Canadian Heritage Committee on June 6th, 2006

[The Chair, Conservative, Gary Schellenberger]

That's it for right now. Thank you.

Mr. Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Mr. Chair.

Thanks to each one of you for coming out today; we really appreciate it.

I wanted to ask a bit on the same train of thought as Mr. Malo was talking about. Who pays for the assessment of these local museums, or the museums looking for the accreditation, or whatever is necessary in order to get all the inspections, and so on?

[Lyn Elliott Sherwood]

The institution needs to have the facility in place to monitor its humidity, etc. The Canadian Conservation Institute does carry out the inspections. In certain cases, if it's part of a larger renovation project, they may charge a fee for the time, because it's a benefit to a single institution, rather than something they're doing for the community as a whole.

[Chris Warkentin, Conservative, Peace River, AB]

So this is at no cost to the indemnification program.

[Lyn Elliott Sherwood]

That's right.

[Chris Warkentin, Conservative, Peace River, AB]

I'm curious about the $1 million per year that is used to operate.

[Lyn Elliott Sherwood]

I'd like to be clear; it was $1 million over five years, or $200,000 per year.

[Chris Warkentin, Conservative, Peace River, AB]

Oh, $200,000. It's fantastic that you're able to run things with that amount of money.

Do you expect that's going to rise as more people apply for the program? Or is there any necessity for us to review that portion to see if any additional funds would be required?

[Lyn Elliott Sherwood]

It's a fair question. We don't anticipate a huge rise; I think we're talking about the addition, perhaps, of another one or two exhibitions a year, and that's certainly manageable within the framework we have.

The cost of what we do for the external advisers is in bringing together a panel periodically to look at everything together. So that might add, for example, a day to the panel's work and an associated cost. But we would not anticipate that it would generate so much more work that we would need to add a significant number of staff, if any.

[Chris Warkentin, Conservative, Peace River, AB]

Okay, that's great.

I'm just curious if there's a necessity from your perspective to start to look at issues surrounding legal ownership of the artifacts as they're coming in, and also at issues arising from our importing artifacts in which we might have some type of illegal or endangered species material.

[Lyn Elliott Sherwood]

The issue of provenance is certainly an important one, and has become increasingly important as attention has been paid both to Nazi-era changes of ownership and to some of the current issues of perceived looting. Part of the evaluation process for an individual exhibition is an examination of provenance. So that's part of the process and part of the documentation that needs to be supplied in the plans for the exhibition.

The same thing is true when you speak of material, for example, that may be composed of elephant ivory or an endangered species. The examination of the plan for an exhibition is actually an object-by-object examination, with a full description. The peculiarities or the particular conservation requirements of individual objects are part of the risk assessment. As part of that, the core documentation would include the material. That's an opportunity to use that.

We certainly do look at the implications for things like the Cultural Property Export and Import Act, in the event that there's any crossover, and the Customs Act. That's all part of the evaluation that's conducted.

[Chris Warkentin, Conservative, Peace River, AB]

So your sense is that the evaluation will take care of, or mitigate, any risk that may be experienced if indeed something actually slips through the cracks. I guess you would assure the committee that nothing will slip between the cracks—or that is the hope, I guess. There's no exact--

[Lyn Elliott Sherwood]

I believe that to be true, given the quality of the evaluators and the requirement for information. I think it is important to note that right now, in the event of a claim against the rightful ownership, this is not something we accept to indemnify right now. So that is not part of the risk. Part of managing that risk to the Crown is that it's an exclusion under current indemnification.

[Chris Warkentin, Conservative, Peace River, AB]

And there are no plans to make that an inclusion?

[Lyn Elliott Sherwood]

It's one of the issues. People have said, cover everything. A number of the American lenders would like us to be covering gross negligence. Part of the risk analysis, as we go through, is what is reasonable to cover and what is a reasonable limit of risk for the Government of Canada?

[Chris Warkentin, Conservative, Peace River, AB]

Thank you very much.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Before I go to Mr. Angus, I do have two small questions too. Because I have the chair, I'm going to take the advantage.

I know that in the fiscal year, the program cannot exceed $1.5 billion. Where is this money? Is it in a fund, or is it just fictitious? Where is the money?

[Lyn Elliott Sherwood]

I'm tempted to give you a facetious answer, which is that it's the Department of Finance's magic money, but the contingent liabilities are actually booked as part of the estimates, so that the potential for payment on the part of the government is actually calculated as part of it.

[The Chair, Conservative, Gary Schellenberger]

It's part of the contingency funds. Okay.

There are some 2,500 museums in Canada, small museums, and there are fewer than 40, I understand, that use this program. Is the program there primarily for the big museums, then? And would those big museums be primarily, then, provincial museums or other federal museums across the country?

[Lyn Elliott Sherwood]

I would say it's certainly true that it was intended for the major exhibitions. The cost of insurance for these exhibitions would be a barrier to a museum's ability to create them. So I think it's fair to say it was targeted.

We are seeing some smaller venues being approved for exhibitions. I mentioned the Rocket Richard one, and that's going to Alberni Valley Museum, the Red Deer Museum, Musée de Chicoutimi, Musée de Val d'Or. So we're starting to see some smaller institutions, and I think one of the contributing factors is actually the cultural spaces Canada program in the Department of Canadian Heritage, which will finance the remedial work needed to bring institutions up to standard. We're certainly aware of a number of institutions that are benefiting.

Keith is part of the recommendation-making process for the cultural spaces Canada program, so we do see the correlation there.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Mr. Angus, go ahead, please.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Normally when we have people before our committee, we zero in on the high cost of administration and whether or not the money would be better spent out in the field. My question to you is whether $200,000 a year is enough, because it is, at the end of the day, a fairly high-stakes game if we're bankrolling a $450 million exhibit. Do you have the resources to make sure you can do the due diligence necessary?

[Lyn Elliott Sherwood]

I would say yes. I am actually going to put Keith, as the program manager, on the spot. The reason I would say yes is that we have the staff and the expertise there, but also, we pull in the panel of external experts to examine every exhibition application. It is a fair question, and I don't actually know how Keith will answer it.

[Keith Wickens]

The $200,000 is used to evaluate an exhibition and then recommend whether or not enough risk has been mitigated to make it feasible for the government to assume the remaining risk. In evaluating an exhibition, the staff has a number of things at its disposal. For instance--and this is just one example--there is a major book on just about every artist who's ever been and the last prices that they have sold to in public auctions. So if we get a particular painter who looks like he's out of whack--and this has happened, in fact the Canadian institution just turned down a lender flat because the price was inflated--we have indications. The actual cost of the assessment is for reading fees by experts who then come and compare their notes, etc. We have experts for security and for fire. We have three conservators who look at the particular fragility of aspects. We have experts in transportation and handling of exhibitions. We have experts who are curators and who are familiar with these kinds of works. We have experts who look at everything from how much light is going onto a delicate piece of paper or what particular company....

I can also add that many of my contacts are international, and certainly I'm on a virtually weekly contact basis with my colleagues in other countries, running indemnification schemes. We share our own experiences when it comes to particular problems that we're not sure we've covered.

[Charlie Angus, NDP, Timmins—James Bay, ON]

So now that money comes out of the $200,000 pot, does it?