Aid to Publishers Application Guide, 2009-2010

1. An overview of the Book Publishing Industry Development Program
2. How to apply to Aid to Publishers
3. New in 2009-2010
4. Requirements for a complete application
5. Eligibility rules for publishers
6. Eligibility rules for books
7. Aid to Publishers: Questions and Answers
8. Government assistance: General conditions
9. Sustainable development
10. Definitions

1.0 An overview of the Book Publishing Industry Development Program

Aid to Publishers is the cornerstone of the Book Publishing Industry Development Program (BPIDP) and is designed to support the ongoing production, marketing, and distribution of Canadian-authored books. Each year, over 200 Canadian publishers, from small presses to firms that publish more than a hundred titles annually, receive funding through this component of BPIDP.

There is more to BPIDP than just Aid to Publishers, though. While the rest of this guide is devoted to complete information on Aid to Publishers, here is a brief introduction to the four other BPIDP funding opportunities for book publishers available to Aid to Publishers recipients.

1.1 Business Planning

BPIDP provides funding for business planning projects that assist recipients in adopting strategic approaches to key challenges in order to improve their capacity to manage business activities and ensure the competitiveness of their organizations.

Publishing firms eligible for either Aid to Publishers in 2008-2009 or 2009-2010, or the most recent year of the book publishing support programs of the Canada Council for the Arts, with the exception of those supported by the Flying Squad for the same or a comparable project, are eligible to apply for funding.

The next opportunity for publishers to apply for a business planning project in 2009-2010 is April 30, 2009 for projects that will begin between September 1, 2009 and March 31, 2010.

See the Collective Initiatives Guide for more information and an application form.

1.2 Internships

The objective of this funding, which helps defray the cost of an intern for one year, is to support the Canadian book industry's development of the next generation of publishing professionals. Internships allow publishing companies to provide valuable training for new industry professionals, who in turn accomplish useful tasks the publishers might not otherwise have the resources to carry out.

Aid to Publishers recipients in the current or previous program year are eligible to apply for an internship project. Recipients in the previous program year of the book publishing support programs of the Canada Council for the Arts are also eligible.

The next opportunity for publishers to apply for an internship project in 2009-2010 is April 30, 2009 for interns that will begin between September 1, 2009 and March 31, 2010.

See the Collective Initiatives Guide for more information and an application form.

1.3 International Marketing Assistance

This component of BPIDP, administered by the Association for the Export of Canadian Books (AECB), provides a variety of support mechanisms designed to develop foreign markets and increase export sales, including funding, promotional and logistical assistance, and market intelligence.

Aid to Publishers recipients in the previous and current program year are eligible to apply for International Marketing Assistance. Recipients in the most recent year of the Block Grant Program of the Canada Council for the Arts are also eligible for certain assistance.

Contact the AECB for more information and an application form.

Association for the Export of Canadian Books 504-1 Nicholas Street Ottawa, Ontario K1N 7B7 Telephone: 613-562-2324 Fax: 613-562-2329 eMail: aecb@aecb.org Website: www.aecb.org

1.4 Supply Chain Initiative

In 2009-2010, funding will again be provided to support publishers' adoption of innovative publishing, marketing, communication, and data management technologies. As in 2008-2009, publishers may apply for support under the BPIDP's Supply Chain Initiative component to undertake technology-specific business planning and internship projects.

More information will be made available with the release of 2009-2010 guidelines, which will be posted on the BPIDP website in the coming months. The application deadline for publishers to apply for funding for internships and business planning under the Supply Chain component is May 29, 2009.

1.5 Opportunities for non-publishers

For information on BPIDP funding for other members of the Canadian publishing industry, see the Collective Initiatives and Supply Chain Initiative application guides.

2.0 How to apply to Aid to Publishers

This document is the official Aid to Publishers application guide for 2009-2010. We strongly recommend that you read this entire application guide (and also the application form) before applying, but here is a quick overview of the steps and documents required to make an Aid to Publishers application.

• Read the eligibility rules to see, first, if your publishing company is eligible and, second, if the books you produce are eligible. Contact us if you have any questions about the eligibility rules.
• You will need to have reviewed or audited financial statements for your publishing company covering a permitted reference year.
• See the requirements for a complete application for all of the other items you will need for a complete application, such as a sample of your books.
• Read the section on the general conditions that apply to most federal government programs. In particular, note the requirements for proper acknowledgement for successful applicants.
• Using your financial statements, complete the application form.
• Send in the printed and signed version of your completed application form and all additional items by the deadline. Please see section 2.2 for further information.

2.1 Special requirements for new applicants

Several of the program's rules have special requirements for new applicants. Details will be found in the appropriate sections of this guide.

