Canadian Heritage Committee on Oct. 22nd, 2009

[The Chair, Conservative, Gary Schellenberger]

I'm going to call to order meeting 31 of the Standing Committee on Canadian Heritage. Pursuant to Standing Order 108(2), we are studying cuts to the Canadian musical diversity program.

Today, in our first hour, we have witnesses from the Conseil québécois de la musique. I will let you folks introduce yourselves.

We also have witnesses from from Effendi Records Inc., and Guilde des musiciens et musiciennes du Québec. I apologize for my French, but I do try.

So the first presentation, please, from the Conseil québécois de la musique.

[Sylvie Gamache, Director General, Conseil québécois de la musique]

Good morning. My name is Sylvie Gamache and I am the Director General of the Conseil québécois de la musique.

Mr. Chair, members of the committee, on behalf of the members of the Conseil québécois de la musique, or CQM, I would first like to thank the Standing Committee on Canadian Heritage for holding this meeting, which will allow us to inform you of the foreseeable effects of the cancellation of the Canadian Musical Diversity Component of the Canada Music Fund. If we are here today with you, it is because the CQM represents many of those who found out about these significant cuts in government assistance in the media last summer.

The CQM has some 300 members, a majority of whom are corporate members working in the area of concert music, also known as specialized music. Our members include orchestras, record companies, festivals and small musical ensembles. More specifically, the CQM is a sectoral association that carries out representation and promotion activities for musicians working in a variety of styles, including early music, classical, jazz, electroacoustic, experimental and world music. Since last summer, our members have become extremely concerned following the announced changes to the Canada Music Fund, changes that will disrupt the specialized music environment and undermine its existence.

We therefore come to you, ladies and gentlemen, in the hope that you and your colleagues in government listen up to what we have to say. Over the next few weeks, we hope that you will follow up on this key issue for the music industry and the many Canadian musicians who have been severely affected by the recent program changes.

You all know that, on July 31, Minister James Moore announced the good news about the 5-year extension to the Canada Music Fund. However, at the same time, he announced major changes to that fund, i.e., the elimination of the Canadian Musical Diversity Component, which includes the grants for specialized sound recording and grants for specialized music distribution, two programs managed by the Canada Council for the Arts. This reallocation of Canadian government funding will redirect the $1.3 million dollars that were originally earmarked for the development of specialized music toward new objectives. And yet, this rather modest amount, which went into the Canadian Musical Diversity component, helped some 100 artists and record companies annually to provide audiences with a broader and more diversified selection of Canadian musical works.

Isn't the primary role of the Canada Music Fund to assist Canadian artists so that Canadians from coast to coast can continue to access a vibrant and diversified musical culture? The Canada Council for the Arts has been managing those programs since the end of the 1980s on behalf of the Department of Canadian Heritage. The grants for specialized sound recordings program was intended to support the recording of specialized Canadian music by Canadian artists, ensembles, groups, orchestras, record companies and independent record producers. Its objective was to foster the production of a greater variety of Canadian art music and insure its availability to the public.

The grants for specialized music distribution program supported the distribution of specialized music by distribution companies and record labels belonging to and controlled by Canadians while allowing funding recipients to effectively distribute, market and sell Canadian specialized music recordings. Unfortunately, despite their cultural significance, these recordings sometimes have limited access to markets and consumers.

The Canada Council for the Arts, which has an in-depth understanding of the specialized music sector, successfully managed both of those programs. The programs supported hundreds of Canadian artists and businesses, many of whom received awards for the quality of their works. Many of them were nominated for prestigious music awards, including the Juno, Félix and Opus awards. That comes as no surprise since the Canada Council's rules of attribution are based first and foremost on the quality of the submitted artistic projects.

Moreover, it should be noted that no other Canadian organization can, as part of their own eligibility and funding criteria, serve those musicians who are deeply affected by these program cuts. This all goes to say that Canada's creative musical genres, whether jazz and electroacoustic music or experimental and world music, will be losing a substantial part of their public funding.

Just like with other government assistance programs, the sound recording and distribution grants promote the career development of our Canadian artists. As you know, they contribute significantly to Canada's international prestige. Such a disengagement leads us to believe that the federal government is withdrawing support from Canadian musical creation, and we cannot accept a decision that endangers an entire section of Canada's musical diversity.

On behalf of the community it represents, the Conseil québécois de la musique is calling on the federal government to recognize the importance of the music that is created, performed and disseminated by our musicians as well as the essential role that they play in the Canadian cultural landscape. Consequently, the CQM asks the government to maintain its support for specialized music creators and recording studios through programs that are adapted to their specific needs and to fund those programs accordingly.

In order to make this all a little more concrete, allow me to open this suitcase containing some of the recordings that have been produced in the past three years thanks to the support of the sound recording program, which is managed by the Canada Council. This major collection of diverse recordings is proof of the creativity, hard work and quality of our musicians and artists.

I will now give the floor to my colleagues, musicians and directors of recording studios. They are directly affected by this funding reallocation. They have come to share with you the short- and medium-term impact of the announced cuts. I turn the floor over to them.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Next--and please keep it as short as you can, or we won't have long for questions.

[Christophe Papadimitriou, President, L'OFF Festival de jazz de Montréal, Conseil québécois de la musique]

Good morning. My name is Christophe Papadimitriou. I have been playing the base professionally for the past 20 years. I am a member of various jazz and world music ensembles. I also accompany pop artists. In conjunction with my career as a musician, I have been directing Montreal's OFF Jazz Festival since 2006. I also work for the Chapelle historique du Bon-Pasteur, which is a cultural centre dedicated to classical and contemporary music. I sit on the board of the Conseil des arts de Montréal and am Vice-President of the Conseil québécois de la musique. I would like to thank you for welcoming me here today as a witness.

My many musical activities allow me to work with a wide variety of specialized musicians and to understand how the sector operates. My remarks today will essentially deal with the consequences of the cuts to the grants for specialized sound recording program for independent artists. The grants helped co-fund some 100 projects across Canada in 2008. They are essential and vital for specialized musicians. The production of a sound recording is a key step not only in the creation of a work but also in its dissemination. A recording is both a physical product of a musical creation, a necessary promotional tool to sell performances both here and abroad, and a reference document that is part of our national heritage.

The recording of specialized music cannot be treated in the same way as that of other more popular genres. I would like to quote the eloquent definition given by the Canada Council:

“Specialized music” is defined as music whose intent or content is not shaped by the desire for wide-market appeal—instead, it places creativity, self-expression or experimentation above the demands and formal expectations of the mainstream recording industry. Specialized music has significance beyond being just entertainment, and it is usually found in the parallel market and alternative distribution systems.

Profitability in terms of album sales does not apply in this case. We are addressing a specialized audience and, therefore, a limited number of sales. The profitability of a specialized music project is calculated in terms of career development. A recording allows a musician to be broadcast on the radio, obtain media reviews and, above all, sell concerts. In the majority of cases, concerts represent the main source of revenue for artists, and without quality recordings, groups have no way to solicit festivals and Canadian and foreign presenters or to take part in musical showcases.

The average funding allocated by the Canada Council for this type of project is approximately $7,000. The funding cannot exceed 60% of the total budget. Artists always invest their own money in this type of initiative, but their precarious status makes it impossible for them to pay the total amount. Moreover, a number of economic players also benefit from these recordings, including studios, sound engineers and graphic designers.

In conclusion, as I have just explained, these funds are essential for the survival of the specialized music sector, and they can only be managed by an institution whose selection criteria are based on artistic excellence rather than commercial benefits, such as the Canada Council for the Arts.

The elimination of the grants for specialized sound recording program will have irreparable consequences on an entire section of Canada's musical scene. The diversity and vitality of our creators is at stake. Quality and excellence are not necessarily rewarded with commercial success, but our artists' know-how and expertise enrich our Canadian heritage.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Denis.

[Jean-François Denis, Director, DIFFUSION i MéDIA, Conseil québécois de la musique]

Good morning. I am Jean-François Denis and I am the Director of the empreintes DIGITALes record company.

Cities, regions, countries take pride in their symphony orchestras and their opera houses, which are two of the best known institutions for so-called specialized music. These institutions have their own characteristics and as such they cannot be subject to the same marketing laws as variety shows or musical comedy. The same applies to the other forms of specialized music such as electroacoustic music, current, experimental and contemporary music.

Some people think that all the different kinds of music make up one homogeneous entity because after all, every kind of music needs creators and performers. Music is experienced directly in a concert hall or through media such as records and radio. People get information about music through newspapers, music magazines and other sources. Different genres of music are practised in very different ways. These different kinds of practice give rise to the development of lines of transmission, production, promotion and distribution adapted to different kinds of music: specialized music needs specialized treatment.

