Does Canonical pay application developers?

All of the default applications in Ubuntu are free software, and in most cases, certainly in all cases that ship on the CD, that means they are not for sale.

If Canonical did pay, it would be a gift. They ship software under the same licenses the software itself ships with. So, in most cases

• there just isn't any product or service that Canonical could pay for, even if they wanted.

However, Canonical and other Linux distributors do sponsor by employing developers to work on software, of course. And, like TheX says, they contribute to the software itself. Which is the whole point.

They "pay" by contributing any bug fixes, feature upgrades back to the developer, as consistent with the nature of open source software, not to mention the press that such applications get by being included as the default software of a major OS.

Open source software is determined by the license. There is nothing to stop a company from paying a software developer and then licensing their work as GPL for example. Clearly most open source developers aren't paid for their open source work.