Ontario Government Explains Why It Gives Major Labels, Other Established Music Companies Big Grants

Tara Walton/Toronto Star
The Honourable Michael Coteau, Minister of Tourism, Culture & Sport, Ontario.

The Ontario government just awarded $14 million (CAD) to 123 music companies in the second round of provincial funding from the Ontario Music Fund for 2014-15.  All successful applicants are required to provide matching funds.

Among the recipients were all three major labels -- Universal Music Canada Inc. ($1.2 million), Warner Music Canada Co. ($750,000), Sony Music Entertainment Canada Inc. ($475,000) -- plus Live Nation Ontario ($175,000), Dine Alone Music Inc. ($600,000), Arts & Crafts Productions ($650,000), Canadian Music Week ($150,000), OVO Sound ($45,000), Metric Productions ($180,000), Ole Media Management Inc. ($463,000), Last Gang Records Inc. ($198,000), The Anthem Entertainment Group Inc ($267,000), Coalition Music Inc. ($198,000) and Zeds Dead Inc. ($283,000). Some received money from more than one category, such as the Ottawa Bluesfest ($200,000 and $120,000) and The Corporation of Massey Hall and Roy Thomson Hall ($200,000 and $175,000). The full list can be read here.

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“The fund provides grants to music businesses -- large and small -- that produce, distribute and promote Ontario-based music and artists,” it states in the news release. “This support is helping create a business environment where Ontario’s talented artists from diverse musical genres and backgrounds can grow and thrive, while helping the industry become even more competitive internationally.

Billboard spoke with The Honourable Michael Coteau, Minister of Tourism, Culture & Sport, Ontario, about the allocation and accountability.

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Billboard: How do you determined which companies receive this grant money?

Michael Coteau: We have four funded streams for music: the Music Company Development fund, Music Futures, Live Music and Music Industry Development. And within that, you’ve got the multi-national domestic companies. But when it comes to our record labels that are eligible for funding, domestic music companies take the majority of that money. So it’s about us making sure, at the end of the day, that we support our local folks, but we also realize that the multinational companies are essential for distribution, internationally. So it’s about developing our home talent and accessing those channels that are out there for international export.

Why would a multinational corporation -- Universal being the largest record company in the world -- need a million dollars that could go to help more of the upstarts?

We want to make sure that groups like Universal and the other multi-nationals are developing Canadian-based artists. For example, the Canadian Tenors are recording here in Ontario, versus previously, their last album was cut in Europe. It’s about making sure that there’s an incentive to keep our talent here and allowing them to record in Canada. The Canadian Tenors are a perfect example of what this fund has been able to do. So keeping talent here and developing that expertise and production in Ontario.

Many of the same names received funding on the last round (2013-14) as this one. How do you vet where the last batch of money was spent by these companies? If it was well-spent and if they made sound business decisions with it before, you gave them another big chunk the following year?

We had 160 eligible applicants who applied and if you added up that amount it equaled about $34 million in requested funding. We issued 136 grants to 123 different companies. There’s such a huge volume of different requests and obviously we’re going to fund the applications that are most aligned with the criteria that we set, but the applications were evaluated through a process through the OMDC [Ontario Media Development Corporation], based on a set of criteria for each of the four streams.

Auditing or vetting even one company would takes weeks. If you’ve got dozens to check where the money was spent -- and see if it did bring increased funds back into the company, and hence, to Ontario and Canada, as well as creating jobs -- how many people do you have going through the applications or do you not go through them with a fine tooth comb?

The reports that we get from our agency [the OMDC] that have come from the companies that actually received money in the previous year, the overall numbers that we get from our agency is that there’s been a 60 percent growth in the area that they were funded, 2000 jobs have been created and over $24 million in new revenue have been brought forward in that sector.

So everything is verified before you give them more money?

Absolutely. The government, making sure of that accountability, this is the biggest challenge that governments in general have, and that’s making sure folks who are receiving hard-earned tax-payers dollars are accountable for the spend. So when we give money to an organization, they have to have a history of financial transactions; they have to meet a certain criteria; and they’ve got to demonstrate that at the end of the day they are contributing to the economy. This is about building Ontario’s identity through music. The foundation for what we’re trying to do here is build the economy through developing a stronger recording, live music, artist based sector.

Is a year enough for you to gauge whether the money these companies have got reaped these results? 

No, you know what, to be fair, maybe obviously a year gives you some perspective, but this is a three-year program; we just launched the second year of the program. We will have a better ability to monitor and gauge those results as year two and year three close. We put in place some different measurably tools and we’ll have a better assessment at the end of this. But we know that since 2010, the sector overall has grown by 6.4 percent and we are going to continue to develop a strong sector here in Ontario. We don’t want to just compete here in Canada; we want to compete at the international level. We want to make sure that Ontario, representing over 80 percent of the music sector in Canada, that we’re competing with New York or competing with Los Angeles; we’re competing with Texas; we’re competing with Nashville. We want to compete to be the best in Canada, but we want to go further than that and be one of the top jurisdictions in the world.

It is good to be able to look at this list of 123 companies and recognize the names -- they are proven entities. But there are always going to be other people with new ventures -- especially with the current state of the music industry, you have to come up with innovative ways to promote and sell music. Are they able to access this money, upstarts without a proven track record?

That is probably one of the most important questions. Always the status quo is going to be the status quo, but how do you continue to develop a sector? Obviously you help the organizations, but you have to make sure those up-and-comers are getting access to that type of funding and that’s why we put those Music Futures in place. It’s to develop our diverse and emerging music sector here in Ontario, including people who like the business side of things and also the artists. So we’re sure that one of the streams that is funded is the Music Futures to support the up-and-comers because, think about music in general, 10 years ago no one knew an international star like Drake or people like Justin Bieber. These are people 10 years ago that were just learning the craft, breaking into the scene, and here they are now with top 10 hits internationally. So we need to continue to support those artists and the business side of that art form as well. It’s a very important piece for us.