Proceedings of the Standing Senate Committee on
Social Affairs,
Science and Technology
Issue 12 - Evidence - May 27, 1998
OTTAWA, Wednesday, May 27, 1998
The Standing Senate Committee on Social Affairs, Science and Technology, to which was referred Bill S-10, to amend the Excise Tax Act, met this day at 3:30 p.m. to give consideration to the bill.
Senator Lowell Murray (Chairman) in the Chair.
[English]
The Chairman: Colleagues, this is our third meeting to consider Bill S-10, a private member's bill sponsored by our colleague Senator Di Nino which would have the effect of removing the GST from reading materials.
Today, we have witnesses from a number of organizations, beginning with the Performers for Literacy, represented by Sonja Smits, an actor and director; and by Leslie Milligan, manager of special projects for the Performers for Literacy.
Ms Smits, please proceed with your opening statement.
Ms Sonja Smits, Actor, Director, Performers for Literacy: Honourable senators, I thank you for inviting me to represent Performers for Literacy about a subject that is very dear to me. As a performer, my art is centred around words. They are the medium through which I communicate to audiences. Reading is and has always been a great pleasure to me. As a child, my mother read to me every night, and that was one of my favourite times of the day. It opened up other worlds and possibilities to me. I loved stories then and I do now. As an actor, I have continued that tradition of story-telling. Literacy is fundamental to my work and my life.
As we face a changing society, solid reading and writing skills are the one constant we know are important for success. The more our children can develop these skills, the better prepared they will be for the future, whatever form it takes. As the first speaker here today, and one representing a national family and literacy organization, I should like to help set the stage for why we must do everything possible as a society to value and encourage reading.
Canada has a formidable literacy problem. In 1995, the OECD and Statistics Canada found that, in spite of universal access to education, 42 per cent of Canadians are below minimum literacy standards, which means they cannot read or are limited to a few words. An additional 34 per cent of Canadians can use only simple reading materials. People with low literacy are three times more likely to be unemployed than others. The cost of illiteracy in Canada is over $11 billion annually.
Literacy is even more important in a time of technological changes. With the rapid development of today's information society, these Canadians are increasingly at risk for long-term unemployment. This is because rapid change requires highly skilled and flexible workers who can adapt to an environment of continuous learning.
Dr. Fraser Mustard has noted that:
In periods of profound technological change with associated changes in wealth creation and distribution, individuals, particularly the young, will be at risk...
This emphasizes:
...the importance of a better understanding of a healthy primary wealth-creating sector and the synergy between this sector and the secondary wealth-creating sector. Many activities in the secondary sector, like some aspects of education, health care, and the support of children, are key parts of the infrastructure for all innovative economies.
Further, the 1996 International Adult Literacy Survey noted that:
...a literate and educated population is the key to capitalizing on and adjusting to structural change.... Literacy has a direct effect on the ability of people to maintain an economic edge in an intensely competitive environment.
However, literacy skills not only contribute to success or failure in the labour market, they are also the threads of a nation's social and cultural fabric, because they help people participate actively in society.
Illiteracy is a health issue because adults with limited literacy face serious problems using the health care system. Altogether, literate people are more independent and have a better quality of life than those who have difficulty reading.
As Dr. Robert Putnam of Harvard University found in a recent study, daily reading is strongly and positively correlated with social trust and group membership.
While we need remedial programs for adults, an even bigger issue is how we can change the outlook for the next generation of Canadians, to prevent illiteracy before it occurs. Education alone is not the answer. While there is a clear relationship between educational attainment and literacy levels, education does not fix a person's literacy skills for a lifetime. Therefore, Canadian culture must also promote literacy.
As The Ottawa Citizen noted, some of the credit for the high Swedish literacy rate is due to a very real culture of literacy. Both illiteracy and literacy are cycles. Studies have found that the development, maintenance and improvement of literacy skills are strongly linked to usage.
How do we develop such skills? The family is the single most important milieu for breaking the cycle of illiteracy. The research is clear that those children who are most at risk for low literacy are those who do not receive the necessary support and stimulation during their childhood, particularly during their pre-school years. What happens during the first few years of a child's life has long-lasting effects on many aspects of emotional, physical and cognitive social well-being. For example, lack of readiness for schooling, leads to increased risks of problems in school and ultimately to failure. These deficiencies lead to low levels of well-being in adulthood.
Parental involvement in learning continues to be an essential supplement to school throughout a child's elementary school years and beyond. Experts believe that reading aloud to children is the single most important thing we can do to prevent illiteracy in the next generation. A parent and child reading together not only helps the child develop reading skills, it also addresses the child's need for nurturing. Reading with older children stimulates listening and comprehension skills, builds vocabulary and concentration, and improves general knowledge. Hearing from community members and role models about the importance of reading in their lives further emphasizes the value of reading. Children who learn to enjoy and treasure reading are more likely to continue to read throughout their lives. Even small changes in behaviour can have major impacts in the long-term.
What can government do to promote literacy? The OECD notes that there are significant differences in literacy levels between countries, so this suggests that government policy can affect literacy levels. We know that literacy skills are required every day and daily practice of reading, writing and calculating sustains and enhances those skills. What Canadians do at work, at home and in the community are critical in determining the population's literacy levels. In most places, the workplace is much richer than the home in terms of opportunities for reading.
We also know that prevention of illiteracy circumvents the costs, both economic and personal, associated with remediation. To me, the diagnosis is clear and the treatment is straightforward: Governments must do all in their power to encourage and promote reading.
This starts with the messages we send. Is it not a fundamental contradiction to be promoting a well-educated and change-ready society while at the same time taxing the means whereby the society is created? We know that taxation discourages consumption; that is why we levy massive taxes on such things as tobacco and alcohol. When a parent walks into a store to buy a book for her child, what are we saying to her when the tax increases its cost by 7 per cent? When a new Canadian finds that Canada taxes its reading material, what does that tell him about what our society values? If reading is the key to full participation in our society, how can we justify a tax that essentially discourages access to the very method whereby this key can be acquired?
Today you will hear many more statistics about the impact of the tax on reading materials in all parts of society. However, I hope that you will keep in mind the very youngest citizens of our country when you are making your deliberations.
I would like to conclude with a poem by Strickland W. Gillilan, which captures simply and eloquently what I have been talking about today:
You may have tangible wealth untold
Caskets of jewels and coffers of gold.
Richer than I you can never be,
I had a parent who read to me.
Senator Di Nino: Thank you, Ms Smits, for coming today. I also thank Ms Leslie Milligan, whom I have known for a long time.
Yesterday we heard, from both Peter Gzowski and Roch Carrier, about the symbolic value -- and I think you alluded to it in your remarks today -- of the elimination of this tax. Could you expand a little on that?
Ms Smits: I made that same point in the reference to a parent going into a store and buying a book for a child. If you start with the premise that reading is an essential function for a society, a very basic one which we need in order to thrive or to survive, then it should be treated as an essential element, and there should be no barriers to that.
Senator Di Nino: I understand that you are a volunteer with this organization.
Ms Smits: Yes.
Senator Di Nino: Obviously you are committed to the cause because you believe that literacy is important to society -- economically, socially and otherwise. Do you have any doubt that the elimination of the GST on reading material would help the literacy cause?
