Canadian Heritage Committee on April 24th, 2018

[The Vice-Chair, Conservative, Peter Van Loan]

I'm going to call the meeting to order.

We have four witnesses in each frame, which will be tight, and I'm told that there was a pre-arrangement for seven-minute rounds for the witnesses. That will be extraordinarily short.

We have with us New Dawn Enterprises, with Erika Shea; Quartier des Spectacles Partnership, with Pierre Fortin and Jacques Primeau; Music Canada, with Amy Terrill; and Akin, with Oliver Pauk and Michael Vickers.

We will start with New Dawn Enterprises and Ms. Shea.

[Erika Shea, Vice-President, Development, New Dawn Enterprises]

Thank you for the invitation to be here today.

New Dawn was founded in 1976. Through its work in a number of sectors, it's focused on creating a vibrant, self-reliant Unama'ki/Cape Breton Island.

The Cape Breton Centre for Arts and Culture, a cultural hub in industrial Cape Breton, is still in the process of becoming. With the support of the Province of Nova Scotia and the Government of Canada, New Dawn began restoring a 40,000-square-foot 130-year-old convent in September 2017. The centre, which will focus primarily on the provision of affordable workspaces for artists, is set to open in May of 2019.

As I thought about what I wanted to share with you today, I settled on three facets of our journey over the last five years as they relate to the work of Canadian Heritage: first, the importance of investing in the creation of cultural hubs in non-metropolitan communities; second, the efficacy and professionalism of Canadian Heritage staff from the perspective of a non-profit organization; and third, as has been highlighted by several other recent witnesses, the importance of operational funding.

Our experiences in bringing the Cape Breton Centre for Arts and Culture to life are very much rooted in the place in which they have unfolded, an Atlantic Canadian community that has struggled for the past four decades to reinvent itself after the rapid decline of its primary industries: coal and steel. This historical context is important. It continues to influence the lives we live in Cape Breton today, and it connects us to, rather than separates us from, many other communities in Canada.

The creation of a sizable cultural hub against this backdrop is transformational. It is a project that stands out today in Sydney, and one that will stand out for years to come, for a number of reasons.

The Cape Breton Centre for Arts and Culture is the largest investment in downtown Sydney in the last eight years. It will open in an area largely characterized by empty buildings, for sale signs, and deteriorating public infrastructure. It will offer people a reason to come back to our downtown and will offer our downtown a critical mass of people to shop at its shops and dine in its restaurants. It will also, as it already has, give people in the community something to be hopeful for, to take as tangible evidence of the corner that many of us are longing to turn.

Bringing the Centre for Arts and Culture to life in this context has meant having to do so with the support of two levels of government, rather than three. In 2018-19, our municipality will repair only one of 60 local roads, will spend less this year than last on street lights, recreation, parks, buildings, and libraries, and has had to turn down more than $3 million in requests for capital investments from community organizations. To say that our municipality is poor would be an understatement.

Your investments in non-metropolitan communities and economically struggling communities are transformational.

I will note that making these kinds of investments will require ongoing sensitivity to the differences that will arise in bringing these kinds of cultural hubs to life. Arts organizations in these communities may look different: they may not be as big; they may not be as long-standing; and they may not be as well-resourced as organizations in larger cities. I say this knowing that the struggle for resources typifies this sector all across the country.

Cultural hubs themselves may also look very different in these communities. They may have to make space for volunteer-run arts organizations alongside professional arts organizations. They may have to be multi-use spaces where a critical mass of users in the arts sector does not yet exist to fill the cultural hubs. They will likely and perhaps almost exclusively have to be able to provide affordable spaces to artists as defined in relation to the local market and income levels of artists. Local governments, despite their strong philosophical support, may not be able to come to the table with financial resources of any kind. These governments, as was the case with ours, may be struggling to meet even their most basic infrastructure obligations.

Cape Breton has a long history of artistic excellence, and many on the island are committed to reinvention through these means.

My two next comments on the efficacy and professionalism of Canadian Heritage staff and the importance of operational funding will be brief.

As a non-profit organization, it has been incredibly uplifting to work with a department that is professional, efficient, and empowering. This has been our experience with Canadian Heritage staff. From the outset, it has been our sense that they believe—beyond the rhetoric—in the importance of cultural hubs. They have remained focused on the end goal and have been flexible, reasonable, and committed advocates as we've worked through the challenges that are inevitable in a project of this size.