• New applicants must provide two years of financial results instead of one.
• New applicants must submit more books than other applicants.
• New applicants must include a copy of all distribution contracts with their application.
• There is a restriction on how recent the reference year can be for new applicants.
• New applicants must submit their company's incorporation papers.
• New applicants may be asked to submit production reports for the two years prior to the reference year in order to confirm that they meet all eligibility criteria.

2.2 Deadline: April 1, 2009

The deadline for 2009-2010 Aid to Publishers applications is April 1, 2009.

We consider your application to be filed on time if the printed and signed version of the application form and all the required additional items are sent by mail or courier, and are postmarked on or before the day of the deadline.

Since no funding can be distributed until all applications are considered, it is essential that complete applications be submitted on time. Therefore, late or incomplete applications will not be accepted. Moreover, applicants are expected to respond promptly to questions or information requests from Aid to Publishers staff. Failure to respond promptly may lead to an application being considered incomplete.

Also, to be accepted, application forms must be completely filled out and all supporting documentation provided. Applicants must keep in mind any extra time required for the preparation of financial statements, royalty reports, or distribution letters by third parties.

For recipients of Aid to Publishers and Supply Chain contributions in 2008-2009, May 31, 2009, is the deadline to submit the contribution reports. Please refer to the contribution report templates for both the Aid to Publishers and Supply Chain Initiative components available on the BPIDP Web site.

2.3 Questions?

We would be pleased to respond to any questions you have as you prepare your application. You are encouraged to contact us as early as possible so that any issues can be resolved before the deadline. New applicants, in particular, are encouraged to contact us before applying.

Book Publishing Industry Development Program Department of Canadian Heritage 15 Eddy Street, 15-4-D Gatineau, Quebec K1A 0M5 Telephone: 1 866 811-0055 (toll-free in Canada) or (819) 997-4944 Fax: (819) 997-4169 TTY: 1 888 997-3123 eMail: padie-bpidp@pch.gc.ca Website: www.pch.gc.ca/bpidp

3.0 New in 2009-2010

Here is a summary of the major changes to Aid to Publishers since 2008-2009. A number of changes have been made to streamline the application process, in response to recommendations from the Independent Blue Ribbon Panel on Grants and Contributions

• Section 4.3 describes changes to the requirements for the Production Report:
  • Applicants no longer have to list reprints in the Production Report.
  • The column titled "Workbooks" has been eliminated.
  • Applicants must provide the language of origin for translations.
• Applicants are no longer required to provide promotional material other than their catalogue.
• The process for providing the justification for printing outside Canada has been simplified. Please see section 4.8 for details.
• The definition of who may be accepted as "official contact" has been clarified. Please see section 4.13 for details.
• Clarifications to the publication minimum have been made concerning applicants that publish a mix of trade, educational, and scholarly books. All books counting towards the publication minimum must be eligible, printed books. Please see section 5.2 for details.
• Section 5.4 describes modifications to the "sources of revenue" criterion for official-language minority and Aboriginal publishers.
• Applicants are no longer permitted to re-use the reference year. Please see section 7.1 for details.
• Modifications have been made to the definition of "co-publishing"

Changes to the application form

• Question 2 (Contact identification) sets out a modified description of who may be accepted as "official contact".
• Question 11 (Marketing activities) has been renamed "Sales channels" and requires less information.
• Question 12 (Title production) has been modified.
• The Business Plan no longer requires a "Long-term Operational Plan".

4.0 Requirements for a complete application

The items listed in this section must be included with an Aid to Publishers application and must be submitted by the deadline. Incomplete or late applications will not be accepted. (A checklist is also included in the application form.)

All applicants must submit items 4.1 through 4.7. Certain applicants must also submit items 4.8 through 4.12.

4.1 Application form

Please complete and submit your form electronically, but remember to send us a printed copy with your signature as well on or before the deadline.

In completing the "Net revenues" section of the application form, please note that sales must be reported net of trade discounts and credits for returns and allowances.

4.2 Financial statements

Applicants with sales of Canadian-authored books (the total of fields 13D, 13H, and 13L on the application form) during the reference year equal to or greater than $2,000,000, including any distribution fee adjustment, must provide audited financial statements. All other applicants must provide a review engagement report. Compilation Engagements (or Notice to Reader) and internal statements are not acceptable.

The statements must cover the applicant's reference year. They must be prepared and signed by an independent accountant holding a designation acceptable to the program on official letterhead.

New applicants must provide financial results for two financial years: the reference year and the year before. The statements for the year before the reference year need not be reviewed or audited. Only the financial results for the reference year will be used to calculate funding.

