Application Guidelines – Support for Distribution

Canada Book Fund

• Objectives and expected results for the Canada Book Fund
• Objectives and expected results for the Support for Distribution
• Application deadline
• Who can apply
• Eligibility
• Eligible expenses
• Limits of government assistance
• How to apply
• Application process
• Email submissions
• How applications are evaluated
• Evaluation criteria
• Application processing time
• Funding decisions
• How funding is provided
• Funding conditions
• Workplace well-being
• Official languages requirements
• Acknowledgement of financial assistance
• Access to information requests
• Disclosure of information
• Audits of recipients and evaluation of the Program
• Contact us
• Glossary

Objectives and expected results for the Canada Book Fund

The main objective of the Canada Book Fund (CBF) is to ensure access to a diverse range of Canadian-authored books nationally and internationally, by fostering a strong book industry that publishes and markets Canadian-authored books.

Objectives and expected results for the Support for Distribution

The Support for Distribution (SFD) component of the CBF is designed to provide temporary emergency financial relief to Canadian book distributors in the context of the COVID-19 pandemic. SFD supports the Canadian book industry by helping Canadian book distributors maintain their operations and support the sale of Canadian books. This support will contribute to maintain a robust book supply chain, ensuring access to a diverse range of Canadian books.

SFD provides financial support to individual Canadian-owned and controlled book distributors so that they can:

• continue meeting their financial obligations toward Canadian publishers for the sale of their books; and
• offer flexibility to Canadian book retailers with respect to terms of payment, and provide other financial advantages in support of the sale of Canadian books.

Application deadline

September 18, 2020, by 5 pm (PST).

Who can apply

In these guidelines, any reference to a "Canadian" entity (firm, company, distributor, publisher, retailer, etc.) should be understood as referring to a Canadian-owned and controlled firm, as described in the glossary.

At the time of the application, and through to the end of the term of any contribution agreement between you and the CBF, your organization must:

• have completed at least 12 months of operation as a book distributor;
• be at least 75% owned and controlled by Canadians;
• have its headquarters and at least 75% of its employees based in Canada; and
• be a private sector firm, a not-for-profit organization or a university press.

If your organization is a publisher that received funding from the CBF’s Support for Publishers (SFP) in 2020-2021, it must also:

• be the distributor in Canada of Canadian-authored print books published by a minimum of two Canadian publishers (in addition to your own titles, if applicable); and
• have eligible net sales of at least $100,000 from distribution activities during the reference year.

If your organization is not a 2020-2021 SFP recipient, it must:

• be the distributor in Canada of Canadian-authored print books published by a minimum of three Canadian publishers;
• have eligible net sales of at least $200,000 from distribution activities during the reference year; and
• demonstrate that the revenue related to the distribution of print books represented more than 50% of its total revenues during the reference year (excluding government assistance received during that same year).

Eligible net sales thresholds do not apply to not-for-profit organizations (e.g. cooperatives).

The following entities are not eligible for support through SFD:

• firms that exclusively distribute discounted books, used books or digital books; and
• firms that exclusively offer sales representation and marketing services.

Eligible net sales

As part of your application, you are required to provide information regarding your net sales from Canadian publishers, which will serve as the basis to calculate the funding amount allocated by SFD. Eligible net sales are net sales related to the distribution in Canada of print books published by Canadian publishers, after any direct sales (for example, sales of a distributor-publisher’s own titles to schools) have been deducted. Please see the definition of net sales in the glossary. Also, please see the “Evaluation Criteria” section for an explanation as to how the criteria related to Canadian-authored titles will be factored in.

In order for the sales of a book to count toward eligible net sales, the book must be:

• a print book;
• 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) and/or translator(s);
• bearing an ISBN assigned to or acquired by the publisher (exceptions may apply in the case of international co-publication); and
• published under the publisher’s imprint or under an imprint for which it has acquired publishing, management and marketing rights.