Based on these solid industrial structures, variety music is now present everywhere in our society. This industry can be used as a model in many ways. In the same way as for song, the chain that connects the creator of specialized music to his fans also developed in its own way, with its specialized magazines and reviews, with its own organizations for concerts and festivals, with its own ensembles and performers, creators and composers, record companies, publishers, radio broadcasts, etc.

Just like the rest of the industry, where every link and every trade complements the others and is potentially assisted by various kinds of subsidies, the vast sector of specialized music also has its links, and each link is equally important for the other links in the chain. This is why if you suddenly withdraw support to two production links, namely sound recording and distribution, it can only destabilize the sector and it could even be catastrophic, as if one sector were asked to function with the methods of another sector. The short-, medium- and long-term impact is enormous, not only on the accessibility of the work—there will be far fewer sound recordings—but it will also impact the renown of our musicians at home and abroad and the entire musical discipline.

In fact, most kinds of so-called specialized music are taught from primary school until university, first to develop appreciation for music and to prepare future audiences, to understand its workings through study, research and analysis and, of course, to train musicians, creators and performers for tomorrow. Music is learned and developed through hearing sound recordings, all the more so because some forms of specialized music exist only on sound recordings. These recordings, these discs play several roles, such as giving access to musical works, promoting education and practical development, and constituting a national heritage to preserve audible tracks of the creativity of our musicians across the whole world.

In January 2010, my record company, empreintes DIGITALes, will celebrate its 20 years in the record publishing business. More than 110 titles—one composer per record—were produced and made available to the public at home and especially abroad. As of today, I have produced 84 records by 50 Canadian composers such as Francis Dhomont, Robert Normandeau, Paul Dolden and Gilles Gobeil, and by 32 foreign composers from France, Belgium, the United Kingdom, Germany, Greece, Sweden and Argentina. Sixty-three of the 84 Canadian records received assistance, which was often modest, from the production program that the Canada Council has been running for more than 20 years. This program helps us to carry out our mission, the mission of my record company, which is to make these unique kinds of music available to the public.

How many of these 63 albums would have been made without the support of the Grants for Specialized Music Sound Recording Program? Possibly none of them because, in August 1989, without this support, setting up a record company that would help Canadian creativity flourish to this day could never have been anything more than a pipe dream.

With the music diversity program being abolished, and with production and distribution assistance programs being cut, how many aspiring musicians and new record publishers will never fulfil their potential? How many listeners and music lovers will be deprived of access to new works? Do you understand that the emerging culture of the new millennium will never be as broad, rich and diversified as the one that all of us here today have enjoyed, the one to which, at least up until now, we have all contributed in such a creative, expressive and breathtaking way?

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Next we will go to Madame Therrien--

[Dean Del Mastro, Conservative, Peterborough, ON]

On a point of order, Mr. Chair, I'm really concerned because we're so far into the meeting and we're only through the first guest. I'm concerned. Can you give some idea as to how much time we're hoping to hold aside for questions?

[The Chair, Conservative, Gary Schellenberger]

We try to hold our presentations to ten minutes. I know one witness has taken up almost eighteen minutes, but I would ask the other two witnesses who are going to present if they could please try to keep the presentations under ten minutes. There might only be one round of questions.

Go ahead, Madame Therrien, please.

[Carole Therrien, Vice-President, Effendi Records Inc.]

Ladies and gentlemen, my name is Carole Therrien, I am from Montreal, and my job titles are many: opera, classical, baroque and jazz singer; music writer and composer; and, lastly, producer, manager and, together with the bass player Alain Bédard, co-founder of the contemporary jazz label, Effendi.

For the past 10 years, Effendi has been one of Canada's biggest jazz labels. We have carved a niche as a leader in the field, helping a growing number of artists make their records and organize their concerts and tours. Our principal objective is to promote Canadian jazz. Our sound recordings host 90% original Canadian music content. We are working with renowned artists such as, amongst others, Rémi Bolduc, François Bourrassa and Michel Donato. We also distribute sound recordings by a number of Canadian and foreign independent labels across Canada.

Since May 2000, we have received multiple nominations for our recordings in a variety of competitions. In addition to the nominations, we have won some 30 prizes. A list of the prizes we have won is provided in the appendix to our brief. For 10 years, we have been working to create Canadian content and promote our music and our culture. Effendi is raising the profile of Canadian culture, both here and abroad, both by means of domestic and international distribution and of scheduling performances at venues such as New York's Lincoln Center and Milan's Blue Note. Four of our artists are touring this fall, three in Europe and one in Canada. We have also just found out that one of our artists, François Bourrassa, has been selected to represent Canada at the next MIDEM trade show.

Abolishing programs to replace them with new, virtually unrelated ones makes no sense. We produce one or two recordings a year thanks to Canada Council for the Arts funding, and have released a number of recordings by artists and producers who have received funding from the Grants for Specialized Music Sound Recordings Program, but not from MUSICACTION or FACTOR. It is a mistake to think that there's overlap between the various programs, and to do so will simply lead to a reduction in the number of records on the market, which will, in turn, have the undesirable consequence of creating greater homogeneity.

The FACTOR and MUSICACTION juries are not exclusively juries of peers, unlike Canada Council for the Arts juries. This means that the juries may therefore not have the requisite in-depth understanding necessary to evaluate the quality of a project, and may only consider commercial factors. Selling 20,000 copies is not necessarily an indication of superior quality; it is sometimes simply an indication of a larger marketing budget.

We are fortunate enough to be well known by MUSICACTION, and thanks to that, we can submit projects to their board that would not necessarily be accepted by their jury. The funding that we receive is often not even enough to produce a recording. In some instances, we have received funding from both the Canada Council for the Arts and MUSICACTION for the same project, but that is not the norm. Furthermore, the support we receive never exceeds 70% of the total funding required. We always have to invest our own time and money. That is why grants for specialized music distribution are essential. Jazz lovers around the world have a fairly similar profile: they are usually disinclined to buy MP3 downloads, as they are always compressed and, therefore, offer poorer sound quality than CDs; they prefer to have the actual CD and its cover; and, often, carefully choose a high-quality sound system to listen to their music. For these reasons, there will always be retailers selling physical recordings, and we will always need support to promote our recordings, lest they be lost in the myriad weekly releases.

Abolishing the program would probably also have a detrimental effect on the capacity of universities and music schools to attract students and therefore to offer courses. In spite of its excellent reputation for teaching jazz, who would go to McGill if it were unable to offer access to the latest recordings? What would be the point of offering these programs if becoming a professional jazz artist were nothing more than a dream of yesteryear? Nowadays, jazz is taught in secondary schools and colleges, as well as at the undergraduate, masters and doctoral level in universities. Do not think that these students will simply turn to commercial jazz. That is not the case at all, they want to be the best they can be, and it is for them that the Grants for Specialized Music Sound Recording Program is so essential.

In the short term, our company risks having to make more risky investments. There will be a decline in the number of quality recordings, which will undermine musical diversity and harbour disastrous consequences for the entire specialized music industry and its attendant job market.

To ensure greater profitability, some companies have not hesitated to offer more popular and even foreign content, content which is often not original. We, however, like other companies, have for a number of years favoured original, Canadian content because we believe in openness, and in the strength and attractiveness of our culture both abroad and here at home.

To conclude, I would like to draw your attention to the issue of attracting new consumers. Why do radio stations insist on endlessly playing the same recordings and the same American composers? Should we not try to help ensure access to quality Canadian content—not Canadian jazz performers playing American classics, but playing their music, our music? It is a question of showing pride in our culture; but to achieve this, radio stations, broadcasters and founders have to take risks. I do not support your decision to cut Canada Council for the Arts programs, and would ask that you please reinstate them quickly.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Fortin.

[Luc Fortin, President, Local 406 of the American Federation of Musicians of the United States and Canada, Guilde des musiciens et musiciennes du Québec]

Thank you for inviting our guild, la Guilde des musiciens et musiciennes du Québec, to appear before your committee. My name is Luc Fortin, and I am a composer and professional musician, as well as being the President of la Guilde des musiciens et musiciennes du Québec, an association comprising more than 3,100 professional musicians. We are also affiliated with the American Federation of Musicians of the United States and Canada, and I will also be speaking on their behalf today.

During the summer, Mr. James Moore announced that Canadian Heritage would be “changing the structure of the Canada Music Fund in order to reduce the administrative burden and increase the visibility of Canadian music on digital platforms and international markets.” Although these are laudable objectives, it has become apparent that the new approach has overlooked key elements of the Canadian musical mosaic. By axing the Canadian Musical Diversity Component which included grants for specialized music sound recordings and grants for specialized music distribution, the government has essentially left a whole category of musicians and artists—whose contribution to our culture is vital—to fend for themselves.

