When books are newly published (almost always in hardcover editions), the sticker prices are quite high. Some retailers, such as Walmart, Costco, Chapters, Barnes & Noble, and Amazon discount these titles heavily, sometimes as much as 30-40%. They do this not because they love consumers, and not because they love book readers, but because they expect doing so will increase their overall profits.
In the process, these deep discounts mean that smaller bookstores with smaller volume and higher per-unit costs find it difficult to compete. Slowly the smaller bookstores that specialized in customer browsing and knowledgeable staff are being competed out of business.
Some people find this form of creative destruction sad. Others see it as a spur to innovation and new forms of growth. But simply put, the smaller bookstores are being out-competed because they are inefficient compared with the large firms that offer mega discounts. In part they are being out-competed because they offer a service (browsing and knowledge -- see this) for which they cannot effectively charge a price. But in part they just do not have the sales volume required to cover such discounting.
The gubmnt of Quebec is trying to forestall the tide of competition by prohibiting deep discounts on newly published books.
Specifically, retailers — online, digital and traditional — would not be allowed to offer discounts to Quebecers greater than 10 per cent on new books for the first nine months of their release.
Their goal is to protect the less efficient smaller bookstores. The effect, however, is to reduce the quantity demanded of new books in Quebec bookstores, large or small.
Unless Quebec can somehow interfere with the mails, people in Quebec can and will order new books from elsewhere. Also, sales of ebooks cannot easily be limited or controlled. And, of course, many people will wait out the 9-month period of the price controls and buy the book for a lower price later.
How big might these substitution effects be?
I'm expecting that sales of new books in Quebec will fall by roughly 20% during the first year after this law is imposed. Most of that drop in sales will occur at the big-box stores, of course, but I really doubt that smaller bookstores will have a noticeable increase in their own sales. Rather than leave the big-box or online retailers for the smaller, protected, stores, people will either buy the books at the big-box stores anyway, shop online, or defer their purchases.
The result will be that fewer new books will be sold in Quebec, especially to price-conscious consumers/readers. This sounds like a law designed to protect inefficient businesses, but it will not help them much, if at all, and meanwhile it will hurt consumers.