Federal Election 2011: Public Cultural Investments under Canada’s 40th Parliament
CCA Bulletin 17/11
April 20, 2011
In 2008, the CCA published a bulletin analyzing the investments made under Canada’s 39th Parliament in the arts, culture and heritage sector. In order to give you a broad perspective, we used several years’ worth of budget analyses to explain funding to the sector. In today’s bulletin, we will aim to do the same thing. By using funding figures from the Department of Heritage, its agencies and programs, we will break down themes surrounding cultural spending under Canada’s 40th Parliament. In this bulletin, we will also outline how funding to Canadian institutions and cultural programs, along with government processes such as Strategic Reviews, have impacted the overall cultural budget of the federal government.
In this analysis, the numbers end with the 2010/11 federal budget as that was the last budget that passed under the 40th Parliament. Though a 2011/12 federal budget was tabled in March 2011, the budget died on the order paper once the writ was dropped and the current general federal election was called. For that reason, we have not included the 2011/12 estimates.
What you want to know in a nutshell
Excluding one-time funding increases which were part of the 2009–2010 Canada Economic Action Plan, overall funding to key grants and contribution programs at the Department of Canadian Heritage has remained relatively stable over the past two years. If we include all one-time funding initiatives, it would be legitimate for the government to claim that in nominal dollars at least, these budgets represent the most ever for funding arts, culture and heritage.
As reflected in all of the CCA’s budget analyses since 2006, over this period, stable funding has been a general trend, even despite significant cuts which have had documented impacts on parts of the sector. Since 2009/10, many important programs have received five-year funding commitments. However, once you dig deeper, it’s evident that stable funding may be an ephemeral occurrence due to the beginning and end of the Economic Action Plan. We have also seen several one-time only funding measures to stabilize cultural institutions in the short term, even though they are in dire need of more long-term investment.
Olympic funding stabilized the Department of Canadian Heritage’s budget during the period. However, even with the end of the Olympics, we have not seen the return of any funds internally to other arts, culture and heritage programs, where some of the funding originated. Separate from funding, several programs have undergone changes with regards to their guidelines (e.g. the changes to the Canada Periodical Fund). Some funds have been moved from one program to another or to another agency altogether (e.g. the programs supporting music diversity). These changes have affected the ability of many cultural organizations to receive the funding they previously relied upon. It’s clear that the government will have to cut deeply across programs to help balance the budget, now that it has forsaken a significant amount of revenue through reduced taxes.
What to expect down the line
There is legitimate reason to believe that this state of stable funding may not continue. Even if the Canadian economy seems to be performing better than most in the G-8, the 2008/09 recession and ongoing global economic instability are generating considerable uncertainty. In the short term, federal expenditures have been frozen, which means that departments, crown corporations and agencies must find internal resources to pay for increased salary and operational expenses.
In its 2011 budget, the outgoing government presented a roadmap to a balanced budget, including $17.6 billion in expenditure reductions over five years. This will require real spending cuts. Moving away from a Strategic Review exercise every four years, the 2011 budget announced a comprehensive one-year Strategic and Operating Review across the entire government in 2011-12. About $80 billion of direct program spending will be reviewed with the objective of achieving at least $4 billion in ongoing annual savings by 2014–15, or 5% of the review base. The review will place particular emphasis on generating savings from operating expenses and improving productivity, while also examining the relevance and effectiveness of programs. This means that Heritage and its associated programs, agencies and crown corporations will again be under scrutiny. Based on 2010/11 budget figures, this could translate to investment cuts of at least $175 million to arts, culture and heritage.
If you want to know more, by theme
The following sections outline major themes the CCA has identified as areas of focus or concern when examining the multi-year funding tables found below.