Ms Smits: I do not know much about the financial aspects of it but, symbolically, absolutely, it would have an impact. To be less polite about it, I was shocked when the tax was originally imposed. I thought it was a terrible thing because it sent the wrong message about the value we place on reading.
Senator Di Nino: Do you think that, if we eliminate the tax, more people will buy more reading material, and that would lead to more reading?
Ms Smits: I think it would send out a signal which says this is very important. We need money to do this, to do that, to run our country, but this is so important that we have to go back and remove this tax from this area because it is a basic need in society and we want to support that. It would send out a very important signal to the country as to the value of literacy and the value of reading. Symbolically, that alone is extremely important.
Senator Johnstone: Would you outline in a little more detail what you mean by your statement that both literacy and illiteracy are cycles?
Ms Smits: For instance, if you have a parent who is illiterate and cannot read to you at home, you will not have as good a chance at reading, at literacy. It continues the cycle of illiteracy.
I had a parent who read to me and introduced books to me, and if society promotes reading and literacy as important and valuable, that will assist me in becoming a literate person.
They are cyclical in that way.
Senator Maheu: Can you confirm what other witnesses told us yesterday? They advised us that literacy groups are not paying any taxes on literature that they buy for teaching, for libraries, for schools.
Ms Leslie Milligan, Manager, Special Projects, Performers for Literacy: I cannot address that, because the books we receive are all donated by publishers and by our corporate sponsors. I do not think we have ever needed to go out and buy books.
Senator Maheu: What would removing the tax in this particular instance mean what to a group such as yours?
Ms Milligan: It would mean everything to our clients, not to us -- our clients, being the children with whom we work. We work with children across the country who come from various types of homes -- single-parent homes, welfare homes, and homes where two parents work and who are putting too much of their income into childcare. If they can go into a bookstore and a book is 7 per cent cheaper, and if just a few of these parents buy a few books for these needy children, then everybody is better off.
Senator Maheu: What would you define as reading materials? Do you include magazines that are run strictly on advertising? Do you include CD ROMs that are used on the electronic highway?
Ms Milligan: We in Performers for Literacy deal with children. Some children's magazines are published, and we would include those, but we are referring mostly to children's books. We would include anything that will encourage children to read.
Senator Maheu: Have you considered whether CD ROMs should be tax-free?
Ms Milligan: That is the sort of thing that we have planned for the future, but funding is difficult. We would have to buy computers first.
Ms Smits: Our organization is not rich enough to do that yet.
Senator Maheu: Many are being given away. Let us look into it.
Senator LeBreton: When Peter Gzowski appeared as a witness yesterday, he talked about a pyramid. The bottom where the pyramid widens out represented the lower income people, that is, people on fixed income. That is where the highest levels of illiteracy are. Would the children that you deal with be more in that lower income group?
Ms Milligan: Ideally, they are. However, we work with the children who come to us.
Senator LeBreton: Are they mostly from lower-income families?
Ms Milligan: The children come from every income group.
Ms Smits: I am amazed at the number of people who do not read to their children at home. That has nothing to do with taxes.
Senator LeBreton: Is it a societal thing as well because people are busy. They are trying to survive and cope and they just do not have the time.
Ms Smits: I think that is correct.
Ms Milligan: Dr. Fraser Mustard is one of North America's foremost experts in early child development. He has done extensive research in some of the inner city areas of New York City. His research has shown that if you cannot turn children on to reading, writing and learning by age 12, it is almost too late.
Senator LeBreton: Are you saying that these studies were done primarily in the United States?
Ms Milligan: No. He is a Canadian, but his research partner was probably American. Those are the centres that typically produce the best research. With respect to learning, there is not much difference between an American child and a Canadian child. That proves to us that the work we are doing with preschoolers is vital, and it all involves books.
[Translation]
Senator Ferretti Barth: You maintained that children should start reading at a very early age and that families should buy books. You also talked about school libraries. You are concerned, as other witnesses were, about children, schools and students in general. The elimination of the GST on instructional material would be welcome news. However, I think it would be a good idea to keep the GST on other types of reading material such as pornographic magazines and those depicting violence that are accessible to young people. I agree that it should be removed from instructional material. There is always the risk that it could suppress children's natural curiosity. Do you think that it is a good idea to remove the GST from instructional material aimed at young children and to maintain it on other types of leisure reading material?
[English]
Ms Milligan: Instructional material is too narrow. Instead, in our organization, we deal primarily with children's books. I can only speak about our own experience.
Ms Smits: I cannot speak about the performance of literacy. As a parent, the debate arises in the schools about what children are reading. For example, there was a fuss about a series of books entitled Goosebumps because they were horror stories. The argument was that children loved them and they would read them. In fact, children who would not normally read would read those books. What is literature or a learning situation to one person may not be to someone else. I think it is rather tricky to discriminate between different kinds of reading material.
The Chairman: On that note, we must conclude. Thank you, Ms Smits and Ms Milligan.
Honourable senators, after hearing today's witnesses, I had hoped that we could move to clause-by-clause consideration of this bill. This will not be possible because the government has now indicated that they would like to have the opportunity to have a witness, the Parliamentary Secretary to the Minister of Finance, Mr. Tony Valeri, appear before us. We have already had officials from the Department of Finance, as you know, but I presume Mr. Valeri, on behalf of the government, will be speaking to the overall policy implications of this bill.
The best we can do is schedule him for a Tuesday morning at ten o'clock. I have notionally set aside half an hour to hear him. We would then have questions and then we would hear from Senator Di Nino as the final witness; the sponsor of the bill has that right. Then, if it is your wish, we would move to clause-by-clause consideration of the bill. That will be Tuesday morning at ten o'clock.
There is one other matter. The steering committee presently consists of your chairman and Senator Stollery. A third member from the Liberal Party is required to round out the steering committee, and I am informed that the Liberal members of the committee and the Liberal whip's office propose the name of our colleague, Senator Maheu. Is that agreed?
Hon. Senators: Agreed.
[Translation]
The Chairman: Our next witness represents the Canadian Federation of Students. We welcome Jocelyn Charron, Coordinator of Government Relations.
[English]
We have also Mr. Larry Wong, manager of the University of Saskatchewan Bookstore. They are joined by Ms Sheryl McKean of the Canadian Booksellers' Association, who is no stranger to the committee, having been here yesterday.
[Translation]
Mr. Jocelyn Charron, Coordinator of Government Relations, Canadian Federation of Students: I will be making my presentation in French. Subsequently, I will be happy to answer your questions in either French or English, as you wish.
Thank you for inviting us here and for listening to the common concerns of students and campus booksellers. What they have to say is important.
As you know, post-secondary students buy their own textbooks and this can often be quite costly.
Post-secondary students were hard hit by the introduction of the GST. As you know, the GST was the first tax on books in Canada's history. There was almost no "hidden" Manufacturers Sales Tax buried in the price of textbooks, because books were exempt from the MST at every stage of production. So, students were hit with a 7 per cent price increase.
As you also know, the government has increased to 100 per cent the GST rebates to eligible public-sector institutions on purchases of books and some periodicals. This helps elementary and high school students, and indirectly helps post-secondary students by helping libraries. However, the effect of this rebate is severely reduced by years of budget cutting by institutions and by increases in student enrollment. Even with the increased rebate, most university and college libraries will be in worse shape next year than this year.
