Welcome back, everyone.
Everyone seems to be, with the exception of myself, virtual today, but these are the days that we're in.
We are studying, with witnesses today, challenges and issues faced by the arts, culture, heritage and sport sectors during the COVID-19 pandemic. Pursuant to Standing Order 108(2), the committee resumes its study on the challenges and issues faced by the sector. We moved the motion on October 23, 2020.
We have two hours today. We have one full panel and we have a second panel coming in an hour from now.
Again I'd like to remind our witnesses that you have up to five minutes to begin. Following that, there will be questions and answers from our MPs, respective of the parties and the time allotment. We'll get to that in just a few moments.
I just want to introduce the people here today.
We have with us a representative from the Association québécoise de l'industrie du disque, du spectacle et de la vidéo.
We have Solange Drouin, vice-president and executive director, public affairs. From Drayton Entertainment, we have Alex Mustakas, artistic director and chief executive officer, and from Music Canada, we have Patrick Rogers, vice-president, corporate affairs.
It's good to see you all.
We're going to start out with five minutes for an introduction and an opening speech. I will be somewhat lenient, but these hours can close very quickly, as many of you would know.
Ms. Drouin, you have the floor for five minutes.
Good afternoon, everyone.
Thank you for inviting us to appear before you today.
Before getting to the heart of the matter and talking about the pandemic, I'd like to take a few minutes to describe the world of music to you.
Globally, this environment is very largely dominated by three big multinational companies: Sony, Universal and Warner. Those three enterprises are present in Canada. Here, they distribute the musical content from international artists and they also develop the careers of Canadian artists they feel can be of international scope, such as Drake or The Weeknd, whom you know.
These three large corporations have virtually nothing to do with the production of Canadian francophone content or that of Quebec artists who speak other languages. Those Canadian francophone artists are almost all allied with independent enterprises that develop their careers here or internationally, in some cases. It goes without saying that the size of these independent businesses cannot compare to that of the three global enterprises.
It will be important to keep that in mind when you analyze the effects of the pandemic on our sector.
All businesses have suffered from the pandemic, of course. On the other hand, independent businesses do not have the same resources as multinationals to cope with it.
To understand our industry, the other thing to take into account is that income for the entire chain of music stakeholders comes primarily from three sources: revenues from the sale of recorded music, from the sale of concert tickets, and finally, funds and contributions from the use of music on the radio and in public places, for example.
With respect to recorded music sales, as you know, since 2005, these revenues have shrunk considerably in favour of streaming, without generating equivalent revenues, far from it. The pandemic has further accelerated this irreversible phenomenon.
The pandemic has also had a catastrophic effect on ticket sales due to the closure of venues. Under normal circumstances, revenues from this activity represent nearly 50% of total business revenues. However, the industry has been totally deprived of this for several months. This loss has had a devastating effect on the entire chain, since more than 75% of expenditures in this sector go to labour, including artists, back-up singers or choristers, musicians, technicians and designers, among others.
Finally, other revenues from music use have also suffered huge declines and will continue to do so. For example, in radio, royalties paid are calculated as a percentage of advertising revenues. As advertising revenues are declining, so are the resulting royalties for authors, performers and producers.
The portrait I'm painting for you is quite dark, I agree. However, the response of our community to the pandemic has been surprising, and even inspiring. Instead of giving up in the face of the enormity of the challenges, the music community has continued to work tirelessly to keep the link between artists and audiences alive.
Since the lockdown, in Quebec alone, several hundred albums have been released. All kinds of activities and shows have been created, such as virtual shows, shows on balconies and in drive-in theatres, and the production of music videos has continued. In short, the independent Canadian companies that accompany the artists have remained open and active.
All of this was made possible thanks to additional funding from the federal and Quebec governments. We have said it several times and we say it again today: thank you for this essential support.
These emergency payments provided our community with some predictability until March 31, 2021. Beyond that date, as it were tomorrow morning, the outlook for the future becomes blurred and uncertain. In fact, a broad consultation with our members revealed a great fear that 2021 will be worse than 2020. This is a fear to which is obviously added the exhaustion of the teams and the accumulation of losses.
Our independent companies have always been dynamic but fragile. The pandemic has made them even more fragile, and their capacity to produce, market and distribute music and shows for local artists has been reached.
In the coming months, a recovery plan must be implemented over as long a period of time as necessary, so that the Canadian and francophone music community can continue to make quality music in all its diversity accessible to Canadian audiences everywhere. To achieve this, financial investments will be necessary, of course.