One-time funding, stimulus spending and five-year commitments
Changing funding guidelines
No funding for developing international markets for Canadian culture
Social benefits and tax measures
Investing in audiovisual production
CBC financing
Canada’s national museums
The Canada Prizes
The impact of the Olympics on cultural spending
Strategic Review processes, budget freezes and the Strategic and Operating Review
One-time funding, stimulus spending and five-year commitments
The 40th Parliament passed the government’s first budget in 2009/10, with a cultural budget of $3,524.4 million. In 2010/11, cultural spending was $3,421.2 million.*
Compared to 2009/10, the Department of Canadian Heritage’s 2010/11 cultural budgets declined by $103.2 million, mainly due to the end of specific project funding and administrative transfers of responsibilities. Reductions of about $50.3 million are due to the conclusion of the 2010 Vancouver Olympic and Paralympic Games. Another $24.9 million reduction stems from the sun setting on the Urban Multipurpose Aboriginal Youth Centres component of the Aboriginal Peoples’ Program. Finally, a $28.7 million reduction stems from the transfer of the Multiculturalism Program to the Department of Citizenship and Immigration Canada.
However, this apparent decline in overall budgets should be interpreted with caution, especially given the high level of spending in 2009/10 due to additional one-time funding associated with the Vancouver Olympics and one-time initiatives connected with the Economic Action Plan (e.g. an additional $30 million to the Canada Cultural Spaces Fund). Interestingly enough, the most substantial one-time investment in cultural activities came through the Department of Industry in the form of the Marquee Tourism Events Program, which gave $100 million over two years to local festivals. This program ended along with Canada’s Economic Action Plan.
Figures in 2010/11 include $15 million in one-time funding provided to four of the national museums in April 2010: the Canadian Museum of Civilization ($6.3 million), the National Gallery of Canada ($2 million), the Canadian Museum of Nature ($3 million) and the Canada Science and Technology Museum ($3.7 million). This funding for the 2010/11 fiscal year was intended to help “address operating pressures” these national museums faced in light of the economic downturn.
Unlike the approach taken under Canada’s Economic Action Plan from 2006 to 2008 — which involved carrying out one or two-year funding commitments — in 2009/10, the government committed to funding several program areas for a five-year period. While such long-term commitments must be taken on with caution as budgets are voted on a year-to-year basis, this actually enabled a strong measure of stability for the sector during the economic downturn, setting many organizations’ minds at ease. The total five-year spending commitment from 2010/11 to 2014/15 was $642 million:
- $33.8 million annually to the Canada Cultural Investment Fund (formerly the Canadian Arts and Heritage Sustainability Program);
- $30 million in annual funding to the Canada Cultural Spaces Fund (formerly Cultural Spaces Canada);
- $18 million per year to the Canada Arts Presentation Fund (the provisionally renamed Arts Presentation Canada Program; including base funding to this program, the annual total is $33.4 million);
- $27.6 million per year for the Canada Music Fund;
- An ongoing commitment of an additional $25 million yearly to the Canada Council for the Arts (maintaining the Council’s total annual appropriation to $181 million for the next five years);
- A follow-through on a budget 2009 commitment: $24.1 million in annual funding for five years to the Canada Arts Training Fund (formerly the National Arts Training Contribution Program);
- The Canada Book Fund (formerly the Book Publishing Industry Development Program) was renewed at its previous level of $36.7 million in 2009/10 for a period of five years to 2014/15. The program received $750,000 in additional funding in the 2009/10 supplementary estimates.
While funding to arts and culture has remained fairly stable in most areas, many organizations have been affected by changes in eligibility criteria and by the shifting of funds from one program to another. For example, in 2010 the government announced that the criteria for receiving funding from the Canada Periodical Fund (CPF) would differ from the previous Canadian Magazine Fund (CMF) and the Publications Assistance Program (PAP — also known as the “postal subsidy”), which it replaced on April 1, 2010.
The CPF provides financial assistance to the Canadian magazine and non-daily newspaper industries so that they can continue to produce and distribute Canadian content in the face of systemic disadvantages in the marketplace.
The creation of the CPF was initially announced on February 17, 2009, revealing the establishment of a streamlined program in support of Canadian magazines and community newspapers. The CPF maintained existing levels of financial support for Canadian magazines and community newspapers–a total of $75.5 million annually. This includes the annual $15 million “postal subsidy” that was once the responsibility of Canada Post.