Sales of the following materials do not count toward eligible net sales:

• books published by organizations whose main activity is not book publishing;
• digital books;
• 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 written by a political party or written by the paid staff of a political party;
• software;
• music recordings;
• books that contain advertising other than the publisher's own promotional material; or
• periodicals published two or more times a year at regular intervals.

Reference year

Eligible net sales as well as other financial information provided in the application form must be based on a reference year. The reference year is the financial year on which your SFD application is based and that which is used to complete the application form. You can choose your organization’s last completed financial year or the last financial year completed before the COVID-19 pandemic as your reference year.

Eligibility

We are responsible for determining the eligibility of each applicant, the net sales and the expenses related to distribution.

Eligible expenses

Support is available to eligible recipients to offset eligible cash expenses between April 1, 2020 and March 31, 2021. Only cash expenses are eligible.

We cannot fund expenses incurred prior to April 1, 2020.

Eligible expenses are limited to payments to Canadian publishers for the sale of books.

When making such a payment using the SFD contribution, you may keep the amount set out for your fees, plus a maximum of 10% of your contribution amount for the costs of administration. This amount is part of the eligible payment.

The assistance allocated under the SFD component aims to ensure continuity of cash flow throughout the book supply chain. Consequently, recipients will be required to re-invest an amount equivalent to the contribution received by the Program (minus the costs of administration) to directly benefit retailers. This re-investment will take the form of a financial consideration to be provided to the recipient’s Canadian retailer clients, in support of the sale of Canadian-authored books published by Canadian publishers.

The following are examples of an eligible financial consideration:

• discounts;
• book shipping costs on certain commercial transactions when they are usually paid for by retailers;
• promotional agreements (for example, point-of-sales advertising, coop advertising, catalogues);
• costs for in-store presentations or activities; and
• extending payment periods for retailers (the costs incurred by the recipient from granting these extensions can be counted toward the financial consideration).

Please note that the obligation to provide a financial consideration to retailers will be included in your contribution agreement, and thus mandatory.

You could be exempt from providing a financial consideration in the case of the documented bankruptcy of a retailer. If such a case arises or if you have other questions regarding the eligibility of a financial consideration, please contact the Program.

In the context of a financial consideration provided to retailers, Canadian-authored books are works that meet the criteria already set out in the “Eligible net sales” section and that can be attributed to a Canadian author.

The following notes on authorship apply:

• A Canadian-authored book is a book that is either written by a Canadian author or adapted or translated by a Canadian;
• 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, the title page or the copyright page.
• A book with multiple authors is considered Canadian-authored if at least one of the co-authors is Canadian.
• A collective work (e.g. an anthology) is considered Canadian-authored if at least 50% of the contributors are Canadian.
• If less than 50% of the contributors to a collective work are Canadian, the editor of the work can be considered the author if the book is clearly and publicly attributed to the editor and he or she has written a substantive preface, introduction, afterword, or conclusion to the book. The work of an editor in overseeing and guiding a book to publication is not considered authorship.
• For children's picture books only, an illustrator is considered an author.

In your final financial report, you will need to demonstrate that you have incurred eligible expenses (payments to Canadian publishers for the sale of books) that are at least equal to the contribution amount received, and that you have provided financial considerations of the same amount to your Canadian retailer clients. Supporting documents may be requested.

A distributor may not disproportionately favour members of its affiliated group, whether they are publishers or retailers, in the allocation of payments or financial considerations. Payments or financial considerations to affiliated entities must not exceed the share that these entities represented in the distributor's net sales in the reference year. For example, if you are a distributor-publisher, and the sales of your own publishing house represented 30% of your distribution operation’s net sales in the reference year, you cannot spend more than 30% of the SFD contribution on payments to your own publishing house. The same applies to the financial considerations provided to retailers that are members of your affiliated group.

Limits of government assistance

To ensure the success of your operations, we encourage you to have other funding sources. This may include contributions from your organization, the private sector or other levels of government.

The total financial assistance received from the CBF’s SFD component and other levels of government (federal, provincial, territorial and municipal) cannot exceed 75% of your book distribution expenses, 90% of your book distribution expenses for official-language minority or Indigenous organizations, and 100% of your book distribution expenditures for not-for-profit recipients.