I will close by underlining the importance of operational funds for cultural hubs. For us, our objective remains: creating affordable spaces for artists to work in.

The operational costs of a centre providing affordable space to artists are no less than the operational costs of a building providing space to entrepreneurs or lawyers or the civil service. We have done our best to create and refine a strong and sustainable operational plan for our centre, but even modest periodic supports are helpful in easing the tension between the competing pressures in such a case: the pressure to keep the cost of space as low as possible and the pressure to provide a warm, safe, comfortable, and accessible environment in which to work.

Thank you.

[The Vice-Chair, Conservative, Peter Van Loan]

Thank you very much.

At the clerk's request, we're going to switch up the order for technological reasons. We're going to move to Akin, with Oliver Pauk and Michael Vickers.

[Michael Vickers, Co-Director, Akin]

Hello, everyone. I'm Michael Vickers and I'm here with Oliver Pauk.

Thank you very much for the invitation to be here to speak today. As co-directors of the arts organization Akin, we'll provide a brief history and explanation of our model, followed by a series of recommendations centred around support through policy changes rather than requests for funding. Additional details can be found in our brief, and we'd love to meet with you individually to expand on any of our ideas.

Akin was founded 10 years ago by a group of artist friends in a modest 600-square-foot loft in Toronto. Still entirely artist-run, Akin is now the largest provider of affordable studio space in Canada, providing nearly 35,000 square feet of space to over 300 creators of all types across eight locations in the Toronto area, along with a year-long calendar of roughly 60 free or low-cost programs across three streams: professional development opportunities for practising artists, creative workshops and programs, and community engagement projects with marginalized groups.

We've doubled lease space and renters in the last 18 months due to an acute need for affordable space and supportive programs, and we function without any operational funding. Studio affordability is maintained by negotiating short and medium rental durations in properties transitioning into redevelopment. Our leases have ranged from six months to 10 years. Landlords and developers lease their properties to us on favourable terms before development can begin, enabling Akin to create social and economic value from buildings that would otherwise sit vacant. In many instances, our members are newcomers to Canada as well as young businesses operating in the cultural realm.

We pursue two often overlooked realities of real estate development in our country. Firstly, there comes a time in every building's life when the need for rehabilitation or redevelopment drives leasing rates down to levels that creative or social enterprises can afford. Secondly, the interval between the decision to redevelop and the actual start of construction often takes three to five years or more. The Akin model is beneficial not only for artists but also for property owners and developers, neighbourhoods, and Toronto's prosperity and quality of life.

In short, we have a formula that works: discounted interim real estate, plus refurbishment for artists, plus management, maintenance, and programming and professional opportunities equals inspiring affordable space for artists and vulnerable groups otherwise priced out of workspace, and the creation of supportive, creative, thriving, and interesting communities. One example is Akin's King Street studios, which operate in a beautiful heritage building owned by Allied Properties REIT, one of the country's largest property owners. It's being leased to us in Toronto's expensive entertainment district at far below market rent so that Akin can provide studios to over 100 artists in this in-between period before the site is developed.

As a different example, we do not only occupy buildings at the end of their life cycle. Akin's newest location will inhabit half of the fourth floor of the Museum of Contemporary Art Toronto, creating affordable space for 25 artists in an important cultural neighbourhood from which many artists have recently been forced out by way of rising rents.

[Oliver Pauk, Co-Director, Akin]

How can cultural hubs and organizations such as Akin be supported at the federal level? By changing the rules and focusing on leasing incentives, questioning tax benefits, and facilitating access to unused government-owned property.

We have three suggestions for serious consideration.

The first is “meanwhile leases”. In the U.K., a government-led initiative of meanwhile leases has been promoted since 2009. These are leases of dormant commercial spaces that accommodate non-profit renters at cost, in return for significant property tax breaks or other considerations to the owners. In the U.K., non-profit users typically do not pay rent at all and are simply responsible for covering the cost of utilities and any improvements to the space. This creates more available space for artists, creatives, and entrepreneurs and also a reward for developers, building owners, and realtors: to have their buildings utilized and activated. Both sides benefit and are incentivized.

Secondly, we would like to address the recent development of a “creative co-location property tax” subclass being rolled out across Ontario. We recognize that this change is a step in the right direction, but fewer than 20 buildings in Toronto actually will qualify for the 50% tax break to property owners, which is not passed down to—nor does it directly benefit—the actual creative class itself. Additional barriers include requirements such as the necessity of a minimum of 10,000 square feet of space or a list of more than 40 tenants, as well as an undefined below-market rent. Could a new tax subclass be developed at the federal level that attaches the funding and financial assistance not only to building owners and landlords but to their tenants, as in the U.K.?