The funding of the CPF has not changed, but the rules have. Under the new program, publications whose circulation levels fall under 5,000 are no longer eligible. The main victims of this clause are literary and arts publications which fall under this threshold. While they remain eligible for the Business Innovation component of the new fund, they have lost the additional financial support they once received under the previous regime. Exceptions to this change include publications for Aboriginal, ethno-cultural and official language communities. Other exemptions include agricultural publications such as The Western Producer, Canadian Cattlemen and Grainews.
Another example of changes to funding can be seen with the 2009 cancellation of funding for the recording and distribution of “specialized music”. This funding was formerly administered by the Canada Council for the Arts, but was then transferred to FACTOR/MusicAction. The sector was thrilled to hear about the five-year renewal for the Canada Music Fund and the need for digital and international market development. Those two sectors of activity certainly benefited from the increased funding, but critics have said that this financial injection into the sector was done at the expense of a strategic investment in Canadian cultural diversity. The musical diversity program administered by the Canada Council fostered the development of new forms of music which, while not necessarily commercially viable immediately, could eventually become so.
No funding for developing foreign markets for Canadian culture
In 2008, the sector saw sizeable cuts through the abolition of two strategically important programs: Trade Routes ($9 million) and PromArt ($10.6 million, when one considers the first cut of $5.8 million announced in 2006). The impact of the abolition of these programs on Quebec’s cultural sector has been documented by CINARS. The Quebec government stepped in with $3 million annually to soften the blow
Since 2008, the sector has asked in vain for the creation and implementation of new programs to help develop markets abroad for our cultural products and help enhance Canada’s image within the international community.
Social Benefits and Tax Measures
The 2010/11 federal budget announced that certain Employment Insurance benefits would be extended to self-employed workers. Specifically, self-employed individuals have the option of registering for the EI program in order to receive maternity, parental, sickness and compassionate care benefits.
Given the high percentage of self-employment in the cultural sector, this change may be of benefit to some workers. For others, however, the program may not be advantageous. For example, once registered, workers cannot opt out. Understandably, the government will seek to avoid having workers opt into the system on a short-term basis. However, this rule reduces flexibility for cultural workers in the long term. Furthermore, even if artists are no longer creating, they must continue in the program as long as they continue to receive income for their past works. Moreover, when drawing on EI benefits (e.g., parental benefits) and not actively creating works, any income artists receive during this period for past works (e.g. sale of their work, royalties, public lending rights, etc.) will reduce their EI benefits.
Investing in audiovisual production
In 2009, the government melded the Canadian Television Fund (CTF) and the Canada New Media Fund (CNMF) to create the Canada Media Fund (CMF), whose mandate is to advance media production on various distribution platforms. Budget 2009 committed $135 million in government funding to this new program for each of two years, roughly the combined total of the two previous funds ($120 million for the CTF and $14.2 million for the CNMF). Total funding to the Canada Media Fund in 2010/11 is $350 million: $135 million from the Department of Canadian Heritage, and the remainder ($215 million) from cable and satellite broadcast distribution undertakings (BDU’s) mandated by the CRTC to contribute to the fund.
CBC budgets have not changed over the past five years. Like all government departments and agencies, beginning last year, for a three-year period, the CBC will have to absorb negotiated salary increases and inflation on goods and services. The apparent stability in funding shown in the main estimates does not reflect the serious impact that the recession has had on the commercial revenue of CBC television services, which represent a third of the organization’s overall budget.
If the government promised five-year stability to a number of key investment programs in arts and culture in its 2009-10 budget, it made no such commitments to the public broadcaster. The annual $60 million top up that the Corporation has received since 2001-02 has been renewed only on an annual basis, despite several arguments that it be made part of base funding, including a recommendation from the heritage standing committee (with dissenting opinion from the governmental committee members). In 2009, the Department of Canadian Heritage also declined to assist the CBC with bridge financing as the broadcaster experienced a budget shortfall of $170 million owing to a decline in advertising revenue. This shortfall led to the elimination of 800 positions and numerous programs in French and English radio and television. The CBC also had to sell off assets to raise the funds it needs.