You have heard the Minister of Finance announce that the government has increased the education tax credits, improved the rules for RESPs and introduced the Millennium Scholarship Fund. Unfortunately, income tax credits and RESPs are useful only for students who are being supported through school by a parent or spouse with significant taxable income.
As for the Millennium Scholarship Fund, we have numerous concerns about it and you will find them in our brief to the House of Commons Standing Committee on Finance. For the purpose of the subject at hand, let us simply say that the fund will certainly help some students, especially if the bursaries are awarded on the basis of need rather than merit. We have to remember that the fund was created in the context of reduced direct funding to institutions and tuition deregulation that has already resulted in some programs charging more than $20,000 in annual tuition. Getting an education now means either having the support of a relative with a very healthy income or taking on years of debt.
I wanted to review the circumstances under which the GST was introduced on textbooks. It explains a little why students encounter some problems when the time comes for them to purchase textbooks. The Millennium Scholarships do not mitigate the damaging effect of the GST applying to textbooks. The new money represented by the Millennium Scholarships will be completely eaten up by tuition increases and increases in student debt as a result of previous government cutbacks, at both the federal and provincial levels. In this context, the GST on textbooks is doubly onerous: by tacking on extra new costs to education, it penalizes students; and by reducing the number of texts students can afford to buy, it degrades the quality of education that students are struggling to achieve.
My colleague, Larry Wong, the manager of the University of Saskatchewan bookstore in Saskatoon, can tell you that the GST affects student purchasing -- that students will forego buying one or more of their required texts because of the GST. When a typical student is spending hundreds of dollars on texts each term, the GST alone can equal the price of one or more books. A tax that takes textbooks out of the hands of students is a bad tax. Even worse, it is a stupid tax, one that will cost the country dearly in future. As your parliamentary colleague, Mrs. Marleau, the Minister for International Cooperation, says, "if the GST is to be applied to reading materials, how do we expect to have another generation of people who can know more and can compete in the world?"
We have also learned that the bill may be amended to include a reference to the non-traditional formats often required by students with disabilities. We would welcome such an initiative and our members are hoping that senators will go ahead with the proposal.
Finally, I want to say a word in support of the literacy groups who have already appeared. They have told you that they see this bill as an important step in improving literacy in Canada. It seems to me that they are the experts in this field, and not the Department of Finance. I urge you strongly to listen to the experts. Again, thank you for having us here.
[English]
Mr. Larry Wong, Manager, University of Saskatchewan Bookstore: Honourable senators, thank you for inviting me to speak here. Our bookstore is owned and operated by the University of Saskatchewan, and I am an employee of that university. Our student population is approximately 15,000 full-time students and 8,000 part-time students taking at least one class. Our formal presentation was made yesterday by Gailmarie Anderson and Sheryl McKean of the Canadian Booksellers' Association. I would like to reinforce that presentation by telling you of my own experience in the trenches at the University of Saskatchewan Bookstore with the issue of taxation on books; and by "books," I mean textbooks, what we call general books, and professional books.
Our foremost customers are students. We consider our faculty as colleagues or associates. They teach classes and we deliver the means for them to teach their classes. In the last fiscal year, our bookstore collected in excess of $376,460.40 from our students from the sale of textbooks alone. Probably 99 per cent of our sales are to students. It is unlikely that non-students would buy such items. Therefore, I am saying that this $376,000 comes directly out of the pockets of our students. In addition, we collected a further $70,000 on general and professional books. Last year, the sale of used textbooks amounted to $564,000, but, because of the way we are registered with the GST, we are exempt from collecting it on used books.
Currently, PST is not collected on any category of books in our province of Saskatchewan. It was attempted some years ago but it only lasted some three months because of the public backlash. In that period of time, the booksellers in Saskatchewan experienced a dramatic decrease in sales of anywhere from 8 per cent to 10 per cent. Public opinion backlashed on the party in power at that time, and the sales tax was dropped. Sales then picked up again. I think there is a message in there somewhere.
As with our Canadian Booksellers Association brief, just dealing with textbooks alone, over the years we have experienced a general trend of decreasing sales. I am talking about the unit sales of textbooks. For example, in a class of 100 students, nowadays we find that 70 per cent of the students will buy the next book. However, 30 per cent will not buy the textbook because they are sharing it, using illegal photocopies, or just getting by without a textbook because they cannot afford it. It is a big issue on our campus.
Students at our university who really need extra help with their rent and food can get from the university a no-interest loan. We call them "emergency loans" and they have been on the increase every year. We think eliminating the GST will help those students at least buy the textbooks that they need.
It is our experience that we do not sell our first-year textbooks in September when the students should be using them. We will sell a pile in December because that is when the exams occur.
Some courses run from September to April. We have a no-returns period in April to prevent students from buying a book, reading it, studying it and returning it within seven days. We sell many textbooks in April. We ask the students why they are buying a book in April which they should have bought in September. They say they find they need it for the exam and that they finally have saved up the money to buy the book on a non-returnable basis. They will sell it back to us, probably right after the exam, for 50 per cent of its original value, but they need the textbook.
We also have students who cannot afford the textbook even in April. They will stand in our aisles for a couple of days, studying the book while standing up. We do not provide couches for that reason. Eliminating that 7 per cent will probably enable some students to buy textbooks.
We are looking at the "golden goose." We are taking apart the golden goose, one piece at a time, and pretty soon the goose will die. The removal of the 7-per-cent tax will help the golden goose survive so that our students can become literate by buying textbooks.
In closing, I would say this: Axe the GST on books.
There is one question I would like to pose to the committee. The following is a statement attributed to a certain parliamentarian: Food is not subject to GST because it is a necessity. So are books. They are needed for young minds to grow.
I am just wondering when that particular parliamentarian will walk the talk, instead of talking the talk.
Ms Sheryl McKean, Executive Director, Canadian Booksellers' Association: I have three brief but important points. We believe the GST is prejudicial. It discriminates against low-income Canadians. The second point is that maintenance of the GST is deceitful. It does not uphold the promise made to Canadians. The third point is that books are unique. They are timeless. They can be used over and over for their original purpose in their original condition and without aids. We respectfully submit that these are reasons why the GST ought to be abolished and we should move forward.
Senator Di Nino: Thank you, witnesses. The committee has heard from a number of individuals and one question keeps coming up all the time. It deals with the definition of "reading material." What is a book? Since you are in the business, maybe you can help us out with your own thoughts on that.
Mr. Wong: Certainly, senator. In our minds, a book is a book. It has pages in it, a cover on it, and if it looks like a book, it must be a book. What we say are not books, are magazines and newspapers. Those fall into a separate category. Whether that category should be taxable or not is another question. They are not used by our students so, as a bookseller at a university, we are not concerned with those. I read newspapers every day and I buy Time magazine. If I do not have my Time magazine, I have a problem.
In the Province of Saskatchewan we sell a McGraw-Hill book called Principles and Practices of Internal Medicine. It is printed in either two volumes or as a single volume which is about four inches thick. It comes out every five years. Every doctor will shell out $200 for it. Last year, the same book came out on a CD Rom. The package looks the same. Open it up and there is nothing but a CD Rom. Our government in the Province of Saskatchewan has deemed that it is software and it is therefore taxable. I see nothing wrong with that.