How can artists benefit from new programs increasing the visibility of Canadian music and digital platforms and international markets if, simultaneously, funding to produce sound recordings and distribute them by a traditional means is being withdrawn? It is abundantly clear that musicians and other artists working in the specialized music field have been overlooked. There is an inherent inequity as those artists who do not have a new album to promote cannot access digital and international markets as easily. Canadian sound recordings, in addition to further enhancing our diverse and thriving culture, are valuable promotional tools for our musicians. Without professional quality sound recordings, these artists will not be able to participate in the digital revolution and will find it difficult to export their music and promote their concerts.

We believe that, to ensure a diverse and representative culture, all elements of that culture must be supported. The many musicians, composers and groups who have benefited from the Canadian Musical Diversity Component have made a valuable contribution to our culture. More than 100 albums a year were produced or distributed thanks to support from the program, a third in Quebec alone. Innovation, research and discovery are at the heart of this musical diversity, and it generates an incredible pool of research and development. Popular music often draws on this indefatigable source of new sounds. Canadian musical culture is a complex and fragile ecosystem, and all of its component parts must be preserved so that they can continue to play their intended role; if not, we run the risk of losing what defines us and what makes us great.

We would therefore ask the Minister of Canadian Heritage to immediately reinstate the Canadian Musical Diversity Component to once again allow talented artists to enrich our Canadian musical diversity.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

There will be one round of questioning. I'm going to give each party six minutes, and that will get us to eleven o'clock.

Mr. Rodriguez, you're first, please.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you very much, Mr. Chairman.

Good morning to all of you. I am delighted to see you all here today, even if what brings us here is bad news rather than glad tidings.

All of you are very involved in the industry. Were any of you consulted in any way before the cuts were announced?

[Sylvie Gamache]

No.

[Christophe Papadimitriou]

No.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Very well. I asked exactly the same question of some of your colleagues from elsewhere in Canada who appeared before us earlier this week, and their answer was the same as yours. Nobody from the industry was consulted, not a single artist, representative or producer. What is all the more unusual is that when consultations were held on the overall quality of the program, 98% of people said that it should be maintained. And yet it has been cut!

Why do you believe the program was cut, and how did you find out about it?

[Sylvie Gamache]

At the Conseil québécois de la musique, we found out about it when the press release of July 31 was published in the newspapers.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I see.

[Jean-François Denis]

We also found out about it through this press release that was issued in Montreal. Furthermore, it was on a Friday afternoon.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

As usual!

[Carole Therrien]

As for me, I found out about it by calling the Canada Council for the Arts. We had certain questions, and we learned that there was only one date available, and that afterwards, the program would cease to exist.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

So you were busy on the Friday afternoon. That's why you did not hear about it then.

[Carole Therrien]

No, but...

[Luc Fortin]

As far as I am concerned, I learned about it indirectly, through Carole and her spouse, Alain Bédard. By carefully searching Heritage Canada's website, I finally found more detailed information. Let's say that very few people know exactly what was happening on July 31. We had to analyze the situation in detail.

[Carole Therrien]

On July 31, there was talk of increasing the envelope of another program, but there was no mention of eliminating those programs.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

In any case, it seems that the timing of the announcement is an indication that the government was not quite comfortable with the situation. When people are uncomfortable with announcing a decision, or when a decision is not supported by facts or figures, they make the announcement on a Friday afternoon.

However, I saw that ADISQ did not object to the decision. Why do you think that is?

[Carole Therrien]

I myself am a member of ADISQ. I don't know why. Are you a member?

[Jean-François Denis]

We should put the question to members of the ADISQ.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Yes, but I would like to know what your impression is.

[Carole Therrien]

I don't know.

[Jean-François Denis]

You have to look at the way the press release was worded. It stated that ADISQ and the industry supported the creation of these two new programs, which they said were needed.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

But they were not necessarily supportive of the resulting cutbacks.

[Jean-François Denis]

Exactly. One program was cut to create two others.

[Carole Therrien]

They were not aware of that.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Fine, but I am trying to understand. You have all said that these programs are needed, they are important, they diversify our music, they are not representative of traditional markets, they are not necessarily based on successful models or pop culture.

So why were these programs cut?

[Sylvie Gamache]

To save money. I don't know.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

But no, since the money is being spent elsewhere.

[Sylvie Gamache]

Indeed. There really is no justification.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

So, in your opinion, those programs were working well.

[Sylvie Gamache]

I read the study on the Canada Music Fund, which Heritage Canada did in 2007. The study analyzed the different parts of the program. Although I read the 82 pages of the report, nowhere did it say that there were problems and that the program should be eliminated. On the contrary, as you conclude, the analysis showed that the program was effective. I also learned that the program did not cost a lot to manage, that it obtained high marks in that regard, and that when people received their grants, they were very satisfied.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

But was there overlap?

[Sylvie Gamache]

The only small problem was that most respondents said they were not completely happy with the amount of the grant they had received. Indeed, for many years now, artists have been asking that the programs of the Canada Council for the Arts receive more funding.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

It is not that they wanted less money. They wanted more, but now they will be getting none at all.

[Sylvie Gamache]

On this very issue, we say that it is not... There is a quote.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

No, my question was whether there was duplication. Are there other similar programs that exist?

[Sylvie Gamache]

We say there is no duplication.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

All right, but do you have any other similar programs left here in Ottawa?

[Jean-François Denis]

In actual fact, the answer is no. We are being told that FACTOR and MUSICACTION have sound recording programs, and that is true. However, there is no further money for these programs in future funds. So there is a good chance there may be a greater demand for grants, which will create enormous pressure on these programs. Moreover, these are fundamentally driven by the industry, by more commercial music, which does not work the same way as specialized music. So we have become orphans.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I get the impression it is going to kill the dream of many people or limit the choice of music Quebeckers and Canadians will have access to.

Officials will be appearing. What is the killer question? What questions should I ask them?

[Sylvie Gamache]

You could certainly ask them how they plan to support this community which should also, and with good reason, be supported.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

All right.

[Luc Fortin]

I personally find that there is a lack of logic here. We are trying to enhance the visibility of Canadian music on an international scale and over digital platforms, but we are preventing an entire category of artists from having access to this visibility by preventing them from recording. The effect that has is to favour one part of the industry over another.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

That was a choice made by the government.

[The Chair, Conservative, Gary Schellenberger]

Time's up.

Madame Lavallée, please.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

My Liberal Party colleague seems adept at asking questions he already knows the answers to.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I learned from the best, you.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

The student seems to have surpassed his teacher. I don't have much time for joking around. I would rather ask you some questions.

First of all, allow me to make a comment. The specialized music program has a small budget but it met a real need. For us, $1.3 million is a lot of money. For this government, accustomed to spending in the billions, it is not the biggest program. The same applies to Canadian Heritage.

Yesterday, artists and musicians testified and really proved that there is a need. They say they need it, and that is what allowed them to launch their careers. Without it, they would still be making music on their computers, in their bedrooms. I would imagine that in your briefcases and bags, you have a number of examples of these types of artists who today manage to make a living from their art, but who, without access to the funds under these programs, would not have managed to pursue their career. They would not have had the means to make their talents known. You also say that the specialized music program is a type of breeding ground for commercial music. It is an R and D sector. You have spoken of know-how, creativity, research and expertise. These terms lead us to believe that people producing specialized music really are specialists in the area of music development and that they inspire those who produce more commercial music.

I apologize if this is taking me some time, but I really want to understand the situation. So, it is an R and D sector. A study was carried out in 2007, as we saw in Le Devoir this morning, showing that this program performed better than all other Canada Music Fund programs. Everybody was happy. It met an incredible need within the complicated music ecosystem that Mr. Fortin was referring to. Then, all of a sudden, on July 31, the Canadian Heritage minister, a Conservative minister, announced, for the second year in a row, that he was abolishing an important program in the area of music development, in the complicated ecosystem of the arts and culture.

I know that politics are not your cup of tea, but you are Quebeckers, you are artists, you are citizens. Do you not believe it is for ideological reasons that this government has slashed, for a second consecutive year, spending on programs where the word “entertainment” did not exist? They hit where it hurt. The government is only interested in entertainment. It confuses the arts and culture with entertainment. There are key words in this particular program, we know that it is not for the masses. It is not a program designed for popular music. These two aspects are not necessarily about entertainment, are they? This is not pop music. Is that why this government announced the striking of this program on July 31?

[Sylvie Gamache]

Ms. Lavallée, I would like to answer you with a question. Why were these programs eliminated? I have neither seen nor read the answer. Perhaps I will hear the answer next week. I do not know the reason.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

That is a question for the officials.

[Sylvie Gamache]

You have to ask the department this question.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Both the department and cabinet.

Do you have any other comments?

