News

Amazon seeks permission to open a 'new Canadian business'

03.03.10 | Emma Jackson

Amazon is seeking to set up a physical base in Canada, The Bookseller can reveal, and has applied to the government to open a "new Canadian business".

The move could lead to a huge shake-up of Canada's book trade. Amazon.com does not have a physical operation in the country, but sells books through its domain Amazon.ca. Moving into the country would mean the company could ship to Canadian consumers more quickly and cost-effectively. But to operate there, Amazon must receive permission from Canada's heritage ministry.

The application is subject to a confidential inquiry by the Canadian government, which will assess whether it breaks Canada's tough cultural protection rules, which are designed to prevent American influences from overpowering Canada's culture.

According to Privy Council documents seen by The Bookseller, an inquiry ordered by Canada's governor general (The Queen's representative in the country) under the Investment Canada Act will probe "investment by Amazon.com Inc to establish a new Canadian business carried on by Amazon Fulfillment Services Canada Inc".

Amazon spokesperson Mary Osako confirmed that an application had been made, but declined to say what it planned to sell through the new company and services. "We're always looking for new ways to serve our Canadian customers, but it's premature to discuss our plans as we await a ruling on our application," she said.

Amazon's proposal was issued on 27th January, and could take 45 days to "determine if it will be of direct cultural benefit to Canada", according to Tim Warmington, media relations officer for Canadian Heritage. He declined to offer more details, as the information is protected by the Investment Canada Act.

The move could prove to be a boon to Canadian publishers, but it would also hit the country's retailers. Dominant Canadian bookseller Indigo declined to comment.

Carolyn Wood, director at the Association of Canadian Publishers, said: "There's a belief that Canadian-owned retailers will be more likely to promote Canadian books," Wood said. "(Amazon) presumably will have to commit to a business model that proves it is in net benefit to Canadians." But Wood said it would be difficult for Indigo's online business, indigo.ca, to compete with a Canadian-based Amazon. "It has been difficult to compete with Amazon.ca as it is," she said. "It will be a challenge."

Amazon launched its Canadian site in June 2002, amid protests from Canadian booksellers who argued that the online store violated regulations that prohibit foreign ownership. The Canadian government ruled that this was not the case since Amazon.com did not have a physical business in the country.

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By Clive Pratt

I am not one for championing Amazon but I may have to change my mind a little here. I have extreme difficulty getting hold of Canadian books and their national wholesalers are a joke (let's close for August shall we? Yeah, why not). As we now use Amazon UK as a wholesale supplier I will happily use Amazon.ca as well. The solution would be for someone to open a decent, respectable, consistent book supplier happy to export books out of Canada unlike what we have today, back-room outfits with poor systems. We would like Canadian books, we really would. But we just can't get them.
Selfishly speaking I want this to happen. Altruistically it will be like placing the foxes in with the chicken. It will wipe out so many good local booksellers. Maybe the CBA should get off its ass and support a export consortium to support Canadian publishers and also prevent Amazon.ca from setting up then we'll all be happy. But to expect some commercial nous from the Canadians? I'll get the chicken ready for those foxes.

Wed, 03/03/2010 - 17:20
By Paul

I had to smile at the charmingly antiquated statement:

"According to Privy Council documents seen by The Bookseller, an inquiry ordered by Canada's governor general (The Queen's representative in the country)..."

The Bookseller may have the Privy Council documents, but only a tenuous understanding of Canadian government. Firstly, the Privy Council is a largely ceremonial body, and it is most likely the Cabinet, the functional elected sub-group of the Privy Council, which would actually be charged with dealing with any decision making. Secondly, "ordered by Canada's governor general" makes her sound like the Viceroy of India; in fact, her role is almost purely ceremonial, and though The Bookseller no doubt read the usual formal preamble about "by order of the governor-general in council", they clearly took it too literally. This would be like saying "Her Majesty ordered an inquiry into the matter" - i.e. the government did. Thirdly, the Queen has a number of representatives in Canada, not just the G-G. One in Ottawa, and one in each province. The Governor-General is her representative at the federal level. And fourthly - perhaps this is quibbling - "The Queen's representative in the country", coming from a British publication, rather implies that the G-G represents the British monarch. She doesn't. Queen of Canada is a role with no legal or constitutional connection to the British Crown. Both roles are simply carried out by the same individual.

Wed, 03/03/2010 - 21:47
By richard

Of course one might well ask why the London-based Bookseller broke this news and not our own trade press?

Wed, 03/03/2010 - 22:08
By Clive Pratt

I am not one for championing Amazon but I may have to change my mind a little here. I have extreme difficulty getting hold of Canadian books and their national wholesalers are a joke (let's close for August shall we? Yeah, why not). As we now use Amazon UK as a wholesale supplier I will happily use Amazon.ca as well. The solution would be for someone to open a decent, respectable, consistent book supplier happy to export books out of Canada unlike what we have today, back-room outfits with poor systems. We would like Canadian books, we really would. But we just can't get them.
Selfishly speaking I want this to happen. Altruistically it will be like placing the foxes in with the chicken. It will wipe out so many good local booksellers. Maybe the CBA should get off its ass and support a export consortium to support Canadian publishers and also prevent Amazon.ca from setting up then we'll all be happy. But to expect some commercial nous from the Canadians? I'll get the chicken ready for those foxes.

Wed, 03/03/2010 - 17:20
By Paul

I had to smile at the charmingly antiquated statement:

"According to Privy Council documents seen by The Bookseller, an inquiry ordered by Canada's governor general (The Queen's representative in the country)..."

The Bookseller may have the Privy Council documents, but only a tenuous understanding of Canadian government. Firstly, the Privy Council is a largely ceremonial body, and it is most likely the Cabinet, the functional elected sub-group of the Privy Council, which would actually be charged with dealing with any decision making. Secondly, "ordered by Canada's governor general" makes her sound like the Viceroy of India; in fact, her role is almost purely ceremonial, and though The Bookseller no doubt read the usual formal preamble about "by order of the governor-general in council", they clearly took it too literally. This would be like saying "Her Majesty ordered an inquiry into the matter" - i.e. the government did. Thirdly, the Queen has a number of representatives in Canada, not just the G-G. One in Ottawa, and one in each province. The Governor-General is her representative at the federal level. And fourthly - perhaps this is quibbling - "The Queen's representative in the country", coming from a British publication, rather implies that the G-G represents the British monarch. She doesn't. Queen of Canada is a role with no legal or constitutional connection to the British Crown. Both roles are simply carried out by the same individual.

Wed, 03/03/2010 - 21:47
By richard

Of course one might well ask why the London-based Bookseller broke this news and not our own trade press?

Wed, 03/03/2010 - 22:08

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