Covid-19 and the challenge to chain retail bookstores in Canada’s cultural landscape

A discussion paper prepared by the More Canada think tank project steering committee
17 June 2020

Executive summary

Covid-19 has created crisis conditions for Canada’s troubled retail bookstore sector, and that has serious
implications for Canadian cultural life.

Indigo Books, whose bricks and mortar Indigo, Chapters and Coles stores dominate retail bookselling in English Canada, was already in financial difficulty pre-Covid. The company lost $49 million in 2019, and was on track for another loss in 2020. In the last two years its shares have skidded from near $20 to $1.35 today. Its CEO Heather Riesman warned a month ago that there was a danger of large retailers going into bankruptcy if government help was not provided. For the 100+ independent publishers who publish most new Canadian-authored books, Indigo is
their biggest customer. Their fate is closely tied to Indigo’s.

The independent bookstore sector appears to have weathered Covid-19 reasonably well. Stores offered customers home delivery and curb-side pickup. Sales have been low, but the booksellers are surviving.

Independent publishers worry that Indigo could seek new foreign owners to tackle its ongoing business issues. Publishers’ experience with foreign companies selling books in Canada is that foreign ownership undermines Canadian identity reflected on bookstore shelves.

Indigo could seek help from Ottawa under the emergency LEEFF program for large businesses. Publishers urge fast action on any Indigo request, and urge that support come with conditions reflecting government cultural policy goals.

Over the medium term, publishers see a need for new government measures that recognize the cultural importance of bookstores in giving Canadians access to a wide range Canadian books. Many other countries already treat bookstores as cultural organizations deserving support, and have devised a wide range of measures to do so. Quebec today has policies that direct public institutions like libraries and schools to spend their public funds in retail bookstores. The result is a robust network of bookstores in virtually every town in that province – in fact, Quebec has more independent bookstores than all of English Canada.

Publishers identify four actions to sustain bookstores in English Canada:
• Maintaining the long-standing policy requiring Canadian ownership of retail bookselling and distribution
• Help for independent bookstores to do more to promote Canadian authors and their books, building on their current success in doing so
• Cultural policy measures accompanying any financial support for Indigo, including an agreement by Indigo to devote 20% of store bookshelf and display space to Canadian books
• New measures for public spending on books to go to retail bookstores that agree to offer Canadians a wide range of Canadian and international books