4.3 Production report

This document, in spreadsheet format, contains all eligible and ineligible titles (new titles and new editions) published during the reference year. You are no longer required to list reprints.

We strongly encourage you to submit your completed report electronically, using the Microsoft Excel template following the instructions available on the BPIDP Web site. Please provide the following information, in the order shown, for each title. We would also ask that you neither alter the template nor leave any fields blank.

Column	Heading	Notes
1	Title	Complete title of the publication (please provide the final title and not the working title)
2	ISBN	Valid 10 or 13 digit number
3	Language	Possible values: E for English, F for French, X for Other
4	Eligible	Whether this product is eligible under the rules of Aid to Publishers. Possible values: yes, no
5	Format	Possible values: book, non-print, book pack, learning kit, other
6	Author(s)	Enter last name first. If more than one, enter all names in the same cell
7	Citizenship	Citizenship of the author(s)
8	Pages	Number of pages, not counting the covers
9	Printing	Country where the book was printed or the non-print material was manufactured
10	Publication date	Provide publication date
11	New title	Possible values: yes, no
12	New edition	Possible values: yes, no
13	Commercial category	Possible values: A, B, C, D, E, F, G A: children's fiction, including poetry B: children's non-fiction C: adult fiction, including poetry D: adult non-fiction E: scholarly F: educational (elementary and high school) G: educational (CEGEP, college, and university)
14	Co-publication	Possible values: yes, no
15	Translation	Possible values: yes, no
16	Translation – language of origin	Possible values: E for English, F for French, X for Other
17	Adaptation	Possible values: yes, no
18	Translator(s) or Adapter(s)	Enter last name first. If more than one, enter all names in the same cell
19	Citizenship	Citizenship of the translator(s) or adapter(s)

4.4 Business plan

In a separate document, please provide a current business plan for your publishing company. You must use the headings listed in the application form and provide all of the requested information. Please provide an organizational chart as part of the business plan if the owners/shareholders listed in the application form are not individuals.

4.5 Author payment / Royalty certification report

As part of the eligibility rules, prior to applying and through to the end of a prospective contribution agreement, applicants must have fulfilled all contractual obligations with respect to author royalty payments or any other method of paying authors.

The program uses royalty certification reports, prepared by an independent accountant holding a designation acceptable to the program to enforce this eligibility rule. The report must appear on the letterhead of the accountant and it must be signed.

Suggested text for the certification report is shown below. Although other wording may be used, all reports must address the two numbered points. For authors not paid by royalties, the text should be appropriately altered.

4.6 Catalogue (if available)

The publisher must provide its most recent catalogue if available.

4.7 Books

Trade publishers and publishers with titles in more than one category must submit one copy of any four eligible books published during the reference year. Educational and scholarly publishers must submit one copy of any two eligible books published during the reference year. Please forward only the required number of samples with your application. If necessary, more titles will be requested during the application analysis

All new applicants must submit one copy of their 10 most recent eligible books.

4.8 Justification for printing outside of Canada

BPIDP requires that eligible books be printed in Canada. There are, however, two exceptions to this rule: first, co-published books with a foreign partner may be printed outside of Canada and remain eligible, and, second, other eligible books may also be printed outside of Canada if competitive prices or specific printing services were not available in Canada.

To claim the second exception, a justification is required. First, indicate in section 12 of the application form the percentage of eligible titles (including new titles, new editions, and reprints) produced in the reference year that were printed in Canada.

Then, if the percentage is less than 100%, you must complete the portion of the application demonstrating why the two most expensive books to print were printed abroad. If the percentage is 75% or less, you must include with your application copies of quotes from Canadian and foreign printers for the two most expensive books printed abroad. If all of your foreign-printed books are co-publications with a foreign partner, a justification is not required. If you are unable to obtain quotes, a written explanation may be accepted by the Program.

If an acceptable justification is not provided, all of your books not printed in Canada will be deemed ineligible.

4.9 Distribution contract(s)

New applicants, those with changes in their distribution arrangements since their last Aid to Publishers application, and those using a distribution fee adjustment must include a copy of all contracts with all distributors, both Canadian and foreign. The contracts must be current and signed by both parties.

4.10 Letter(s) from distributor(s) and/or confirmation by independent accountant holding a designation acceptable to the program

Only applicants using a distributor's fee adjustment must submit these letters.

Distributor's fee adjustment

Typically, a publisher's financial statements include the fees withheld by distributors in sales revenues, along with a corresponding amount for "Distribution" or "Marketing" under operating expenditures. This is by far the most common practice among applicants to BPIDP.

