CCA Bulletin 49/08 – The Economic Meltdown: Arts Organizations Feel the Heat and Finance Minister Flaherty Seeks Ideas for Economic Stimulation

November 25, 2008

Just the Facts

As bad news on the economy keeps rolling in, arts organizations and institutions are beginning to feel the pinch as endowments are failing to generate income.

Endowment funds have been promoted by the federal and some provincial governments as a prudent way to build financial security and promote longer-term planning. In Saturday’s edition of the Globe and Mail, journalist James Bradshaw featured an extensive look at how the dismal performance of the stock markets is placing new pressures on arts organizations. One example amongst many: the National Ballet of Canada is projecting a $ 900,000. 00 shortfall in budgeted revenues due to the current market downturn.

It is not just front-line arts organizations that are dealing with income shortfalls. The Canada Council for the Arts dedicates a percentage of the income earned by its endowment to operating costs and grants. Several endowed Canada Council prizes will also likely be affected, perhaps resulting in lower prize amounts or in some cases, delays in the awards themselves. It is important to note that the Canada Council has not indicated how or if the economic situation has affected its operations, grants, or prizes.

Beyond the arts, the rest of the economy is also trying to cope with this major economic tsunami, to the point where the Minister of Finance, the Hon. James Flaherty, has asked for suggestions as to how best to stimulate the lagging economy. Given the fact that creating jobs in the arts and culture sector costs a fraction of what it costs to create jobs in the industrial sector, it would seem that a good strategy would be to invest in that important segment of the creative economy to see rapid returns.

The CCA is preparing a memo to Mr. Flaherty built around a number of key proposals, including:

The creation of a national mentorship/internship program to facilitate succession planning within the arts, cultural industries, and heritage sectors. This would generate new jobs, address the longer-term needs of the sector and could be deployed very quickly. The price tag would be in the tens of millions, but still a far more certain investment than $ 3 billion for the auto industry.

A Multi-platform Canadian Content Fund to stimulate creation of Canadian cultural content for any production or distribution technology would serve several key public policy objectives and unleash the creativity and innovation within the creative economy.

The creation of an international cultural marketing strategy to permit producers, creators and arts professionals in all art forms to build markets and audiences for Canadian creative and artistic productions. The strategy would salvage some of the important opportunities to promote Canadian culture that have been lost through the cancellation of PromArts and TradeRoutes.

The establishment of a national cultural research strategy that provides better data on cultural labour market trends, audiences, new markets, diversity and economic impact of governments’ investment in the arts, cultural industries, and heritage sector. Over the past several years, successive budget cuts at Statistics Canada have disproportionately affected arts and culture and deprived the sector of essential data for its proper assessment and development. Priority attention should be given by the government to remedy this situation.

Fast track the implementation of a Canadian museums strategy. The Department of Canadian Heritage has been labouring over a new federal museums policy for a number of years. This is an opportunity to roll out the policy and the funding required to make it work.

As is done in Quebec and in a number of countries, the federal government should encourage creativity by granting an income tax exemption on a certain level of copyright and residual rights revenue for artists and creators.

What Can I Do?

The CCA would like to submit these and other ideas to the Minister of Finance and the Standing Committees on Finance and Canadian Heritage before Christmas. The Economic Update that the Minister of Finance will deliver this week will provide an excellent context for putting forward ideas to not only stimulate the economy, but also to put the arts and culture sector on more solid footing.

If you or your organizations have ideas that could be part of the Arts Stimulation Package, please either share them with the Minister of Finance and copy the CCA, or send them for inclusion in the CCA brief.

When the Minister of Finance goes looking for ideas, the CCA and the cultural sector don’t have to be asked twice!