Interim Update

October 2016

OMDC Industry Profiles receive a full update once per year. The interim update summarizes key changes approximately six months after the profile’s release.

a Krista Mitchell, “Are Canadians spending their leisure time reading?” BookNet Canada, June 3, 2016;

b “The Scotiabank Giller Prize Presents Its 2016 Longlist”, Scotiabank Giller Prize, September 7, 2016;

c Statistics Canada, “Book Publishing Industry, 2014”, Catalogue no. 11-001-X, May 19, 2016.

d Becky Robertson. “Kobo’s ebook pricing appeal win upholds status quo (for now)”, Quill & Quire, September 12, 2016.

Introduction

Book publishing in Canada is a $1.9 billion industry, with nearly two-thirds of revenues generated in Ontario.1

The Ontario publishing ecosystem includes large, foreign-owned publishing firms as well as smaller, Canadian-owned publishers. The Canadian-owned sector in Ontario comprises mainly long-established private corporations. Nearly three-quarters of Ontario respondents to a recent survey have been in operation for more than 20 years, and half of responding companies could be considered small, reporting revenue for 2011 under $1 million;2 the largest book publishers operating in Canada are foreign-owned. Most of Ontario’s book publishers are English-language and based in Toronto. Ontario’s six French-language publishers are located in Ottawa, Sudbury, and Toronto.3

Ontario authors and publishers are frequently recognized for their outstanding work:

  • André Alexis’ critically acclaimed novel Fifteen Dogs, which follows a group of dogs who have been granted human consciousness, was published in 2015 by Ontario’s Coach House Books. Fifteen Dogs won several prestigious book prizes in its year of publication, including the Scotiabank Giller Prize and the Rogers Writers Trust Fiction Prize.
  • Ontario authors and publishers received several accolades at the 2015 Governor General’s awards. Toronto author David Yee’s Carried Away on the Crest of a Wave was the English Drama Winner, published by Playwrights Canada Press. The Children’s Literature prize went to Ottawa writer Caroline Pignat for The Gospel Truth.
  • The 2015 Trillium Book Award in English was awarded to Kate Cayley for How You Were Born (Pedlar Press). The Trillium French-language winner was Michel Dallaire, for Violincelle pour lune d’automne, published by Ottawa’s Les Éditions L’Interligne. The English-language Trillium Book Award for Poetry went to Brecken Hancock for Broom Broom (Coach House Books) while Micheline Marchand won the award for Children’s Literature, French for Mauvise Mine (Les Éditions L’Interligne).
  • Chatam, Ontario publisher Biblioasis had a stellar 2015, with three of their titles longlisted and two shortlisted (Samuel Archibald’s Arvida and Anakana Schofield’s Martin John) for the Giller Prize, while the Governor General’s Poetry award went to Biblioasis’ Robyn Sarah for My Shoes are Killing Me. Titles by Biblioasis have also recently been shortlisted for the B.C. Book Prize, ReLit Awards and the Rogers Writers Trust awards.

Industry Size and Economic Impact

The following information on employment, revenue and the consumer market should be considered a snapshot of activity in the industry based on the best available information. Many of the figures for Canadian-owned publishers contained in this profile include a very small number of large corporations whose characteristics differ significantly from those of small- and medium-sized book publishers.

Ontario Book Publishers 2008-2010, (Numbers on chart expressed in thousands of dollars),
2008 - Operating Revenue=$1,337,695, Operating Expenses=$1,184,916, Salaries, Wages and Benefits=$263,594, Operating Profit=$152,779;
2009 - Operating Revenue=$1,369,141, Operating Expenses=$1,215,696, Salaries, Wages and Benefits=$264,641, Operating Profit=$153,445;
2010 - Operating Revenue=$1,321,597, Operating Expenses=$1,174,603, Salaries, Wages and Benefits=$259,803, Operating Profit=$146,995;
Source: Statistics Canada, “Book Publishers 2010,” Catalogue no. 87F0004X, Table 1, April 2012.

