2011 federal budget from the arts and culture perspective

CCA Bul­letin 11/11

March 22, 2011

Just the Facts

After releas­ing the 2011 Main Esti­mates sev­eral weeks ago, the Hon. Min­is­ter of Finance, James Fla­herty, today tabled a much antic­i­pated 2011 fed­eral bud­get. Titled: The Next Phase of Canada’s Eco­nomic Action Plan: A Low-Tax Plan for Jobs and Growth, this is the first bud­get fol­low­ing the end of the government’s Eco­nomic Action Plan.

Accord­ing to the gov­ern­ment, the reces­sion has ended, and thus, the econ­omy no longer requires stim­u­lus fund­ing. The big ques­tion was whether the bud­get would offer enough good­ies to at least one of the oppo­si­tion par­ties to keep the gov­ern­ment in power and avoid an elec­tion. As it turned out, all three par­ties, includ­ing the NDP, rejected the bud­get imme­di­ately and it is evi­dent that Cana­di­ans will soon go to the bal­lot boxes.

Today, the CCA pro­vides a first blush review of how the 2011 fed­eral bud­get would have impacted Canada’s arts, cul­ture and her­itage sec­tors had it been passed.

Tell me more

The gen­eral the­sis of the 2011 bud­get claims that the gov­ern­ment will build on the suc­cess of the Eco­nomic Action Plan. Sup­port for the cre­ative econ­omy in the Eco­nomic Action Plan amounted to $335 mil­lion in invest­ment. Accord­ing to the gov­ern­ment, the next phase’s low-tax plan for jobs and growth will lay the foun­da­tion for long-term pros­per­ity by sup­port­ing key dri­vers of eco­nomic growth – inno­va­tion, busi­ness invest­ment, fam­i­lies, com­mu­ni­ties, edu­ca­tion and train­ing – in a respon­si­ble man­ner that pre­serves Canada’s fis­cal advantage.

Cul­tural Funding

In this ver­sion of the 2011 bud­get, we see the next phase of Canada’s Eco­nomic Action Plan put into place to sup­port cul­ture and com­mu­ni­ties, and invest­ing in inno­va­tion, edu­ca­tion and training.

In terms of arts and cul­ture, we see more or less the sta­tus quo, includ­ing fund­ing con­tin­ued to grants and con­tri­bu­tion pro­grams, some on an ongo­ing basis, as well as a hand­ful of one-time investments:

• Renewal on an on-going basis (as opposed to an annual renewal) of $100 mil­lion per year to the Canada Media Fund to invest “in the cre­ation of con­ver­gent dig­i­tal con­tent across mul­ti­ple plat­forms, includ­ing tele­vi­sion and leading-edge appli­ca­tions for Inter­net, wire­less and other emerg­ing platforms”;
• On-going fund­ing of $15 mil­lion per year to the Canada Peri­od­i­cal Fund to sup­port a broad range of pub­li­ca­tions and ensure a diver­sity of Cana­dian con­tent in 2011-12 and 2012–13;
• $25 mil­lion over five years to renew fund­ing for the Har­bourfront Cen­tre in Toronto;
• Renewal for 2011–2012 of the $60 mil­lion granted to CBC/Radio-Canada for the “pro­duc­tion of high-quality Cana­dian programming”;
• Grant­ing of a one-time invest­ment of $7.5 mil­lion to the Royal Con­ser­va­tory of Music to launch a national exam­i­na­tion sys­tem in part­ner­ship with Carnegie Hall

In this bud­get we also see a tar­geted focus at ‘dri­ving inno­va­tion’ through Canada’s Dig­i­tal Econ­omy Strat­egy – for which the CCA con­tributed a brief in the sum­mer of 2010. The bud­get rec­og­nizes that the dig­i­tal econ­omy is woven into a mod­ern knowl­edge econ­omy and it sets the stage for the release of Canada’s Dig­i­tal Econ­omy Strat­egy later this spring. The bud­get does so by intro­duc­ing new mea­sures focused on accel­er­at­ing adop­tion of infor­ma­tion and com­mu­ni­ca­tions tech­nolo­gies at small and medium-sized busi­nesses, prepar­ing stu­dents for careers in the dig­i­tal econ­omy, and build­ing Canada’s dig­i­tal con­tent through the Canada Media Fund.