The same government also taxes audio-cassette tapes of books. An audio cassette is not reading material. You open box to find a cassette. That is taxable. We have no problem with that at all. Senator, to answer your question, if it looks like a book, it must be a book.
Senator Di Nino: And if it smells like a book, it must be a book.
Mr. Wong: Exactly.
Senator Di Nino: Let me see if I can tackle another issue which has arisen during our deliberations. There are certain books or certain reading materials which, in the minds of some, are inappropriate for use by society. We could refer to books that are racist such as Ernst Zundel's books; we could refer to skin magazines, pornographic books. To focus on your comment that books are books, they are bound and so forth, there are certain books which, in certain minds, would be considered pornographic or racist.
How would you deal with that? What sort of advice would you give us in dealing with this issue when we are talking about the removal of the tax on reading material?
Mr. Wong: At a university bookstore, we have a lot of liberal minds. One faction buys books on abortion, and the other faction are pro-lifers. Each group will give me hell for one reason or another, and I am stuck in the middle. We try to carry both because it is a matter of choice. As I understand it, pornographic material falls under the Criminal Code. It is not for me to decide whether it is appropriate or not.
Similar comments could apply to gay and lesbian reading material. It is a prevalent issue on our campus and we have no problem with providing that reading material. We received a pleasant letter from the president of one particular association thanking us for carrying them. We are pretty open-minded.
If you are talking about child pornography, in my simple mind, anyone involved in the distribution of that material should be tarred and feathered and run out of town. Whether I can distribute those books is a decision for the law makers of this country. I would probably have a bunch of student demonstrations if I did bring in such material of my own accord.
Senator Di Nino: You stated that the Province of Saskatchewan does not charge provincial sales tax on books. Do you know of any province which charges sales tax on reading material?
Ms McKean: No, we do not know of any other province that does charge it. There is the HST, of course, but that is a different issue.
Senator Di Nino: Other than the harmonized sales tax which was recently introduced in some of the Atlantic provinces, you are not familiar with any other province which charges provincial sales tax on books?
Mr. Wong: I can cite one example from a different country. We have a large veterinary college, the only one in Western Canada and the second biggest in Canada. Many foreign exchange students attend that college. Our German students come over and buy books by the armloads and take them back to escape the VAT. That textbook, which they buy in English because it is not available in German, will be worth twice as much in Germany. Students will bring an extra suitcase in order to take several back. What more can you say about a country that has a tax which forces students to smuggle books into their own country?
Senator Maheu: Mr. Wong, when you were responding to Senator Di Nino, you said that pornographic material should be part of the Criminal Code. We are here to discuss taxes. Should be it be taxed or not?
I like your description that a book is a book, and that it is reading material. I could not agree more.
Mr. Wong: As parliamentarians, if you say that the book can be imported into Canada and it is not under the Criminal Code, it is a book and I would say that it cannot be taxed. There is too much onus on us to try to figure out what should be taxable. It should be either all or nothing.
Senator Maheu: Do you feel that magazines that are run strictly on advertising should be taxable?
Mr. Wong: Personally, I think magazines and newspapers should be taxable, because they are not a necessity. People who read newspapers will pay the tax, which is not that onerous. However, in general, first year chemistry students must buy a $10 textbook, a $25 study guide, a $15 lab manual -- not to mention all the lab fees they must pay.
Senator Maheu: How much mark-up does your bookstore have? What incentives have you initiated to assist students in your particular university?
Mr. Wong: First, we are owned and operated by the university. For years, we had saved up to expand our bookstore. Our president needed a new library circulation system, so one afternoon he decided that he would take $1.5 million out of our building fund and put it toward the new library circulation system. We had no problem with that. In fact, it was great. For the next three weeks, I did not have to buy coffee because all the librarians kept coming over to thank me for that generous deed. Of course, I was in shell shock after losing $1.5 million.
Several years ago, the students of Alberta did a survey about textbook prices. Traditionally, textbooks are low cost items. You get a 20-per-cent discount. Most of the books either originate in Toronto or are shipped from there, and if they sell it in Toronto for $70, we sell it for $70 in Saskatchewan and we pay the freight costs.
Most of my colleagues say that to run a university bookstore, you need a margin of 22 per cent. The expectation is that we should lose 2 per cent each time we sell a textbook. This was fine when freight was approximately 2 per cent, but freight costs have increased. Sometimes freight costs run from 5 per cent to 7 per cent, and textbooks are a big loser. We keep our heads above water only because there is a mixture of used books and general books that are not textbooks but that are being used in a class.
About 58 per cent of sales in textbooks are new textbooks. We also sell a lot of clothing, which has a mark-up. We like to get at least 40 points or 45 points from that, and the prices are still a bargain compared to downtown. We use that money to run our bookstore.
Our bookstore is not inexpensive to run. We have a union staff. To get a clerk 1 into our store costs us $10.95 an hour, plus another $5 or $6 in benefits. One of the real killers last year was workman's compensation, which doubled overnight. In fact, it was retroactive for three months. That cost us an arm and a leg.
The Chairman: Essentially, your other products are subsidizing what you lose on the textbooks.
Mr. Wong: Exactly.
[Translation]
Senator Maheu: Among other things, you mentioned that literacy groups were disgruntled. Is it not in fact true that community groups, libraries and schools do not pay the GST on books? You also mentioned scholarships. These have nothing to do with the tax. Why do you single out community groups when they do not pay any GST on books?
Mr. Charron: We broadly support literacy groups. Students live and breathe culture and ideas on a daily basis. Before they attend university or college, they complete quite a journey. As an association and as a society, I think it is in our best interest to encourage people to read any way we can because this is part of a much broader phenomenon of disseminating culture. It is in this spirit that we support literacy groups. Individuals who purchase books must pay the GST, while bookstores and libraries are exempt. These groups are appealing to senators to put an end to this practice. We support them in their quest.
Senator Maheu: On listening to your presentation, I got the impression that you were saying that all community groups pay the GST, particularly in Quebec where over 700 new French books are published. That is not the case. I merely wanted to point this out that not everyone pays the GST.
[English]
Senator Johnstone: I should like to commend the quality of the presentations that have been made here today and yesterday. I had wondered whether 7 per cent would really make much difference in whether or not a person would buy a book. However, you people seem to have figures that say that sales are down when the GST is applied and they increase when the GST is removed. I understand from the presentations that have been made so far that it affects sales greatly.
Mr. Wong: That is correct. For example, I usually read one general fiction book on the plane on the way to Saskatoon and another one on the way back. I am a book person and I read a lot. It used to be that you could pick up a book for $5.95; now they cost $9.95, and the taxes on top of that do not help. After a while, instead of buying five books, I will buy three.
Ms Charron: I work for the federation. I am a paid lobbyist. The truth is, I have not been in a classroom for seven or eight years. I was recently looking at books in the Eye Institute at the Ottawa General Hospital, because I wanted to know more about my eye condition. I looked at the prices of books dealing with ophthalmology. I could not believe how expensive they were. On those books, a 7-per-cent tax makes a huge difference, especially if you have to buy more than one. It makes a difference for our members. You can say that they will become doctors -- and perhaps we can tax their BMWs once they become doctors -- but, in the meantime, let them have the books.
