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Newfoundland and Labrador’s new book tax has the province’s literary community concerned for the future

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A still from Josh Goudie’s The Lore Tax

A still from Josh Goudie’s The Lore Tax

Two items in particular stood out to the literary community of Newfoundland and Labrador among the widespread cuts and tax increases presented in the provincial government’s April 2016 austerity budget: a proposed closure of 54 of the province’s largely rural libraries, and the addition of a 10 per cent harmonized sales tax on books, on top of the five per cent GST already levied but no longer rebated.

Following widespread public outcry, led by local literary figures such as author Lisa Moore, Education Minister Dale Kirby announced in June that the library cuts would be put on hold for review by the private consulting firm EY. (Its recommendations, which were expected in early 2017, have not yet been made public.). But the additional tax came into effect on Jan. 1, making Newfoundland and Labrador the only province to charge HST on book sales. The tax covers all physical and digital titles – including textbooks – purchased either online or through brick-and-mortar retailers.

Newfoundland and Labrador already has the lowest literacy rate in Canada and spends among the least per year on reading materials ($128 per household in 2015). Those statistics make the government’s move to put additional taxes on books even less understandable, says James Langer, editor of St. John’s–based publisher Breakwater Books. “We do know that the demand for books in Newfoundland has been decreasing,” says Langer. “Overall, if the demand is going down, you don’t increase the price. That’s Economics 101.”

In recent years, provincial governments in Prince Edward Island and Nova Scotia have proposed charging HST on book sales, but changed course after negative responses. Making the end product more expensive also runs counter to the Newfoundland government’s own strategy of injecting funding into the local publishing industry through the Publishers Assistance Program, which has the express goal of keeping book prices low. Those prices have actually decreased relative to inflation in recent decades, Langer says, meaning books were more affordable than ever before the additional tax came into effect.

“Before this happened if you looked at the price of books in Newfoundland and Labrador and compared it to the rise in price for other consumer goods, we’ve stayed stable,” says Langer. “When you adjust for inflation, books are actually cheaper now than they were 15 years ago.”

It’s too early to predict with any certainty how the tax will affect sales long-term, Langer says. He feels confident that the strength of Breakwater’s back catalogue and forthcoming releases will protect the publisher from significant hits, but expects it will have to increase marketing efforts in other markets in anticipation of sales declines at home.

But in a small province with a spread-out population, a handful of dedicated booksellers, and the looming threat of library closures, losing even one retailer or publisher would have a measurable impact. “The position that some Newfoundland and Labrador publishers are in, I think this is really going to cause them to struggle,” Langer says. “We might lose a book publisher. I think it’s quite possible that we’re going to lose a bookseller because of this tax, which is really quite unfortunate.”

The loss of local stories and history is harder to quantify. Telling stories is part of how a culture learns what it is, says kids’ author Joshua Goudie, who decided to speak out against the tax. Together with his father, Craig, who illustrates the Goudies’ picture books, he created The Lore Tax, a video tale inspired by The Lorax – Dr. Seuss’s 1971 call for environmentalism – criticizing the government for failing to promote literacy and local written culture. “You write children’s books,” Goudie says his father told him. “There’s probably something in this, a cautionary children’s tale.”

Promoting and publishing local stories seems especially vital at a time when Newfoundland culture is enjoying a wider audience: Come from Away – the musical about residents in the small town of Gander set immediately after the Sept. 11, 2001, terrorist attacks – just opened on Broadway, and The Colony of Unrequited Dreams, a play based on the 1998 novel by Wayne Johnston, recently ended its run at the National Arts Centre in Ottawa. “It’s important to see yourself reflected in your culture, and in books and stories,” Goudie says. “To throw an obstacle in the way of that developing just seems really short-sighted.”