Publisher Key Porter Books has laid off 11 of its 17 employees and plans to close its downtown Toronto office.

The employees were laid off Wednesday and six others based in Toronto will begin working out of H.B. Fenn's office in Bolton, Ont., next Monday, chairman Harold Fenn said in an interview with CBC News.

"For a long time publishing in Canada has been extremely challenging," Fenn said. "We acquired Key Porter in July 2004 and over the years have invested financially and administratively in trying to developing a publishing program that is profitable. But looking at the fiscal year that began May 1, we're not seeing that improvement."

"It's come to the point where we can no longer support the current structure at Key Porter the size that it is."

Key Porter, which has represented authors such as Janet Lunn, Farley Mowat, Joseph Skvorecky and Margaret Atwood, will continue to exist, Fenn said.

But it will take on a smaller slate of books and stick to the more profitable lines such as Canadian politics and history, he said. He anticipates fewer fiction titles and says the imprint will avoid fiction from untried authors who do not have a following.

"Fiction is a problem for us. It does well with well-known authors, but when publishing fiction from first-time novelists it takes a long time to establish a market," Fenn said.

H.B. Fenn shut down a line of its distribution operations last year with the loss of 50 jobs in Bolton.

The Key Porter layoffs are the latest downsizing of Canada's troubled book publishing industry, which saw layoffs last year at Random House of Canada and McClelland and Stewart, and a downsizing at Raincoast Books.

Fenn, who said he'd been in the business for 50 years, said he'd seen a "tremendous shift in how business is done."

In addition to the competition from e-books, there is greater international competition, especially in online sales, he said.

With files from The Canadian Press