Good morning. My name is Patricia Feheley, and my colleagues and I represent the Art Dealers Association of Canada. We would first like to thank the chair and the honourable members of the committee for inviting us to appear today.
The ADAC is the only national association representing professional commercial art galleries and dealers. We are the major driving force behind the art market. I'm appearing here today with two colleagues from the ADAC: Johanna Robinson is the executive director of the association; Miriam Shiell is the immediate past president and is a senior dealer in both the Canadian and international art markets. I have a commercial gallery specializing in contemporary Inuit art as well as selected first nations artists.
The art market in Canada is increasingly fragile. Consumer spending on art in Canada plunged between 2000 and 2008 by 20.3%. Exports of works of art, central to sustaining a strong Canadian art market for our artists, fell in the same time period by over 25%. The average artist's income is pitifully low.
We did not prepare a formal brief regarding Bill C-32 because we have few objections to the majority of the provisions and because this is better addressed by our colleagues in the other cultural subsectors. Most of the provisions of Bill C-32 support our own view that it is essential that all creators retain not only control over their works but also rights to any secondary revenues.
We're particularly supportive of mandating a review of the Copyright Act every five years. In fact, we agreed to appear here today simply because we have been aware of a concerted effort to include in Bill C-32 a provision for artist resale rights or droit de suite, a provision that would allow certain artists to share in revenues from secondary market sales of their works. For the remainder of this statement, I'll refer to this provision as ARR.
Our position is simple: it is premature and it would be irresponsible to add these rights into Bill C-32 at this time. There are many negative aspects that must be considered. It is an extremely complex issue, one that could affect the art market in this country. This impact could be serious enough to warrant considered thought, research, and consultation, which takes time. In our estimation, this time will not be allowed if ARR is added to Bill C-32 at this late date.
Consider the following. We are the business professionals who are most intimately connected with the local and international art market. Neither the ADAC nor the auction houses, which are also major stakeholders, have even been consulted on this issue. Consider the countries that have signed on to the ARR. The United States, with the exception of California, has not implemented it, nor has Asia. The former is the strongest market for Canadian contemporary art; the latter is considered one of our fastest-growing art markets.
A considerable amount of the European art market has been moved to Switzerland, a major European art centre. Switzerland does not recognize it. In Europe there are fundamental problems with the design and implementation of the ARR. Protests have been lodged, both by dealers and by artists. A considerable amount of the European art markets have moved to Switzerland and even to New York.
Based on the European experience, ARR will most often have to be absorbed by art dealers. Typically, commissions for secondary market sales range from 10% to 20%, as we must compete with the auction commissions. An additional 5% is considerable, and it will have to be factored into the resale; that is to say, the resale price will go up. Ultimately, it is the consumer who will pay. Knowing that a 5% tax will be assessed when a work is sold could be a major disincentive to collectors in a fragile art market, particularly, as happens frequently, if the collector is selling at a loss.
It is our opinion that much of the secondary art market will either go underground or leave the country, masking any gains to artists' reputations that the secondary market has.
The expense should also be considered. Both small business and government will have to ensure that it is properly implemented and monitored--for instance, monitoring for compliance when it goes outside the common marketplace, such as to eBay sales. Revenue Canada will have to consider the ARR for both deductions and donations.
Most importantly, secondary market sales that would be counted for ARR account for only a very small portion of the total art market in Canada. Within this small proportion, the benefits will accrue only to a small percentage of artists.
According to a recent study of the ARR in Britain, the top 10% of artists shared 80% of the total amount collected.
In France, 70% of the amount collected goes to seven artists and their families.