Challenges Facing the Cultural, Heritage and Sport Sectors Today
The focus today is on the cultural, heritage and sport sectors, which collectively employ 750,000 Canadians, contribute $61.9B annually to national GDP, and whose products - arts, books and music – have provided Canadians comfort, community and a sense of common identity during these turbulent times.
As you know, the cultural, heritage and sport sectors were among the first to suffer widespread closures, cancellations and associated losses due to the pandemic and public health guidelines on live venues - and will be among the last to return to normal operations, perhaps beyond 2021.
There has been severe damage to these sectors as a result, which are already vulnerable due to being overwhelmingly comprised of small-to-medium organizations, heavily reliant on not-for-profit models of operations and operation in market failure conditions.
The figures bear out the challenges facing these sectors. Statistics Canada estimates that the seasonally adjusted real GDP in 2012 dollars of the ‘Information and cultural industries’ sub-sector in July 2020 showed a roughly $3.0B drop from February 2020.
The real GDP of the ‘arts, entertainment and recreation’ sub-sector stood at $7.3B in July 2020, against $15.6B in February 2020 – a fall of over 50% in just four months.
The total labour force in performing arts, spectator sports and related industries was -19.2% lower in September 2020 compared to September 2019.
While incomplete, the picture to date is of fragile sectors, uniquely vulnerable to the effects of this pandemic – without support, many organizations would have ceased operations already, and many are still in danger.
Developing Departmental Response
As the pandemic deepened, the Government responded – on April 17, 2020, the Prime Minister announced $500 million to establish a new COVID-19 Emergency Support Fund for Cultural, Heritage and Sport Organizations.
The Department designed the fund to complement the Government’s existing COVID-19 support measures, including the Canada Emergency Response Benefit and the Canada Emergency Wage Subsidy.
The key principles for the ESF were that the funds should flow as quickly as possible, that the process be streamlined wherever possible, and that applicants who are not normally recipients of PCH funding be included when disbursing funding, within the parameters of the Department’s mandate.
The ESF also built on pre-existing measures announced on March 25 2020 to simplify the process for submitting and processing requests for 2020–21 funding for the Canada Book Fund and Canada Periodical Fund, which allowed eligible beneficiaries to complete applications and access financial assistance much more quickly than usual.
The Department also independently accelerated the distribution of existing funding to eligible recipients, and designed a range of other measures to complement ESF funding and address other critical issues facing the culture, heritage and sport sectors.
Rolling Out Departmental Response
The emergency funding began in May 2020, and was disbursed in two phases – A first phase took advantage of existing funding mechanisms to advance approximately $307M in temporary additional funding to recipients already benefitting from program funding, via a number of Departmental funding programs, and from the Canada Council For the Arts and Telefilm Canada.
Phase II funding was disbursed based on gaps identified after Phase I, related to program coverage, diversity/equity and regional distribution – it included $45M for special measures in support of journalism under the Canada Periodical Fund, $25M for independent broadcasters investing in news and community broadcasts, and $52.1M to arts and culture organizations that were not previously eligible for funding from Canadian Heritage programs.
The Department was also highly reliant on its partners, in particular the Canada Council for the Arts, Telefilm Canada and the Canada Media Fund as well as FACTOR and Musicaction, for their assistance in distributing the funds through a streamlined process that facilitated the rapid distribution of funding in a consistent manner across organizations.
Apart from the ESF, the Government supported broadcasters by flowing funding to Canadian Radio-television and Telecommunications Commission to enable the waiving of Part I license fees for the 2020-2021 fiscal year, and earmarked $25.7M for national museums and the National Battlefields Commission.
As the ESF winds down, we are administering a survey to recipients of the Emergency Support Fund to help assess the effectiveness of the funding in terms of financial relief, employment impacts and various social impacts.
Already, Phase 1 Emergency Support Fund recipients responded in high numbers to the survey and 77% of respondents said the Fund helped them stay in operation to a large or moderate extent, highlighting how critical the response was just to help our sectors stem the tide of losses.
Timelines
To give you an idea of the speed with which all this occurred:
The Prime Minister announced the ESF on April 17, 2020.
Minister Guilbeault announced the launch of the program on May 8, 2020.
The other measures I referenced were rolled out in parallel with the ESF in the summer of 2020.
Over 96% of funding ($482M) had been dispersed by the Government-wide deadline of September 30 2020 for emergency response mechanisms like ours, and had reached over 10,000 recipients.
The remainder will be dispersed by December 31, 2020.
The Department is aware that more needs to be done to support the sector during this pandemic, and is developing policy options for consideration as part of the Fall Economic Statement and Budget 2021 – these options will be informed by the results of a series of 22 town halls and roundtables conducted by Minister Guilbeault with stakeholders in September and October 2020, which highlighted the vulnerable state of the sector and potential areas of action going forward.
