The federal government is allowing online book seller Amazon.com to build a warehouse in Canada in return for the U.S. company's promise to promote Canadian culture and to hire its first-ever Canadian employees.

The government said Monday it approved Amazon.com's plan for a “fulfilment centre” warehouse after reviewing the proposal under the Investment Canada Act. That law protects the bookselling business from foreign ownership because it is part of a cultural industry.

Canadian booksellers had opposed the warehouse proposal, saying it would harm the country's cultural industry.

The review began in January after Amazon proposed to open its first warehouse on Canadian soil and aimed to determine if the investment would be a “net benefit to Canada.”

James Moore, the Minister of Canadian Heritage, said Amazon.com has shown its willingness to promote Canadian cultural products.

“Our government is committed to strengthening Canada's economy through all its sectors, especially arts and culture,” Moore said in a statement. “Amazon has shown its willingness to promote Canadian cultural products, and we are pleased it is continuing to demonstrate this through this new investment.”

Under the Investment Canada Act, foreign investment in book publishing and distribution has been limited to Canadian-controlled joint ventures.

The Canadian Booksellers Association has been vocal in its opposition to the warehouse, arguing it could set a precedent allowing “American Goliaths” to become a commanding presence in Canada.

But Amazon.com called the argument that a foreign owned retailer couldn't be trusted to promote Canadian culture “preposterous.”

As part of the deal, Amazon will invest more than $20 million, including $1.5 million for cultural events and awards and for promoting Canadian-authored books abroad.

Amazon's commitment also includes adding Canadian jobs, improving service for Canadian consumers, and increasing the visibility of Canadian and French-language products on its Canadian website.

Paul Misener, Amazon.com's vice-president for global public policy, said the company believes a local fulfilment centre will enable it to better serve Canadian customers as well as those in other countries who seek out Canadian books and cultural products.

“Amazon.ca (the company's Canadian web portal) is enthusiastic to continue our long-time support of Canadian customers and culture, including continued support of cultural events and awards in Canada and the promotion of Canadian books internationally,” he said.

The company will also establish dedicated staff to assist Canadian publishers and other suppliers of cultural products and make more Canadian content available on the Kindle e-reader.

In addition, it is creating a summer internship program for Canadian university and college students.

Loading... Loading... Loading... Loading... Loading... Loading...

Canada had been the only country in which Amazon sells books online, but did not have a distribution centre. Instead it used a third-party shipping service in Canada to get around the country's foreign investment rules.

The government signalled in the throne speech last month that it is opening key sectors, including the satellite and telecommunications industries, to both venture capital and investment from outside the country, which could have implications for other industries.

Read more about: