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:
- Author Lynn Coady's collection of short stories Hellgoing published by House of Anansi Press won the 2013 Scotiabank Giller Prize. Ontario-born poet Anne Carson won the 2014 Griffin Poetry Prize for her collection Red Doc (McClelland & Stewart).
- Ontario books received several accolades at the 2013 Governor General’s awards. Nicolas Billon's Fault Lines was the English Drama Winner, and was published by Coach House Books. The Children's Literature - Illustration award went to Matt James for Northwest Passage from children's publisher Groundwood Books.
- The 2014 Trillium Book Award in the English language went to Hannah Moscovitch for This Is War (Playwrights Canada Press/Banff Centre). The Trillium French-language winner was Marguerite Andersen, for La mauvaise mère published by Éditions Prise de Parole. The English-language Trillium Book Award for Poetry went to Souvankham Thammavongsa for Light (Pedlar Press), while Daniel Groleau Landry won the French-language Trillium Book Award for Poetry for Rêver au réel (Les Éditions L'Interligne).
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. The two largest Canadian-owned book publishers represented 34% of the total Canadian-owned publishing market in 2012.4
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 2012.5
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 2012.6
- 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%.7
- A recent study revealed that, in 2011, Ontario-based, Canadian-owned book publishers earned just over $319 million in total revenue.8
- 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.9
- 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.10
- Physical book sales still make up the vast majority of Ontario-based, Canadian-owned book publishers’ revenue, at over 88.5% in 2011. Physical book sales through brick-and-mortar retailers accounted for 50% of 2011 revenue, while digital sales channels accounted for almost 4%. (This figure excludes Harlequin Enterprises. Harlequin’s isolated digital sales were closer to 15% of its total sales.)11
- In 2013, nationwide sales of print books through traditional channels decreased 3% in volume compared to 2012 levels. Canadian-owned publishers reported a sales volume of 3.8 million units, with corresponding retail sales revenues of $52.4 million. This represented a decrease of 14% in units sold and a 15% decrease in sales revenue from 2012. The average list price for trade paperbacks from Canadian-owned publishers remained steady at $17.99 in 2013, while list prices for mass market paperbacks increased marginally over the same period to $7.42 from $7.37.12
- Juvenile Fiction was the best-selling genre in Canada in 2013, with a 19% share of sales dollar value and 27% of sales volume based on sales through traditional book retailers. General Fiction came in second with a 14% share of sales value and 13% share of sales volume. Foreign-owned-publishers generated a high proportion of these sales.13
- According to The Canadian Book Consumer 2012 - Book-Buying Behaviour in Canada, the average Canadian book buyer purchased 2.8 books per month and approximately one in three Canadians is a book buyer. The majority of buyers tend to stick to one format or the other with 85% choosing print and just under 20% choosing e-books, while nearly 7% purchase both print and e-books. However, buyers of both formats (print and e-books) buy 4.5 books per month, compared to 2.6 for buyers of print books and 2.7 for e-books. Uptake for e-books is currently lower with juvenile books than adult books, since the category includes picture books as well as young adult titles, and there is limited availability of picture books as e-books.14
- In 2013, 20% of book buyers bought one or more e-books, up from 18% in 2012. Some of the main reasons consumers purchase e-books rather than print are for portability and their instant availability. Conversely, some of the factors discouraging consumers from adopting e-books include restrictions on lending and borrowing, restrictions on transferring books between devices, limited availability of titles in e-book format, and a perception that e-books are not good for gift-giving.15
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 recent survey will be focusing in the next two years 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.16
- Although digital book sales are on the rise, publishers must continue to focus on both digital and print publishing as physical book sales still dominate the landscape. 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.17
- 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.18
- 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 2013-2018.19
- E-book sales continued to grow in Canada during 2012, and approximately 15% of unit sales in English-speaking Canada in 2012 were in a digital format. Consumer behaviour when purchasing e-books is changing as well. In 2010, when a print book was not in stock, 74% preferred to wait for the print book to be available, in 2012 this number decreased to 33%. E-book sales are strongest in the Fiction category with Mystery/Detective topping the list, followed by Romance.20
- According to a recent BookNet survey, about 90% of Canadian publishers currently produce e-books, with the remainder starting or planning to do so. Publishers are moving in this direction as a means to increase sales and accessibility of their titles. A minority of publishers (27%, most of which are large companies) have developed a digital-only program with certain titles released only in e-book format. Many publishers are also experimenting with new formats and distribution tools such as enhanced books (especially with audio and video as the added components) and apps.21
- Publishers typically sell e-books through multiple sales channels, and the dominant channels differ between trade publishers and scholarly/professional companies. E-book retailers are a key sales channel for trade publishers, with intermediaries (wholesalers) and direct sales to readers also playing a role. In contrast, wholesale is the most important sales channel for scholarly books. E-book sales remain a relatively small revenue stream for most publishers, with 2 out of 3 publishers generating less than 10% of annual revenue from e-book sales.22
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.23 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.24 In May 2014, Torstar Corporation announced plans to sell the largest Canadian-owned publisher, Harlequin, to New-York based media company News Corp for $455 million. Harlequin would become a division of the News Corp subsidiary HarperCollins Publishers. The transaction still needs formal approval from shareholders and under competition laws in Canada and the U.S..25
- 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. New 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.26 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.27 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.28
- In 2012, the Association of Canadian Publishers (ACP) released a report entitled, Consultation on K to 12 Educational Publishing in Canada, which provides ACP member publishers who work in the kindergarten to grade 12 educational publishing sector with information to help increase their involvement in this market. The report also provides ACP with strategic advice designed to assist them to stimulate business in this sector for their member publishers.
