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One of the last bastions of 20th-century cultural nationalism in Canada slipped into history when international publishing conglomerate Bertelsmann AG, owner of Random House and its Canadian subsidiaries, absorbed the final semi-independent remnant of iconic publisher McClelland & Stewart.

Under the direction of publisher Jack McClelland, the company broke new ground in the 1960s by proving that Canadian readers were eager to read Canadian writers – and, in the process, developed a list of authors whose names remain synonymous with the country's literature around the world, including Margaret Atwood, Michael Ondaatje and Farley Mowat.

M&S flourished under still-extant legislation that bans foreign takeovers of Canadian publishers. And while it will continue to publish under its own imprint, its federally approved disappearance as an independent company brings to a head widespread industry concern about the survival of that law and other policies that have historically supported Canadian publishers and authors.

Already a 25-per-cent owner of the company, Random House Canada announced Tuesday that it has taken sole ownership of McClelland & Stewart by acquiring the 75-per-cent share formerly held by the University of Toronto, which acquired it as a donation from former M&S owner Avie Bennett 11 years ago.

Despite its minority stake, Random House had gradually taken over more of the Canadian company's operations in recent years. The firm declined to reveal whether there was a cash consideration in the latest transaction, styling the takeover as a means of helping the Canadian company withstand ongoing financial challenges.

"It's a very difficult environment right now for Canadian publishers – for all publishers, quite frankly," Random Canada president Brad Martin said in an interview. "I think this was the best solution."

Before announcing the transaction, Random Canada quietly approached the office of Minister of Canadian Heritage and Official Languages James Moore to seek an exemption from long-established provisions of the Investment Canada Act, which specifically outlaw such takeovers. The company reported that Mr. Moore granted the approval "on the basis of the commitments we made that demonstrated that this investment is likely to be of net benefit to Canada."

Among those commitments, Random has promised to maintain the separate identity of the M&S imprint, to continue its poetry program and to establish an annual McClelland & Stewart Lecture at the University of Toronto. Representatives of the minister's office were unable to confirm details of the arrangement Tuesday afternoon.

The M&S decision follows earlier ministerial decisions that allowed companies such as Amazon and Apple to bypass Canadian distribution channels in apparent contravention of the act, leaving publishers with the impression that the law has become a dead letter.

"Having this happen without a change in policy is an indicator of where the policy is going to go," said House of Anansi publisher Sarah MacLachlan. "The big questions for independents that still exist is, will the policy still allow for us to exist?"

The takeover is "not a big surprise," said long-time M&S author Michael Ondaatje, reflecting a common view among many insiders, who reacted more with resignation than dismay at the news. "I guess the reality is it's pretty tough to survive as a publisher nowadays," he added. "It's not like the days of Jack McClelland any more."

Calling the takeover "regrettable," Association of Canadian Publishers director Carolyn Wood faulted the government for allowing existing protections for Canadian publishers to lapse.

"These policies have served Canadian writers and readers well and they would continue to do so if they were enforced," she said. "They have allowed the creation of an industry that has achieved great success with relatively modest investment."

But other observers saw little alternative to the eventual takeover. "As a Canadian publisher I'm thrilled that Random House has stepped up," said Kim McArthur of McArthur & Company. "We are facing almost insurmountable challenges, including the competition from multinationals combined with the economy and the move to digital. The fact remains in this market you do need investment."

The takeover of M&S is not "the end of a dream," Ms. McArthur said. "It's the end of an era."

When it celebrated its 100th anniversary in 2006, McClelland & Stewart could lay claim to having published many, if not most, of Canada's distinguished authors: Leonard Cohen, Mavis Gallant, Farley Mowat, Rohinton Mistry, Peter Robinson, L.M. Montgomery, Pierre Trudeau, Margaret Laurence, Stephen Leacock, Anne Michaels – the list goes on. For a variety of reasons, many stayed loyal to M&S despite better offers from elsewhere. It's a remarkable CanLit legacy. Here are some major authors who did – and a few who didn't.

Margaret Atwood

Among the most celebrated writers internationally, Atwood – a strong cultural nationalist – has spurned lucrative offers from other publishers to stay with M&S, which has published her fiction since The Edible Woman, though her poetry was always published elsewhere.

Alice Munro, W.O. Mitchell, Robertson Davies, Guy Vanderhaeghe

These major writers all published with now-defunct Macmillan of Canada, but moved houses when their legendary editor, Douglas Gibson, went to M&S.

Michael Ondaatje

Like Atwood, Ondaatje, whose The Cat's Table was short-listed for 2011's Scotiabank Giller Prize, has a golden international reputation and, doubtless, many better offers. But one reason so many of the country's best fiction writers stay with M&S is for the perceptive and assiduous editorial attentions of Ellen Seligman.

Peter C. Newman

Newman's first major book, Renegade in Power (a take-down of John Diefenbaker) was published with M&S, and he stayed with the house until 1982. Penguin Canada offered Newman, who quit the editorship of Maclean's to pursue writing full-time, a $500,000 advance, it was said, for his trilogy on the Hudson Bay Company. M&S's Jack McClelland couldn't compete. It was a watershed of sorts, since at the same time, branch plants of publishing giants such as Random House and Penguin decided to get serious about publishing Canadian works.

Pierre Berton

A long-time drinking buddy and carousing companion of Jack McClelland, Berton stayed loyal as long as McClelland owned M&S. When he sold to Avie Bennett, Berton moved on.

- Martin Levin and Roy MacSkimming

So who's left in the world of large-scale independent Canadian publishing? Not as many as you might think.

Douglas & McIntyre

Arguably the most important Canadian-owned survivor, this Vancouver-based publisher was co-founded by Jim Douglas and Scott McIntyre in 1970. Douglas retired in 1980. Douglas & McIntyre would like to be known these days as D&M Publishing, a new name and logo adopted in 2008, but old habits die hard and the new branding hasn't stuck very well. Rob Sanders joined the publisher in 1988, and is publisher of D&M's GreyStone imprint. So far, D&M has published 2,000 books, with about 1,000 in print. Strong suits: memoirs, art, environment, hockey.

House of Anansi

Assertively literary publisher founded in 1967 by Dennis Lee and Dave Godfrey. In its early years, Anansi published many writers who went on to become superstars, including Margaret Atwood, Matt Cohen, Michael Ondaatje, Marian Engel, George Grant and Northrop Frye, as well as translations of French-language works by such authors as Roch Carrier, Anne Hébert and Marie-Claire Blais. In 2011, Anansi published two novels on the Giller short list, The Sisters Brothers and The Antagonist. It was purchased by Stoddart in 1989, and then in 2002 by Scott Griffin, founder of the Griffin Poetry Prize, who has expanded the house's prestigious list considerably. Strong suits: Fiction, poetry.


Publishes books of Canadian history, military history, politics, current affairs and biography, as well as a newish line of mystery fiction (Castle Street) and has recently moved into lavishly produced art books. The press was founded in 1972 by Kirk Howard, and today has more than 2,500 titles in print and currently publishes more than 100 new titles a year, though rarely, if ever, a bestseller. Strong suits: local history and politics, crime fiction.

Thomas Allen & Son

Founded in 1916 by Thomas Allen, this house is the largest family-owned and -operated publisher in Canada. Over the years, it has published such literary lights as Canadian poet Edna Jaques, feminist and parliamentarian Nellie McClung, Winston Churchill, Stephen Leacock, Foster Hewitt and William Lyon Mackenzie King. Most recent star book is Esi Edugyan's multi-award-nominated and Giller-winning Half-Blood Blues. Strong suits: fiction, memoir.

- staff