Employment and wages

  • In 2012, Canadian publishers paid out $382 million in salaries, wages and benefits, a 2.7% increase from 2010. Ontario publishers accounted for $256 million, or 67%, of these wages, salaries and benefits in 2012.4

Revenues and related figures

(N.B. Unless otherwise noted, the following figures include all book publishers in Canada, including both domestically-owned and foreign-owned.)

  • Book publishers operating in Canada reported $1.87 billion in operating revenues in 2012, down 6.0% compared to 2010. Publishers also reduced their operating expenses, but these decreases did not fully compensate for the reduced earnings, so profit margins slipped from 11.2% in 2010 to 9.4% in 2012.5
  • Ontario book publishers reported $1.23 billion in operating revenues in 2012, about 9% less than the $1.29 billion reported in 2010, but Ontario’s share of national operating revenues increased slightly over this two-year period, from 64.6% to 65.7%.6
  • A recent study revealed that in 2011, Ontario-based, Canadian-owned book publishers earned just over $319 million in total revenue.7
  • This same study provided estimates of the direct, indirect and induced impacts on jobs, household income and GDP. Across Canada in 2011, these Ontario-based, Canadian-owned book publishers generated an estimated 2,590 jobs across Canada, including 1,660 FTEs directly in the book industry. Likewise, the book publishing industry generated an estimated $117.5 million in household income for Canadians; $90.3 million in Ontario. An estimated $197.4 million in total GDP was generated across Canada and GDP of $159.8 million is attributed to Ontario.8
  • Ontario-based, Canadian-owned book publishers spent slightly over $263.7 million in operating expenditures in 2011. Just over $116.8 million, or 44%, was spent in Ontario. They also spent an estimated 73.6 million on wages and benefits in 2011, and 58.8 million of this was spent in Ontario.9
  • In 2014, the majority of Canadian book publishers (69%) brought in between 1-10% of their revenue from digital book sales. A smaller percentage (17%) derived between 11-20% of their revenue from digital sales. Publishers are broadening the ways in which their e-books reach consumers; aside from selling via retail channels, publishers are using subscription services (19%) and direct to consumer sales. Notably, the number of publishers using direct to consumer sales is increasing – from 42% in 2013 to 66% in 2014.10

Canadian Book Publishing Operating Revenues by Region, 2010. Total Revenue = $2.05 Billion. (Numbers on chart expressed in thousands of dollars); British Columbia=$58,939, 2.9%; Alberta=$28,906, 1.4%; Rest of Canada=$24,314, 1.2%; Ontario=$1,321,597, 64.6%; Quebec=$612,144, 29.9%. Source: Statistics Canada, “Book Publishers 2010,”  Catalogue no. 87F0004X, Table 1, April 2012.

Consumer market

  • In 2015, nationwide sales of print books through traditional channels stayed relatively flat compared to 2014 levels. Canadian-owned publishers reported a sales volume of 1.98 million units, with corresponding retail sales revenues of $34.2 million. This represented a decrease of 11% in units sold and a 4.6% decrease in sales revenue from 2014. The average list price for trade and mass market paperbacks from Canadian-owned publishers remained steady at $18.75 and $12.15 in 2015.11
  • Juvenile Fiction was the best-selling genre in Canada in 2015, with a 29.6% share of total unit sales through traditional book retailers, representing 20% of the value of the total book market. General Fiction came in second with a 28% share of units sold, and the same percentage in sales volume.12 Foreign-owned publishers generated a high proportion of these sales.
  • In 2015, data from a BookNet Canada consumer panel show that e-book sales in Canada have leveled off. Roughly 17% of industry sales were from e-books in 2015, the same level seen at the end of 2013. The shrinking price differential between print and e-books may account for the stabilization.13

Trends and Issues

This section provides information on growth rates, trends and burgeoning issues in the global and domestic book industry.