In addition, the pandemic has exacerbated the urgency of revising two framework laws for our sector.
First of all, I'm talking about the revision of the Broadcasting Act. Bill , currently before Parliament, establishes a framework for online businesses, often foreign, and will ultimately subject them to regulation that will enhance our content and financial contributions. This legislative review must be completed before the next election. We cannot flub this historic event.
The revision of the Copyright Act is another tool you can give the cultural community to ensure its sustainability. For example, the private copying regime, which has been successful for many years, must be reinstated.
Thank you for your attention. I'll be pleased to take your questions.
Thank you, Mr. Chair and committee members, for allowing me a few minutes to crawl back in from the window ledge to appear before you today.
I'll give you just a bit of background. Drayton Entertainment is an award-winning charitable arts organization that produces professional live theatre at a circuit of seven venues throughout Ontario: the Hamilton Family Theatre Cambridge; the St. Jacobs Country Playhouse and the Schoolhouse Theatre, Kitchener—Conestoga; the Drayton Festival Theatre, Perth—Wellington; two stages at the Huron Country Playhouse in Grand Bend in Huron—Bruce; and, the King's Wharf Theatre in Penetanguishene, which is in Simcoe North. We also have a centralized production facility and recently announced youth academy in Waterloo.
What began as a relatively community-based volunteer arts organization back in 1991, a grassroots movement 30 years ago in the tiny village of Drayton, Ontario, has become one of the great success stories of Canadian theatre. Back then, there was one employee, a legion of volunteers, a nine-week season and a paid attendance of 14,000, with a modest budget of $99,000. Fast-forward to the 2020 season—the pandemic season—a season that would have consisted of 832 performances throughout the province to a paid attendance of over 275,000, with a $12.5-million budget and an estimated economic impact exceeding $65 million.
Drayton Entertainment now provides over 400 employment contracts to actors, musicians, designers and other creatives, making us one of the largest employers of professional artists in the country. Additionally, we employ upwards of 175 staff and have an active network of 550 volunteers contributing over 30,000 hours annually.
The remarkable thing I would like to note is that since our inception—because I've been here since the inception, and some of my staff would say it's too long—we have received zero operating funds from any level of government or arts councils. Of course, we have benefited from the occasional federal investment in capital infrastructure upgrades or expansions, resulting in a substantial return on investment.
The pandemic has impacted us in many theatres in three noteworthy ways. Firstly, the loss of all programming has caused significant hardships not only for us, but also for our municipality, tourism and hospitality sector partners, who rely on us as a major driver of regional economies.
Secondly, what we do is communal by nature, and this makes recovery a daunting prospect for any business.
Thirdly, despite the lifeline of the emergency wage support and the emergency response benefit, with no revenues to cover our fixed operating costs we've been forced to terminate all artist contracts and lay off the majority of our staff. It pains us to be in this position, of course. Along with our industry colleagues, we've mitigated financial losses, reduced overhead and minimized expenses through every possible means.
As we continue to navigate these challenges, we've identified four support recommendations to the standing committee.
I will start with number one, and that is a fair and transparent application process to access government funds. Criteria should be expanded for any current or future aid programs to include eligibility for those organizations that do not already benefit from annual operating funds from any tier of government. In short, arts organizations like ours should not be overlooked for not being a client of these entities and the subsidies or grants they provide. Earlier this year, the government announced that $55 million was allocated to the Canada Council for the Arts, which opted to disburse to just its current clients, with no opportunity for the rest of us to apply and make a compelling business case for support.
The second recommendation we would have is to top up the wage supports. We would respectfully recommend that the emergency wage subsidy restore the maximum 85% rate for the hardest hit sectors. This would allow us the flexibility we need to bring back workers to position our recovery. Even with the current wage subsidy program, which we are very grateful for, many arts organizations are operating with little to no revenue, unable to sustain the top-up wages or benefits required to retain our teams.
The third recommendation is mitigating fixed costs. Restrictive measures such as operating to a maximum of 50 audience members has the same net effect as a complete shutdown for us. With the new emergency rent subsidy program, there is concern that arts organizations may qualify for only the additional 25% top-up support in the event of a total lockdown, and that's determined by regional health authorities. Expanding this eligibility criteria would greatly benefit a sector whose venues have been largely sitting empty since March.
