Cultural review sets sights on Target

The federal government has launched a review under the Investment Canada Act into whether retail giant Target’s move into Canada could erode the amount of Canadian cultural content on store shelves and hurt domestic publishing houses.

The federal government, on the recommendation of Heritage Minister James Moore, says in a cabinet order it’s “in the public interest” to review — under Section 15 of the act, which deals with cultural heritage and national identity — “the investment by Target Canada Co. to establish a new Canadian business carried on by Target.”

Target announced in January 2011 a $1.83-billion deal to acquire the leases on up to 220 Zellers stores from Hudson’s Bay Co. Target has since purchased the leases of 189 sites currently operated by Zellers and plans to open 125 to 135 stores in Canada, the majority of which will open in 2013.

Depending on the outcome of the review, Target could be required to introduce more Canadian authors and musicians on its store shelves and distribute imported titles through Canadian-controlled publishers.

“The government is committed to ensuring that foreign investments benefit Canadians. We will review Target’s proposal and make an announcement in due course,” James Maunder, director of communications for Moore, said Thursday.

Target’s plans to sell cultural content such as books, CDS and DVDS will be subject to a net-benefit test under the Investment Canada Act. Cases are approved based on a commitment to Canadian content.

Under that test, the government could seek commitments such as “the development of Canadian authors” and for the company to “support the infrastructure of the book distribution system,” according to Canadian Heritage’s foreign investment policy on book publishing and distribution.

“The Investment Canada Act requires that foreign investments in the book publishing and distribution sector be compatible with national cultural policies and be of net benefit to Canada and to the Canadian-controlled sector,” explains the policy.

The federal cabinet order was issued March 27, with the review to begin immediately.

Millions of dollars of direct federal investments in the cultural sector could potentially be undercut if Canadian publishers take a financial hit from the entrance of a large foreign retailer into the Canadian market. The federal government invests around $30 million annually in Canadian publishing houses.

“Our planned retailing of cultural products — DVDS, music (CDS), books, magazines — is subject to review by the Minister of Canadian Heritage. This process commenced with the issuance of the Order in Council,” Lisa Gibson, spokeswoman for Target Canada, said.