Growth rate and industry trends

  • While most Ontario publishers who responded to a 2013 survey reported they would be focusing on growth in Canada and the U.S., over half identify near-term growth opportunities in the U.K., and a third in Europe. Among their greatest challenges they identified access to affordable capital, changing business models and competition from other media for readers’ attention.14
  • To succeed in today’s marketplace, publishers must continue to focus on both digital and print publishing as physical book sales still dominate the landscape, and sales of e-books have leveled off. Surveyed publishers reported that on average, revenue on an e-book is approximately 88% of the revenue generated by a physical book. However, profit margins on digital sales are slightly higher than on physical sales.15
  • The global consumer, educational and professional book publishing market is anticipated to grow at a compound annual rate of 1.1% to US $128.0 billion through to 2018. Consumer e-books continue to be the fastest growing sector at 17.6% CAGR predicted by 2018. PwC pegs 2018 as a tipping point year, when e-books will generate 52% of consumer book publishing revenues.16
  • PwC projects that the overall Canadian book publishing market will grow at a compound annual rate of 1.5%, from US $2.15 billion in 2013 to reach US $2.31 billion by 2018. The market for consumer print and audio books is expected to contract between 2013 and 2018 (-2.8%) but sustained growth in e-books (13.1%) will offset these trends. Print books currently account for two-thirds of all books purchased, and PwC predicts that by 2018, e-books will have a 37% market share across consumer, educational and professional segments. Canada’s e-book market grew at a stronger pace than that of the U.S. from 2010-2012, however PwC predicts that US e-book growth rates will exceed Canada’s through 2013-2018.17
  • According to a recent BookNet Canada survey, 93% of Canadian publishers currently produce e-books. The figure rises to 100% among the largest publishers, and 91% of small and self-publishers report e-book production. Only two percent (among the small and self-publishers) report that they have no plans to produce e-books. The same survey asked publishers about the availability of their print books in e-book format. Only 15% of publishers have all print titles available digitally, while nearly half report having between 1-50% available.18

Global and domestic issues

  • Federal policy on foreign investment in Canada’s book publishing industry is being closely watched by book industry stakeholders. Currently, the Investment Canada Act prohibits foreign ownership in the book publishing, distribution and retail sectors in Canada unless the Department of Canadian Heritage determines that an exception should be made because the foreign ownership will provide a net benefit to Canada.19 The Department of Canadian Heritage consulted with stakeholders on the policy in 2010, but to date no changes have been made. Reaction to the foreign investment policy and how it is being implemented differs among segments of the publishing industry. The Association of Canadian Publishers has gone on record advocating that Canada’s foreign investment policy for the book industry retain the current restrictions on foreign control, and that any changes include transparency and reporting mechanisms on the effectiveness of net benefits arising from foreign undertakings.20
  • After more than ten years of discussion and consultation, Canada’s Copyright Act saw major revisions in 2012 with the passing of Bill C-11. Revised provisions around fair dealing allow users of copyrighted works more flexibility without the need to gain permission or pay licence fees for certain works―the extension of fair dealing to education in particular is having major effects on the book publishing industry.21 A 2012 Supreme Court ruling involving Access Copyright and the province of Alberta gave new rights to students and educators in using copyrighted materials for research and private study and some educational institutions are now opting out of Access Copyright licences, arguing that fair dealing covers their use of copyrighted materials in classrooms. 22 Access Copyright has been taking legal action against educational institutions, and has applied to the Copyright Board to certify a tariff that would act as an enforcement mechanism.23
  • eBOUND Canada released a study in 2015 examining the challenges and opportunities that Canadian book publishers and libraries face with respect to their mutual interests in the digital marketplace for books in the library system. The study examines issues in public, college and university libraries. The research found that majority of e-books in public libraries come from one wholesale vendor, while in the university and college library system, there are multiple content aggregators and publisher platforms.24