For our fourth recommendation—my personal favourite—if I were king of the world, I would create an arts recovery incentive fund. As we look to the future, a dollar-matching arts recovery incentive fund similar to the ministry's very successful arts endowment incentives program would enable arts organizations to tap into the philanthropy of our audiences, who would know that their gifts would be matched by the Government of Canada. I just believe all stakeholders would feel they have so-called “skin in the game” when it comes to recovery.
In closing, Mr. Chair, on a personal note, other than our industry's staggering financial losses, the mental health of our members is of utmost importance. A professional musician I spoke to recently said with tears in his eyes that being a musician is all he's ever done in his life. An actress, who has the weight of the world on her shoulder, said that she's trained for this all her life, but now wonders whether it's time to leave the business.
We need the creative sector. COVID-19 has been devastating to our emotional well-being.
Charlie Chaplin once said that he likes to walk in the rain, so that no one can see his tears. I hope you can see us through the rain right now because we can certainly use your help.
Thank you very much.
It's good to see you, Mr. Chair. Thank you for this opportunity.
My name is Patrick Rogers, and I'm the interim co-CEO of Music Canada. I'd like to thank the committee for the opportunity to speak today.
Music Canada is the trade association to Canada's major record labels: Sony Music Entertainment Canada, Universal Music Canada and Warner Music Canada. Normally, our work focuses on promoting and protecting the value of music, which helps artists and the businesses that support them to thrive and contribute to our economy and culture. However, in March when the Canadian music industry was forced to cancel the Junos the same week as North American sports were shut down, and as Canadians stopped gathering in large numbers, our members directed us to focus our efforts and resources on helping the most vulnerable individuals in our industry: artists, crews and everyone working the live-music space. The livelihoods of these individuals were among the first to be hit by the pandemic and will be among the last to recover.
To help ensure that governments at all levels had accurate information to understand the pandemic's impacts and to develop effective relief measures, we partnered with Abacus Data to conduct national polling about how the pandemic was affecting artists and their fans. One study surveyed over 700 professional musicians so that we could better understand the impacts through their lens.
Here are some important numbers.
The report found that professional musicians perform, on average, nearly 100 times a year, typically travelling across Canada and the world to do so. Revenue generated from live performances in turn helped support an average of 11 other people, such as band members, technicians and other industry jobs. A staggering 85% of musicians agreed that without live performances they will have difficulty earning enough to pay the bills.
The most important number is zero. There are zero live shows, zero festivals and zero gigs as artists, fans and the industry have understood them for generations. With this in mind, we've spent the pandemic amplifying the voices of artists in settings like this and assisting colleagues and organizations, like Erin Benjamin of the Canadian Live Music Association, as they work to highlight the difficulties being faced by venues and the artists who play in them.
In addition to surveying artists, we also commissioned a separate national survey of Canadians, with a first round released in May and an update in August. Those results were similarly startling. They underscored that the virus will keep Canadians, including identified music lovers, home long after they're allowed to attend events. About one in two of those live-music lovers believes that it will be six months or more after government restrictions lift before they'll feel safe returning to live shows and festivals, small and large indoor venues, and elsewhere. As time progresses, that concern has risen significantly.
Our research also confirms something that we knew to be true: Canadians miss live music. While watching a concert online might scratch the itch, it's no substitute for the feeling you get from being at a live show. Canadians love live music, and they've told us that they desperately want to go back when they believe it's safe to do so.
We know that live music will eventually return with the same energy and significance that it previously had, but government support is critical to ensure that it exists when we come out the other side. How do we get to the other side? Artists and individuals working in our sector need to receive continued and direct financial support—like the Canada recovery benefit—for as long as live-music venues are regulated, closed or only partially open across the country. These funds will be needed for longer than many expect. As we are witnessing now, the need will increase if the public health situation worsens.
Lastly, Music Canada and our industry colleagues came to this committee last year to discuss the need for copyright reform. Virtually the entire Canadian music industry asked that a few simple amendments be made to the Copyright Act to help ensure that artists are paid when their music is played. The report from this committee, “Shifting Paradigms”, provides a great road map for upholding that principle.
I hope that this committee and the government will return to that work soon because with the pandemic eliminating opportunities to tour for artists, the fallacy that artists don't need copyright protection has been exposed for the myth that it always was.
I'd like to thank the parliamentary secretary for her continued championing of this principle, both during the writing of the report and now in her new role.