[Luc Fortin]

Ever since the cutbacks began, we have been looking for a reason that makes sense from an accounting or political stance. However, we really have not come up with anything. We are in fact starting to think that there is some type of ideology, some way of looking at culture that is behind this, something that we are perhaps not used to seeing. As you said, there appears to be a preference for mass culture rather than more specialized culture. There does not appear to be an overall view of Canadian culture with all of its various facets.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Would mass culture survive if we were to cut back on specialized music?

[Luc Fortin]

As I said in my presentation, this is a complex ecosystem. Each part nourishes the other, one way or the other. I have a master's in electroacoustic composition; I am a guitarist and I play world music. My colleague Jean-François Denis has a PhD in electroacoustic composition.

[Jean-François Denis]

Thank you!

[Luc Fortin]

My training has helped me in all sectors.

[The Chair, Conservative, Gary Schellenberger]

We have to move now to Ms. Chow, please.

[Olivia Chow, NDP, Trinity—Spadina, ON]

We know creativity can come in many forms. It's diverse and cannot be contained. It's not always just for entertainment and doesn't necessarily always have mass appeal. This program specifically encourages emerging artists who have different voices. I don't know, but perhaps that's a bit too threatening.

Certainly I want to lift this discussion away from the “why”, because after you've been in politics for a long time, sometimes the rationale has very little to do with why, but politics instead has a lot to do with it, which is what I want to ask about.

I notice there is an online petition, which, the last time I saw, had about 5,800 signatures. Aside from your asking why and wanting to get it restored, I want to get a feeling from you and the people you represent and you speak with, your friends and colleagues, of the kinds of activities you are doing to look for ways to have the funding replaced, or to find some ways of continuing to encourage the young artists so they do not feel the 100 grants or $2 million are gone.

So what political action are you taking, at least that you can share publicly? You may not want to tell me, and that's okay.

[Jean-François Denis]

That is a very good question, and there are many ways to answer it.

The announcement was subtle. Overnight, we were told that everything had been completely cut. That doesn't give us very much time to reorganize. I do not know how my colleagues here are feeling, but it is as though we are in a state of shock. What do you do after a fire occurs? We are thinking about how we can get through this. If we had known that we would have to move two or three months in advance, we could perhaps have organized ourselves, but for the time being this is impossible. We are in reaction mode.

We are here today; we have met. There is a great deal of collegiality in the sector because we all know that music is a big ship. Specialized music, symphony orchestras, opera houses, folk songs, rock, we are all in the same boat. If the boat sinks, we all have a few minutes before we all find ourselves in the water. Whether we are working in the specialized music field or whether we represent more commercial musicians, everyone will tell you that we all need each other. This collegiality exists.

That does not answer your question, which is a very interesting one.

[Olivia Chow, NDP, Trinity—Spadina, ON]

The reason I asked that is I notice that in Ontario—I don't know about Quebec—the arts groups are looking at a project they did quite a few years ago called Arts Vote, which showcased the number of artists who were very engaged as citizens, politically engaged.

I don't know whether that's an area you want to consider. Certainly with respect to the diversity funds, are the people who have obtained these funds in the past few years speaking out? I see that a few of them have been talking about it. Could all of them collectively post something online so that we can let people know that here are the people who have received these diversity grants, and as a result they have launched their careers and the grants have actually made a huge difference?

[Sylvie Gamache]

The Conseil québécois de la musique has put a lot of information on its website. We have included all of the press releases that we have received from groups, associations and political parties. We have also included newspaper articles that we were able to find; there is a hyperlink for these articles. The texts which we are presenting today will be there. People who wish to obtain information can easily get it through the site.

Upcoming and young artists are involved in the Conseil québécois de la musique. Moreover, we have an award, the Opus award, which is for the Discovery of the Year, that we hand out every year along with the bursary. I would like to clarify that although we are talking about specialized music, we are not always referring to extremely specialized niche music. In my opening statement, I said that many of the recordings that my colleagues here have made have been nominated, have been finalists and even winners of the Juno award, the ADISQ prize, the Felix award, the Opus award. Every year, we hand out 30 or so Opus awards to our members and there are 6 categories for the recordings. Next year, in 2010, I do not know whether we are going to be able to hand out these awards if there are cutbacks, because there will hardly be any more recordings.

It is important to point out that the Canada Council for the Arts does not automatically hand out grants to anyone who applies. There are a lot of applicants and few are chosen. There is good quality at the outset because selection is done by a jury of peers. I know that Effendi prepared a long list of their recordings that were nominated by various juries.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Del Mastro, for the last question, please.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much, Mr. Chair, and thank you to our witnesses for appearing today.

The member from the Liberal Party, Mr. Rodriguez, asked if anybody had been consulted. All of you indicated that you had not been consulted. Just as a bit of background, there were over 500 groups consulted prior to the re-extension of the Canada Music Fund. The groups represented everything from individual artists all the way up to provincial ministries of culture right across the country. So there was broad consultation, and there will be witnesses who will come forward to speak about the consultation that did occur.

I guess before this was re-extended, we had a period of uncertainty in the music industry. I'm really surprised by some of the comments. Ms. Gamache, you indicated that it seems like the federal government doesn't want to support the music industry. I'd say $138 million over five years is quite a bit of support. The Canada Council grants $9 million out of $30 million for specialized music. Almost a third of everything they put into music is going into specialized music. Sixty percent of the musical diversity fund applicants also receive funding from other areas of the music funding portfolio.

I just want to refer to some of the quotes that I have from various groups, because I'm not hearing any of that. I suppose I'm surprised. Ms. Lavallée indicated that she thinks it might have something to do with an ideology, but then her ideology was to vote against the largest budget in support of arts and culture in the history of this country. That was her ideology. So I'm surprised by that.

If we look at what some of the individuals said, we see that Pierre Rodrigue, the president of MUSICACTION, said to the Minister:

As president of MUSICACTION and vice-president of Astral Media Radio, allow me to congratulate you, Mr. Minister, on the confidence you are displaying in the Canada Music Fund. This announcement is even more essential, as it comes at a time when the record industry's business model is being questioned.

Solange Drouin, director general and vice-president of ADISQ, said that the current grants were scheduled to sunset in April 2010, so they are very happy. They were eager to know what the new grants would be.

Heather Ostertag, president and CEO of FACTOR, said:

We are fortunate to have strong leadership and vision from our current government which recognizes the importance of supporting sustainable business models and believes in the cultural component and how it weaves itself into the overall Canadian identity.

Duncan McKie, president and CEO of the Canadian Independent Music Association, said that there was no direct funding until this year for the development of the digital component of the music business. He said these international and digital market development initiatives are much-needed programs and the benefits they will induce will support many artists in multiple genres as they create worldwide markets for their performances and products. He said he appreciates the government's efforts in this regard and wishes to restate their support for the CMF renewal.

Now, I recognize that we live in a country that is a democracy and the views within any given industry are going to be as diverse as the views of Canadians broadly. When we've got a fund that is $1.4 million a year that's part of a much, much smaller fund and we have a government that has put more money into the Canada Music Fund, the Canada Council for the Arts, the arts in general, and performances across the country, I guess my question is twofold. One, would you agree that it's important that we're looking forward and trying to position Canadian artists so that they can reach globally and are current with the digital market development initiatives? Or do you think it's more important that we look backwards?

[Carole Therrien]

It is all well and good to invest in digital, but you have to have a quality recording at the outset. We therefore need assistance to go into the studio and hire musicians.

My dear sir, the international outreach of specialized music sometimes precedes that of singers or musicians making popular Canadian music. Electroacoustic, jazz and classical music artists already have international careers and do not necessarily sell a significant number of albums in Canada, or even abroad. However, these recordings enable them to have an international career. If the funds subsidizing the distribution and recording is eliminated, these artists will no longer have the recording enabling them to promote themselves and perform internationally.

[Dean Del Mastro, Conservative, Peterborough, ON]

But the five-year, $138 million extension of the Canada Music Fund, the overall fund that supports Canadian music, provided certainty to the industry. No government had ever provided a five-year extension of it before. It allows you to count on what is there for support, despite what may happen; you know there's all kinds of talk that the government is going to have to move from a position of providing stimulus to the economy to budgetary restraint in a couple of years, but both the music industry and the broader arts industry know they are not going to be part of that because we've made commitments five years out. Isn't it important that we've done that?

[The Chair, Conservative, Gary Schellenberger]

Give a very short answer, please, because our six minutes are up.

[Christophe Papadimitriou]

We have all said that we have nothing against these subsidies and an extension of the funding. We are in complete agreement with that. As for digital, there is no problem. Nevertheless, why do away with this subsidy for specialized recording, which is so important? Why eliminate this small amount?

We have nothing against the extension of funding for the Canada Music Fund, and digital music. Nevertheless, I think that these two things can take place together. We must not eliminate this fundamental component.

[The Chair, Conservative, Gary Schellenberger]

Please make your answer very short.

