CCA Bulletin 24/08

July 17, 2008

The CCA Publishes its Annual Analysis of the Federal Budget

Main findings

The CCA publishes today its 2008 Budget Analysis in which it examines federal funding from 2007/08 to 2008/09 to the Department of Canadian Heritage (DCH), cultural agencies and crown corporations.

After almost three years, it is still difficult to establish what position the government may take towards culture as significant funding reductions might be forthcoming given the known government priorities, the downturn in the economy and the disappearance of budgetary surpluses resulting from, in particular, cuts to the GST.

A number of key findings emerge. First, stability seems to be the operative word: overall funding levels held very steady in Budget 2008, as virtually all organizations examined in this analysis did not see a funding change of more than four percent, and additional expenditures may accrue to the sector through the supplementary estimates process. This is undoubtedly good news for the sector. Second, funding to key grants and contribution programs at the Department of Canadian Heritage also remained quite steady, with the notable exception of Canadian Culture On-line, which was cut completely (and somewhat unexpectedly) in Budget 2008.

The analysis confirms also that the government appears to favour a greater role for the private sector in the cultural domain and an interest in locating national cultural institutions outside of the National Capital Region, most recently through the process to identify the location of the Portrait Gallery of Canada, but also with respect to the Canadian Museum for Human Rights.

There are very real concerns over the government’s apparent reorientation of approach to the cultural sector and the lack of transparency and predictability in decision-making, particularly when it comes to arts and culture. Culture does not figure among the government’s priorities, and the appetite for large-scale policy decision-making and long-term commitments within the Department of Canadian Heritage appear to have waned, as attested by the fact that one is still waiting for a new museums policy close to four years after this had made the object of a broadly based consensus amongst all political parties and respective stakeholders.

What is not of a nature to reassure either is the fact that much of the new funding to the Department of Canadian Heritage over the last three years has accrued to sport (largely for the Vancouver 2010 Olympics) and new cultural programs targeting community-based events at the local level. In addition, while the Department indicates it will seek renewal for most programs comprising what used to be known as Tomorrow Starts Today, these commitments are in no way guarantees, as governments can reverse their intentions at a moment’s notice.

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More specifically, the analysis shows that beginning with the Main Estimates, overall departmental expenditures are set to grow this fiscal year over last (these figures must be interpreted with caution as they do not include expenditures in the supplementary estimates). While this is undoubtedly welcome news for the Department, it masks the distribution of expenditure changes across the various Program Activities. As indicated in the Plans and Priorities of the Department of Canadian Heritage for 2008-2009, the Department pursues two broad objectives, expressed in terms of strategic outcomes;

“Canadians express and share their diverse cultural experiences with each other and the world.”

To achieve this outcome, the Department “helps to ensure that Canadians can express their creativity, showcase their talents, and share their diverse experiences via the arts, heritage institutions and sport activities, both amateur and professional.”

and

“Canada is an inclusive society built on intercultural understanding and citizen participation.”

The Department seeks to achieve this outcome by “providing programming in support of socio-economic inclusion for disadvantaged groups such as off-reserve Aboriginal people and official language minority communities, but also exchange and dialogue on shared citizenship values between Canadians of all origins and backgrounds.”

The largest increase ($46.1 million) accrues to the Department’s second Strategic Outcome, which does not include programming for the arts, heritage or cultural industries. On the other hand, expenditures on the first Strategic Outcome, where programming for the arts, heritage and cultural industries occurs, decline from 2007/08 to 2008/09 by $17.8 million, with increases to some Program Sub-Activities (an additional $1.7 million and $19.5 million, respectively to ‘Preservation of Canada’s heritage’ and ‘Access to Canada’s culture’) and decreases to others (declines of $1.5 million and $37.5 million, respectively, to ‘Canadian content and performance excellence’ and ‘Sustainability of cultural expression and participation’).

Overall changes in spending at the Department appear to be privileging its second Strategic Outcome over its first. While in 2007/08, the proportion of overall departmental funding to the first Strategic Outcome was 57.0%, this figure declined in 2008/09 to 54.6%. While this decline is small, it will be important for the sector to monitor these figures on an ongoing basis given that departmental spending on the arts, heritage, and cultural industries is undertaken through Strategic Outcome 1. These concerns are fuelled by the further realization that there appear to be some fairly substantial funding declines on the horizon, particularly for the Department’s first Strategic Outcome, which is slated to drop from $759.7 million in 2008/09 to $624.3 million in 2009/10 and $454.7 million in 2010/11. These declines are related to the slew of programs coming up for renewal over the next two years and if they were realized, the proportion of overall departmental spending on its first Strategic Outcome would drop to 52.6% in 2009/10 and to 46.6% in 2010/11. These figures must therefore be interpreted with extreme caution as Parliament only votes on the annual Main Estimates (2008/09), so Planned Spending is subject to change between now and 2009/10, including through program renewals.

As the CCA indicated in a previous bulletin, over the next two years, $342.3 million worth of program funding will sunset and will have to be presented to Treasury Board and to the Cabinet for renewal. The CCA has contacted the department regarding these renewals to ascertain whether the Department plans to seek renewal of these programs at the same (or increased/decreased) funding levels, and whether it can provide some indication as to the probability that it will seek renewal for those programs indicated as possibly being renewed, namely the Book Publishing Industry Development Program and the National Arts Training Contribution Program.

The Department’s response confirms that commitments to renew programs must not be viewed as guarantees: even for those programs for which the RPP indicates Canadian Heritage will seek renewal, the Department states that “it would not be appropriate to comment on the probability of funding renewal at the current time and states further that renewal is contingent on various factors, including government priorities”.

For the specific case of the Book Publishing Industry Development Program, the program is undergoing a program evaluation to assess its relevance and effectiveness ‘in delivering results and services for Canadians.’ The decision as to whether or not to go forward with funding renewal for this program (and if so, at what level) awaits completion of the evaluation. In the case of the National Arts Training Contribution Program, the program was renewed for a five-year period in September 2007 to March 2013 (for some reason, this was not reflected in the Department’s Report on Plans and Priorities).

We are also seeking confirmation if the renewal will include the $ 25 million allocation to the Canada Council which came annually under what used to be known as the Tomorrow Starts Today suite of programs. We are awaiting word back from the department on this last most important query and will inform you of the result.