heritage and culture are less likely to be produced.
Book publishing in Canada is not an overly lucrative business—trust me. We are a large country with a large population, and there are huge differences between our regions. For example, publishing a book on the Mi'kmaq heritage is difficult, as the market is very small. Conversely, as a regional publisher, shipping books across the country has its own problems. We lose money on every small order we ship to British Columbia, for example. We need our educational institutions to support our work if we are to continue to do the kind of publishing that preserves our Canadian heritage.
Collective licensing is good for publishers, writers, students, and educators. Selling small, individual licences is time-consuming for all involved. It requires a lot of back-and-forth. Having Access Copyright handle this administration is beneficial to publishers, authors, and those who access the content.
We believe that is an effective and affordable way to ensure learners have access to the material they require, and for creators and publishers to receive compensation for that material. Through collective licensing, the highest fee is $26 per student. I believe for that fee access to quality Canadian content is a bargain. Canadian educators and students currently benefit from a wide variety of Canadian-specific materials that meet curriculum objectives and support academic achievement.
We believe that the authors of those books should be able to make a living and continue to write them. We should all be in this together.
Thank you.