The Chairman: Thank you, witnesses.
[Translation]
The Chairman: Our next witness is Mr. Hervé Foulon, the President of Editions Hurtubise HMH Ltée. Welcome, Mr. Foulon. You have the floor.
Mr. Hervé Foulon, President, Editions Hurtubise HMH Ltée: I have had the good fortune of working in the publishing industry for 25 years and therefore, I think I can say that I know this business quite well. Unfortunately, I also know about the problems associated with the tax on books because I had the opportunity to chair in 1990-1991 the coalition opposing taxes of any kind on reading material. This was just around the time the federal government brought in the GST and the provincial government was considering a similar move.
Our position is the same now as it was then: taxing reading material is akin to condemning ignorance. As publishers and industry stakeholders, we are absolutely essential to the process of making books as accessible as possible to everyone. Books are still the easiest and most affordable way of opening the doors of education and culture to a maximum number of people.
According to UNESCO's charter of the book, every individual has the right to read, books are indispensable to the education process and society has a duty to create conditions that foster authors' creativity. The Charter also states that a healthy national publishing industry is critical to a nation's development and that conditions favourable to authors are critical to the growth of the publishing industry.
We want to do everything possible to encourage people to read. In my business, I have had the opportunity to work fairly closely with publishing industry people in Africa. Books are not taxed in African countries, this at the request of countries of the North that wish to provide assistance to them. Efforts are made to make textbooks and general reading material available to children and adults alike. On the subject of literacy and culture, we must not confine ourselves to textbooks. General reading material is also important and should be available to everyone at an affordable price.
When books are taxed, the first to feel the effects are those who can least afford it. Those who can afford it will always manage to buy the books they need. The less fortunate are the ones who end up being penalized. Where once they would have bought maybe two or three books, now they can only afford to buy one or two.
Books are important way of promoting our culture and our identity. The print medium is still the best way of achieving these objectives. I do not wish to repeat what others may already have said.
Senator Maheu: When I stop by Monet, the bookstore, I always end up buying several children's books. Yesterday, we heard that 700 books were being published each year in Quebec. That seems like a lot to me, but the industry would not be publishing that many books if sales were not strong.
Community groups and literacy organizations, among others, which should feel the effects of taxation, do not in fact pay the GST. In your opinion, are we not overdramatizing the situation somewhat? Are you really having problems selling your books? Do they end up gathering dust on the shelves? Are you concerned about book sales or really about literature?
Mr. Foulon: I do not think that we can look at the problem from that angle. A publishing house in fact publishes a wide range of books, from cookbooks to novels and essays. Our business handles a range of reading material, including textbooks. I will not comment as to whether we publish too many or not enough titles. Anyone who has something to say should be able to find someone willing to publish it. The publisher's job is to determine if indeed the work would be of some interest. I certainly will not admit that there are too many or not enough books published. I recall a time not so very long ago when authors and writers struggled to find publishers willing to make their works available to the public. I do not think we should be saying that there are too many books published today. I would be too afraid of turning back the clock 20 or 30 years, and that would be a shame. In Canada, the government has made an enormous contribution to the development of the book industry, having realized the importance of making books available to all Canadians.
The industry draws its importance from its diversity and size. Today, we can boast of having a successful industry, despite its ups and downs, like any other industry. Readers are the ones who suffer much more because of the tax. They are the ones who are penalized. We often hear people say that education and literacy problems are prevalent. Nearly 40 per cent of young people drop out after high school. Many adults are more or less illiterate because they get out of the habit of reading.
When persons do not enjoy picking up book everyday and when in addition, it costs than seven per cent more to buy a book, then, as I said earlier, instead of buying three books, they will only buy one. They will never read enough books.
Senator Maheu: What significance do books hold for you? What, in your opinion, should be taxed: magazines, CD-ROMs, and so forth?
Mr. Foulon: I am talking about printed matter.
Senator Maheu: All printed matter?
Mr. Foulon: Yes, any kind of printed material helps to improve a person's reading skills. Earlier, mention was made of certain types of books or magazines. I would not want to be the one who rules on this. Should we tax the works of Sade and not other classics? I would not want to get into this kind of debate. Deciding which books children should buy would lead to a debate on education. It is the responsibility of our legislators to decide whether or not to tax books and it is up to parents to decide what children should or should not read.
[English]
Senator Di Nino: I would like to ask you a question about the market for French-language books in Canada.
I assume that, because of the limited market available, there is an also limited distribution for Canadian French-language books. Is there a difference in price because of this market? Is there a higher cost per printed word, however that is described, for French-language books in Canada, as opposed to those printed in the English language?
[Translation]
Mr. Foulon: Obviously, when we talk about market, the more copies of the same title you can print, the better your chances of keeping costs down, along with the retail price. As far as the francophone market is concerned, this depends on whether we are talking about textbooks or literary works. From a quantitative standpoint, these are two very different markets. With respect to the literary market, whether it be general or youth literature, while the market may have grown in Quebec because the Quebec and the French Canadian publishing industry have also grown, compared to the number of imported books, the number of available works for teaching French or supporting reading in French or French as a second language has decreased.
Francophone or French as a second language markets in other provinces have tended to shrink in recent years. That is a fact. By how much? That is difficult to say. At one time, programs were in place to help with the dissemination and publication of some French language works in certain provinces. These programs have either disappeared or been scaled back. Perhaps they will be reintroduced. This is an example of some of the financial woes that we have experienced. Certainly, the market outside Quebec has shrunk.
In Quebec, reading is generally on the increase, but we have to look at the type of material people are reading. Young schoolchildren are reading more as a result of the growth in libraries over the past two decades and increased opportunities for reading. However, once children reach the age of 15 or 16, reading levels begin to decline. This is frustrating, to say the least. There is a certain awareness of the problem, but it is not being addressed for various reasons. At 15 or 16 years of age, young people start to "drop out." That is what we see happening today.
[English]
Senator Di Nino: We understand that the removal of the GST on reading material will not solve all of the problems of illiteracy, but with regard to recreational reading, symbolically -- and actually, in effect -- if we eliminated that additional cost, do you think that there would be an improvement and an increase in the number of people who would do recreational reading?
[Translation]
Mr. Foulon: I believe so. Recently, a summit on books and reading was held in Quebec. We stressed at the time that decisions arising from the summit should not under any circumstances result in higher book prices. A study is currently under way to determine what proportion of household income is spent on non-essentials such as videos, cigarettes and books. Apparently, very little is spent on books. We need to motivate people to read and buy books and increasing book prices is not the way to do this.
Since some people are already finding it difficult to keep their head above water, we must not try to push them under completely. On the contrary, we should be extending a helping hand to them. Any effort to lower book prices will be welcomed.
When the GST was first introduced in 1991, a Coopers & Lybrand study found that a one per cent increase in book prices could result in a 2 or 2.5 percent drop in sales. This study was done by a reputable firm. Certainly we could get our hands on these results.
