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As one major Canadian publisher disappears with the global merger of Penguin and Random House, the federal government has lowered protectionist barriers to welcome an eager replacement.

Long restricted to distributing foreign titles, the Canadian branch of New York based Simon and Schuster will now be permitted to publish books in Canada by Canadian authors, according to a statement released by Heritage Canada.

"Simon and Schuster Canada has met its obligations under the Investment Canada Act and may now launch a book publishing business in Canada," Heritage Canada spokesman Pierre Manoni said in an e-mail.

"Canada has a vibrant book industry," he added. "This shows that companies want to invest and publish in Canada's publishing industry."

The announcement comes a month after the ministry approved the Random Penguin merger, which will see the country's two most prominent trade book publishers combine into a single company and is widely expected to reduce opportunities for Canadian writers to find a market for their work.

Simon and Schuster Canada has been lobbying for the right to publish in Canada since the company's inception more than a decade ago and has managed to act in that capacity by persuading its corporate parent to publish Canadian-themed books in New York that it can legally import for sale in Canada. In its most prominent deal, the company contracted with Prime Minister Stephen Harper to publish a book about the early history of hockey, set to be published this fall.

Simon and Schuster Canada president Kevin Hanson did not respond to requests for an interview. But other observers were quick to applaud the move.

"We have to have more options in this country, especially with Penguin and Random House merging," Toronto literary agent Denise Bukowski said in an interview, noting that the market for new manuscripts has steadily tightened following previous mergers that have seen the disappearance of several formerly independent publishers in Canada, including McClelland & Stewart, Doubleday and Little, Brown.