CCA Bulletin 12/07

Ottawa, Thursday, March 22 2007

Deconstructing the Federal Budget 2007 from a cultural point of view

A second look at Monday’s budget

For the past two days, since Budget Day in the House of Commons, the CCA has been looking at the Government’s Main Estimates for 2007-08. The Main Estimates are the projected spending of the federal government in all government departments and agencies for any given fiscal year. This is where the Budget starts to make concrete sense and where close scrutiny reveals whether the money announced is new or not or whether apparent cuts have been transformed into reallocations to new minted programs, suited to new needs or to the government’s political agenda.

For the second year in a row, the Federal Government has released its Main Estimates a few weeks before it tabled its budget. In previous years, the Main Estimates were released after the federal budget and provided a complete outline of government’s expenses, including items from the freshly-minted federal budget.

The Main Estimates for 2007-2008 were tabled on February 27 2007, well in advance of the March 19, 2007 federal budget announcement by the Hon. Jim Flaherty. As was the case last year, we can expect to see further details on spending reflected in the Supplementary Estimates which will not be made public until the fall, as part of the overall economic update. This means that the full government’s budgetary intentions will remain unclear until next September or October, a reason for hope or concern, depending on where you sit.

A required mechanism of government, Supplementary Estimates have the added advantage of delaying decisions you don’t want to take or announce on Budget Day. For instance, the government could decide to make up for ignoring in Monday’s budget the needs of Canadian museums and finally announce it will implement a policy it supported when it was in opposition. Alternatively, Canada’s New Government may decide not to do as in the past few years, namely not to make up the some $60 million cut to the budget of the CBC through the Supplementary Estimates process. Thankfully, at the moment of going to press, we learn that Minister Oda has announced the renewal of this paltry 60 million dollars, for the next two years. At least, this will save several months of uncertainty not only for the CBC, but for all artists, creators, producers who depend on this financing to do their work.

What then do this year’s current Main Estimates tell us at first look?

First, they confirm the first impression that if the government has a strategy for the cultural sector in Canada, it has not started to implement it. While there are laudable items in the budget concerning culture in the broadest sense of the word, and while there is a concern for grassroot financing and for involving the private sector, there is no obvious plan or policy the announced expenditures can be linked to, nor any long term commitment to anything, all allocations having a maximum lifespan of two years.

The main example of this is with the much heralded 2006 increases to the budget of the Canada Council for the Arts which, for the time being, appear to be no more than truly one-time increases. Not only that, but the Council could see a further reduction to its budget after 2010 if the suite of programs in the Tomorrow Starts Today (TST) envelope is not renewed. There is still little clue to the fate of these programs over the long term in either the budget or the Main Estimates.

The two-year commitment to the Canadian Television Fund made by Minister Oda during the recent crisis is limited to precisely that and at a level which has not been reviewed since its inception in 1996.

The Department of Foreign Affairs and International Trade has not seen fit to supplement the public diplomacy funds for cultural relations. The program lost funds in the last round of the billion dollar reallocation exercise in fall 2006, turning Canada’s posts abroad into fundraisers to support cultural programming and relations around the world, including our missions in London, Tokyo, Paris, Berlin, and Washington to name but a few. These cuts have an impact on the ability of Canadian artists and arts organizations to develop foreign audiences and markets, which is an important dimension of attaining a broadened financial base for their long-term health and sustainability.

The new $30 million program for local arts festivals and special events was a surprise to many, though it is not immediately clear which department will be responsible for the administration of the program nor what the nature and details of the criteria of eligibility for these funds are.

And finally on the taxation side, nothing in the 2007 budget to ensure equity for self-employed Canadians, a growing segment of the population where one traditionally finds large numbers of artists and creators.

What next?

There are a few remaining questions hovering in the wake of the budget that may still have an impact on federal spending programs and agencies that support Canadian arts and culture. First and foremost – is the billion dollar reallocation exercise, announced in the 2006-07 federal budget as a two-year process, still in place? Has the target amount shifted? Not clear at the moment.

We will be following these and other 2007 budget issues very closely on your behalf. As answers emerge, we will continue to share information with our members and supporters via our bulletins. As a new initiative to provide and share information, within the next few days we will organize two conference calls to give an overview of the situation and answer questions as best we can. Keep an eye on your email for the details.

Also, as previously indicated, the CCA will strive to answer all outstanding issues and questions as it works to prepare its more detailed analysis of this year’s federal budget, a document which should be available by late April / early May.

Tell Me More…

In the Canadian Heritage Portfolio, here are some standouts:

The budget of the Department of Canadian Heritage (DCH) declines from $1,384,631,000.00 to $1,363,015,00.00, which is a decline of close to $22 million;
Creation of Canadian Content and Performance Excellence – an increase from $297,000,000.00 to $ 341,080,000.00;
Sustainability of Cultural Expression and Participation – a decrease from $281,000,000.00 to $ 210,633,000.00;
Community Development and Capacity Building – a decrease from $42,143,700.00 to $ 35,644,933.00;
Grants in Support of the Multiculturalism Program – a decrease from $42,134,700.00 to $35,644,933.00;
Canadian Television Fund – an increase from $ 99,550,000.00 to $119,950,000.00
Book Industry Development Program – an increase from $19,460,242.00 to $27,460,242.00;
National Arts Training Program – a decrease from $15,903,920.00 to $10,709,000.00;
Court Challenges Program – a decrease from $2,802,076.00 to $100,000.00;
Exchanges Canada Program – a decrease from $17,894,389.00 to $11,712,389.00;
Celebrate Canada! Activities (Canada Day Celebrations) – a major increase from $1,352,600.00 to $15,988,600.00.

The Main Estimates have also re-ordered some programs. At first glance it would seem that major cuts have been made, only to find the difference under another program heading with the same target community.

The Department of Canadian Heritage Portfolio Agencies are also included in this section of the Main Estimates, some highlights are:

the additional $30 million to the budget of the Canada Council for the Arts is included, honouring the commitment of the 2006-07 federal budget to increase on a non-recurrent basis the budget of the Council over two fiscal years, ending March 31 2008;
the budget of the Canadian Broadcasting Corporation has declined from $1,112,039,000.00 last year to $1,043,953,000.00 for 2007-08;
the Museum of Nature’s allocation rises from $59,145,000.00 to $84,221,000.00, the increase is to cover capital costs associated with the ongoing renovation of the museum;
the National Arts Centre (NAC) sees an increase from $33,283,00.00 to $35,216,000.00;
the National Film Board (NFB) appropriation is to rise from $64,839,00.00, to $67,118,000.00;
Telefilm Canada sees a decrease from $125,042,00.00 to $104,649,000.00, which is likely a technical adjustment related to the Canadian Television Fund increase (see above)

At the Department of Foreign Affairs and International Trade (DFAIT), the CCA sees a further decrease in the grants dedicated to cultural relations to $4,694,000.00 from $7,894,000.00 due to the contribution made through the billion dollar reallocation exercise announced on September 25 2006. However, academic relations saw a decrease in their granting program from $13,550,000.00 to $10,510,000.00, though this was accompanied by another infusion of $2,170,000.00 in the contributions listings.