The distributor's fee adjustment rule is designed to level the playing field for those applicants with financial statements not presented this way. If the amount withheld by distributors is not already included in net sales, it may be added to the appropriate fields in the "Net revenues" section of the application form (please ensure that any fees added are separated into eligible and ineligible sales). The same amount must also be added to "Distribution" or "Marketing" in the "Operating expenditures" section of the form. The adjustment is for distributor's fees only and must not include the trade discount.

In an effort to make the review of any potential distribution fee adjustment more timely and accurate, a field in the application form asks applicants to identify the amount of distributor's fees added to net sales. This field is located at the top of the "Net revenues" section.

Most applicants would already have distribution fees or marketing fees included in their sales and, therefore, this rule would not be applicable. To confirm your situation, check and see if you have an amount for "Distribution" under operating expenses on your financial statements. If you do, then you would also have a matching amount included in your sales revenue and a distribution fee adjustment would be unnecessary. An exception to this would be if you have more than one distributor, and some of them withhold fees and some do not, in which event, an adjustment would still be applicable to those fees withheld by a distributor and not included in your financial statements.

Format of the letter

If the distribution fee adjustment does apply in your case, you must provide (1) a copy of the agreement with your distributor and (2) a letter from the distributor in a specific format to support the amount of the adjustment.

The letter must be on the letterhead of the distributor and must confirm the exact amounts of the net sales and the distribution fee deducted for the reference year. The adjustment is for distribution fees only and must not include the trade discount.

Letters reporting only a percentage instead of the exact amount of the distribution fee are not acceptable.

A suggested text for the letter is shown below.

Confirmation by an independent accountant holding a designation acceptable to the program

In the event that you are unable to obtain the required confirmation letter from your distributor(s), the program will accept confirmation from the independent accountant that either audited or reviewed your financial statements for the reference year. The wording of such confirmation should be similar to the above-suggested text of a letter from your distributor(s), using either of the following two methods:

(A) By a separate letter under the letterhead of the independent accountant; or

(B) By including a note to your financial statements specifying the relevant details.

In either of the above two methods, the independent accountant must unambiguously quantify -in Canadian dollars - the relevant amount of total net revenue after deducting trade discounts and the relevant amount of distributors' fees not included in your income.

4.11 Incorporation papers

New applicants and recently incorporated applicants (since the last Aid to Publishers application) are required to submit their company's incorporation papers.

4.12 Geographic Analysis Report

If you are a publicly traded company, please provide a Geographic Analysis Report dated between February 1, 2009 and March 31, 2009. Consult your trade agent if you require further assistance.

4.13 Letter authorizing submission of the application

An authorization letter from the official contact must be included if someone else signs the application form. The "official contact" is the person indicated in the application form as authorized to sign the application form and contribution agreement, and to bind your publishing firm.

5.0 Eligibility rules for publishers

5.1 General requirements

Only book publishing firms are eligible for Aid to Publishers. At the time of application, the applicant must have completed at least 36 months of operation as a book publisher.

From the time of application to the end of the term of any contribution agreement between BPIDP and a publisher, the publisher must:

• be at least 75% Canadian-owned and -controlled in fact;
• have its headquarters and at least 75% of its employees based in Canada;
• be a private-sector firm or university press;
• be financially viable; and
• have fulfilled all contractual obligations with respect to author royalty payments or other method of payment to authors.

The program will determine financial viability based on the publisher's application form and supporting documentation, business plan and other information, as needed. The program also reserves the right to request additional information and/or documentation from an applicant to determine eligibility.

A publisher is not eligible if net sales of its own titles were $20 million or greater in the reference year and the average profit margin for the three financial years ending with the reference year was 15% or greater.

Unincorporated divisions of larger organizations are not eligible, with the exception of university presses.

Aid to Publishers recipients in the current or previous program year must immediately inform the program of any change of ownership. The program will review a change of ownership to ensure the recommended funding is consistent with the eligibility requirements and objectives of the program.

5.2 Publication minimum

IMPORTANT: All books counting towards the publication minimum referred to below must be new, eligible, Canadian-authored, printed books.

The publisher must have an active and ongoing publishing program and:

• by the end of its reference year, have published a minimum of 15 trade books or 10 educational or scholarly books. For those applicants that publish a mix of trade, educational and scholarly books, the minimum of 10 books will apply, providing at least five of those books are educational and/or scholarly;
• during the three financial years ending with the reference year, have published a minimum of 12 trade books or six educational or scholarly books. For those applicants that publish a mix of trade, educational and scholarly books, the minimum of six books over three years will apply provided at least three of those books are educational and/or scholarly; and
• during the reference year, have published at least one book.