[Sylvie Gamache]

At the outset, we rejoiced in this good news. The problem lies really with the fact that this $1.3 million fund has been reallocated. That is what we are really talking about. This is hurting about 100 artists, every year, and is jeopardizing the entire specialized music sector.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

I appreciate hearing your positions this morning, and your answers to the questions.

We'll recess for about five minutes as we bring in our next witnesses.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

We'll call the meeting back to order for our second hour.

Pursuant to Standing Order 108(2), we continue our study on cuts to the Canadian musical diversity program.

We have as our next two witnesses Mr. Bob D'Eith, from Music BC Industry Association, and Mr. Alain Pineau, from the Canadian Conference of the Arts.

Go ahead, Mr. D'Eith, please.

[Bob D'Eith, Executive Director, Music BC Industry Association]

Thank you.

Music BC is an non-profit music industry association dedicated to the development and growth of the music and music-writer companies in British Columbia. Our mandate is to act as a non-profit society that supports the spirit, development, and growth of the B.C. music community provincially, nationally, and internationally. Music BC provides education, resources, advocacy, opportunities for funding, networking, and a forum for communication. We have over 800 paid members and 4,000 active subscribers to our weekly e-news. Membership covers all genres of music and extends from artists to studios to labels to managers and all other industry personnel. Music BC is also the FACTOR-affiliated office for British Columbia.

As far as my background is concerned, I'm the executive director of Music BC and I'm a practising music lawyer. I've been in the business for 20 years and acted in many capacities, from artist to lawyer to label executive. As an artist, I've been nominated for two Juno awards and won two western Canadian music awards. I'm on the FACTOR national advisory board and on the executive of CIMA, formerly CIRPA, the Canadian Independent Music Association. I'm a member in good standing of SOCAN and the American Federation of Musicians.

On behalf of Music BC and the board of CIMA, I applaud the government for renewing the Canada music fund for five years at full funding levels. This commitment to stability and growth of Canadian music regionally, nationally, and internationally is exactly what the music industry needs. Many in the industry were consulted on the need to renew the Canada music fund and this message was received and acted upon. Making the renewal for five years will allow the industry to plan for the future in order to make real progress in the continuing growth of the music industry.

Renewing the Canada Music Fund will ensure that funds such as FACTOR, MUSICACTION, and the collective initiatives and music entrepreneur components stay fully funded. This is also welcome news to the Canadian provincial music associations, which access funding through FACTOR to create needed programs for Canadian musicians and the music industry personnel that we support.

As far as Canada Council and the musical diversity program are concerned, this has served the non-commercial genres well for many years, and many wonderful recordings of Canadian classical, jazz, folk, and rural genres have been funded by the program. Notable B.C. artists include the Vancouver Chamber Choir, Veda Hille, and Amanda Tosoff Quartet. While FACTOR does do a great deal of diverse music, the Canada Council has been able to fund additional projects that were not meant for commercial use. This funding of the arts for art's sake has been an important part of the fabric of our society and has enriched Canadian cultural landscape.

Also, distribution assistance through the program has served such organizations as the Canadian Music Centre, which presently has been distributing the CBC classical catalogue. Cutting these funds will affect that greatly.

In terms of what the music industry needs, the music industry was greatly affected by the cancellation of the Trade Routes cultural export program. Those cuts, along with cuts to the Canadian cultural representatives at Canadian consulates around the world, left a huge void in the music business.

For example, before these cuts, Music BC was able to bring a number of music supervisors up to Los Angeles to meet with local artists. Within one week, a local artist, Kelly Brock, placed three songs in the popular CSI series and was able to finance her entire tour that year.

Since that time, local artists and companies have placed dozens of songs in U.S. television series and movies. Also by way of example, the Western Canadian Music Awards has been able to bring in buyers from all over the world, including the Glastonbury Festival and South by Southwest in Austin. The benefits would be greatly diminished in terms of this international representation.

Prior to the renewal of the Canada Music Fund, the music industry was consulted on our specific needs in this new music paradigm. With the Internet playing such a large role in artistic development and marketing, a digital sales and marketing program was requested. Also, with the cancellation of the federal Trade Routes export program, the music industry isolated the need for music export marketing. The export of music outside of Canada accounts for 40% of the revenues of larger Canadian independent music companies. The Department of Canadian Heritage listened to this request and tabled both digital sales marketing programs and an export marketing program.

While these programs have been announced with the renewal, the details and administration of these programs have not yet been determined.

A lot of blame has recently been allocated to FACTOR in the press and by some lobbying groups about the reinstatement of the program. While an agency is undoubtedly needed to administer programs, it's my understanding that neither FACTOR nor MUSICACTION requested to be the administrator of any reallocated funds. And if they do become the administrator, it will be at the request of the Department of Canadian Heritage.

It's also very important to know that at no time did the music industry ever request a reallocation of funds from the Canada Council for these new programs. The music industry values the work of the Canada Council and did not ever suggest that these programs be funded by elimination of Canada's music diversity program. The decision is that of the Department of Canadian Heritage, not the music industry.

In conclusion, it is very unfortunate that the Department of Canadian Heritage has felt compelled to make a policy decision that will create two new programs at the cost of an existing program. The easier and perhaps better route would have been to increase overall funding to allow for the new programs.

In any event, it is imperative that the Canada Music Fund be allowed to roll out in a timely fashion. The entire industry awaits the implementation of the fund.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Our next speaker is Mr. Pineau, please.

[Alain Pineau, National Director, Canadian Conference of the Arts]

Mr. Chairman, members of the Standing Committee on Canadian Heritage, as has just been said, my name is Alain Pineau and I am the National Director of the Canadian Conference of the Arts, or the CCA. I would like to thank you for giving the CCA this opportunity to intervene as part of your study on the recent cuts to the musical diversity support programs.

The CCA is the largest and oldest cultural organization in the country. Established in 1945, it represents a broad range of members covering all cultural disciplines, all lifestyles and all regions of the country. The CCA defines itself as the national forum for the arts, culture and heritage sector. It provides information, analyses, research and, from time to time, opinions on all of the political issues which, at the federal level, have an impact on the Canadian cultural sector.

Given the breadth of its mandate and the large perspectives it is called upon to adopt, the CCA rarely intervenes with respect to specific issues like the one currently in front of you. But it will intervene when, as we deem to be the case here, some fundamental principles are at play with respect to the health of the Canadian cultural sector and the welfare of the hundreds of thousands of artists, creators, and arts professionals who work in it.

The CCA has publicly rejoiced in the fact that the government has committed to a five-year renewal of the Canada Music Fund. We welcome the fact that the Minister of Canadian Heritage has recognized the need to increase the money available for digital and international market development. Those two sectors of activity will certainly benefit from the increased money they will receive through FACTOR and MUSICACTION.

It is, however, most unfortunate that this needed injection was done at the expense of what we deem to be an important strategic investment in Canadian cultural diversity. These programs that have been abolished foster the development of new forms of music that are not necessarily commercially viable immediately, or ever for that matter, but could eventually become so.

Why does the CCA invite the government to seek new funding to maintain those programs? First, because investing in what is deemed to be at the fringe today may well shape our culture tomorrow. Second, because it is important for the federal government to help develop the incredible, inexhaustible natural resource we have; namely, the diverse cultural communities that weave the new fabric of Canadian society.

We do believe that one of the responsibilities of the federal government is to invest in experimentation, which will lead to the development of new forms of music by Canadian artists. This is like risk capital or investing in fundamental research in other sectors of our economy.

Moreover, we believe that it is through modest programs such as the ones that were terminated that Canada is meeting within its borders the commitment regarding cultural diversity that our successive governments made when they ratified and then supported internationally UNESCO's 2005 Convention. Cultural diversity begins right here, by supporting our own creativity, which is rooted in the rich diversity of our population.

As for the economic argument, we have presented several examples of musical genres or of musicians that successively went on from the programs managed by the Canada Council to the programs of FACTOR and of MUSICACTION when their reputation led them to some kind of commercial viability. Canadian Celtic music is an example, as well as the artists of various cultural origins in genres such as gospel, jazz, experimental music, without mentioning small classical music ensembles that only have a modest catalogue of recorded works. Besides, the argument of administrative streamlining does not seem to be valid in this case. In fact, if we go by the information included in the summary evaluation that was made in 2007 on behalf of Canadian Heritage, there is very little duplication between the programs that were terminated and the programs of FACTOR and MUSICACTION.

Last Tuesday and also earlier, you had the opportunity to hear about this from the artists who came to testify: the relatively modest sum of $1.3 million that was invested in recording and distributing so-called specialized music made a world of difference for artists, creators and small ensembles, some of which are very well known, although they are not commercially viable, in the way that MUSICACTION uses this term.

