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What Artists & Art Orgs Need to Know About Budget 2014

The federal budget was released on Tuesday, and while it’s difficult to determine just what the exact art-sector consequences are, given the intricate way that funding systems work, there are some early signs. Here are some of the key points.

1. Funding for the Canada Council and some other core heritage programs appears to be holding steady—which can read as both good and bad.

One thing touted in the budget was $105 million per year in core arts programs, including $25 million for the Canada Council for the Arts, $30.1 million for the Canada Cultural Investment Fund, $30 million for the Canada Cultural Spaces Fund, $18 million for the Canada Arts Presentation Fund and $1.8 million for the Fathers of Confederation Buildings Trust.

However, this is not new funding—it was funding that the Canada Council was already applying for and getting every year of late. What this announcement simply assures is that the Canada Council and the other programs will get this same amount of funding every year starting in 2015, without having to apply for renewal of that funding annually.

Also worth noting is that this funding announcement doesn’t cover the council’s entire budget—the total annual budget of the Canada Council is $181 million, not $25 million. And while the government document uses the word “permanent” in referring to this change, most sources agree that “permanent” in these documents means five years.

As a result, members of the arts community have voiced both pros and cons about this Budget 2014 announcement.

“It isn’t new money,” says Kate Cornell, a spokesperson for the Canadian Arts Coalition, “but it’s money [the council] doesn’t have to apply for every year, so it’s really a vote of confidence in the Canada Council that the coalition is very happy about.”

John McAvity, executive director of the Canadian Museums Association, also supported the announcement. “We’re pleased with the budget—certainly there were no cuts to our sector and the government has really maintained its commitment to heritage and the arts.”

However, Anne Bertrand, director of the Artist-Run Centres and Collectives Conference, voiced concern about this announcement, pointing out that “stability” in funding can also be regarded as “stagnation.”

“If anything, the stagnation represents a progressive attrition as expenses continue to rise, as does the number of applicants to existing programs,” Bertrand said via email. “[Canadian Heritage] programs are renewed with no increases; unfortunately, the visual arts are not well served by this budget as [those] programs mostly cater to the performing arts.”

Still, Bertrand notes, “In the current climate”—for example, the fact that this budget was framed as being focused on deficit reduction—“the arts community is grateful that budgets are maintained.”

2. The Canadian Museum of History, a particular focus for the federal government, will take over the Virtual Museum of Canada as well as another online resource about Canadian heritage.

Budget 2014 proposes to move funding and responsibility for the Virtual Museum of Canada to the Canadian Museum of History—the development of which is a particular focus of the current government and began in late 2012 with an announcement of “the Harper Government’s intention to introduce legislation creating the Canadian Museum of History, the first in a series of measures on the road to Canada’s 150th birthday in 2017.”

Whether this change, due to take place in 2015, will lead to staffing changes at the Virtual Museum of Canada (which has to this date been relatively independent) is unclear. A spokesperson from Canadian Heritage stated in an email that “It is too early to confirm at this stage what will be the impact of this decision on Canadian Heritage employees. Decisions will be taken and communicated to staff as information becomes available.”

When asked about the potential impact on museums in Canada, John McAvity of the Museums Association said that “the Virtual Museum of Canada is a funding program that benefits us all.” He also said that if it’s just being administered by the Canadian Museum of History, then it falls in line with the network of travelling resources that Canadian history museums are currently trying to develop.

The Canadian Museum of History will also take over funding and responsibility for what the government calls “Online Works of Reference”—which includes components of and access to The Canadian Encyclopedia, The Encyclopedia of Music in Canada and The Dictionary of Canadian Biography. When asked about this development, Canadian Encyclopedia publisher Anthony Wilson-Smith said the publication’s present funding arrangement is up for renewal March 31. “The fact that we are specifically mentioned in the budget is of course encouraging,” Wilson-Smith said. “But again, we don’t yet know more.”

The Budget also mentions ongoing funding of $4.2 million for the Virtual Museum of Canada and ongoing funding of $1.2 million for Online Works of Reference—which, again appears to not be new funding, but simply funding that was due to end and has been renewed.

When asked why the responsibility for the Virtual Museum of Canada was being extended to the Canadian Museum of History, rather than another Canadian museum, a Canadian Heritage spokesperson stated via email that “the mandate and objectives of the Virtual Museum of Canada naturally complement the purpose of the Canadian Museum of History to enhance Canadians’ knowledge, understanding and appreciation of events, experiences, people and objects that reflect and have shaped Canada’s history and identity. The Canadian Museum of History is leading the establishment of a network that will connect history museums across this country for the benefit of all Canadians. Through these partnerships, and in tandem with the Virtual Museum of Canada, the Canadian Museum of History will make our national collections accessible to as many Canadians as possible.”

3. There are new guidelines around donations of certified cultural property which could affect art collections of major museums and galleries.

Many Canadian art museums and galleries rely on donations of certified cultural property for building their collections. And to date, donors have been rewarded by being able to claim a capital gains exemption on donations of certified cultural property—that is, they are able to receive a tax exemption based on the current value of an artwork, rather than what they originally paid for it.

However, Budget 2014 expresses a concern that “certified cultural property could be a target for abuse by tax shelter promoters because of the combination of its favourable tax treatment, inherent uncertainties in appraising the value of art and artifacts, and the exemption from the rule that deems the value of a gift to be no greater than its cost to the donor in certain circumstances.”

As a result, “Budget 2014 proposes to remove, for certified cultural property acquired as part of a tax shelter gifting arrangement, the exemption from the rule that deems the value of a gift to be no greater than its cost to the donor.”

This measure is to take effect immediately after budget day. However, the budget notes other donations of certified cultural property—i.e. ones not acquired as part of a tax shelter gifting arrangement—will not be affected by this measure.

The results of this measure in the cultural sector are yet to be seen.

4. Still no stable long-term funding guarantee for the CBC, NFB, or Telefilm.

While some in the arts were pleased with the budget, ACTRA (Alliance of Canadian Cinema, Television and Radio Artists) issued a critical press release following the budget announcement.

It says that “ACTRA has asked the federal government to guarantee stable, long-term funding for the CBC, NFB, Telefilm and increased funding for the Canada Media Fund. ACTRA is also looking to the federal government to make regulatory changes to re-introduce income averaging for artists, and to sign and ratify the Beijing Treaty, thereby extending moral and economic rights to audio-visual performers.”

Since none of these were in the budget, ACTRA national president Ferne Downey stated, “Culture is not a frill, it’s a major industry based on renewable resources. It’s unfortunate that the government found no room in their budget to recognize this.”

5. There are still many other areas where the arts would like to see budget progress—and are hoping to see it in the pre-election budget of 2015.

While the Canadian Arts Coalition’s Kate Cornell was pleased that Canada Council funding was remaining stable, she also noted that that is only one of three action points requested by the coalition.

The second budget item the coalition would like to see in future is a 10 per cent increase to the operating budget of the Canada Council, which would provide a total of $300 million per year.

The third item CAC would like to see is a restoration of funding for programs that support international touring of Canadian artists. “It used to be embassies would support performing artists when they were going to various countries,” Cornell said. That’s the kind of support she is hoping to campaign for towards 2015.

For his part, John McAvity of the Canadian Museums Association said his members would like to see approval of a donations-matching program they have been proposing to MPs. He is also looking forward to that in coming years.

“I think the main thing is, this budget is continuing to deal with the deficit,” McAvity said. “Next year, it’s a whole other story as we are looking at a budget before an election.”

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