[English]
Senator Di Nino: I have one other question, if I may. In 1991, the GST was introduced, including on books. Would you be able to put some meat on some of these issues that you are discussing? Would you be able to tell us how much an average recreational book, either a hardback or a paperback, would have cost in 1991, and what it would cost today in 1998? Then we could figure out how much of that is the 7 per cent. Is there a number that you could give us?
[Translation]
Mr. Foulon: I do not know if these findings will be relevant or not because between 1991 and the present, a host of factors have come into play. For instance, paper prices have risen dramatically. What proportion of this increase can be attributed to the tax, to fluctuating paper prices, to increased labour costs or some other factor? However, the number of titles published as, on average, remained the same, or even increased. Average print runs have, however, decreased. Where once between 4,000 and 5,000 books were regularly printed on average, and I am speaking for francophone publishers, this number has now fallen on average to somewhere around 1,500, 2,000 or 2,500 books. This is an important consideration. Publishers and retailers throughout the book industry are now looking to global sales in order to turn a profit.
[English]
Senator Di Nino: The question upon which I am trying to focus without trying to lead you is: What would the average cost of a book be, including the 7-per-cent tax? How much would the average person spend on books by the end of the year if that person bought one each month?
[Translation]
Mr. Foulon: Adult novels easily retail for between $20 and $25 on average at bookstores. It is somewhat different in the case of children's books. I am talking mainly about novels. The price of imported books is even higher because of other factors such as the exchange rate. The price of children's books has remained lower. They cost around $7 or $8 in Quebec.
[English]
Senator Di Nino: So, if you were a serious reader, the cost of books would pile up at the end of the year.
[Translation]
Senator Ferretti Barth: Could you explain something to me? You share the same concerns as other witnesses that have come here, including students. Is that correct?
Mr. Foulon: Yes.
Senator Ferretti Barth: Let us assume that as a result of the GST, students stop buying books because they have become too expensive. When I was a student in Europe, I recall that we had student ID cards. These cards enabled us to get into the movies or the theatre for less. Perhaps we could adopt the same approach here, that is issue ID cards to students which would exempt them from paying the GST on textbooks. Senior citizens are entitled to travel discounts when they show their senior's card. Perhaps schools can come up with a way to exempt students from the GST. It is an idea worth considering.
You stated that people are no longer in the habit of reading. Is this because of the GST or because television has invaded the home? You mentioned non-essentials and the fact that families are buying fewer cigarettes and books. Cigarettes cannot be replaced by a piece of wood, but television programming can substitute for reading. We have all seen mothers plunk their children down in front of the television! You cannot tell a six-year-old to pick up a book and start reading. He prefers to watch cartoons. Television has done a great deal of damage. You stated that the GST was introduced in 1991. Is that right?
Mr. Foulon: In early 1991, I believe.
Senator Ferretti Barth: Everyone seems to be greatly concerned about the GST. Do you have any statistics to give us which would indicate that prior to 1991, there were X number of readers, whereas today, there are only this many readers. Are you blaming the GST for the decline of our book industry?
Mr. Foulon: Let me respond immediately to your question about television. I am not speaking now as a publisher, but rather as a father of four children. I disagree with what you said.
Senator Ferretti Barth: Well, sir, my husband had to put the television under lock and key so that the children could do their homework. They were products of the television generation.
Mr. Foulon: Television can have a beneficial impact on reading. Many books have become successful because a film or a television series was based on them. Just look at the success of Arlette Cousture's book Les filles de Caleb. The book was initially a success, then a television series was produced and subsequently, even more copies of the book were sold. I am not at all critical of television, as you seem to be. At times, I object to the way some people use this medium. This is true of many products and services. Careful choices must be made. We cannot choose for other people. This is where education comes into play. Judging from what we have heard recently, education is one of the government's top priorities.
Your first question concerned students. I was not talking only about students. To my mind, books are for everyone, students, children and adults alike. Some adults take adult education classes. Education is an ongoing, daily process. There is the traditional form of education received at university, and then there is the other type of education, the lifelong learning process. This is where books come into the picture. They provide adults, young people and retired persons with a range of technical, cultural, political or other information. Books are for everyone. The higher the price of books, the less accessible they are to some people.
Senator Ferretti Barth: Who exactly are you referring to?
Mr. Foulon: To those who are less fortunate.
Senator Ferretti Barth: Would that be students? What to you think of the idea of issuing ID cards to students?
Mr. Foulon: I was not talking about students in particular.
Senator Ferretti Barth: Some witnesses seemed to be concerned that students could not afford to buy leisure reading material. There is a way to resolve that problem.
Mr. Foulon: That may be true for students, but it is also true for others. I know many people who are reluctant to buy books, and I am talking about people who are 40, 50 and 60 years old. They maintain that they could use the $25 for something else.
Senator Ferretti Barth: You know, books are like cigarettes. Some people can read less, but others cannot. The love of books and reading is something very personal.
Mr. Foulon: I agree that books and cigarettes have something in common. Reading too can become addictive. Let us give people every opportunity to take up this habit.
The Chairman: I want to thank Mr. Foulon for sharing with us his views as a publisher and as a father of four.
[English]
The Chairman: Could we now have Ms Barbara Clubb, the chief librarian of the Ottawa Public Library, to the witness table. Ms Clubb, we are glad to have you here on this important private member's bill which we have listened to with a great deal of interest. We have about a half-hour to hear an opening statement and to have a dialogue with you. Please, proceed.
[Translation]
Ms Barbara Clubb, Chief Librarian, Ottawa Public Library: Good afternoon. I am very happy to be here today.
[English]
Thank you for inviting me here and for listening to the concerns of libraries and library users. Libraries, as you probably realize, have very little to gain monetarily from this bill. As you know, the government has already removed the GST from books sold to most libraries by increasing to 100 per cent the GST rebates eligible to public-sector institutions on purchases of books and some periodicals. This was a significant step forward, and we applaud the government initiative. Congratulations are in order, and I know that Senator Di Nino has said as much to this committee.
I am here today to support the other witnesses, particularly the representatives of literacy groups, in asking you to take the next logical step of removing the GST from the purchase of reading materials by individual Canadians.
In many ways, public libraries and libraries of other types are on the front lines of both Canadian literacy efforts and the GST debate. We provide high-quality, relevant, high-interest reading materials to Canadians with a range of reading skills, including a large number of new readers, ESL learners, and, in particular, new Canadians. Many libraries house and support literacy programs reaching out to our communities. At the Ottawa Public Library, we have a tutoring room which people can book, and we have a number of specialized literacy collections for parents and for small children.
The demand for materials that will both challenge and educate new readers, ESL learners, and new Canadians has grown tremendously in recent years. At the same time, we have seen an increase in the number of library users who use the library resources because they cannot afford to purchase their own reading material. The 7-per-cent GST hits these people especially hard. As you have heard from other witnesses, lower-income Canadians spend a higher portion of income on reading material than higher-income Canadians. Therefore, the GST on reading can be considered a regressive tax.
You have also heard that the single largest predictor of literacy skills is the presence of reading materials in the home. Even though I am the chief librarian of an institution which loans materials, I believe that it is equally important for individuals and families to be able to purchase materials which they can keep in the home as their treasure of learning.
We have some library users who use our material simply because they refuse, on moral grounds, to pay a tax to read.