I hope that, as you turn your minds to assisting the music community in the face of the pandemic, you will again recommend addressing those copyright measures, which will help bring relief.
Thank you for your time today. I'd be pleased to answer any of your questions.
Canada loves live music; indeed we do. That's a valid point.
Folks, now we're getting into the questions.
I'd just like to say something to our witnesses: If you want to get in on a conversation that's happening, you have to get the attention of the person asking the question. You can do that by waving at the screen; hopefully, the questioner will pick that up. I ask that the questioners please have a look at their gallery view to find out who wants to weigh in.
This is the first time in my life that I've ever chaired or been involved in a committee meeting where I'm the only member in the room. I'm not sure if I'm lonely or intoxicated with power. I'll figure that out, hopefully, by the end of the meeting.
Nevertheless, let's try to do this as quickly and smoothly as we can because it's a very important issue.
Mr. Shields, you have six minutes, please.
I would suggest that the wage subsidy would be at the top of the list. Mitigating costs would be second. The incentive fund, of course, would help us in recovery. That is moving forward and raising money for the recovery and growth and generational change that we would like to do.
For us, as I guess a relatively modest-sized arts organization in this country, our 2020 losses will be close to $3 million. Next year, moving into 2021, if there is no programming, with just the fixed costs alone and just a very small core staff left, the losses will be over $1 million. One of the problems in 2020 was that because of our collective bargaining agreements with actor unions, advance royalties, creatives and so on, a number of buyouts cost us nearly $1.5 million.
We won't have that next year, obviously, because we have not contracted anyone. We're looking at, next year, at least a $1-million loss without even putting a key in any of our theatre doors.
Thank you, panellists, for being here.
This is very emotional testimony from everyone, and it hits very hard.
I will follow up where Mr. Shields left off. It's too important to pass up the opportunity.
Mr. Mustakas, you described an artist saying that being a musician is all he's done for his entire life. That resonated with me because, until a year ago, I would have said the exact same thing. Theatre is a big part of Kitchener—Conestoga.
We all know that great art comes from struggle, but we haven't seen struggle at this level, at this depth, so I want to speak more about mental health.
I know that these artists and the people around them.... It's not just the artists; it's all of the workers who are on and behind the stage. Those programs we're talking about can help people get through.
I'm also concerned about our younger artists who are just trying to get into the arts. Is there any way to pair the two that you're talking about, supporting artists to help with the younger generation and seeing if we can help them get in? That way, they're helping their own peers.
We certainly need the support. We have had a very successful youth program over the years that we're expanding. We believe this is an area where we will be most effective on generational change.
I know a lot of young people who are in acting schools and musical theatre programs and who study music and so on. I'm worried they won't have a place for an outlet when they're done. Any support we can get for them, I think, is critical. We miss our musicians. There's nothing like live music.
The other thing I should mention—it's not only the artists and the young people—is that we received just recently over 600 comments from our theatregoers. Many are of an older demographic who miss what we do and who tell us what a big part of their lives live theatre and live music have been. We have to think about all of them, as well. As soon as it's safe to do so, we will be back.
You're absolutely right, Mr. Louis. Great things come from struggle, from the bottom up. That's when community comes together. You can see the poster above my shoulder on Les Misérables if you want to talk about struggle.
We do need to not forget the grassroots who are our future as well.
I realize I forgot to describe the mission of the association I work for. ADISQ represents independent music producers in Quebec and in the greater Canadian francophonie. I wanted to clarify that.
As I said earlier, the whole community continued to work, whether it be authors, artists, performers, musicians, producers or broadcasters. These people stayed active and tried to stay in touch with the public. If nothing is done, the work that we have been able to do for some time will not be able to continue. Ultimately, we risk losing everything we've built over the last 40 years.
What we have built over the last 40 years is a star system, supported by the artists who are loved by the public and the companies that support them. That's precious. Of course we're talking about the artists, but we must never forget those who journey with them. If they were to appear before you, artists would tell you that they are more successful when they are well guided by companies. We finally have strong Canadian companies that are developing artists' careers and supporting them. We have managers and a host of other tradespeople who contribute to the career development of artists.
We risk losing not only artistic careers, but also an important industrial infrastructure that exists to receive new artists and develop their careers. They are working to ensure that we have access to new music, so that tomorrow morning we are not forced to listen only to our best hits or classics. They work so that one day, in a burst of nostalgia, we can listen to the old songs of 2020.