The communiqué announcing the renewal of the Canada Music Fund and the disappearance of the program supporting musical diversity stated that:

Music industry business models are changing. Businesses that were once largely concerned with sales of physical formats need to diversify their revenue streams (for instance, through live music and merchandising) and use digital models (including on-line stores, subscriptions, over-the-air mobile downloads, and streaming) to promote and sell their content.

We fully agree with this statement, and it is the reason why, this week, we suggested to the Minister of Canadian Heritage that he should find at least $1.3 million, the sum that is needed in order to restore the terminated programs, which is a priority that we consider to be just as important as the priority of increasing the budgets of the FACTOR and MUSICACTION programs for their market development.

Many artists are already recording, performing, touring, promoting, and distributing through the support of the Internet, but they cannot move their work to the next level of economic viability without support programs like the ones that were terminated.

A recording for specialized creators and ensembles is a business card. It's the promotion of a tour. It may be the gateway to successful distribution through the Internet. The latter is something those artists and ensembles are now most unlikely to achieve. A case in point is the demise of the non-profit distribution services of recordings administered by the Canadian Music Centre, thanks to the financial support from the Department of Heritage. At a cost of $150,000—I repeat, $150,000—the CMC distribution services make it possible for over 1,300 titles produced by some 200 small independent Canadian labels to achieve international distribution. By grouping together catalogues too small to be considered individually by distributors, the CMC has been able to negotiate on their behalf with the likes of Nexus or the Independent Online Distribution Alliance, giving those Canadian artists access to 300 online distribution services and to more than 2,000 public library re-subscription services. The program supports the development of markets for those Canadian niche formats that would not otherwise be able to reach their audiences.

The CMC will have no choice but to close the distribution services of these recordings if the money is not available on April 1, 2010, and that's five months away.

We submit to you that $1.3 million a year is a very reasonable public investment to make so that emerging and experimental forms of Canadian cultural expression may take advantage of the famous long-tail effect in the new Internet economy.

Some might argue that if this is such a high priority, the Canada Council, whose budget was increased by $30 million per year last year, should find some way of getting the money that is needed for maintaining the terminated programs. The problem with this easy solution is that it ignores the fact that the $30 million that was added to the annual Canada Council budget is insufficient to meet many identified needs, which is why the CCA spoke out in other forums and asked that the base budget of the Canada Council be increased to $300 million by the year 2014.

Asking the Canada Council to compensate for the termination of the program from the Department of Canadian Heritage would in fact amount to some kind of cut, at the very moment when the Canada Council is liable to lose $9 million of its budget due to the strategic program review required by the government, without mentioning the loss of revenue from its foundation which, like all other foundations, has been hit by the economic crisis.

That's not to mention that the $30 million increase has been partly offset by the $20 million and more that has been cut in the past three years--my colleagues here alluded to that--from programs such as PromArt and Trade Routes, which has put additional pressure on the Canada Council to try to pick up the slack.

Hence, for all these reasons, on behalf of the CCA, I now invite your committee to recommend to the minister that he do whatever he can to find what is basically a very modest sum for restoring programs that support research and innovation in Canadian music along with the development of the cultural diversity that is characteristic of our population.

Thank you for your attention to this presentation. I am ready to answer your questions.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

We're going to do two rounds of five minutes each.

We'll go to Ms. Dhalla, please.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Thank you very much to both of you for coming.

I was interested in Bob's opening comments. Were you actually consulted when the Minister of Canadian Heritage made the decision to make the cuts?

[Bob D'Eith]

No. What I said was that we were consulted about the Canada Music Fund, but we were never asked whether that would be at the expense of any Canada Council funding. We were consulted on what our needs were.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

When was that consultation?

[Bob D'Eith]

I met with the minister. I'm not sure if it was part of the formal consultations, but I actually met personally with the minister at my office around the time of the Junos, which was last March.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

We've had a number of witnesses here--Gary Cristall, a musician; Jesse Zubot; Nilan Perera; Mr. Érick d'Orion; Andrea Menard; and Bill Garrett--and we have been asking them continuously. No one was consulted, and as Alain was saying, they all found out about it through a press release, by watching it on television, or through the Internet that Friday at 4:30.

When you met with the minister, was there any discussion at all or indication that something along these lines would be coming in terms of the cuts to your program?

[Bob D'Eith]

No. There was no talk of cuts. As I said, what we were asked about was what our needs were. We specifically talked about the cut to Trade Routes and the impact that would have on the music industry and also the changing music industry, generally, and how support for digital music sales and marketing is essential in this new age.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

What has been the impact since the announcement of the cuts to the programs in British Columbia and for your members in particular?

[Bob D'Eith]

Do you mean the cuts to Trade Routes or the announcement of the cuts to this program?

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

I mean the announcement of the cuts to this particular program.

[Bob D'Eith]

Obviously nothing has happened yet, because it's a new cut. Obviously a lot of artists who count on that for moving forward and for recording and promoting their music are suddenly without a home. FACTOR, for example, does fund classical and jazz and roots and folk, but there's a certain segment of those genres that will never get FACTOR funding or MUSICACTION funding. Those are the ones that really are being put in jeopardy now. I think the decision needs to be made there.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Alain, I know that you were describing some of the dire results of not having the funding of $1.3 million. Can you please elaborate for the committee what the repercussions of this money will be for your members?

[Alain Pineau]

As I said at the outset, the mandate of our organization is not specifically that narrow. We really embrace the whole kitty. We're intervening here on the issue of principle.

I cannot tell how many artists will be affected. Others have, and it's on the record. They're in a much better position to do that. We're coming here in terms of investing in creativity and investing in developing cultural diversity in new formats and new genres. We are here to advocate for risk capital in this particular sector. We deem it a very small amount of money to invest in development, and it's much needed.

That's all I can say on this particular issue.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

In terms of the other programs that exist—and you have a good sense of the needs of your membership right now—do you think there is anything in existence at the moment at the federal level that will be able to compensate for this $1.3 million?

[Alain Pineau]

Not that I am aware of—except, as I said, if organizations like the Canada Council are also asked to take from Peter to feed Paul. If we're talking about redirections within the envelopes, that's indeed the approach that seems to have been taken in this case, for whatever reasons. We're here to say “I don't think so, that's not the right idea”, but in the spirit—which we applaud—taken by the government in renewing and securing the current level of funding for five years, because I really don't think there have been major increases in the budget of the Canada Music Fund. There may have been some fringe increases, but essentially we're talking about a redirection of money that existed. The fact it is subject to votes of Parliament on a yearly basis and there's a commitment for five years is certainly something that is most welcome, and this has been expressed publicly. Mr. Moore quoted a number of our members who were lauding this. He doesn't have a quote from me, but he could, because from the above perspective, that's not the problem.

The problem is exactly what's been described in front of you during all of these sessions, in that you're taking away from something that is really important but doesn't seem so. It may have seemed at the first level, at first blush, there were duplications with the existing programs, but I think there's enough evidence here in front of you to show that is not the case. I hope the government will recognize that.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Madame Lavallée.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

My first question is addressed to Mr. D'Eith.

You said that you had been consulted.

[Bob D'Eith]

Yes, I was consulted by the minister, but not about cutting this program.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Do you consider that you were consulted in a formal way? Did you fill out a form or was it an informal private conversation?

[Bob D'Eith]

No, unfortunately, I'm brought into a lot of these things, so I can't remember whether or not I was actually brought in formally to talk on this topic, but we've had many top discussions nationally on this. I think where I was able to address it most directly was with the minister. Again, we were able to say there was a great need to replace the Trade Routes funding, because that was cut, and that we also needed some help for digital music.

As I said, at no time was there any discussion on cutting this fund.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

You understand that your testimony is of tremendous importance. In fact, out of the 500 groups referred to by the parliamentary secretary, you are the only person who told us that they were consulted regarding the Canada Music Fund.

Do you remember your conversation with the minister?

[Bob D'Eith]

Oh no, I recall my conversation with the minister very well. I am just saying that while I know there were some consultations that happened generally, I just can't recall—

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Could you repeat to us what was said during your conversation?

[Bob D'Eith]

Sure. At the the time, we were trying to get funding for the Juno Awards, and the federal government at that point was not willing to contribute to the provincial part of it. That was the reason for the meeting. At the same time, we were able to talk about general issues, including the Canada Music Fund, FACTOR, and also the cuts to Trade Routes. I brought those up, and how important the need for export marketing for music was within the industry. And I also brought up the idea of help for digital music.

But I think you'll find as the week goes on that you will probably talk to other people who were formally consulted, like FACTOR, Heather Ostertag, and CIMA—formerly CIRPA. There were a number of organizations formally consulted on this.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

You understand that the kind of persons or groups that were consulted had their own commercial interests to defend. That is what these people defended, as you also did. You say that you were consulted about the renewal of the Canada Music Fund, but not about the cuts.

