When the Canadian dollar started rising last fall, most Canadians were excited at the prospect of being able to purchase consumer goods at cheaper prices. After all, if the Canadian dollar was worth more than the American dollar, we should be able to pick up deals on items coming up from the States. While there is truth to the logic that if a Canadian were to buy something priced in American dollars they would save money, it doesn't always bear out. It has actually meant hard times for some industries.

Even before the loonie (the Canadian one dollar coin has a picture of a loon on its tail's side and is referred to as a loonie) went above par against U.S. currency, there were rumblings of worry from Canadian book publishers. Canadian book buyers have long been accustomed to seeing two prices on the backs of their books: one for the Canadian market, and a less expensive one for the American market (by about ten to twelve dollars for a hardcover). Since most people have always put that down to the differences in the purchasing value of the two dollars, it was expected that publishers in Canada would be able start cutting their prices.

In reality, the worth of the Canadian dollar had little to do with pricing of titles in this country. The biggest single factor dictating price is a simple matter of market size. Quoted in The Globe & Mail, Canada's national newspaper, Carolyn Quinn, executive director of the Association of Canadian Publishers, said that with a potential market of only 33 million people, you have to charge more in the hopes of recouping your outlay than you would for a market of over 200 million.

In the face of an anticipated consumer revolt, Canadian publishers have been forced to drop their prices between 25 and 30 percent. Although that has already translated into a four percent increase in sales, and an increase of three percent in total dollar sales for the fall of 2007, the long term forecast isn't as rosy. It's simple math. You reduce prices by 25 percent; your revenue drops by 25 percent. If your total sales is only increasing three percent, that means you're taking an actual loss of 22 percent in total revenue.

While the larger international houses like Random House, Penguin, and others can probably weather this storm, the smaller distributors and publishers won't be as fortunate. In fact the first casualty was just announced this last week. Raincoast Publishing of British Columbia announced they would no longer be publishing original works, and would be focusing on distributing imported titles only.

While director of marketing and publicity for Raincoast, Jamie Broadhurst, claims it's because 80 percent of their business comes from distributing American titles, and having to reduce prices by 20 percent across the board due to public demand is forcing them to cut their publishing division, something about that claim rings a little hollow. According to Roy MacSkimming, author of The Perilous Trade (a history of publishing in Canada), Raincoast has been reducing the publishing arm of its business steadily for the past little while. Since a management change a few years ago, they stopped developing any new talent.