- In recent years, bricks and mortar bookstores have been challenged by a number of developments, including competition from online retail, the advent of e-books and, in some markets, rising rents. Some bookstores have closed their doors while others, such as Canada's largest book retailer, Indigo, have diversified their offerings. These various developments have led to an overall shrinking in the volume of physical retail space dedicated to books, which some argue poses a significant challenge to book discovery. Publishers have been developing their direct-to-consumer sales strategies as one means of response.29
The information included in this section is an overview of some of the government assistance to the book publishing sector. This is not intended to be a comprehensive list of government assistance available.
- The Department of Canadian Heritage’s former Book Publishing Industry Development Program (BPIDP) was restructured as the Canada Book Fund on April 1, 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 2015-16.30
- In 2014-15, Ontario publishers have access to provincial assistance 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’s Book Publishing Support program (Emerging Publisher and Block Grant streams) and the Ontario Arts Council’s Block Grants to Book Publishers.
- The OMDC-sponsored Trillium Book Award, having celebrated its 27th year in 2014, 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 June 18, 2014
- Statistics Canada, “Book Publishers 2012,” Catalogue no. 87F0004X, Table 1, March 2014.
- Ontario Media Development Corporation (OMDC), An Economic Impact Study of the Ontario Book Publishing Industry, July 2013, p. 8.
- 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.
- BookNet Canada, The Canadian Book Market 2012, p. 14. Based on volume sold.
- Statistics Canada, “Book Publishers 2012,” Table 1.
- ibid, Table 1 and Highlights.
- ibid, Table 1.
- 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 do the Statistics Canada data, therefore direct comparisons with the Statistics Canada data cannot be drawn.
- BookNet Canada, The Canadian Book Market 2013, pp. 10, 14-15. Currently, BookNet tracks only a small portion of sales from online retailers in Canada and does not track e-book sales in Canada.
- ibid, pp. 12-13.
- BookNet Canada, The Canadian Book Consumer 2012, Book-Buying Behaviour in Canada, pp. 12, 15, 20.
- BookNet Canada, The State of Digital Publishing in Canada 2013, March 2014, pp. 3-4.
- PwC, PwC Global Entertainment and Media Outlook 2014-2018: Book Publishing, June 2014, pp. 2,3.
- ibid, pp. 9, 10.
- BookNet Canada, The Canadian Book Consumer 2012, Book-Buying Behaviour in Canada, pp. 30
- BookNet Canada, The State of Digital Publishing in Canada 2013, p. 22.
- ibid, p. 33.
- Department of Canadian Heritage, Investing in the Future of Canadian Books Discussion Paper, July 2010.
- 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.
- "Torstar sells Harlequin to News Corp. for $455M," The Toronto Star, May 2, 2014.
- Stuart Woods, “Universities push back against Access Copyright lawsuit,” Quill and Quire, April 18, 2013.
- 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.
- Francine Kopu, "One-time Goliath turns the page," The Toronto Star, May 10 2014; Marcus Gee, "Are bookstores dead, or turning a new page?" The Globe and Mail, April 4, 2014.
- 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.