The maximum amount that can be awarded to an eligible recipient is $1,500,000. Also, no affiliated group can receive more than $1,500,000 in contributions.

How to apply

Read these Application Guidelines in their entirety before completing your application.

Contact us to request an application package.

You must meet all eligibility requirements and submit a complete application package to be considered for funding. A complete application package includes the Application Form and the following supporting documents:

• Audited financial statements for your reference year, if available.
• The list of Canadian-owned and controlled publishers whose books you distribute in Canada at the time of application, as well as their eligible net sales for the reference period (please use the template provided by the Program).
• If you have never submitted a funding application to Canadian Heritage, a copy of your incorporation papers.
• Geographical Analysis Report dated between August 31, 2020 and September 30, 2020. Only publicly traded companies have to provide this document.
• A disclosure regarding the participation of any former public office holder or public servant subject to the Values and Ethics Code for the Public Sector and the Policy on Conflict of Interest and Post-Employment.

We also reserve the right to request additional information and/or documentation from an applicant.

Application process

• Complete, sign and date the Application Form;
• Attach all the required supporting documents; and
• Submit your application by email, mail or in person.

Email submissions

We encourage you to submit your application package electronically to the following email address: PCH.fondsdulivreducanada-canadabookfund.PCH@canada.ca.

The email must be sent no later than 5 pm. (ET) on the date of the application deadline for your application to be considered.

How applications are evaluated

Each application is verified and tested against program eligibility criteria. The amount of the contribution is generated using a formula and eligible net sales are used as the basis for the calculation of each contribution.

Failure to comply with any conditions from previously received funding will be considered in the evaluation of your new application and could result in a rejection of your new application.

Evaluation criteria

A formula will be used to allocate funding, which means that each eligible applicant will receive a portion of the overall funding envelope according to a set of variables. Each recipient will receive financial support that corresponds approximately to the percentage represented by its eligible net sales in relation to the total eligible net sales reported by all eligible applicants, without, however, exceeding the limit of government assistance and the maximum amount of financial assistance set for the component (see Section on “Limits of government assistance”).

The percentage of sales of Canadian-authored books from SFP recipient publishers in comparison to these publishers’ total sales will be taken into account in the formula, using administrative data from the SFP component of the CBF. The issue of the percentage of sales of Canadian-authored books by Canadian publishers that are not SFP recipients and that had sales of more than $50,000 during the reference year will be examined on a case-by-case basis by the Program.

Application processing time

We will acknowledge receipt of your application within two weeks of receiving your application in our office.

Funding decisions

Please note that decisions regarding eligibility and funding amounts are final.

How funding is provided

We provide funding in the form of a contribution.

A contribution is a conditional payment issued for a specific purpose, as outlined in a funding agreement. The funding agreement is signed by your organization and by us and specifies the terms and conditions to receive payment. At the end of your funding period, you must submit a final report.

Funding conditions

You may be required to submit interim reports during your funding period. If you receive $250,000 or more as a contribution, you are required to submit an audited financial report.

Additional conditions may apply and, if applicable, will be included in your funding agreement.

Workplace well-being

The Government of Canada is strongly committed to promoting healthy workplaces where harassment, abuse and discrimination are not tolerated. Organizations that receive funding from Canadian Heritage must take measures to create a workplace free from harassment, abuse and discrimination.

Official languages requirements

We are committed to taking positive measures to enhance the vitality of official-language minority communities and to promote the use of English and French in Canadian society. If you receive funding, you agree to comply with the official languages requirements set out in your application and in your funding agreement.

Acknowledgement of financial assistance

If you receive funding, you must publicly acknowledge – in English and in French – the financial support received from the Government of Canada in all communications materials and promotional activities. Additional requirements may be included in your funding agreement.

For additional information, please refer to our Guide on the public acknowledgement of financial support.

Access to information requests

We are subject to the Access to Information Act and the Privacy Act. The information you submit in your application may be disclosed in accordance with these acts.