For the moment, we have to keep creating these songs. We need to distribute them throughout Canada, Quebec and the entire francophonie.
That's what we risk losing if we don't help artists, performers and the businesses that support them.
My question is for Ms. Drouin.
Thank you for accepting our invitation.
As you have explained, the music industry is heavily impacted by COVID-19. We are well aware of and sensitive to the issues affecting our local artists. We want to continue to offer them a support plan, as we did through the emergency fund, which enabled us to provide $500 million to organizations responsible for culture, heritage and sport. Phase 1 helped people who had already received funding. Phase 2 was more open to everyone.
I met with the Conseil de la culture de l’Estrie, where I was told that there was a loss of skilled labour in the entertainment and artistic production industry. Due to the interruption of show productions, many technicians and specialists have moved to Montreal or have opted for another career.
Could you tell us a little bit about the scarcity of skilled labour in the regions in our music industry?
Welcome back, everyone, to the second part of our committee.
I'll get right to the introduction of our witnesses. They are Yvan Noé Girouard, director general of the Association des médias écrits communautaires du Québec; from News Media Canada, John Hinds, president and chief executive officer; and, from the Rosebud Centre of the Arts, two guests, Paul Muir, education director, and Bob Davis, volunteer board governor and general manager of the Old Trout Puppet Workshop. Well, how about that? Love the name.
We're going to start with five minutes from each group.
We're going to start with the Association des médias écrits, with Monsieur Girouard.
The floor is yours for five minutes.
I would like to thank the members of the Standing Committee on Canadian Heritage for giving me the opportunity to express my views on the shortcomings of certain federal assistance programs for community media.
First of all, I would like to introduce the Association des médias écrits communautaires du Québec.
AMECQ was founded in 1980. It represents 80 newspapers and magazines that are non-profit organizations administered by a volunteer board of directors. These newspapers and magazines represent the local population taking charge of local information. They are generally produced by a majority of volunteers.
I want to make it clear that the word “community” does not have the same meaning in English as it does in French. In English, “community newspaper” refers to a newspaper, usually private, that serves a community. There is no distinction between non-profit and private newspapers. In French, the term "communautaire" means non-profit organizations. This creates confusion in the presentation of assistance programs to the media.
I would like to touch on four specific issues: the Local Journalism Initiative; the Community Media Strategic Support Fund, which supports official language minority community media; the media tax credit; and advertising for community print media.
First, let’s talk about the Local Journalism Initiative.
While commendable at first glance, this initiative put forward by Canadian Heritage and administered by News Media Canada is not appropriate for Quebec community print media. The Association des médias écrits communautaires du Québec deplores the fact that this program is in no way intended for its member newspapers and magazines.
On its website, News Media Canada promotes the Local Journalism Initiative in these terms:
In some parts of Canada, residents do not have access to journalism about community issues and institutions through local newspapers, community radio, television or other news media. These gaps in coverage mean that citizens do not have necessary information about news, issues and events that affect them and their day-to-day lives.
AMECQ mainly deplores the fact that this program is only intended for media covering a region described as a news desert or as an area of news poverty. Therefore, not all of our members are eligible for this program.
The Local Journalism Initiative says it provides funding to news media to hire journalists to cover civic institutions and issues of importance in underserved communities. This is what it says on the News Media Canada website:
The Local Journalism Initiative supports the creation of original civic journalism that is relevant to the diverse needs of underserved communities across Canada...
Among other things, a media outlet applying for a grant is required to describe how the area it wishes to cover constitutes a news desert or an area of news poverty, and to explain why its publication is qualified to fill this void.
AMECQ is therefore asking that this program be revised so that community print media in Quebec can have access to it and that concepts such as “underserved community”, “news desert” or “news poverty” be abolished.
I would like to bring to your attention the simplicity of a response provided by email to one of our members whose request was turned down. They told him that a new appeal had indeed been launched in Quebec, that the Local Journalism Initiative was being publicized as widely as possible and that this was the reason why this member had received the flyer. They told him that if he wished to re-apply, they would be happy to do it for him, but like him, they honestly did not see how the end result would be any different.
AMECQ also regrets that a new invitation to take part in this program was sent to its members on the evening of January 24, 2020, when the deadline for registration was January 27. Did they invite them in order to clear their conscience? If News Media Canada wanted our members not to register, they couldn’t have done better.
