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Canadian novelist and short-story writer Caroline Adderson has been long-listed for the world's richest short-story prize, the £30,000 ($47,000) Sunday Times EFG Private Bank Short Story Award. One single short story will win this. There are 16 stories nominated, many of them by big names: Junot Diaz, Ali Smith, Mark Haddon, Graham Swift. The eligibility criterion for the prize is that the author must have been published, either in book or magazine form, in the United Kingdom or Ireland.

The story that Adderson submitted, called Erection Man, has not been published anywhere; she sent it in cold. Interestingly, the story had been rejected by a couple of major publications. (It's still sitting on the desks of a few big-magazine editors; let's see if they read it a little more closely now.)

The short list, of six, will be announced in a month – each of these finalists will win £1,000 ($1,600). The winner will be announced in Oxford on March 22. Interestingly, since the creation of the prize in 2010, not one of the winners has been from Britain. So our girl has a chance.

"I honestly didn't even notice it was for £30,000 when I submitted," Adderson says on the phone from Vancouver, where she lives and teaches. All the stories submitted were judged "blind" by the five-person jury (a jury that included U.S. novelist Lionel Shriver and British novelist Joanna Trollope), but now that the names of the finalists have become known, some of the larger reputations may have an edge. Adderson herself is an unassuming personality; she is not a frequent tweeter or public diarist.

The story that got her this far is one of a series she is writing around the life of an imaginary Vancouver woman called Ellen McGuinty. This one is written from the point of view of a young man, Ellen's casual lover, at a stressful Christmas gathering with his real girlfriend and his unsophisticated family. It exemplifies Adderson's trademark wit: her burying of tensions in bantering dialogue, her fixation with absurd details. Her characters are deeply Vancouver in all their preoccupations, from craft-fair pottery to hydration systems for long-distance cycling, and also refreshingly horny (especially Ellen, who is generally somewhat impatient with the vacillating men she uses for her sexual needs).

Adderson has already published several of the Ellen stories in the kind of Canadian literary journal that is known mostly to people in the business of literature (Eighteen Bridges, The New Quarterly, Canadian Notes & Queries). One of them was selected for the collection Best Canadian Stories. When the cycle is complete, she will publish them as a novel she plans to call Ellen In Pieces. This is a popular thing to do these days among short-story writers, who all know that publishers, especially major ones, are not keen on short stories – they don't sell well. They would rather call a book a novel.

"I had recently read a number of books that were called novels but just linked stories," Adderson says. "That's just a marketing device. But I want to see if I can do it." She points out that earlier collections of linked stories – such as Alice Munro's Lives Of Girls And Women – could have been rearranged and marketed as novels as well. Times have changed; we don't seem to value the particularly difficult craft of the miniature in an era of doorstopper trilogies.

There is a new challenge to be found in writing self-contained stories that when put in sequence create a larger narrative, Adderson says. "I just love the short-story form. A novel and a short story are not in the same family. The novel is a dramatic form, the short story a poetic one. That's not to say it doesn't have a narrative – it does, it's just the language that drives the story." What she is aiming to do is to take these individual "poems" and organize them in such a way that they reach a climax.

I'm going to try to resist making a pious point about how Canadian artists are so often recognized abroad while going unknown in our own media. Sometimes the opposite is true. I can at least hope that this recognition, among the very best writers in English in the world, will bring attention not only to this non-lucrative art form but also to a Canadian artist of dazzling talent.

Caroline Adderson will be giving a lecture with videos, as part of Ryeberg Live, in Vancouver at Club PuSh on Granville Island, on Jan. 27 at 7 p.m.

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