Thank you for this opportunity. The Writers' Union of Canada appreciates this opportunity to participate in pre-budget consultations.
The union was founded by writers for writers in 1973 and has evolved into the national voice for over 1,800 writers of books in all genres. Our mandate is to promote and defend the interests of creator members and of Canada's freedom to write and publish.
The union has an extremely important role to play in shaping the application of your objectives. First, to support the creative work that is the heart of the Canadian cultural economy, the Writers' Union of Canada urges the Government of Canada in its next budget to introduce a copyright income deduction for creators modelled on that used successfully in the province of Quebec; second, to exempt from taxation subsistence grants for creators that are administered by the Canada Council for the Arts; and third, to increase the Public Lending Right Commission's budget to bring it to the same hit rate as when it was established 18 years ago.
Let me expand a little on those three items. The income copyright deduction has been used in Quebec for several years. This deduction not only corrects a tax penalty but also works to encourage, rather than penalize, those who try to make a living from their creations.
In Quebec the provision applies to writers, artists, filmmakers, and composers; that is, it applies to any artist who produces copyrighted material that generates income. This provision would be easy to administer, and its effect would be to encourage self-employed creators to concentrate on creating new works instead of taking non-creative jobs to provide the necessary income to buy time to create.
The second issue that I raise is subsistence grants. This is one of the most confusing inequities that I am aware of in policies. These grants are created and delivered to artists to provide a minimal stipend to artists to live for several months while they create their cultural product--hence the word “subsistence”--yet by the time the grants are released and income tax comes in, the creator has to then pay back an extremely large portion in taxes.
The third item I mentioned is the Public Lending Right Commission. Canada is very pleased and proud to be one of the handful of progressive countries in the world to have a public lending right commission. The call to create a commission was spearheaded by the Writers' Union of Canada. This small organization provides a modest annual income to Canadian authors whose works are available in public libraries for lending. I don't think I need to explain that there is a royalty earned when a writer sells a book, but when a book goes into a library, it's read repeatedly. Unfortunately, the amount of money that's been invested into the Public Lending Right Commission since its inception has decreased, so we're asking that the government reinvest in the Public Lending Right Commission and in its culture to make sure that the values of the Public Lending Right Commission are at least at a par with what they were 18 years ago.
In conclusion, the cultural sector is large and it's growing. Depending on how you calculate it, it embraces different people. It counts between 5% and 8% of the Canadian labour force. At the heart of this enormous productive, vital part of the economy is a very small core of self-employed creators who earn incomes that are 25% to 50% less than those for comparable jobs in other sectors.
In summary, we are urging the government to remove the tax inequity currently carried by creators with fluctuating incomes through a targeted copyright income deduction and by introducing an exemption from taxation on creator subsistence grants that are administered by the Canada Council for the Arts. We further seek this government's support in ensuring that the Public Lending Right Commission is adequately funded in the next budget.
Thank you very much for this opportunity. I look forward to your questions.