I would now like to say a few words about the Community Media Strategic Support Fund, which supports official language minority community media.
Although commendable as well, this program is in no way accessible to our newspapers and magazines. Yet, even if they publish in French in a province where the official language is French, these media would need financial assistance from the federal government.
Now I'm going to talk to you about the media tax credit.
On April 17, the Department of Finance announced in a press release measures to support Canada's information sectors during the COVID-19 pandemic. These measures include a 25% refundable Canadian journalism labour tax credit.
Again, this initiative is commendable, but difficult to apply to community print media. Indeed, to be eligible for the tax credit, a newspaper must employ at least two journalists working an average of at least 26 hours per week for at least 40 consecutive weeks, and they must devote at least 75% of their time to producing news content.
Most community newspapers wishing to take advantage of the tax credit have only one employee who combines the duties of reporter, photographer, editor and coordinator, or even general manager. Newspapers—
Thank you for inviting me to speak today.
My name is John Hinds, and I'm the CEO of News Media Canada.
We are the voice of Canada's news media industry. We represent over 600 newspapers and news media publications in all provinces and territories. Our membership includes daily and weekly community newspapers and news sites, and ranges from the largest urban daily to small community newspapers in rural and remote regions.
The news media sector in Canada continues to experience challenges that have only been exacerbated by the pandemic. Over the past few years 250-plus newspapers have closed, and in Saskatchewan alone we have lost over 20% of our newspapers. That was before the pandemic. In the initial months of COVID, we saw another round of closures and mergers, and many smaller newspapers stopped publishing while larger publications saw newsroom layoffs. As a result, there are now more areas of news poverty and news deserts in the country.
Our greatest industry challenge is declining advertising revenue, particularly print advertising, with declines of up to 20% a year. In many ways, COVID simply sped up that trend. At the beginning of the crisis, advertising plunged by up to 75% in many markets, and the industry is still struggling with advertising declines in the range of 30%. Sectors like events, travel and local retail are just not advertising, which has dramatically impacted small community newspapers that rely on print advertising.
What is particularly frustrating is that the impact of COVID on our industry defies the rules of economics. There has never been more demand for our products while at the same time there is so little revenue. Millions of Canadians, nine out of 10, continue to engage with their local news media for trusted news and information about COVID in their communities.
For many newspapers, particularly community newspapers, government advertising was traditionally a major client. Federal government advertising has fallen to almost nothing in the last few years. This defies logic given that our products are read by more Canadians than the digital giants. At the beginning of the pandemic, the government announced a $30-million communication budget, but unlike many provincial governments, there was limited placement in our news media. The government can deliver on its mandate to communicate with Canadians by implementing a strategy of placing ads where Canadians are looking for trusted content and advertising.
Having said that, I want to acknowledge and thank you for the support provided to assist our industry. I also want to acknowledge the impressive team of officials at Canadian Heritage who understand the issues, and are working tirelessly to find solutions.
I want to highlight two areas that allowed the industry to continue to operate during the pandemic.
The wage subsidy was, and continues to be, a lifeline for most publications, and has allowed most to continue to publish and avoid laying off staff. We believe that this program needs to be maintained unless revenue rebounds.
The aid to publishers program has also been a lifeline. This program, which dates from before Confederation, has traditionally been available to small subscription-based print community newspapers. As part of the COVID relief plan, funding was increased by 25%, which allowed many papers to continue to publish. One-time funding was also provided to non-subscription newspapers, and we would ask that this be continued until at least 2021, given the market conditions. Ideally, this funding would be permanent and increased as smaller community newspapers are increasingly challenged in the digital world.
The future of news media is digital, and all our members are looking to a digital future, though that future differs from publisher to publisher. However, without government action to regulate the digital space, the future is grim. Two global monopolies, Google and Facebook, control 80% of the digital ad revenue in Canada, and that continues to grow every year.
Real news costs real money to report, but monopolies are cutting newspapers off from the sources of revenue to pay for it. Their business models are based on using news media content that they do not pay for. Governments and other democracies are fighting back, and we are pleased that the commitment to regulate the monopolies was included in the Speech from the Throne.
We believe that the approach that is being undertaken in Australia is the perfect solution in Canada. It allows newspapers to negotiate fair compensation with monopolies, it levels the playing field, and it does so without relying on government funding, new taxes or user fees. We know that all our members support this initiative, and we hope that you would move quickly on this file.