The CBC (along with the Canada Council, the National Film Board and Telefilm) went through the Strategic Review process for budget 2010-11, and was asked to identify 5% of its budget deemed low priority. This could have amounted to a cut of roughly $50 million, but no funding was reallocated outside of the organization, with the government stating that reallocations were not necessary “as programs delivered by these organizations are aligned with the priorities of Canadians”.
In 2009/10 and 2010/11 the government made significant contributions to the private sector-led Canadian Museum for Human Rights. The 2009/10 budget committed $26.7 million to the museum, the majority of which ($25.2 million) was allocated via the supplementary estimates for operating and capital expenditures. The $55 million of funding for 2010/11 was broken down as follows in the main estimates: $15.9 million in operating funding and $40 million in capital expenditures.
In 2009, the budget of Library & Archives Canada was, in part, underwritten with funds available within the organization because the government cancelled construction of the Portrait Gallery of Canada (approximately $29 million) in 2008 due to “global economic instability”. The Portrait Gallery has since been downgraded to a program element of Library & Archives. While the Portrait Gallery of Canada Program was listed among Library and Archives’ priorities in its 2010/11 Report on Plans and Priorities, the organization’s strategy for the gallery focused on travelling exhibitions and online approaches.
As mentioned above, in April 2010, the government provided one-time funding of $15 million to four of Canada’s national museums. In 2010, the government also granted Pier 21 Museum in Halifax national museum status, only the second such institution outside the national capital region, after Canadian Museum for Human Rights in Winnipeg.
As reported in the CCA’s 2009 federal budget analysis, the government announced to everyone’s surprise that it would allocate $25 million to an endowment fund for the creation of the Canada Prizes for the Arts and Creativity. Initially targeting foreign artists, the Prizes were to be administered through a new entity and were linked to the Toronto Luminato Festival.
Confronted with considerable criticism from the sector who pointed to more pressing needs (like investing in market development at home and abroad), the government quickly sent the project back to the drawing board. In early May 2010, the Minister of Canadian Heritage announced that the Canada Council would administer the Prizes, which were recast to recognize outstanding Canadian artistic achievements and help brand Canada as a centre of excellence. In June 2010, the government appointed an advisory panel to prepare recommendations respecting the parameters of the prizes. The panel presented its report to the Minister at the end of the summer 2010. However, there was no mention of the Canada Prizes in the 2011 federal budget tabled in March 2011 or in the 2010/11 main estimates.
The impact of the Olympics on cultural spending
As mentioned previously, beginning with the 2009/10 to 2010/11 period, spending was set to decrease on all three strategic outcomes in the Department of Canadian Heritage: by $36.6 million for the first outcome (“Canadian artistic expressions and cultural content are created and accessible at home and abroad.”), $76.9 million for the second outcome (“Canadians share, express and appreciate their Canadian identity.”) and $72.9 million for the third outcome (“Canadians participate and excel in sport.”), for an overall decrease of $186 million. The largest decreases are slated for two program activities: 1) Promotion and attachment to Canada ($53.5 million), largely due to the conclusion of the Vancouver 2010 Olympic and Paralympic Games (Torch Relay, $24.1 million and Opening Ceremonies, $17.4 million) and International Expositions ($11.2 million), and 2) Sport ($72.5 million), again due to conclusion of the Vancouver 2010 Olympic and Paralympic Games.
With respect to the decline in sport funding, it should be recalled that some of this funding was sourced through reallocation of cultural spending to sport in the Department’s 2007 Strategic Review. As such, this funding was essentially ‘lost’ to the arts and culture sector in the first Strategic Review process (see next section).
Strategic Review processes and budget freezes
In 2007, the government developed a new Strategic Review process, which involves ongoing expenditure reviews to evaluate whether programs are achieving their objectives, whether they are effectively administered and whether they are in line with Canadians’ priorities and federal responsibilities.
