Business

Canadian Government Excited About 2018 Budget; Music Industry Not So Much

Canada Parliament building
MarcBruxelle

Close up of peace tower (parliament building) in Ottawa, Canada.

Many Canadian independent music industry professionals are clearly disappointed by Budget 2018, announced by the Government of Canada’s Department of Finance this week.

Tabled by Finance Minister Bill Morneau in the House of Commons in Ottawa, Budget 2018 -- Equality + Growth: A Strong Middle Class -- was guided by a new Gender Results Framework and takes "the next steps towards building an equal, competitive, sustainable, and fair Canada -- where science, curiosity, and innovation spur economic growth," the release states.

"Budget 2018 also renews the Government's commitment to building a new relationship together with Indigenous Peoples, based on recognition of rights, respect, cooperation, and partnership. Furthermore, it remains focused on Canada's future and the things that truly matter to Canadians, with investments that protect our environment, support a sustainable low-carbon economy, and promote equality and prosperity for those who need it most at home and around the world."

"Federal Budget Fails to Support Canadian Music: No mention of support for the Canada Music Fund in Budget 2018," screams the headline in a press release circulated by the Canadian Independent Music Association (CIMA), alleging in the body of the release that "there are not enough dollars currently allocated to the commercial music system to properly invest in the music industry."

CIMA was hoping the Federal government would add as much as $8 million (CAD) to the Canada Music Fund's annual budget, currently at approximately $26 million. The new budget maintains the same amount for the CMF.

"We saw the Cultural Exports Fund as a signal that our industry’s needs are being heard and that the Canadian government is a willing partner in supporting our local industry and creators. Unfortunately, the 2018 budget ends any momentum that was being created," CIMA president Stuart Johnston concludes.

CIMA is a not-for-profit national trade association representing English-language, Canadian-owned and controlled businesses in the domestic music industry -- including producers, labels, studios, managers, agents, licensors, music video producers and directors, creative content owners and artist entrepreneurs -- in all, more than 280 Canadian companies and professionals and 6,200 Canadian artists.

"Current funding programs such as the CMF are over-subscribed and underfunded," said Johnston in the release. "The Federal Government missed an important opportunity to support Canadian creators and the world-class entrepreneurs such as record label executives, managers, and publishers who leverage the Canada Music Fund investments for our artists."

For the past 10 years, there has been "no permanent increase" to the CMF. The former government cut $1 million from the fund in 2012.

In Budget 2016, the Federal budget included an investment into "Showcasing Canadian Talent to the World," where the music sector benefited from a $4.2 million investment over two years.

In September 2017, the federal government "continued to move in the right direction," CIMA acknowledges, with its commitment to expand market access and export opportunities for all cultural industries by investing $125 million in Canada’s first Creative Export Strategy, including the creation of the Cultural Exports Fund.

Requesting an increase of $8 million to the Canadian Music Fund, Johnston tells Billboard, "Our advocacy on this began a year or more ago, which quite literally involved many dozens of meetings, emails and phone calls with the Department of Canadian Heritage and the Finance Department officials. We also provided written submissions to Heritage, as well as to the pre-budget process of the Finance Department. We also engaged the broader industry, which collectively sent more than 70 letters of support to the Finance Minister and the Heritage Minister."

"Our funding request was echoed by others in the industry as well," he added. "To say our disappointment is palpable is an understatement."

Of note, however, Music Canada was "pleased to see" that Budget 2018 "illustrates the Government's commitment to reforming the Copyright Board of Canada."

Budget 2018 advances the Government’s Intellectual Property Strategy, as well as outlines measures to modernize Canada’s regulatory frameworks. Recognizing the need to promote efficient and predictable regulation within these frameworks, the Budget proposes support for the Government to "pursue a regulatory reform agenda focused on supporting innovation and business investment."

"Reforming the Copyright Board of Canada has for years been a top priority for creators and the businesses that support them," Music Canada president & CEO Graham Henderson said in a statement. "Music Canada extends our appreciation to the Government, particularly Ministers Bains and Joly, for taking the next step in modernizing this institution, which is vital for Canada’s cultural industries."

To those outside of Canada, and unfamiliar with the Canadian government’s support of the arts, there are grants on the municipal, provincial and federal level.

For example, the Ontario Music Fund, administered by the Ontario Media Development Corporation (OMDC), doles out considerable grants to dozens of Ontario-based music companies each year, among them: Arts & Crafts Productions and Dine Alone Music each received $500,000 in the 2016-2017 round; ole Media Management $450,000, Last Gang Records $250,000, Live Nation Ontario Concerts, $150,000, Universal Music Canada, $800,000, Warner Music Canada $550,000, and Sony Music Entertainment Canada $400,000.  CIMA received $90,000 and $425,000 (see full list here). The Province of British Columbia does the same through the BC Music Fund, which was announced in 2016 and is administered through Creative BC.

"In terms of the Canada Music Fund, we consider the range of grants that companies, artists and associations receive as an investment in their businesses," Johnston tells Billboard. "Since the industry typically cannot qualify for traditional bank loans, access to capital and cash flow are major challenges for them. So these grants are leveraged by the companies to invest in their artists. And I have to point out that the major labels can only qualify for Ontario Music Fund grants. The focus of my remarks and yesterday's budget involve the Canada Music Fund, in which only Canadian owned and controlled companies can qualify. The CMF in part also funds FACTOR and Musicaction, so it's not all directed (directly) by the feds."