Book tax will hurt local businesses
Dear Editor, As the owner of a book publishing company in Newfoundland and Labrador, I ask that the provincial government repeal a 10 per cent provincial sales tax on books, due to commence in January.
While this measure would raise a negligible amount of revenue, the direct harm inflicted by it on my company will be substantial. Boulder Publications relies heavily on the Newfoundland and Labrador market for its continued existence, so it stands to reason that our sales will decline if the government proceeds with taxing books.
Theoretically, Boulder could reduce prices in order to counteract the tax. From a practical perspective, however, this is impossible because our costs — including printing, graphic design, editing, transportation, shipping and wages — continue to rise.
Meanwhile, thanks to the new tax, publishers headquartered outside Newfoundland and Labrador face a unique opportunity. My company competes with other Canadian publishers, many of which receive substantially greater support from their provincial governments than those in this province receive. Most worrying to Boulder is a decision by Nova Scotia, in October, to provide $1.1 million to publishers in that province. The focus of this large injection of funds is expansion of export markets for Nova Scotia publishers, both outside Canada and within. Newfoundland and Labrador will be high on their list of opportunities, due in large part to the tax our government has decided to impose on books. Since no other province taxes books — and because of generous government support — publishers residing elsewhere can also afford to subsidize retail prices for books created specifically for the N.L. market. They accept a lower margin of profit here because their primary markets lie elsewhere in Canada or the United States.
Major publishers have already taken heed of the strong demand for local books in N.L. This Christmas, I counted three children’s books created specifically for this market that were published by major international publishers. Most notably, their retail prices are quite a bit lower than those charged by local publishers. The challenge this poses will be exacerbated with the new tax.
I am certain the Ball administration would not intentionally hobble the ability of my company to compete. I therefore ask the government to immediately cancel its plan for taxing books.