The Department of Canadian Heritage, federal museums and Library and Archives of Canada were among the seventeen organizations participating in the first Strategic Review in 2007. While the $15 million in ‘savings’ identified by federal museums was reinvested over three years in their capital and operating expenditures, the savings from the Department of Canadian Heritage – including some arts and culture funding cuts like PromArt and Trade Routes – were redirected toward three programs: the 2010 Olympic and Paralympic torch relays, the Road to Excellence for summer Olympic athletes, and the Official Languages Action Plan (components of the second and third strategic outcomes of the Department).
Public spending in the arts and culture sector was not under scrutiny in the Strategic Review undertaken for budget 2009, but it was for the 2010 Strategic Review. The CBC, Canada Council, National Film Board and Telefilm Canada all underwent Strategic Reviews for budget 2010 to identify the 5% of their budgets that was ‘low priority’. Fortunately, Budget 2010 noted that “reallocations were not necessary as programs delivered by these organizations are aligned with the priorities of Canadians”.
In Budget 2010, the government announced that Strategic Reviews would henceforth result in hard cuts: funds are not reallocated, but rather cut completely from government spending. Budget 2010 also announced that government organizations would have to absorb the 1.5% increase in annual wages for the federal public service as well as inflation on goods and services. Departments would be required to fund these increases by reallocating within their operating budgets. The Department of Canadian Heritage indicates that the total amount of these additional expenses for 2010/11 is $2.0 million. The Department of Canadian Heritage is scheduled for a Strategic Review in 2011/12, the results of which will be announced in Budget 2012. The Department indicated that no decisions have been made regarding the participation of external stakeholders in this review process.
However, the 2011 Strategic Review process may well be replaced by a different exercise as the government attacks the deficit. In the 2011 federal budget (which died on the order paper when the writ was dropped) the government announced a comprehensive one-year Strategic and Operating Review across the entire government in 2011/12. The Strategic and Operating Review would examine direct program spending, as appropriated by Parliament. About $80 billion of direct program spending will be reviewed with the objective of achieving at least $4 billion in ongoing annual savings by 2014–15 or 5% of the review base. The review will place particular emphasis on generating savings from operating expenses and improving productivity, while also examining the relevance and effectiveness of programs. This review process is surely to appear again in the next budget if the 41st Parliament sees a Conservative minority or majority government, in which case the entire Department of Canadian Heritage Portfolio will be under scrutiny.
* This number includes the Main Estimates and Supplementary Estimates A/B/C for 2010/11
Department of Canadian Heritage Grants and Contributions
Program |
2006-07
|
2007-08
|
2008-09
|
2009-10
|
2010-11
|
Arts and Heritage Sustainability Program |
|||||
Capacity Building |
6,310,043
|
6,310,043
|
6,134,043
|
4,365,479
|
Program component discontinued
|
Endowment Incentives |
14,884,420
|
14,884,420
|
14,884,420
|
14,884,000
|
Program component became part of Canada Cultural Investment Fund
|
Stabilization Funds |
626,760
|
626,760
|
626,760
|
Program component discontinued
|
|
Networking Initiatives |
1,000,000
|
1,000,000
|
1,000,000
|
1,000,000
|
Program component discontinued
|
Arts Presentation Canada Program (Now: Canada Arts Presentation Fund) |
21,418,998
|
20,761,498
|
28,362,112
|
28,362,112
|
27,878,855
|
Building Communities through Arts & Heritage |
3,092,000
|
7,900,000
|
17,655,000
|
19,155,000
|
|
Celebrate Canada! Merged with Celebration and Commemoration Program in 2009/10
Celebration and Commemoration Program
|
12,951,037
|
21,988,600
|
31970426 , 36,336,423
|
45,657,286
|
11,829,533
|
Cultural Capitals of Canada |
3,862,680
|
3,862,680
|
3,862,680
|
3,862,680
|
Program became part of Canada Cultural Investment Fund
|
Cultural Spaces Canada Program (Now: Canada Cultural Spaces Fund) |
26,901,423
|
30,442,423
|
29,342,801
|
58,459,560
|
26,949,850
|
National Arts Training Contribution Program (Now: Canada Arts Training Fund) |
15,903,920
|
16,618,000
|
16,703,920
|
23,542,520
|
22,742,440
|
Canada Cultural Investment Fund (formerly Cultural Capitals of Canada and Endowment Component of Arts & Heritage Sustainability Program) |
18,746,680
|
25,182,705
|
|||
Heritage |
|||||
Commercial Heritage Properties Incentive Fund |
9,873,000
|
||||
Museums Assistance Program |
12,023,284
|
10,098,000
|
14,445,845
|
14,446,000
|
14,576,284
|
Cultural Industries |
|||||
Book Publishing Industry Development Program (Now: Canada Book Fund) |
39,764,798
|
38,094,798
|
37,637,660
|
37,387,660
|
36,666,301
|
Canada Music Fund |
22,889,658
|
22,889,658
|
22,614,982
|
23,364,082
|
25,828,331
|
Canadian Television Fund |
119 950 000
|
119,950,000
|
119,950,000
|
119,950,000
|
Now: Canada Media Fund: 119,950,000 + 14,196,077
|
Canada New Media Fund |
17,032,000
|
14,025,000
|
14,196,077
|
||
Canada Magazine Fund |
16,067,998
|
15,567,998
|
15,381,182
|
14,881,638
|
Now: Canada Periodical Fund 74,774,598
|
Publications Assistance Program |
45,400,000
|
45,400,000
|
45,400,000
|
60,400,000
|
|
Other Grants and Contributions |
|||||
Sport Grants & Contributions | |||||
Athlete Assistance Program |
27,000,000
|
27,000,000
|
26,676,000
|
26,677,000
|
27,000,000
|
Sport Support Program |
97,825,345
|
101,847,481
|
109,563,183
|
101,118,596
|
117,000,972
|
Games’ Hosting Program |
167,585,000
|
148,823,284
|
78,914,404
|
80,784,404
|
16,315,575
|
Celebration and Commemoration Program |
45,657,286
|
11,829,553
|
|||
Official Languages |
|||||
Enhancement of Official Languages Program |
109,219,100
|
108,923,289
|
111,020,927
|
112,010,600
|
111,523,131
|
Development of Official Language Communities Program |
214,828,820
|
216,344,930
|
241,113,473
|
241,695,100
|
226,031,984
|
Aboriginal Peoples’ Program |
66,787,262
|
66,203,732
|
57,757,982
|
59,362,911
|
56,214,907
|
Department of Canadian Heritage, Agencies and Crown Corporations
(Figures in millions of dollars)
Organization |
Total
|
|
|
|
|
Department of Canadian Heritage |
1,459.50
|
1,440.50
|
1,450.00
|
1,448.10
|
1,336.40
|
Canada Council for the Arts |
171.4
|
181.8
|
182.1
|
181.6
|
181.8
|
Canadian Broadcasting Corporation |
1,114.00
|
1,104.00
|
1,157.50
|
1,112.60
|
1,137.10
|
Library and Archives of Canada |
114
|
154.8
|
164.9
|
128.3
|
127.8
|
National Arts Centre |
56.3
|
55.9
|
52.5
|
35.2
|
36.1
|
National Gallery of Canada |
46.6
|
51.4
|
55.5
|
50
|
50.9
|
Canadian Museum of Human Rights |
5
|
26.7
|
55.9
|
||
Canadian Museum of Civilization |
61.5
|
61.9
|
69.3
|
62.7
|
71.2
|
Canadian Museum of Nature |
59.6
|
84.9
|
62.3
|
32.4
|
33.3
|
National Museum of Science and Technology |
30.6
|
32.1
|
35.5
|
34.6
|
35.3
|
National Film Board of Canada |
70.9
|
67.1
|
67
|
65.1
|
68.5
|
Telefilm Canada |
105.2
|
105.2
|
107.8
|
104.7
|
105.7
|
TOTAL |
3,288.90
|
3,339.90
|
3,409.40
|
3,524.40
|
3,421.20
|