Build­ing on the end of the Eco­nomic Action Plan and its $3.8 bil­lion to advance Canada’s knowl­edge econ­omy, the March 22nd bud­get estab­lishes 10 new Canada Excel­lence Research Chairs. Some of these new chairs will be active in fields rel­e­vant to Canada’s Dig­i­tal Eco­nomic Strat­egy. These invest­ments are meant to help develop and attract tal­ented peo­ple, to strengthen Canada’s capac­ity for world-leading research and improve com­mer­cial­iza­tion, to accel­er­ate pri­vate sec­tor invest­ment to enhance the abil­ity of Cana­dian firms to par­tic­i­pate in global mar­kets, and to cre­ate an advan­tage for Cana­dian business.

Tax Credit

The bud­get is pep­pered with a series of tax cred­its for a num­ber of Cana­di­ans, and there is one that con­cerns the arts. This is pos­si­bly the only new item for the arts in this 2011 bud­get, and is in fact the rein­tro­duc­tion of a promise made dur­ing the 2008 elec­tion. The pro­posed 15% Children’s Arts Tax Credit, pro­vided on up to $500 of eli­gi­ble expenses for pro­grams asso­ci­ated with children’s artis­tic, cul­tural, recre­ational, and devel­op­men­tal activ­i­ties, would trans­late into annual returns of $75 for par­ents. The CCA orig­i­nally asked for this tax credit in April 2006 and wel­comes it as a recog­ni­tion by the gov­ern­ment that arts train­ing is just as impor­tant as phys­i­cal train­ing for Cana­dian children.

This credit will be based on the eli­gi­bil­ity con­di­tions for the Children’s Fit­ness Tax Credit. The credit will be avail­able for chil­dren under the age of 16 years old for reg­is­tra­tion costs asso­ci­ated with par­tic­i­pa­tion in qual­i­fy­ing super­vised activ­i­ties. Accord­ing to the bud­get, this mea­sure will apply to eli­gi­ble expenses paid start­ing in the 2011 tax­a­tion year. It is esti­mated to reduce fed­eral rev­enues by $25 mil­lion in 2010-11, and by $100 mil­lion in each of 2011-12 and 2012–13.

Review of all Gov­ern­ment Expenditures

As noted in the CCA’s 2010 bud­get analy­sis, fed­eral gov­ern­ment depart­ments and agen­cies are cur­rently under a spend­ing freeze and over the past four years, all of them have under­gone strate­gic reviews. Last year the National Film Board of Canada, Tele­film, CBC and the Canada Coun­cil for the Arts were sub­ject to such reviews of their direct pro­gram spend­ing. How­ever, no real­lo­ca­tions were nec­es­sary as pro­grams deliv­ered by these orga­ni­za­tions were found “to be aligned with the pri­or­i­ties of Cana­di­ans.” The strate­gic review process is gen­er­ally con­ducted on a rotat­ing basis every four years.

Mov­ing away from this model, the 2011 bud­get announces a com­pre­hen­sive one-year Strate­gic and Oper­at­ing Review across all of gov­ern­ment in 2011-12. The Strate­gic and Oper­at­ing Review will 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.

What can I do?

Read the 2011 fed­eral bud­get and com­ment on our blog on how you think this bud­get will affect Canada’s arts, cul­ture, and her­itage sec­tor. Please also con­sult our list of all men­tions of the words: “art”, “arts”, “cul­ture” and “cul­tural” found in the 2011 fed­eral budget.