Why textbooks are so expensive

The price of textbooks is a constant source of frustration for students. When proposed changes to the Copyright Act were announced earlier this month, the education sector followed the crowd and focused its attention on the protection of digital locks that make it illegal to bypass the locks, even when using copyrighted material would be otherwise permitted. But, at least for students, what isn’t on the table to be changed within the Act could be even more important: a relatively obscure set of provisions, in existence for more than a decade, known as the book import regulations that raise the cost of textbooks by as much as 15 per cent.

A form of cultural protection, the regulations grant Canadian publishers—or the Canadian arms of foreign owned multinationals—exclusive rights to import and distribute titles published abroad, fully protected by copyright laws. Publishers on this side of the border, like Pearson Education Canada and the Canadian branch of Oxford University Press, are permitted to charge a 10 per cent premium for American titles and a 15 per cent premium for titles outside North America, usually from Britain.

Unless Canadian-based-distributors charge more than the prescribed 10 or 15 per cent, or take too long to deliver book orders (in some cases they have up to two months) retailers who try to import titles from other sources could find themselves in court. Even if bookstores are able to secure otherwise legitimate contracts with a third-party foreign exporter, they would be in violation of the Copyright Act.

If you have ever wondered why book prices in Canada often don’t align with exchanges rates—something that has become more evident since the dollar has been hovering around parity—this is one reason why.

Although everyone who buys books sees their costs increased due to the regulations, Chris Tabor, director of the Queen’s campus bookstore, says students are disproportionately impacted. Whereas a typical novel will cost less than $30, it is not uncommon for textbooks to cost $100, with some titles going for nearly $300. “So 10 and 15 per cent doesn’t sound like a big deal on a Harry Potter novel, but for students who are spending $800 to $1,000, for their books, it adds up, it’s significant,” he said.

Controversial when enacted in 1999, the regulations have been largely ignored over the past several years. That is starting to change. Last spring, the Canadian Alliance of Student Associations (CASA) met with several Members of Parliament to solicit support for the repeal of the importation rules. Tina Robichaud, CASA’s national director, said while MPs, from all parties, were generally supportive, many were surprised that the provisions even existed.

CASA estimates that protecting exclusive rights for publishers through the Copyright Act costs students as much as $30 million a year. Removing the regulations, because it can be done without amending the Act itself, “is an easy way of putting money back into students’ pockets,” Robichaud said.

In May, representatives of the Canadian Booksellers Association (CBA) met with Heritage  Minister James Moore. Initially the group’s intentions were to lobby against allowing Amazon to set up a bricks and mortar warehouse in Canada. But, because Amazon had already been given the go ahead, CBA shifted its focus to the repeal of the import regulations.

And, earlier this month, Campus Stores Canada, a trade association, appears to have been the only education related group to criticize the government for not addressing the regulations as part of other changes to the Copyright Act. “Rather than see the cost of textbooks reduced by as much as 15 per cent overnight, this act will ensure that Canadian students will . . . continue to overpay millions,” executive director Wayne Amundson, said in a release.

Despite what would seem like an easy way to reduce costs for students, a demographic the Conservative government is often accused of ignoring, there are no immediate plans to revisit the book import regulations. In an email, Matthew Deacon, press secretary for the heritage minister, stated: “There is the potential that removing these provisions may result in lower revenues for authors and book publishers.”

Tabor, who refers to the mark up as a “private tariff” says there is no accountability for how publishers use the extra funds. “This money is going to, generally speaking, foreign-owned distributors. They’re collecting it, the author doesn’t get it, the Canadian taxpayer, in the form of government coffers, doesn’t get it, and it’s coming out of the pockets of our students,” he said.

Publishers disagree, preferring to emphasize that the 10 per cent is a maximum amount that protects retailers and consumers from distributors who would abuse their exclusive rights through even greater mark ups. “It’s up to 10 per cent,” Pat Ferrier of publisher McGraw Hill Ryerson said. “There shouldn’t be the assumption that what we do is automatically add that. In fact in many cases . . . it’s much less than that.”

Ferrier added that the mark up is a buffer that permits publishers to cover costs associated with importing, warehousing and distributing books, as well as providing teaching materials for professors, and facilitating returns. “In addition to providing all the sales and marketing effort to sell those books, there’s a big service component,” he said. He also pointed out that it is ultimately bookstores that set prices, and that Canadian publishers still compete with each other.

Bill Zerter, of publisher John Wiley and Sons, says sales from imported books drive the Canadian publishing industry. Without the protection of exclusive distribution rights that ensure markets for imported books, many titles in disciplines such as law and history with specific Canadian content would not otherwise be published. “The international product that we bring in has been declining and it’s being replaced by high quality Canadian product,” he said

The Canadian Publisher’s Council, whose members represent approximately 70 per cent of the Canadian undergraduate textbook market, was unable to provide data on the proportion of Canadian titles compared to imported titles prior to 2005. Nevertheless, the Council’s data do show a steady rise in Canadian authored textbooks published by its members, growing from more than 1.8 million units sold in 2005 to a little over 2 million in 2009, a growth rate of 9.2 per cent. During the same period, the market for imported textbooks has declined by 4.2 per cent.

It isn’t just publishers who value the cultural protection provided by the Copyright Act. In reference to the Canadian Booksellers Association’s lobbying efforts, Ben McNally, of Ben McNally Books in Toronto, said “I was scandalized that members of the retail booksellers association would go to Ottawa and do something that would be potentially injurious to our partners who are publishers.”

Tabor says that whatever the cultural justification for maintaining the import regulations, it simply doesn’t make sense in a climate where students can order books online for cheaper and have them delivered faster, than going through a bookstore. “It defies business logic that an individual can import more efficiently than an importer of commercial volumes of books,” he said.

When asked if being more directly exposed to free trade would encourage publishers to reduce costs, Jacqueline Hushion of the Publishers Council, who participated in a conference call with Ferrier, Zerter and other representatives from the publishing industry, said cutting costs would not be so easy. “How would they do it cheaper? If you could tell us that would be great,” she said.