New editions and reprints are not considered new titles. However, new editions may be considered new titles for official-language minority, Aboriginal, and small literary publishers, providing that previous editions of the title were not published by the applicant or by a publisher in the same affiliated group, if applicable.

5.3 Sales minimum

In the reference year, the publisher must have:

• eligible sales of own titles of at least $200,000 or $130,000 for official-language minority publishers and Aboriginal publishers

or

• a sales-to-inventory ratio for its own titles equal to or greater than the minimum ratio for the appropriate commercial category

Minimum sales-to-inventory ratios by commercial category

Educational books / Trade books	2:1
Scholarly books	0.33:1

Note: For official language minority publishers and Aboriginal publishers, the minimum ratio is 0.33:1, regardless of commercial category.

An example of meeting the requirement of the 2:1 ratio would be a publisher with sales of own titles during the reference year of $100,000, that has inventory valued at the end of the reference year at no more than $50,000.

An example of meeting the requirement of the 0.33:1 ratio would be a publisher with sales of own titles during the reference year of $33,000, that has inventory valued at the end of the reference year at no more than $100,000.

A weighted ratio will be calculated for firms publishing in more than one category.

5.4 Sources of Revenue

In the publisher's reference year:

• at least 65% of the publisher's net revenue, including grants and contributions, must be from the publication and sale of books, including distribution, printing and the sale of rights and permissions. The percentage for official-language minority and Aboriginal publishers is 40% providing the majority of the other revenues are derived from activities that are, in the opinion of the Department, cultural in nature;
• revenue derived from the sale of author-subsidized titles must not exceed 25% of net revenue; and
• the number of self-published titles must not exceed 75% of the total number of new titles.

6.0 Eligibility rules for books

6.1 Eligible

A printed book that is:

• either written by a Canadian author or adapted or translated by a Canadian;
• at least 48 pages in length, except for children's books, which can be less than 48 pages;
• clearly and publicly attributed to the author(s) or translator(s);
• the publisher's own title and bears an ISBN assigned to or acquired by the publisher;
• published under the publisher's imprint or under an imprint for which it has acquired publishing, management and marketing rights; and
• printed in Canada, except for co-published books or books with an acceptable justification.

Notes on eligible books

A book with more than one author is considered Canadian-authored if at least one of the authors is Canadian. The editor of a collective work is considered the author if the book is clearly and publicly attributed to the editor and he or she has written a preface, introduction, afterword, or conclusion to the book. The editing regularly done by a publisher in order to bring a manuscript to publishable form is not considered authorship.

For children's picture books only, an illustrator is considered an author.

The author or translator is always the person to whom the book is publicly attributed. The name of the author(s) or translator(s) must appear on the outside of the cover, the spine or the copyright page.

6.2 Also Eligible

• non-print material derived from an eligible Canadian-authored, printed book;
• learning kits; and
• book packs.

6.3 Ineligible

Titles that do not meet the eligibility criteria and any of the following:

• author-subsidized titles;
• directories, agendas with less than 36 pages of original editorial content, catalogues, calendars, maps or books of maps, loose-leaf updates, colouring books, sticker books or other activity books, games in the form of a book, and other similar products;
• books underwritten by a political party or written by the paid staff of a political party;
• software and music recordings;
• books that contain advertising other than the publisher's own promotional material;
• periodicals published two or more times a year at regular intervals; and
• titles that, in the opinion of the Department of Canadian Heritage, contain the following types of content:
  • material that is hate propaganda, obscene or child pornography, or any other illegal material, as defined in the Criminal Code;
  • pornography or other material having significant sexual content unless it can be demonstrated that there is an overriding educational or other similar purpose;
  • material that contains excessive or gratuitous violence;
  • material that is denigrating to an identifiable group;
  • any other similarly offensive material.

7.0 Aid to Publishers: Questions and Answers

7.1 What is the reference year?

The reference year is the publisher's financial year on which its Aid to Publishers application is based and which is used to complete the application form.

There are a number of rules that govern the reference year:

• The reference year cannot be longer than 12 months, but it can be shorter.
• The same reference year cannot be used twice and the current reference year must immediately follow the end of the previous year used to apply to Aid to Publishers.
• For 2009-2010, the reference year must not end before October 31, 2007.
• For 2009-2010, new applicants cannot use a reference year ending after December 31, 2008.

If you are considering changing your financial year, please contact BPIDP as soon as possible to discuss possible implications for your contribution amount and options for adjusting your reference year.

