If Amazon.com Inc. is allowed to open a distribution centre in Canada, it will set a precedent for changing Canadian foreign ownership rules, the Canadian Booksellers' Association says.

"We believe there's a reason they're in place … and we don't believe that reason has changed," group spokeswoman Susan Dayus said Tuesday of the foreign ownership rules governing the publishing industry.

A Canadian Heritage spokesman said the government has ordered a review of Amazon's proposal to open a Canadian distribution centre to determine if the investment "will be of net benefit to Canada."

Spokesman Tim Warmington said the proposal is reviewable under the Investment Canada Act, "if it falls within a prescribed specific type of business activity that is related to Canada's cultural heritage or national identity, and if the governor-in-council considers it in the public interest."

Amazon has been tight-lipped about the proposed investment and a spokeswoman for the company says it doesn't comment on its future plans.

Amazon now uses Canada Post to fill Canadian orders from its U.S. hub. The company has applied to the Canadian Heritage and Official Languages office to establish a cultural business in Canada.

But the booksellers association argues the additional competition would not be a net benefit to Canada or the Canadian-controlled bookselling sector.

On Monday, association president Stephen Cribar wrote a letter to Prime Minister Stephen Harper, Industry Minister Jim Flaherty and Heritage Minister James Moore, outlining the concerns.

"Individual Canadian booksellers have traditionally played a key role in ensuring the promotion of Canadian authors and Canadian culture," Cribar said in the letter. "These are values that no American dot-com retailer could ever purport to understand or promote."

The association contends that allowing Amazon to operate a business within Canada would contravene the Investment Canada Act, which requires that foreign investments in the book publishing and distribution sector be compatible with national cultural policies. Canadian cultural laws also protect the Canadian book industry from foreign competition.

In 2002, the booksellers association failed in its attempt to block Amazon.ca from having an online presence in Canada. Ottawa ruled at the time that the Investment Canada Act didn't apply to Amazon.com as long as it had no bricks-and-mortar retail presence in Canada.

with files from CBC News