Government support 25

  • The Department of Canadian Heritage’s former Book Publishing Industry Development Program (BPIDP) was restructured as the Canada Book Fund in 2010. Annual federal funding to the industry was maintained at $39.5 million through a five-year extension of $9 million in supplemental funding that was scheduled to sunset in 2009-10. In its Economic Action Plan 2014, the federal government made this supplemental funding permanent by pledging $9 million in ongoing annual support to the Canada Book Fund from 2015-16.26
  • In 2014-15, Ontario publishers have access to provincial funding through several OMDC programs and a tax credit: the Book Fund, the Export Fund and the Ontario Book Publishing Tax Credit (OBPTC). Through its Industry Development Program, the OMDC also provides support to book industry organizations for events and activities that stimulate growth of the industry.
  • Other funding mechanisms at the federal and provincial levels include the Canada Council for the Arts and the Ontario Arts Council’s Block Grants to Book Publishers.
  • The OMDC sponsored Trillium Book Awardhaving celebrated its 28th year in 2015, recognizes excellence among Ontario writers as the province’s leading award for literature. Past Trillium winners include Margaret Atwood, Michael Ondaatje, Timothy Findley, Ian Brown, Michèle Matteau and Alice Munro.

Profile current as of April 6, 2016

Endnotes

1 Statistics Canada, “Book Publishers 2012,” Catalogue no. 87F0004X, Table 1, March 2014.

2 Ontario Media Development Corporation (OMDC), An Economic Impact Study of the Ontario Book Publishing Industry, July 2013, p. 8.

3 Lucie Hotte et al., La Chaîne du livre en Ontario français: un état des lieux, June 2010, Chaire de recherche sur les cultures et les littératures francophones du Canada, p. 83.

4 Statistics Canada, “Book Publishers 2012,” Table 1.

5 ibid, Table 1 and Highlights.

6 ibid, Table 1.

7 Ontario Media Development Corporation (OMDC). N.B. The findings from this report only include Canadian-owned book publishers based in Ontario, and do not include data for multinational firms as does the Statistics Canada data, therefore direct comparisons with the Statistics Canada data cannot be drawn.

8 ibid.

9 ibid.

10 BookNet Canada. State of Digital Publishing in 2014.

11 BookNet Canada. State of Digital Publishing in 2015.

12 BookNet Canada, State of Digital Publishing in 2015.

13 Publishers Weekly, “Canadian Publishing 2015: E-book Sales Level Off”

14 OMDC.

15 ibid.

16 PricewaterhouseCoopers (PwC), PwC Global Entertainment and Media Outlook 2014-2018: Book Publishing, pp. 2, 3.

17 Ibid, pp. 9, 10.

18 BookNet Canada, The State of Digital Publishing in Canada 2014, p. 11.

19 Department of Canadian Heritage, Investing in the Future of Canadian Books Discussion Paper, July 2010.

20 Association of Canadian Publishers, submission to the Department of Canadian Heritage on Review of the Revised Foreign Investment Policy in Book Publishing and Distribution, 2010.

21 Stuart Woods, “Universities push back against Access Copyright lawsuit,” Quill and Quire, April 18, 2013.

22 ibid.

23 Access Copyright, “Canada’s writers and publishers take a stand against damaging interpretations of fair dealing by the education sector,” Press Release, April 18, 2013; Association of Canadian Publishers, 2013 Annual Report.

24 eBOUND Canada, EBook Collection Practices: A Report to the Canadian Publishing Community on Trends, and Issues in Canada’s Public, University, and College Libraries, September 2015.

25 The information included in this section is an overview of some of the government support to the book publishing sector. This is not intended to be a comprehensive list of government support available.

26 Department of Canadian Heritage, “Government of Canada Renews Investments in Canadian Books with an Emphasis on Digital Technologies,” Press Release, September 22, 2009; Department of Finance Canada, The Road to Balance: Creating Jobs and Opportunities, February 11, 2014.