7.2 How is the amount of a contribution determined?

Aid to Publishers contributions are determined exclusively by a formula based on eligible sales. There are two main steps in working out a publisher's contribution. First, what are known as "factored sales" are calculated by multiplying a publisher's eligible sales—of both finished products and rights—in its reference year by the appropriate sales coefficient for each category. The coefficients for 2009-2010 are shown in the table below.

Aid to Publishers Sales Coefficients

Canadian-authored books
Eligible sales up to $400,000	Official or Aboriginal language translations	3.75
	All other Canadian-authored books, including learning kits	3
Eligible sales > $400,000		1
Foreign-authored books adapted or translated by a Canadian	Up to 25% of sales of Canadian-authored books	0.5
	Portion > 25% of sales of Canadian-authored books	0
Eligible non-print material	Up to 50% of sales of Canadian-authored books	1
	Portion > 50% of sales of Canadian-authored books	0
Book packs	Sales up to $400,000	1.5
	Portion > $400,000	0.5

Note: For official language minority publishers and Aboriginal publishers, the Canadian-authored books coefficient is 4.5 for eligible sales of up to $100,000.

The second step is to allocate the program's annual budget proportionally among all recipients based on factored sales. For example, if a publisher's factored sales were 1.2% of the total factored sales, that publisher would receive 1.2% of the total Aid to Publishers budget, up to the maximum annual contribution. For 2009-2010, the maximum annual contribution is $850,000.

Adjustments are then made to take into account the fact that no individual recipient or affiliated group of recipients can receive more than the maximum annual contribution, except under the new affiliates rule. If an affiliated group's combined contribution is calculated to exceed the maximum, it will be lowered to the maximum and individual contributions to its members will be based on their shares of the total factored sales of the group. The extra amount will be distributed to the other recipients in the program. In this way, the entire Aid to Publishers budget is distributed each year.

Although contributions are based on eligible sales in a previous year, the funding is intended to support an applicant's publishing program between April 1, 2009, and March 31, 2010.

7.3 What are the rules affecting affiliated publishers?

Unless members of an affiliated group can demonstrate editorial independence, their contributions will be subject to a modified calculation. Members will be considered editorially independent if their publisher and/or editor do not share time in any way with other members, and if they do not make use of the time of the publisher and/or editor of another member. If there is only one editorial staff person filling the role of both publisher and editor, that person's time must not be shared in any way with other members, and other members must not make use of the time of that person. The program will determine editorial independence based on the publisher's application and supporting documentation/information, as needed.

Members of an affiliated group who submit individual applications, but fail to demonstrate editorial independence, will be subject to the following modified contribution calculation:

• the members' sales will be combined for the purposes of calculating a contribution amount (please note that the contribution amount may not exceed the maximum annual contribution);
• this amount will then be pro-rated between the members, proportionally based on factored sales.

Members of affiliated groups are encouraged to contact the program in order to discuss their status under this rule before applying.

New affiliates

Following a transaction, the Aid to Publishers contribution to a new member of an affiliated group will not be counted toward the group's total contribution for three program years, potentially allowing the group to exceed the maximum annual contribution for those three years. For this rule to apply, both the acquired and the purchasing publishers (or another subsidiary or affiliate of the purchaser) must be Aid to Publishers recipients. An acquired publisher can benefit from this rule only once during its history as an Aid to Publishers recipient and for no more than three consecutive years. A maximum of one transaction per affiliated group per program year will apply. The program will send annual letters to all affected recipients to notify them of their status under this rule.

Please note that new affiliates are not exempted from the requirement to demonstrate editorial independence, nor from the measures that apply to applicants who do not demonstrate editorial independence.

7.4 How can an Aid to Publishers contribution be spent?

Contributions must be used to offset spending between April 1, 2009 and March 31, 2010, for activities that support the production, marketing and distribution of eligible books, including editorial, design, printing, author development, author royalty, salary, overhead, promotion, advertising, packaging, shipping, and capital expenditures. Contributions must not be used to pay dividends, bonuses or other extraordinary compensation to shareholders or owners.

Recipients are responsible for keeping track of eligible expenses between April 1 and March 31 and applicants proceeding with expenditures prior to approval of an Aid to Publishers contribution are doing so at their own risk.

7.5 How are payments made?

Publishers generally receive 90% of their Aid to Publishers contribution on signing a contribution agreement.

Publishers must provide a final report on the use of the contribution. This report requires information on the use of the contribution and total government assistance between April 1, 2009, and March 31, 2010. It must be submitted on or before May 31, 2010. Following the acceptance of this report by the program, the final 10% will be paid.