Disclosure of information

By submitting your funding application, you authorize us to disclose any information submitted with this application within the Government of Canada or to outside entities for the following purposes:

• to reach a decision;
• to evaluate the results of the operations; and
• to support transparency, accountability and citizen engagement.

Audits of recipients and evaluation of the Program

We reserve the right to audit your accounts and records to ensure compliance with the terms and conditions of your funding agreement. We also conduct periodic Program evaluations, during which you may be required to present documentation.

You must keep any records, documents, or other information that may be required to perform the audit or the evaluation for five years. Demonstrated failure to maintain such records may result in the repayment of amounts previously received.

Contact us

For further information, please contact us:

Canada Book Fund
Department of Canadian Heritage
15 Eddy Street, 25-8-T
Gatineau, Quebec J8X 4B3

Email

PCH.fondsdulivreducanada-canadabookfund.PCH@canada.ca

Telephone

819-997-0055
1-866-811-0055 (toll-free)

TTY

1-888-997-3123 (for people who are deaf, hard of hearing or speech impaired)

Agents are available to answer your questions Monday to Friday, 8:30 a.m. to 5:30 p.m. (ET).

Regional offices of the Department of Canadian Heritage

Glossary

Adaptation

The publication under a Canadian publisher's imprint of a foreign-authored 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 that 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.

Audited financial report

An audited financial report includes a statement of operations for the given period with regard to the project and is prepared by a certified accountant who is not part of your organization.

Author-subsidized title

A title for which an author has made a material financial contribution that could reasonably be expected to impact the publishing decision. This includes funds going from the author to the publisher, or a related third-party, as well as an author's obligation or commitment to purchase copies.

Book publishing

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

Canadian

A citizen within the meaning of the Citizenship Act or a permanent resident within the meaning of the Immigration and Refugee Protection Act.

Canadian-owned and controlled firm

A firm:

1. that is a sole proprietorship, partnership, cooperative or 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 firm’s headquarters is based in Canada;
4. whose chairperson or presiding officer and more than half of whose directors and other similar officers are Canadian; or permanent residents within the meaning of the Immigration and Refugee Protection Act;
5. 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;
6. if a corporation without share capital, of which Canadians beneficially own or control, directly or indirectly, interests representing in monetary value at least 75% of the total value of the assets;
7. if a partnership, trust or joint venture, of which a Canadian or Canadian corporation or any combination of the two, beneficially own or control, 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, and of which the chairperson or other presiding officers and more than half of the directors or other similar officers are Canadian.

If at any time one or more persons that are not 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 firm, the firm is deemed not to be Canadian-owned and controlled.

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-authors

Two or more authors who jointly conceive and write a book and to whom the book is clearly and publicly attributed.

Co-publication

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.

Digital book

Digital version of a book, including an audio version, which is sold through the Internet or by any other non-physical transmission.

Distributor

For the SFD component, a distributor is the entity that handles logistics on behalf of its clients, including: receiving and storing books, fulfilling orders, invoicing and collecting accounts.

Editor

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

Employee

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

Final financial report

A final financial report includes, as separate items, the budget as well as all of the revenues realized and expenditures incurred for the given period with regard to the project being funded.

Final report

A final report is submitted at the end of your project based on the requirements in the funding agreement. Your final report needs to provide the results of the activities you have undertaken for the duration of your project.

Financial statements

A complete set of financial statements, including a statement of financial position; a statement of operations; and a statement of changes in financial position. Financial statements may be audited or unaudited.

Independent accountant holding a designation acceptable to the program

A professional designated as a Chartered Professional Accountant (CPA) 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 CBF in advance.

Interim reports

Interim reports are submitted during your project based on the requirements in the funding agreement. These reports indicate the results of the activities undertaken for a specific period. In addition, they include a status report on the work to be accomplished and updated revenue and expense reports.

Net sales

Sales after discounts as well as credits for actual returns and allowances for returns have been deducted.

Own titles

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

Publisher

An organization that publishes books as its primary activity. The publisher must have an active and ongoing publishing program. The publisher 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.

Translation

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