Bill C-32 (40th Parliament, 3rd Session) Committee on Feb. 8th, 2011

[Patricia Feheley]

We have to be realistic and say that the recession has not helped it, by any means. The Canadian art market is always fragile because we simply do not have the population to support the number of artists we have. So for those of us who work to promote the work of artists, it's very much an uphill battle. It's important to get it out of Canada, to get it out globally, because our art market is not big enough.

It's particularly fragile at this time, but you have to remember that the art market is cyclical, like everything else. It goes up and down. It will be more fragile sometimes than other times. I think we have to be careful about imposing something that remains in place.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Absolutely.

So our largest markets are outside of the country. You mentioned the U.S.; you mentioned Asia. I presume that includes aboriginal art?

[Patricia Feheley]

Yes.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Is that a fair statement?

[Patricia Feheley]

Absolutely.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Very good.

Ms. Shiell, you were about to provide an answer to a question from Mr. Angus that he didn't want to hear and he stopped you. You were about to explain the flaws in the comparison between what a piece of art received in 1958 versus what it receives now. Could you elaborate on that?

[Miriam Shiell]

That argument is totally bogus. I had to ask Tony Urquhart sitting here what his studio rent was in 1959. In 1959, the art market was so tidy that any artist would have been grateful for any sale, and any sale would have made a huge difference in their livelihood. Not that we're saying that it is not so today. Any sale is important to any artist. But to say it was $250—inflation took its toll. In fact, if that artwork is now selling for $10,000 at auction some 60 years later, we're probably losing money on it. And the issue of losing money is one that hasn't been addressed yet. If you're applying the ARR across the board to all secondary market sales, how do we know whether or not that seller is losing money? And if he is losing money, is the government going to allow that deduction as part of a capital loss?

Increasingly, we must also look at who's going to bear the cost of the ARR. Essentially, the wealthy are the major art-buying public. So we're looking at taxing them again. Money will go to where it gets the best return, so it will go where it doesn't have to pay these increased costs. It will in fact go underground. I think that's a real issue, because this is a marginal market in the first place.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

So one of the things we want to avoid is the black market?

[Miriam Shiell]

We want to avoid grey markets. We want to avoid black markets. We want to avoid things like collector-to-collector deals, where the dealer is brokering and no taxes are being paid. These are practices that are going on all the time. New York is the biggest art market in the world, and it's right on our doorstep. It is the elephant in the room, there's no doubt about it, and we should always recognize that.

The British art market is $18.5 billion a year, compared with the Canadian market, which, in the 1990s, was half a billion dollars a year. If we want to be generous, we could say it's now a billion dollars a year. It's probably something considerably less than that. We don't have any recent numbers from Stats Can to be able to give you that definitively. It's tiny.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much.

I want to move to Ms. Britski, just in the interests of time. To begin, for a point of clarification, Ms. Britski, are you aware that the ARR and the exhibition aspect as well, which our colleagues from Quebec have spoken about...that these two proposals are outside the scope of Bill C-32 and as a result, for all intents and purposes, are outside the scope of discussion at this committee?

[April Britski]

I know the resale right currently isn't in the bill, but there is a section that does refer to sales, which Christian knows more about. But I do believe this is the best place to introduce the resale right, because, as you all know, it can take years to push copyright amendments through--

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

We're seeing that, yes.

[April Britski]

Yes. I think it's important to note that Canada was the first country in the world to make it so that artists, when they exhibit their work in a public gallery, receive a fee, and that right is in the exhibition right in the Copyright Act. It breaks my heart that we will, at best, be number 60 to get the resale right.

With respect to the other countries that don't have it, I say at best we'll be 60, because I understand that the U.S., Japan, Switzerland, and I believe Venezuela are all actively pursuing it right now.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

We heard from the Art Dealers Association of Canada that one of their concerns about the ARR proposal is they feel there hasn't been sufficient consultation about this. Could you respond to that? Could you tell us what consultations you have done, what consultations CARFAC has done?

[April Britski]

We've conducted a number of information sessions across the country, with artists primarily, and intend to do more. We've consulted widely with other countries about how the resale right works, how it's administered, and what kind of impact it's had on the market. We've talked quite a bit internationally to find out what kind of impact it will have.

We have heard from some dealers and some auction houses about their points of view about how it would work, and some are in support and some obviously are not. But there has definitely been some consultation.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Ms. Feheley, you explained that the experience in Europe, to say the least, has been contentious. Could you just elaborate a little?

[Patricia Feheley]

I think I have to put something on the table. There have been two...well, in fact, one book and another major report published in the last two to three years that very definitely include a lot of information about the difficulties ARR has caused in other countries.

Nowhere in any of the material I've read here in Canada about this or pertaining to this discussion have these been referenced. We have the text of one, which was texted to us in the last couple of days. We had a week to prepare for today or we would have had a much bigger brief.

I think we have to recognize that a lot of the statements that are being made are simplistic, and they're also based on older data. There is considerable new evidence of the problems with ARR, particularly in Europe.

Unfortunately, I can't quote the 26 pages, but I can certainly provide the references for anyone who wants to pursue it further.

[The Chair, Conservative, Gord Brown]

Thank you very much. That will have to be the last word. Well....

[Miriam Shiell]

May I just give one example?

[The Chair, Conservative, Gord Brown]

No, we are out of time. I'm sorry, we have to be fair with our rounds and we're pretty well fair on that.

Thank you to the witnesses for being here today and for their informative presentations.

This meeting is adjourned.