8.0 Government assistance: General conditions

8.1 Acknowledgment of support

All Aid to Publishers recipients must recognize the financial support provided by the Government of Canada by printing the acknowledgment text in all eligible titles (including new editions and reprints), catalogues and Web sites. The acknowledgment text may be accompanied by the Canada wordmark, available at www.pch.gc.ca/logos. Neither an acknowledgment nor the wordmark should be placed in ineligible titles.

The English acknowledgment text is:

We acknowledge the financial support of the Government of Canada through the Book Publishing Industry Development Program (BPIDP) for our publishing activities.

The French acknowledgment text is:

Nous reconnaissons l'aide financière du gouvernement du Canada par l'entremise du Programme d'aide au développement de l'industrie de l'édition (PADIÉ) pour nos activitiés d'édition.

8.2 Public information

All recipients must be prepared to assist the Department of Canadian Heritage in preparing public announcements or promotional events about their contribution.

Contribution amounts awarded to successful applicants, as well as each recipient's eligible titles published in the reference year, are public information and will be listed on the BPIDP Web site.

8.3 Limits on government assistance

For Aid to Publishers recipients, total government assistance cannot exceed 75% of the publisher's total eligible expenditures, 90% of the publisher's total eligible expenditures for official-language minority publishers, Aboriginal publishers, or small literary publishers and 100% of the publisher's total eligible expenditures for not-for-profit recipients.

8.4 Repayment of government assistance

Aid to Publishers recipients must repay a contribution of $100,000 or greater unless the publisher's profit margin-excluding all BPIDP funding was less than 15% during the publisher's financial year in which the contribution was received and during its two preceding financial years.

8.5 Audits

The program conducts audits of certain recipients each year. In such cases, recipients must make available any records, documents or other information that may be required to perform the audit.

8.6 Minister's discretion and decisions

The eligibility criteria and guidelines of BPIDP will not restrict the discretionary power of the Minister of Canadian Heritage or a representative to refuse a request for financial assistance.

The Minister, or a duly authorized representative, at their own discretion, may decide to accept or refuse, in whole or in part, any application submitted. The decision made by the Minister or representative is conclusive.

9.0 Sustainable development

The Government of Canada is committed to supporting Canada's role as a global leader in sustainable development practices and technologies, including the use of environmentally friendly paper.

The program encourages recipients to choose environmentally friendly paper options whenever possible and to work toward increasing the number of their books printed on recycled paper or on paper made from fibre that has been certified by an independent forest certification organization such as the Forest Stewardship Council (FSC).

Many Canadian-owned publishers have already made significant commitments to using environmentally friendly paper. To improve the program's knowledge of such practices and its ability to support and encourage them, publishers are required to complete the survey located in the Sustainable Development Practices section of the Aid to Publishers application form.

10.0 Definitions

Aboriginal publisher

A publisher owned and controlled by members of the Aboriginal peoples of Canada, which includes Status and Non-Status Indians, Métis and Inuit people.

Adaptation

The publication under a Canadian publisher's imprint of a foreign-published book in its original language with either substantial changes to at least 25% of the original written content or at least 25% new content written by a Canadian author to ensure it is suitable for the Canadian market. The adaptation and the original foreign book cannot be co-publications.

Affiliated group

A group of companies in which the same person, group of persons, or entity holds the majority of shares with full voting rights or has control in fact of these companies.

Author-subsidized title

A publication dependent on a financial contribution from, or any purchase by, the author.

Book pack

An eligible book packaged and sold together with a non-book item, such as a CD or a toy. Exception: books sold with a CD inside the cover that is not visible from the outside are not considered book packs, but are considered books.

Book publishing

Professional activity involving the selection, development and editing of manuscripts; contractual agreements with authors or copyright holders; production and marketing of printed books under the firm's imprint; and the assumption of the risks associated with these activities.

Canadian

1. a citizen within the meaning of the Citizenship Act who is ordinarily resident in Canada
2. a permanent resident within the meaning of the Immigration and Refugee Protection Act
3. a Canadian corporation or
4. a non-profit organization in which 75% of its members are persons referred to in paragraphs a) or b)
5. a partnership, trust or joint venture in which a person or any combination of persons referred in paragraphs a), b), c), or d) beneficially owns or controls, directly or indirectly, interests representing in value at least 75% of the total value of the assets of the partnership, trust or joint venture, as the case may be

Canadian-owned and -controlled firm

A firm:

1. that is a sole proprietorship, partnership, cooperative or a corporation (for profit or not for profit) established under the laws of Canada or a province;
2. whose activities are based primarily in Canada;
3. whose chairperson or presiding officer and at least 75% of whose directors and other similar officers are Canadian citizens or permanent residents within the meaning of the Immigration and Refugee Protection Act;
4. if a corporation with share capital, of which Canadians beneficially own or control, other than by way of shares held only as security, directly or indirectly, in the aggregate at least 75% of all the issued and outstanding voting shares representing at least 75% of the paid-up capital;
5. if a corporation without share capital, of which Canadians beneficially own or control, directly or indirectly, interests representing in value at least 75% of the total value of the assets.

