CCA Bulletin 39/08 - Funding Arts and Culture under Canada’s 39th Parliament

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This document looks at the Department of Canadian Heritage’s budgets from 2005/06 to 2008/09. It is based on the Canadian Conference of the Arts’ Federal Budget Annual Analyses for those years. By lining up side by side the funding allocated over that period to the Department of Canadian Heritage, its agencies and programs, this analysis points to trends in spending during Canada’s 39th Parliament.

The Department of Canadian Heritage: Selected Grants and Contributions

(Table 1)

An important point of clarification is in order before examining and comparing expenditures across this time period. When looking at figures, one must bear in mind that the budgetary process for 2005-06 and 2006-07 was disrupted by a federal election. This makes comparisons between the end of the 38th and 39th Parliaments somewhat tricky. All expenditures, including those for arts and culture, are under-represented in Budget ’05/06 and inflated in Budget ‘06/07 because of this kink in the process: expenditures for 2005/06 are understated because only Main Estimates were tabled in that fiscal year. The 2005/06 Supplementary Estimates tabled by the government in the fall of 2005 were not passed by Parliament before it dissolved in November for the federal election. As a consequence, expenditures for 2006/07 are overstated as the supplementary expenditures from 2005/06 were rolled into the 2006/07 Main Estimates documents.

As a result of these departures from the normal expenditure budget cycle, a comparative analysis of increases and decreases in expenditure levels over the last three fiscal years must be undertaken with care. In brief, the lack of supplementary estimates in 2005/06 makes it challenging to undertake apples-to-apples comparisons in the sector in the 2006/07-2008/09 period.

Having said that, overall funding to key grants and contribution programs at the Department of Heritage has remained relatively stable over the past three fiscal years.  However, there have been a number of budget reallocations within the Department.

Canadian Heritage (PCH) operates under two broad Strategic Outcomes (see Appendix 1 below). Under the first outcome, the government supports Canadians to express and share their diverse cultural experiences with each other and the world: this is where funding for the arts, heritage and cultural institutions and industries occurs.  The second Strategic Outcome positions Canada as an inclusive society built on inter-cultural understanding and citizen participation.

While the overall budget of the Department remains fairly stable, there seems to be a trend for funding to be reallocated from the first strategic outcome towards the second one: thus, in 2008, the largest increase ($46.1 million) accrues to the Department’s second Strategic Outcome while the first one shows a net decrease of $17.8 million. Statistically, in 2007/08 the proportion of overall departmental funding to the first strategic outcome was 57%. This figure declined in 2008/09 to 54.6%.

A notable reallocation of funding within Heritage includes the cuts which have surfaced since April 1, 2008, with savings being directed, amongst other priorities, toward the recurrent $30 million to the Canada Council budget $30 million and three other programs under the second Strategic Outcome of PCH: the 2010 Olympic and Paralympic Torch Relays, the Road to Excellence for summer Olympic athletes, and the Official Languages Action Plan. Budget 2008-09 provided $25 million to the torch relays, and $24 million over two years and $24 million ongoing annually to the Road to Excellence programs, while the program for the Development of Official Languages Communities received an increase of $24.7 million.

Table 1 - Department of Canadian Heritage: Selected Grants and Contributions

(for a detailed description of each program, please refer to full CCA Budget Analysis)

(A) While cultural funding levels rose modestly in Budget 2006, it is crucial to bear in mind that there were no Supplementary Estimates in fiscal year 2005/06. Additional expenditures in 2005/06 were made through Governor General’s Special Warrants and these incremental amounts were included in the 2006 Main Estimates. As such, funding increases in 2006-07 must be interpreted with caution as they include expenditures undertaken in the previous fiscal year.

(B) Increases to the Arts Presentation Canada Program and the Building Communities through Arts & Heritage Program were designated to local arts and heritage festival programs.

(C) The government has indicated that increases to Celebrate Canada are due to funds for the 400th Anniversary celebration of Québec City in summer 2008, and for Eucharist Congress, also in 2008. This program generally provides financial assistance for community events between June 21st and July 1st, but the program is only intended to cover a portion of the costs of the events.

(D) The Museums Assistance Program increased by $5 million for the summer museums internship program announced in Budget 2007.  As such, this represents no new funding to the program, which was cut by $2.3 million per year in fall 2006.

(E) In 2007, the contribution of the government to the Canadian Television Fund was renewed at its 1996 level until March 2009.  $20 million were also re-allocated funds from Telefilm Canada, which registers the equivalent decrease. Increases in 2006 can be owed to Governor General Special Warrants which were related to the 2005-06 budget (see note A above).

Table 2 - Comparative spending of Selected Agencies and Crown Corporations during Canada’s 39th Parliament

1 These figures cover only appropriations. All of these organizations also generate annual revenues.

(F) In the 2006 Budget, the government announced a one time increase, over two years, to the budget of the Canada Council of the Arts (an additional one-time $20 million in 2006/07, and a second one-time increase of $30 million in 2007/08). A permanent increase of $ 30 million to the base budget of the Council is reflected in the 2008-09 budget.

(G) Treasury Board provides government departments and appropriated Crown Corporations with compensation for increases to collective agreements (ie. Inflation funding on their salary budgets).  Since 2004/05, CBC has received this funding for salary inflation for fiscal years 2005/06 and 2006/07 of approximately $20 million per year. This represents a permanent increase to the funding base.  Fiscal year 2008/09 includes an increase of $20 million which was transferred from the 2007/08 budget in order to offset the cost of the 2008 summer Olympics. This was a one-time adjustment. The 2008/09 budget also includes a $6.6 million cut by the government as part of the Expenditure Review Reduction.  In 2004/05 Canadian Heritage transferred $2 million for digitization of archives, but this funding will not be received in 2008/09.

(H) The changes in funding to Library and Archives Canada are the result of two factors. The first is the integration of the National Library of Canada and the National Archives of Canada in 2004, which resulted in special one-time transition costs and funding. In 2006/07 and subsequent years, additional funds were allotted to Library Archives for the collection development, description, and care of the Portrait Gallery of Canada.

(I) In 2006, the government announced that it would allocate a one-time $100 million for infrastructure funding to: the Museum of Nature, the National Gallery of Canada, the Canadian Museum of Civilization, the Canada Museum of Science and Technology, and the National Arts Centre. Accordingly, the 2008 decline in funding to the National Arts Centre and the Canadian Museum of Nature did not affect operating grants but reflects the completion of one-time capital projects.

(H) The National Film Board owes its increase to $2.5 million transfer from the Department of Canadian Heritage for ‘activities to advance the creation of cultural content on-line and other digitization projects,’ and a $420,000 transfer from the Department of Canadian Heritage for the development of Official Language Minority Communities.

(I) Telefilm Canada funding decreased to $105.2 million in 2006/07 and $104.6 million in 2007/08, owing to the transfer of $20 million to the Department of Canadian Heritage for the Canadian Television Fund

Appendix 1 : Canadian Heritage: Program Activity Architecture

Strategic Outcome 1 program activities include: Canadian content and performance excellence, sustainability of cultural expression and participation, preservation of Canada’s heritage, and access to Canada’s culture. Program sub-activities include: arts & cultural industries, heritage, sport, international, Aboriginal living cultures, 2010 Winter Games (cultural programs).

Strategic Outcome 2 program activities include: promotion of inter-cultural understanding, community development and capacity building, and participation in community and civic life. Program sub-activities include: official languages, multiculturalism, Aboriginal partners, citizen participation, sport, youth, celebration, international, 2010 Winter Games.

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