Policy on foreign investment in the book industry
The Revised Foreign Investment Policy in Book Publishing and Distribution (1992) is an important factor in determining whether a proposed foreign investment in Canada’s book industry is likely to be of net benefit to Canada; other factors are identified in section 20 of the Investment Canada Act . Under the Act, the determination of net benefit in the cultural sector is made on a case-by-case basis by the Minister of Canadian Heritage through the review of proposals for controlling foreign investments. An investment may proceed if it receives the Minister’s approval.
The Policy states the Government’s longstanding position of favouring Canadian control of businesses in all three sectors of the book industry: publishing, distribution, and retail. Canadian control is a key and longstanding tenet of the Government’s intervention in the book industry, given the demonstrated commitment of Canadian-owned firms to the identification, development, and support of a wide range of Canadian authors.
The Policy supports foreign control only where it occurs as a result of indirect acquisition, or through direct acquisition of a business in financial distress. In cases where controlling foreign investment in the book industry is approved, the Policy also serves as a guide for the types of “undertakings” (formal behavioural and financial commitments) that the Government may seek to ensure net benefit to Canada.
The application of the Policy in specific cases is the responsibility of the Department’s Cultural Sector Investment Review division. The Policy, like the Investment Canada Act, applies only in cases where the foreign-controlled business would, if approved, be physically located in Canada.
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