I should like to point out that libraries do pay some GST on reading materials. The increased GST rebate covers only books and periodicals containing less than 5 per cent paid or unpaid advertising. Most scholarly journals, literary magazines and not-for-profit publications contain more than the allowed 5 per cent and are, therefore, ineligible for the rebate.
Newspapers are also specifically excluded from the rebate. As you know, newspapers are a valuable part of the service provided by a library. Subscribing to a half dozen or more newspapers can be very expensive. Newspapers from foreign countries are a particularly valuable resource for new Canadians. As a public library whose acquisitions budget has not increased in at least six years, we find that servicing the increasing number of new Canadians who are using the public library in the City of Ottawa is getting to be beyond our means.
The GST on newspapers and periodicals continues to be both an irritant and a drain on our library budget. Increasingly, we see it as a significant barrier to being able to provide for those in Canadian society as a whole, and particularly in the City of Ottawa, who are least able to purchase those materials themselves.
Finally, libraries are the centre of public debate in many communities. We are not political institutions. We strive to provide fair, unbiased information for the use of all citizens in debating issues of interest, as the Library of Parliament tries to do for parliamentarians. In that role, we often hear from citizens on various issues of the day, and we certainly continue to hear about the GST on reading materials because those who borrow books from public libraries are often the same people who purchase reading material from bookstores.
There is never, in our opinion, a conflict or a competition between libraries and bookstores. There has always been, and I believe there will always continue to be, a symbiotic relationship between the two.
Canadians do not accept paying a tax to read and they have not forgotten that both the present government and the previous government promised to remove the GST from reading materials. They are waiting for that promise to be kept.
The first part of keeping that promise, in terms of zero-rating the GST for public library purchases on most materials, was exceedingly well received by my institution. I know that there is no way the federal government can direct that that money go back into acquisition. I know that there is no moral obligation for us to do that. I have not surveyed my colleagues to determine what happened to that money, but I do know that on the day that that announcement was made in 1996, every chief librarian to whom I spoke immediately did a mental calculation to determine how much additional funding would go into their acquisitions budget.
In our case, it was in the neighbourhood of $38,000. I can assure you that the majority of that funding went back into our acquisitions budget in the areas that were particularly needy. Literacy is one of those areas; resources for persons with disabilities is another.
In conclusion, I should like to thank you for the opportunity to appear here. Thank you for listening to me as a representative of Canadian public libraries, and in particular the 41 largest public libraries in Canada which collectively serve over 11 million individuals and which have at their disposal an immense network of resources to serve Canadians with reading materials. This network will be better served if we can take the next steps in dealing with the GST.
The Chairman: Thank you, Ms Clubb. Did I understand you correctly to say that one of the problems with the initiative announced by Mr. Martin and his budget in 1996, to provide a 100-per-cent rebate, is that it does not apply to newspapers? And you are trying to provide foreign newspapers to new Canadians who frequent the library?
Ms Clubb: That is correct.
The Chairman: Why do you pay GST on those?
Ms Clubb: Some of those newspapers are published in Canada and some are purchased abroad. It depends upon which ones we are purchasing.
The Chairman: They are not necessarily foreign, but foreign-language?
Ms Clubb: Yes, they are foreign-language.
The Chairman: With regard to those that come from abroad, one of the arguments being made for removing the GST from magazines is that there is a great deal of leakage; the government is not collecting very much from Canadian subscriptions to foreign magazines unless those magazines wish to register and remit the GST. Do you have to pay GST on a large number of foreign-language newspapers?
Ms Clubb: I do not have the exact figures, although I can certainly get them for you. We subscribe to a considerable number of foreign-language materials. Because we are always looking for less expensive ways to provide that service, we are looking into providing it over the Internet, which would remove any benefit to the tax system. We are looking into cancelling our print subscriptions.
The Chairman: Are many of these foreign-language newspapers on the Internet?
Ms Clubb: They are not all on the Internet, but increasing numbers are. This is what new Canadians need in their transition. It is the whole issue of news from home.
The Chairman: I have a second question which bears on a question which Senator Maheu asks routinely about taking the sales tax off books and magazines. She makes a distinction, as have others, between the general run of books and magazines and those which people would consider to be pornographic, obscene, racist or whatever. I assume the rebate on books that you enjoy applies to all books. I further assume that since you are running a public library, you have books in your collection that I, or someone else, might consider to be objectionable, pornographic or racist.
Ms Clubb: That could be, yes. To begin with, we have a selection policy that guides our acquisitions and which is approved by our board. Our board is appointed by City Council, and our mayor is currently a member. Moreover, if anyone in the community objects to anything that we have in our collection, there is a process they can follow in order to register their objections, appear before the board, and request that an item be removed.
In a number of cases, we have removed material because, on reviewing a particular item, we deemed that where it may have been appropriate in our collection five or ten years ago, it was no longer appropriate for any number of reasons. Therefore, we do not hold to a rigid policy that says anything we buy must stay forever. We are trying to implement and live by a very liberal policy of intellectual freedom, but not so far as to appear to have our heads stuck in the sand.
The Chairman: Something that had a saving cultural merit five years ago might not have a saving cultural merit today.
Ms Clubb: That is right. We have a very complicated process of choosing children's books, in particular. Every single child's book that is purchased in our library is read by our staff before it is acquired. Therefore, it is not as if we are buying things on an open purchase order, which some libraries do. We are very careful with what we purchase because we have a limited amount of money and we do have a big readership.
We are aware that the society we serve is changing and the norms that govern tastes are changing as well. Recently, we had a case where a book that was fine 15 years ago was seen to be no longer appropriate. There have been any number of books that libraries have removed from their shelves because they were racist or inordinately sexist. It is common practice to review that kind of material. A library is a human organism. We do make mistakes. Fortunately, we do not make very many.
In my two-and-a-half years, I have not had a single issue come before the board with regard to censorship. We have a very liberal-minded community in Ottawa.
Senator Di Nino: Ms Clubb, you have said that the community in this area is very liberal -- small L liberal, obviously. Would the norms would be different in different parts of the country?
Ms Clubb: Yes, they would.
Senator Di Nino: Therefore, what may be acceptable in your library may not be acceptable in some other parts of the country; is that correct?
Ms Clubb: It is possible, yes.
Senator Di Nino: Therefore, defining whether printed material would be acceptable or would fall into categories that are used daily -- racism, pornography, et cetera -- would be very difficult, or at least controversial, in different parts of the country.
Ms Clubb: Yes. You could probably liken it to video terminals or lap-dancing.
Senator Di Nino: Thank you for your example. You mentioned a number of $38,000. Was that half or the total amount?
Ms Clubb: That would be half. That would be the new purchasing power that we realized in our budget.
Senator Di Nino: Let us understand what that means to a library like yours. Is this a major, minor, significant or insignificant amount?
Ms Clubb: Our total acquisitions budget is $1.6 million.
Senator Di Nino: Annually?
Ms Clubb: Annually, yes. So $38,000 represents what one can easily see is a very small percentage of the budget. However, we are very careful of every single penny. We have any number of fund-raising schemes to raise a few thousand dollars here and a few thousand dollars there. When we can get $38,000 in one fell swoop, that is significant.
Senator Di Nino: We would actually be talking about $76,000, since $38,000 is only half; is this not correct?