Thank you, Mr. Chair and committee members, for the invitation to attend, and specifically Mr. Shields, who invited us here today.
We're happy to be here. Rosebud Centre of the Arts is located in a small hamlet of just 92 people, northeast of Calgary on the way to Drumheller. It's home to Rosebud School of the Arts, a post-secondary arts training institution and Rosebud Theatre, a professional live theatre. We have additional dining services for patrons who attend our theatre performances to enjoy a meal before attending the show.
Our scope of operations in a typical year involves around $3.5 million, and of that $3.5 million, roughly $2.5 million would come from theatre revenue through ticket sales and dining services.
Our professional productions run from March to December. We have as many as five in a year, along with two student productions, and we attract up to 35,000 or sometimes 40,000 people to our hamlet of 100 people. They are predominantly from the Calgary area, but people from all regions of Alberta do travel to our community. We also have accommodations, gift shops, a museum, galleries and resident artists.
We have a staff of about 20 people, but we employ up to 150 people part-time, again predominantly residents from the region.
We're the largest employer in Rosebud and one of the largest in Wheatland County. We're a socio-economic driver in the area. The work we do generates business for businesses and employers around us. We're part of the provincial arts and education tourism fabric, partnering with Travel Alberta, other post-secondary institutions and other arts organizations in Alberta.
Uniquely, we're a guild school. We follow a mentorship and apprentice educational model, which is unique in Canada. We receive no provincial funding for our education, and our public funding for the arts is less than 2% on an annual basis.
Bearing all of this in mind, you can understand how COVID really hit us hard, as it did, I'm sure, for many other arts organizations that you've heard from. Our theatre operations were closed entirely in 2020. We were attempting to run another show here for Christmas, but just today that show too was suspended due to COVID conditions in Alberta.
We're experiencing an over $2-million loss in revenue from ticket sales. More specifically, we're experiencing over 30,000 patrons not coming to our community. That has ripple effects outwards on other businesses and entrepreneurs in our region in terms of the accommodations, the retail sector and all the employment that goes along with the work that we do.
We are thankful for the CEWS program, which did support our operations to a degree this year, and I'll have more to say about that in a moment. However, by and large, we have been unable to access the emergency funding or regular funding that's been made available through the Canada Council for the Arts or Canadian Heritage.
In particular, one of the biggest challenges for arts organizations has been the administration side of things to manage through COVID. Certainly on the arts side, there's been less work for artists, but on the administration side, the amount of work has been greatly increased in terms of budgeting, managing human resources and dealing with communications and stakeholders.
One of the gaps in the federal aid programs is that unless you are already registered with the Canada Council for the Arts and recognized, you do not have access to the emergency funding provided by Canadian Heritage, and the CEWS program is insufficient to support arts organizations when there is no corresponding revenue coming in to help offset costs.
We look forward to discussing more of these issues with you.
Thank you very much, Mr. Chair.
Thank you very much, Mr. Chair. Thank you to all of the witnesses.
Mr. Davis and Mr. Muir, on the last panel we had one of the theatres from my own riding, the Segal Centre, and I asked all my questions to them, so forgive me if I don't ask you questions. I did hear that your production of Anne Frank a few years ago was phenomenal. My cousin went to it and had rave reviews. Thumbs up to that. I'm sure I'll be speaking to you at a later date.
I'm going to go to Mr. Hinds. Mr. Hinds, I was glad to hear that the support from the federal government, at least with respect to the aid to publishers and the CEWS, was very helpful to your organization. I, like many people, actually prefer print media to digital. I want to make sure our newspapers not only survive, but thrive. I'm a little dismayed to hear of the small percentage of ads that actually went to newspapers.
Did you get a better number of ads from provincial and municipal governments during the course of COVID or were they also mostly going towards digital?
You talked about a program that is very important to me, the Community Media Strategic Support Fund, which supports official language minority newspapers. In my riding of Mount Royal, the majority of newspapers are local. From what I understand, you consider that there are gaps in this regard, because French-language newspapers in Quebec whose employees work on a volunteer basis, such as the ones you represent, are not eligible for this program.
As you know, the Speech from the Throne spoke of the importance of promoting French in Quebec. So this is a failure, in my opinion. One of the ways to support French-language newspapers in Quebec would not be to implement a program for official language minority community media, but a program to support local community newspapers in Quebec.
Could this help your members?
Obviously, while Australia is a country of similar media landscape and similar political landscape to Canada, any model would have to be adjusted to local context.