If at any time one or more persons that are not described in any of paragraphs a) to e) of the definition Canadian have any direct or indirect influence through a trust, an agreement, an arrangement or otherwise that, if exercised, would result in control in fact of the publishing firm, the firm is deemed not to be Canadian-owned.

Children's book

A trade book published for the children's or young adults' markets, including picture books, easy-to-read books, chapter books and young adult books. Educational books intended for elementary school students are also considered children's books. Teacher's guides and books of reproducible material are not considered eligible children's books.

Co-publishing

Joint financial investment by two or more publishers to conceive, produce and print, under their respective imprints, individual titles or collections to be sold in their respective markets. Provided all other eligibility criteria are satisfied, co-published books are eligible, but applicants may claim as eligible sales only their portion of the total revenue. The partner publisher of the applicant may be foreign-owned.

Co-publishing may also include situations in which an applicant sells rights to an own eligible title to foreign publishers and coordinates production of the books. The applicant's revenues associated with such arrangements may be considered eligible export sales.

Editor

The individual who works closely with the authors and who is responsible for overseeing and guiding the content of a book. The editor may also be involved in other activities such as manuscript revision, acquisitions and title management.

Educational book

Instructional material, such as textbooks, teachers' guides and learning kits designed for the primary, secondary or post-secondary school markets.

Employee

Full- and part-time paid staff working directly for the publishing company. Owners are considered employees unless they have no active role at the firm. Independent contractors are not considered employees.

Independent accountant holding a designation acceptable to the program

A professional designated a Chartered Accountant (CA), Certified General Accountant (CGA), or Certified Management Accountant (CMA) operating at arm's length from the applicant and from the firm or individual who maintains the applicant's financial records and statements. Applicants that wish to have their application documents prepared by an accountant holding a different designation should contact the program in advance.

Learning kit

A product for the primary, secondary or postsecondary school markets consisting of one or more eligible educational books packaged and sold together with other complementary materials, such as software, audiovisual material, maps or activity sheets. To be considered eligible, a learning kit must be made up of elements intrinsically linked to each other. The focal point of a learning kit must clearly be the eligible educational book(s). The entire learning kit is considered one educational title.

New applicant

An applicant that did not receive a contribution from Aid to Publishers in each of the two previous years of the program.

New edition, new title, reprint

A new edition is the publication in modified form of a book previously published by the same or a different publisher. In contrast with a new title, a book is considered a new edition if more than 50% of its content is taken from the previously published book. In contrast with a reprint, a new edition must have at least one of the following: substantial changes in the format or binding; reformatting of at least 50% of the text; either substantial changes to at least 25% of the original written content or at least 25% new written content; or substantial changes to the illustrations, other than on the cover.

Non-print material

BPIDP recognizes two types of non-print material. Electronic: file for use on an eBook device or a personal computer, including an audio file. Physical: audiotape, audio CD, CD-ROM, DVD, or a similar product.

Official-language minority publisher

A publisher based outside Quebec who publishes primarily in French or a publisher based in Quebec who publishes primarily in English.

Official or Aboriginal-language translation

A Canadian-authored book translated by a Canadian from an official or Aboriginal-language to an official or Aboriginal-language.

Own titles

Titles for which the publisher holds publication, development and marketing rights for its own market.

Publisher

The individual who is responsible for the overall vision and direction of the publishing house as well as the entire process of producing books. The publisher is usually the ultimate editorial decision maker regarding the publishing house's output of titles.

Scholarly book

A book based on research that makes a significant contribution to the development of knowledge in a given field and is subject to peer review prior to publication.

Self-published title

A publication with at least one author who is a shareholder or an owner of the publishing firm.

Small literary publisher

A publisher with sales of Canadian-authored books during the reference year of less than $400,000, who has also been awarded a Book Publishing Support grant by the Canada Council for the Arts or an operating grant from a provincial arts council in 2008-2009.

Total government assistance

All federal, provincial, territorial and municipal funding provided toward the same eligible costs.

Trade book

A book intended for the public in general, including literary works, how-to books, dictionaries, encyclopedias and reference works intended for professionals. Any title that is not an educational book or a scholarly book is considered to be a trade book.

Translation

The publication under the applicant's imprint of a Canadian- or foreign-published book in a different language. A book with text in more than one language is not a translation.