Ms Clubb:The new money realized with the zero-rated GST amounted to $38,000.
Senator Di Nino: That has a major impact on what you can do in the library.
Ms Clubb: Absolutely.
Senator Di Nino: You also spoke about foreign-, English- and French-language newspapers. Would that apply to magazines as well? Would you have magazines?
Ms Clubb: Thousands of titles.
Senator Di Nino: Thousands of titles?
Ms Clubb: Yes.
Senator Di Nino: Are they also an important part of the library's ability to serve its clientele?
Ms Clubb: Absolutely. They would fall under the leisure and education categories. We have a whole range of material in magazine and periodical form. We have common or monthly magazines but we also have a range of scholarly journals.
Senator Di Nino: We are talking about newspapers, magazines and periodicals.
Ms Clubb: That is right.
Senator Di Nino: Would some of these also be in foreign languages?
Ms Clubb: Yes, they would.
Senator Di Nino: Would some of these be printed in Canada and some not?
Ms Clubb: That is right. Our major languages would be Chinese, Vietnamese, Arabic and Russian. We buy heavily in eight languages.
Senator Di Nino: Would you have any idea what the Toronto libraries would have to carry to service their clientele?
Ms Clubb: Many more.
Senator Di Nino: We are not talking about a small or an insignificant component. When you add periodicals, magazines and newspapers together, and these in numerous different languages, perhaps eight in Ottawa and possibly as many as 80 in the Toronto main library, it amounts to a significant component of the library's material.
Ms Clubb: That is right. Let me give you a brief example: Of the almost 4 million items our library circulates, 3 per cent is in Chinese and about 11 per cent or 12 per cent is in French.
Senator Di Nino: The removal of GST on this material would make a substantial difference to your budget.
Ms Clubb: Yes. Take Chinese, as an example. We get donations from the Chinese embassy, from the Taipei Economic & Cultural Office and from the Chinese community. What we buy in Chinese is one thing, and what we get donated is another. We could not do without the combination of the two. However, we just cannot keep up with that particular demand.
Senator Di Nino: Finally, you made the comment that you are here more to support others who are more directly involved with this issue. I wonder if you could answer a question that I asked a couple of times. What do you feel the removal of the GST on reading material would mean symbolically for Canada and Canadians?
Ms Clubb: It would certainly be an addition to the pool of money that is available for individuals to purchase learning materials. There are any number of studies that indicate that the earlier a child reads, the better off they will be, and the better position they will be in to make their way in life.
There are studies that indicate that the biggest issue is if children are read to in the home. That is a key indicator of educational and financial success. If parents cannot afford to buy materials for use in the home, then that is an impediment to the cycle of children being able to read before they get to school.
It may be somewhat of a reach, but this is all part of the Convention on the Rights of the Child. It is all part of supporting the world of children and the lives of children into adulthood. If the GST were to be further moderated, the Canadian government and the Canadian people would be taking a significant step, which the library community would ensure would be communicated around the world, toward creating a much more hospitable base for children and newcomers.
Senator Maheu: Thank you for your presentation. I wanted to quote one of my colleagues while referring you to some things that certain witnesses have said. They were identifying what they believe qualifies as reading material. Some agreed that a computer system was not reading material and should remain taxed. Others felt that anything that touched something that was read should not be taxed.
My colleague shares my view on many things. I object to removing the GST on pornographic material and leaving it on diapers. That is what the honourable senator said in the chamber when she was rebutting Senator Di Nino's presentation. She went on to ask if we should tax computer material and CD-ROMs. She spoke about having gone to Rankin Inlet into a class of young children who were on the computers learning how to read English. It was not printed material as we define it and as many of our witnesses have defined it. It was effectively something like a CD-ROM on a computer. Would that be considered reading material? Should that be exempt from the GST? In your opinion as a librarian, as someone who deals with both computer programs and books and other printed material, how broadly should we define reading material?
Ms Clubb: As you may or may not know, Bill Gates has established the Gates Library Foundation to support the introduction of computers into public libraries. The Ottawa Public Library was one of the earliest recipients of that funding in its previous incarnation called "Libraries Online!." The new foundation will allocate approximately $400 million to public libraries for computers specifically for public access. We had the first meeting with the foundation in Ottawa last week to establish the Canadian portion of the foundation.
In connection to this initiative that he has taken with his wife, Bill Gates was asked which, a book or a computer, a library or a family should purchase if they could buy only one. His answer was absolutely and definitely, "Buy a book." That is my opinion also in the initial analysis.
However, we cannot be so foolish as to believe that using printed material is the only way that people will learn. We have a submission into Industry Canada indicating that, more and more, government wishes to do its business on the information highway. This government has a goal to make 25 per cent of its goods and services, and specifically its reading material, available in electronic form and, in some cases, electronic form only, by the year 2000. That is an enormous amount of paper that will not be printed. That is an enormous amount of material that will not be acquired.
Libraries are selective depositories, so we obtain some of that for free, but many people must buy it. If it is available only in electronic form, then this society and government have a problem because almost two-thirds of this country is populated by individuals who do not have computers in their homes. Therefore, the preliminary solution is to provide that access through the public library. We see a symbiotic relationship between government and the public library network to provide access to electronic material.
We spend approximately 15 per cent of our $1.6 acquisitions budget on electronic products and services, including CD-ROMs and talking books. Additionally, we are looking at the whole issue of licensed data base acquisition. That means that we will be purchasing a licence to access any number of data bases, such as in the area of health, and then making those data bases available for free. Those services are all taxed and, consequently, even more expensive.
In conclusion, I would say that we would support the elimination of the tax on non-reading, non-print materials. Increasingly, that is where people will obtain their information. It does not mean they do not have to read it. In most cases, it does not come in picture form, it comes in word form; it is just on a computer screen. More and more, we find that people are delighted to get the material on the screen but cannot resist printing it out. In the end, they get printed material, faster.
I am aware that the issue of pornography has come up in the past. I do not know the numbers in terms of how much is spent on pornographic literature as opposed to how much is spent on every other kind of reading material. My only concern is that I would not want individuals who purchase non-pornographic material to be penalized because of the smaller number of individuals who do purchase that material.
Not having done any research on this particular topic, I am speaking off the top of my head. I would expect that neither the removal of the tax on pornographic material nor its retention would make much difference in terms of how much is purchased.
The Chairman: Thank you for your presentation.
I notice that we had down here 15 minutes for The Don't Tax Reading Coalition. This was really an offer on their part to return if we required any technical information or elaboration of their previous testimony. I am inclined to forego that. We have already circulated the OECD information that we discussed when they were here. Senator Di Nino will be the final witness and I think can wind up next Tuesday quite effectively.
If there is further information, we would be glad to receive it in written form and circulate it to the members of the committee.
Senator Di Nino: Mr. Chairman, I can tell you that representatives from The Don't Tax Reading Coalition made themselves available because at the May 6 meeting there was some mix-up in the distribution of their material and they were not able to fully complete their presentation. However, if the members of this committee feel that they have sufficient information, particularly the written text that was submitted, that should be fine.
The Chairman: We have that, and if there are questions on the basis of the testimony, they can be made through you or in written form. Let us leave it at that, then, for now.
The committee adjourned.