Did the minister ask you what would happen if the specialized music program was terminated?

[Bob D'Eith]

There was never any discussion of that, of course. This was as much a surprise to us as anyone else. As I said in my presentation, we don't advocate a derogation of the funding to the Canada Council and we would never advocate that.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

I'm sorry for interrupting you, but I do not have much time.

Thus, you were not consulted about the termination of the specialized music program.

[Bob D'Eith]

No, never.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Pineau, the Canadian Conference of the Arts is a forum. The parliamentary secretary said that 500 groups had been consulted regarding the termination of the program. Do you know these 500 people?

He said there were over....

[Alain Pineau]

No, I am not aware of this. It is normal not to consult an organization such as ours regarding the renewal of some specific program. When the news came out, during the summer, I was on vacation. We found the press release a few weeks later. Actually, summer is often a calm period for artistic organizations.

For us, the most important priority was to renew the final phase of the program that was then known by the name "Today is Tomorrow". It was one of the important components. It was among the cuts that had not been announced in June, and we were wondering if there would be another one in the publication program. I do not know whether this was done, I did not follow the situation closely enough. We were happy with that. As I just said, Mr. Del Mastro could theoretically have quoted me and described how happy we were with this commitment, which was real. Had we been consulted—which would have been unlikely—we would have said no, just as we are saying no today. Cutting the budgets for basic research is not a good idea.

[The Chair, Conservative, Gary Schellenberger]

Okay, the time's up.

Ms. Chow, please.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Thank you.

I notice that the music fund this year in 2009 is $27.6 million. That's about $10 million more than 2001--remember, I'm a New Democrat, not a Conservative--and that is $4 million more than 2005. Having said that, yes, there is a big cut of $1.25 million off the diversity funds. You can hear from my questions from previous panels that I'm very much opposed to this fund. Thinking about how we move forward in a 2010 budget, this upcoming budget, the Canada Council has a commitment of $181 million, including $25 million in new funding.

If, in the ideal situation, the Canada Council received an extra, say, $2 million for specialized music distribution and specialized sound recording grants for those who are dealing with contemporary Canadian compositions and spoken words, music, all of the things that diversity funds used to fund, would that get us out of the jam of having all the most creative, edgy, or beginning artists--over a hundred of them--being unable to get some grants to get themselves started?

Having asked about the best way forward, would that be the best way? Or should it be restored as part of the $26.6-million Canada Music Fund? Or should it, in an ideal world, come through the Canada Council in an increase of, say, $1.5 million?

[Bob D'Eith]

Obviously, if we could increase the funding this problem goes away. We get our new programs, which we are desperately needing, and the specialized music gets funded. If you were able to give the Canada Council some extra money to replace the funding that was cut, then the problem is solved. Great idea.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Thank you. I was hoping for that--

[Alain Pineau]

Yes, it's an idea we will certainly fully support as well. From all the information we have, it should remain with the Canada Council, because this is not an issue of pitching FACTOR or MUSICACTION against the Canada Council. They are operating under different circumstances, with different mandates, under different criteria, and it is not taking anything off FACTOR to say their concerns are not with this sort of developmental money. They have to have a return on their investment. They are making loans.

So yes, and I will not waste the opportunity: you started with $2 million—$2 million would be fine, because I'm sure the extra $700,000 could be put to good use in terms of music development. We're not too greedy; we would just be happy if it were back to the $1.3 million as a base budget of the Canada Council and remain there. They will be able to show, in I hope 15 years' time, the same sorts of results they've shown for the past 23 years with this program, which according to all evaluation processes—and God knows government evaluation processes are tight—show that it's run efficiently and it does what it's supposed to do.

[Olivia Chow, NDP, Trinity—Spadina, ON]

So have there been specific requests? I guess that's what we're talking about. I hope this committee can make that recommendation.

[Alain Pineau]

We did not specifically say in our letter to Minister Moore that the money should go to the Canada Council. We've taken that for granted. We just said it's $1.3 million, and surely to God in the next budget you can find that to prevent the disappearance of something that is important. This may be a sort of collateral, a little flower that was crushed by mistake. That's our best hope. Let's recognize it and let's heal it.

[The Chair, Conservative, Gary Schellenberger]

Mr. Uppal, please.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Thank you, Mr. Chair.

Thank you for coming, witnesses.

I'm really not going to get into the details of the consultations and the process, because over 500 people—individuals, artists, groups—were consulted.

I agree with you that the five-year renewal for the Canada Music Fund brings stability not only to that fund but to the industry itself. This program we're talking about specifically serves fewer than a hundred grants a year across Canada. Most of those applicants still receive funding from other government programs, and those other programs are now stronger because of the investment in the Canada Music Fund.

Almost 50% of the albums produced with CMF support in the last year were albums of niche genres of music. With regard to funding niche music in the last fiscal year, the CMF provided funding of over $1 million for classical, $1.7 million for jazz, and over $3 million for roots music. Apart from the CMF, the Canada Council has a $30-million budget for its music, which includes $9 million for specialized funding. So the door is definitely open for artists to receive funding from other channels.

If you can, Mr. D'Eith, talk a little bit about the importance of investment in digital music of all types, especially in this day and age.

[Bob D'Eith]

If you read the newspaper, you're probably aware that the entire recording side of the music industry has been in a tailspin for the last five or six years because of the digital downloads and the whole phenomenon of the Internet. In traditional retail, we're seeing bankruptcies in distributors, retail stores, and labels. Major labels have been firing wholesale and going back to being marketing companies.

An interesting phenomenon is that a lot of the responsibility for artist development has fallen back on the artists themselves. One of the areas of development that artists and independent labels can use is online digital music that can be sold legitimately through iTunes, subscription services, and mobile downloads around the world.

This is a new model that is just growing now. We isolated this as a specific need for the music industry—to try to grow the ability of the music industry to develop digital music, digital sales, and digital marketing. This would help replace all the traditional sales that have been lost over the last five to six years. We're talking billions and billions of dollars in sales losses, with 70,000 firings in major labels in North America. It's been devastating. Having this funding right now is a recognition that we need to move forward and embrace the new technology. But we need some help.

We feel that this issue of the Canadian music diversity fund has been pitted against the digital and the export. We're comparing apples and oranges. It's a shame that a press release said that we were taking money from Canadian music diversity and giving it to the industry for digital and export marketing. It pitted the industry against the non-traditional community, which we just don't accept. We're not in competition. We embrace the non-commercial community. It's just a shame that this happened. But the need is real, it's now, and support for digital music is essential.

[Alain Pineau]

We seem to be talking at cross-purposes. Nobody disputes that the investment of the government, as was confirmed through the five-year renewal of the Canadian Music Fund, is needed. On better days, I would even argue that it's not enough.

The issue here is that we're talking about something completely different, which is being suppressed for a good cause. It's like cutting off your right limb in order to be able to scratch your back. It's like supporting the auto industry today to save jobs, while failing to invest in alternative forms of transportation. That's what we're talking about here.

You can tell me that the government has made important investments in other areas that are just as important as this one. I will agree 100%. I'm saying that this one is just as important and it's a small amount of money. Can we revisit?

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Ms. Zarac please.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

Thank you, Mr. Chair.

Good afternoon. I am not a regular member of this committee, but since I have been here, I have understood that the industry is very happy with the extension of funding over a five-year period. I also heard that the government may have met more than 500 associations or artists to establish the new mode of funding.

Mr. D'Eith, you said that you wanted to send out a very clear message saying that the reductions were made by Canadian Heritage and did not reflect the opinion of your association or of the industry.

You belong to this group of 500 associations or artists who did not know that this was a poll aimed at establishing a new way of funding the program. I felt that you were somewhat defensive when you said that.

[Bob D'Eith]

Sorry. I didn't mean to be on the defensive. It just seems the music industry or the commercial industry is somehow being pitted against the non-commercial in this.

We were consulted on what would help the music industry. We were not consulted on cuts to the Canada Council. If we had been told that our funds would be at the expense of something, we may have had a completely different approach. We may have said maybe we need to balance things, or maybe we have to rethink that.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

You think that you belong to the 500 organizations that were consulted, but you were not really aware of it. Am I right?

[Bob D'Eith]

I'm not sure if I'm on that list. I can only tell you that I did speak to the minister and we did speak about these issues. Was it a public forum? No. But I feel we were consulted because what I said was implemented and it was echoed by many of the organizations I'm affiliated with, so we were very happy with the fact that we were listened to and that our consultation had some impact, which was great.

What we just didn't know was that it was going to be at the expense of something.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

Thank you.

Mr. Pineau, you said that something would be closing down in April 2010 and that it would impact on research, innovation and exploitation.

[Alain Pineau]

It had to do with distribution.

