Could an Independent Publishing Industry Survive in Canada?

And would it make any difference if it didn't?

Over at his Substack, Kenneth Whyte has been excerpting a new book from his Sutherland House Publishing. Here’s the latest post:

The big fix for Canadian publishing

The first couple of posts were chock full of fascinating insights into the serious economic and systemic challenges faced by Canadian publishers. There’s unrelenting competition from a global giant (Amazon), the impossible task of distributing a niche product in a decentralized market, and government policies that present all the wrong incentives.

But I find myself in rare disagreement over the most recent post in the series. It’s the specific policy recommendations that sound so…inappropriate:

• Force booksellers (meaning: Amazon) to raise their prices to match the publisher’s suggested retail price

• Force publishers and distributors to offer uniform wholesale discount rates

• Force schools, universities, and libraries to purchase books exclusively from accredited booksellers

• Force online booksellers to feature Canadian titles

Should the first three of those recommendations became government policy, the effective death of Canadian publishing would be pretty much immediate. After all, the problem here is that Canadians aren’t buying enough books by Canadian authors. Well, legislating higher prices for those books is guaranteed to cut sales down to pretty much nothing. “The surgery was a brilliant success but the patient died.”

It’s no mystery that retail book sales are price-sensitive. In a market where easy substitutes exist, consumer demand is highly elastic. It’s reasonable to assume that a one percent price increase in such a market will lead to a slightly higher drop in sales volume.

Given that, right now, Amazon typically discounts mainstream physical books by around 30 percent, Canadian publishers could expect comparable declines in sales. And that number doesn’t account for further cost increases - and sales losses - due to the proposed wholesale discount and academic sourcing restrictions.

And let’s take step back and a couple of deep breaths here. Does anyone seriously think the Canadian government could convince Amazon to change their pricing model? If there’s one thing we should have learned from the disaster of the Liberals’ Online News Act, it’s that the Canadian government simply lacks the leverage and the competence to successfully challenge U.S. tech giants.

I just don’t see the logic behind all this. But the fact that it’s being proposed at all testifies to how deeply concerned these smart and well-intentioned people are about the future of Canadian publishing.

However, I’m unconvinced that protecting Canada’s independent publishing industry should be a major government budget priority at all. Cultural funding already accounts for a significant slice of our federal budget¹. According to the official 2025-26 spending estimates:

• The Canada Council for the Arts will receive $360 million

• The Canada Media Fund will receive $160 million

• The Canada Periodical Fund will receive nearly $74 million

• The Canada Music Fund will receive $41 million

• The Canada Book Fund will receive $40 million

Those funding levels have, for the most part, existed for many years - decades in some cases. Yet the clear impression you get by interacting with people working in the culture industry is that the crisis today is at least as critical as it was forty years ago:

• News media are collapsing even with huge federal subsides

• Private broadcasters claim they can’t compete with the richly-subsidized and ad-purchasing CBC

• The CBC claims the two billion dollars they already receive annually (either through direct or indirect public funding) isn’t nearly enough

• Music, theater, and indigenous creators face irrelevance

Which is another way of saying that a lot of the money that’s been sprayed at the problem until now has, for all intents and purposes, failed to make a noticeable difference. Yeah, sounds like more of the same will work a charm.

According to their website, the Department of Canadian Heritage is responsible for five core responsibilities, one of which is creativity, arts and culture. Specifically, that particular mandate requires the ministry to ensure:

• Canadians are able to consume Canadian content on multiple platforms.

• Professional arts experiences are available to Canadians in their community.

• Creative industries are successful in the digital economy, foster creativity and contribute to economic growth.

• Creative industries are successful in global markets.

• Canadians are better equipped to counter the effects of online disinformation.

How’s all that going?

Well Canadians are certainly able to upload their content to any number of internet platforms where it can be consumed by their compatriots. But none of the infrastructure that makes it all happen required a single dollar of Canadian government investment or guidance.

Professional arts experiences are, apparently, few and far between.

Successful creative industries exist in the digital economy, but it’s debatable how much of their success can be attributed to government inputs. The government claimed credit for between $61 and $62 billion of gross domestic product from cultural industries. But the specifics demonstrating a causative relationship are, to be fair, difficult to prove. And major efforts like the Online Streaming Act have been unambiguous disasters from start to sorry finish.

So if it’s difficult to demonstrate successful outcomes from billions in historic subsidies, why should we expect doubling down to be all that much better?

But I’ve got a different question. This is something that I freely admit could be completely wrong-headed. Still, I think it’s a question that should at least be asked.

How do we know that even genuine artistic content created by Canadians improves the state of Canadian identity and culture?

BTO, The Guess Who, and Rush were certainly wildly successful and much loved by their fans. But is Canada somehow measurably more Canadian because of their work? Could someone unfamiliar with their work even know they’re Canadian?

The endless hospital, police, and legal TV drama series funded by the Canada Media Fund do feature establishing shots of the CN Tower every ten minutes or so. But how does that enhance shared Canadian identity?

Do novels - even great novels - written by authors who happen to be Canadian create an atmosphere that can combat the Liberal government’s contention that Canada is “the first post-national state” with “no core identity, no mainstream”?

At root, my question is: even if we knew that a particular subsidy could enhance the reach and cultural power of a Canadian artist, is there a compelling national interest in making that happen?² Or, more accurately, is there any national interest in taking on greater debt and the accompanying interest payments, given that money we spend is to a large degree drawn from deficits?

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1. Although it’s hardly a drop in the bucket compared with interest charges on our federal debt.

2. Naturally, if it could be demonstrated that cultural subsidies would stimulate a higher GDP, then they’d be no different from any other industry sector.