What we like about the Australian model is its simplicity. We don't want to get into a situation where government is taxing and allocating stuff to media, because we've heard from a number of people, particularly a number of deputies, that that's not a way we'd like to go. This really allows the industry and the digital monopolies to negotiate fair terms for compensation. I think that's the thing about the Australian model that is appealing.
The other thing that's appealing about the Australian model is, unlike the French model, which only deals with the compensation for the journalism content, the Australian model has a code of conduct. We've also seen in the last couple days the British government putting forward this idea of a code of conduct. The code of conduct regulates the ad side of it. When Google and Facebook want to change their algorithms, they have to give 30 days' notice. They can't boot things off and change things.
I think what we like about the Australian model is that it doesn't raise taxes and it doesn't deal with government intervening in the marketplace, but it allows a fair market interaction between the platforms and newspapers.
The print newspapers have their websites and are beginning to have a lot of digital advertising. With our advertising agency, CPS, we are beginning to use digital. We are only at the beginning, but things are starting to go well.
I would like to go back to the federal government advertising. Last year, the 62 newspapers we represent received only $2,339 in advertising in total. This year, the amount has reached $35,000, and, for a few weeks, I have been seeing full pages appearing in our media. So it seems that some kind of blockage is being removed.
However, that unblocking must continue after the pandemic. At the moment, it is advertising intended to promote health measures with a view to combatting the pandemic.
One of the things is that we had to cancel the entire 2020 season, which Bob referenced earlier. Throughout the summer and the fall, as the COVID restrictions lifted a little, we did put on a show, not one that was scheduled but a one-act version of A Christmas Carol
, which was super exciting.
With COVID, we knew that we could only serve about 20% of the audience that we would normally be able to serve. We also created a film version of that play. It's now available on the Internet for people to watch.
As for your question, MP McPherson, in terms of moving forward, as Bob indicated, our organization, our operating, has reduced by over two-thirds. When we look ahead to continued COVID restrictions through 2021, it's still quite bleak.
Here's an interesting thing, though, that I find fascinating. Our student intake has increased. To me, that's hopeful. That says that there's a group of young people out there who are still interested in training to become storytellers and to become theatre professionals, while at the same time the theatre itself is almost not present.
In terms of what the government might be able to support, we've run into a number of roadblocks because we are a unique organization. We're a theatre but we're also an educational institution that is not recognized under Post-Secondary Learning Act, etc., so we find ourselves in a unique place. We hit a roadblock within the post-secondary funding world, and we hit roadblocks within the professional theatre training world.
One thing, as Bob was mentioning earlier, is the CEWS support. While we have been super grateful for the CEWS support, at the same time, it hasn't been enough. Of course the reduction of the CEWS is coming at a time when we are still unable to restart our main revenue generator, which is ticket sales.
Do you want to add to that, Bob?
Thank you to all of the witnesses for being here today.
I have just one comment for Mr. Hinds before I go to Rosebud. As you mentioned, the amount of taxpayers' money in Canada going to Google—and the non-return—is a huge issue. I have many weekly newspapers in my riding that have suffered greatly from a lack of print advertising. They suggest that if the federal government would put taxpayers' money into print advertising instead of giving it to the big Googles and FaceBooks out there, they would survive.
Rosebud, I really appreciate you being here today. As you say, you're in a small community, but you attract tens of thousands of people from the surrounding area. As you have said, the possibility of receiving funding is not something you've looked for in the past, but in an emergency situation....
As you are now millions of dollars short and you have students who want to be in this profession and are attracted to what you represent in the community, what suggestions might you have for getting out of this conundrum and this emergency we're in? What suggestions might you have for us to look at going forward?
Okay, Mr. Muir. Sorry about that.
Madame Bessette, according to the clock, you could be the last person. However, because of the technical difficulties that we have, I'm going to take it upon myself to stretch it a little bit, so here's what I'd like to do.
Madame Bessette, I'll give you your five minutes. However, after that I'm going to ask Ms. McPherson and Monsieur Champoux if they would like to have quick questions, maybe for clarification. I'm not going to give them a set amount of time. I'm just going to allow them a couple of questions, otherwise we would go too long.
Could I get the blessing of the committee to do that? I know I'm going beyond the scope here of what I normally do, but I just wanted to get that in, given the technical difficulties that we have.
Mrs. Bessette, you have the floor for five minutes.