[Lise Zarac, Liberal, LaSalle—Émard, QC]

Could you tell us more about the impact that this will have?

[Alain Pineau]

Distribution is one part of the $1.3 million. The Distribution Service has existed for many years and it is managed by the Canadian Music Centre on behalf of the Canada Council. This service created an international network for distributing small catalogues by consolidating the catalogues of 200 publishers. This could have to do with individual artists who have published their works or, for instance with the St. Lawrence Quartet, that released five or six recordings and that enjoys an international reputation, but it will never make any money from this.

By combining all the small catalogues, the Canadian Music Centre succeeded in negotiating with Naxos, or with the online service, international distribution over Internet; that is the future. Besides, this is what we quoted in the July announcement. We recognize this and we entirely agree with Mr. Del Mastro: This sector must look toward the future. However, it is a mistake to think that the program we are talking about is part of the past. It is very much a part of the future, in our opinion, and this distribution system includes, among other things, the recordings—and I did not know this—and the catalogue of music that was recorded by Radio-Canada, and perhaps they are making fewer recordings than they used to make. This is quality music that shows that the Canadian artists, orchestras and classical music ensembles, and even experimental music groups, when Radio-Canada was still involved with that, have a role on the international stage that we can be proud of.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

I'll move on now to Monsieur Pomerleau.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you, Mr. Chair.

All the people—mainly artists—who came before us during the past two meetings explained how vital this program was for them in many ways. It is a basic need of theirs because they are creators more than people who work in the commercial field. They told us that this program is, in a way, research and development for the arts and that it would nurture future production. Some even told us that it was crucial for Canada's image. These people have often won international prizes, for example Juno awards, and they are known abroad, even though they are less well known in Canada. They are known as bringers of Canadian culture. This is important.

We realize that this program costs very little, namely $1.3 million. It will be cut, but we see that it has little overlap with other programs. Others told us that this was a program that cost very little to administer and that the sums that are being cut will be redistributed. Therefore there is no advantage for the government in cutting these sums because they will be redistributed elsewhere. There is no clear justification for this nor any reasons having to do with accounting, administration or the budget.

Mr. Pineau and Mr. D'Eith, what is the basic reason behind the government's cutting this program?

[Alain Pineau]

I am not going to speculate about the reasons why the government would make this kind of transfer. The most generous explanation that I can provide is that it was done inadvertently.

You will have the opportunity next week to ask officials from Canadian Heritage if they recommended this. Normally, if these people recommend something, there should be reasons for it. These reasons would refute our statements. Either there was an issue with duplication—this is not the information we obtained—or someone felt the money was wasted, or it was a greater priority to head in this direction and just too bad for research and development!

Next week, the officials should be able to tell you whether or not they recommended this to the minister. If it is not the case, other reasons will have to be found. I will not fabricate any reasons for the purpose of this exercise.

[The Chair, Conservative, Gary Schellenberger]

Mr. D'Eith.

[Bob D'Eith]

It's interesting. I agree that a number of these artists receive money from FACTOR, MUSICACTION, and what not. A good example is Jesse Zubot, who came in last week. He's a good friend of mine. He's a prolific artist in Canada. He has won multiple awards. He is an interesting fellow and he has an interesting music career. There are some commercial products that he and his partners do. But there's also a side of Jesse Zubot, and artists like him, that leans toward experimentation. I'm not sure what he said, because I wasn't here, but I would imagine he would say that although he might receive some money through FACTOR and other organizations, he would always want the ability to create in an unfettered way.

[Roger Pomerleau, Bloc, Drummond, QC]

That's what he said.

[Bob D'Eith]

Did he? I honestly didn't know. But that is the distinction. It's really easy to see on a spreadsheet that artists received FACTOR, Canada Council, or this or that, and then to say that they're double-dipping. But the reality is that these are the same people who are also experimenting, who are pushing the envelope. If anybody is going to push the envelope, it's Jesse Zubot. He's right out there. He's brilliant. And we should support artists like him. If you dig deeper into the program, you'll realize that there really is a value to that.

[Roger Pomerleau, Bloc, Drummond, QC]

May I put another question, Mr. Chair?

[The Chair, Conservative, Gary Schellenberger]

Okay, but keep it very short.

[Roger Pomerleau, Bloc, Drummond, QC]

Mr. Pineau, you mentioned UNESCO. You are among the very few that mentioned it.

What are the obligations of Canada with regard to the UNESCO treaty?

[Alain Pineau]

I cannot quote the entire text, but the commitment has to do with preserving and promoting cultural diversity all over the world, on the international scene, and with recognizing that cultural products—if I can use this expression that some find offensive—and cultural expressions are not commercial products like the others. This must be taken into account in international trade treaties.

Especially in a country like Canada, where cultural diversity is real and growing—in Quebec as well as in the country as a whole— we say that charity begins at home. If we make a commitment to support cultural diversity on the international scene, we must make a commitment to forge a Canadian cultural identity with the resources we have here. This is where the argument of cultural diversity comes into play. The Canadian government has made such a commitment. Its commitment must be valid both at home and abroad.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Ms. Grewal.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Thank you, Mr. Chair.

Thank you, gentlemen, for your time and your presentations.

My question is for Mr. D'Eith. He is from my home province of British Columbia. About 60% of those funded by the Canadian musical diversity fund also receive funding from other kinds of music funds or a Canada Council music program. Mr. D'Eith, are you familiar with other sources of federal funding for Canadian musicians? Can you tell us something about continuing the funding for this program? Is it true that the government also supports popular artists and major labels?

Talking about Jesse Zubot, I would like to say that he didn't receive any funding under this program.

[Bob D'Eith]

I'm not sure what Jesse may or may not have received. It's hard for me to speak on this, because we are the affiliated office for FACTOR, but we are not FACTOR. So I can tell you what I know, but I can't speak on FACTOR's behalf.

What I can say is that FACTOR does fund all genres. I know for a fact that of approximately 1,500 applications, over 450 of those were of the non-commercial variety—about $4 million last year—but as I did say, there is a distinction to be made between funding classical jazz roots and.... It's a fan: at some point along that continuum, it is something that FACTOR would never support, and that is where this program kicks in.

It picks up the slack where FACTOR would just not get involved because there's not a clear commercial viability to it. So it filled a gap that MUSICACTION and FACTOR and other programs didn't cover, to my knowledge.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Mr. Chair, I will pass the rest of my time to Mr. Gourde.

[The Chair, Conservative, Gary Schellenberger]

Okay, Mr. Gourde.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you very much, Mr. Chair. I thank my colleague for allowing me to put one last question.

Could you describe in a few minutes your vision of the future of cultural diversity? What do you see for the coming 10 or 15 years?

[Some hon. members]

Oh! Oh!

[The Chair, Conservative, Gary Schellenberger]

You only have about a minute for the answer.

[Alain Pineau]

This is not something I can tackle in 30 seconds here, and even if you gave me an hour, I'm not sure I would be ready to answer that question point blank.

I am stating that our society is culturally diverse. We have not gone the melting pot route. We are trying to honour and respect the various cultural traditions and backgrounds of the mosaic of Canadian society—which is more of a mosaic than it was when a book was written on that in the fifties—and to say that we should invest in that diversity in genres. I think you had in front of you a native lady from Saskatchewan last Tuesday, who came here to express that she is doing something that doesn't belong anywhere. That's creativity.

I have a problem when we are told that 60% of the people.... I don't know the source of the statistic, but what if 60% of the people who received money from this program that's been abolished also received money from FACTOR and MUSICACTION? It just goes to prove that you go from creativity to commercial viability, and it's just like saying that 60% who go to the hospital for a heart attack have been to a hospital before—probably for something else. That's the point my colleague was explaining to you: the purpose was different. The purpose of this fund, administered by the Canada Council, was research and development, and the same artist can come into a genre that becomes commercially popular and viable. There is a difference between a grant for creativity and a loan for a commercial venture. My understanding is that's the system.

We're not saying that FACTOR and MUSICACTION are bad people because they look at it from an investment point of view, from the return on investment point of view—that's their mandate—but we're saying that the Canada Council people look at it from a different angle.

By the way, we are talking about 100 artists. That hides the reality that it's a 15% success rate, if I remember the figure correctly. In other words, 15% of the people who applied to this fund received money. The competition is very high; it's only the top-quality people who make it. That's why I'm saying that I'm jumping to $2 million. You are part of government, so you know what choosing is about, but I've been on peer juries for other reasons, and you have 20 out of 100 applicants who really deserve the money, but you have to stop at the tenth, because that's in line with the amount of money you have. It doesn't mean the others are not good; it means they didn't make the cut this time.

So this is a program for excellence, and it's not a program for a small minority. It's a program for the development of excellence.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

I must say we do appreciate your candid answers, and thank you very much for coming.

The meeting is adjourned.