Thirdly, we would like to advocate for the government to facilitate more effective processes for the use of vacant government-owned property through the below-market rent policy. The current rules in Toronto make it more difficult than ever for non-profits to access these spaces, including mystery around which spaces are in fact available. Like many others, as a non-profit affiliated with a for-profit, we are automatically barred from access. Even before this, it was nearly impossible for small non-profits to be considered for city-owned properties.

As an example, there is a condo building at 61 Heintzman Street in Toronto that created a city-administered rental space as part of a section 37 agreement mandating that the space would be used to benefit the local community. What happened instead was that a storefront space was created and sat dormant and unused for five years, and, after Akin was deemed ineligible by the city's legal department, it has continued to sit vacant for an additional two years, completely unused. New regulations created at the federal level could require more concrete, useful awarding of budget and space from developments to artists or community groups. City staff could work to facilitate the communication and successful usage of these types of spaces so as not to squander the opportunities they offer.

Finally, there is a lack of cultural policy to support these initiatives and a need for more gatherings with the purpose of sharing information on this subject. Government should help bring organizations in this field together and facilitate sharing of knowledge and the building of community at local, provincial, and national levels.

We ask for revisions of current legislation to enable Akin not only to flourish in the arts, but to assist individuals and groups across a broader spectrum and to protect, assist, and foster cultural hubs and districts across Canada.

Thank you so much for the opportunity to be here today.

[The Vice-Chair, Conservative, Peter Van Loan]

Thank you very much.

We'll now move on to Music Canada, with Amy Terrill, who I suspect will come back for a repeat performance when we do our copyright review.

[Amy Terrill, Executive Vice-President, Music Canada]

I hope so, given the opportunity.

Good morning. Thank you for the opportunity to speak with you today. I'd like to commend you on your study, as currently this is a really active topic of conversation across the country.

My interest stems from my work on “music cities”, which we began at Music Canada in 2011. We define a music city as “a municipality of any size that has a vibrant music economy which is intentionally supported and promoted”. Since 2014, I've led our study of over 30 cities around the world and have become one of the world's leading thinkers on the topic. I've advised cities on every continent and have spoken at countless events. I'm an active member of music city committees in Toronto and Vancouver.

Music Canada published a road map for the development of a music city in 2015. Since then, about a dozen Canadian cities or regions have taken up that road map as well as other independent work and have begun to develop music strategies, including most recently Ottawa, which released a strategy two weeks ago.

One of the most important components of a music city is the availability of spaces and places for rehearsal, recording, and performance, as well as education. It's also likely the top issue identified in Canadian communities.

Some of the common concerns that arise in public surveys and focus groups relating to music are as follows. The first is the lack of affordable rehearsal spaces and live-work spaces, and really the affordability of housing in general. The second is the pressure on small grassroots venues, as well as affordability pressures and the pressures that come from mixed-use areas, with venue closures creating gaps in what we call the “venue ladder”, which is needed to adequately incubate artists. Third, heavy red tape has often been cited as a concern. The fourth is the need for greater audience engagement. Fifth, there is a need for greater opportunities to collaborate and to connect with other professionals, both within music and across the cultural sectors.

Creative hubs in cultural districts can respond in their own ways to these community-identified needs and in so doing can accomplish larger policy, economic, and cultural goals. In our music city investigation, we've identified three typical formats for creative hubs.

There are hubs that are artist-centric, with recording facilities, rehearsal and performance spaces, workshops, and access to the professional services of lawyers and accountants, for instance; hubs that are music business incubators, like you might see for other industries, providing hot desks, networking events, business development, support and training; or, some combination of the two. There are examples in each of those formats. Cultural districts, on the other hand, allow municipalities in particular the flexibility to design rules and regulations that can be used to nurture creative activities in organizations in a set geographic area.

Both of these tools are ultimately about creating spaces and places for cultural uses. As you consider this topic and how best the federal government can support them, there are two things I'd like you to consider.

Number one, music spaces are sometimes not what you might expect. A large portion are not buildings specifically built for a music purpose. Likely half of the inventory is made up of multi-use repurposed or unused spaces: bars, restaurants, coffee shops, libraries, retail spaces, microbreweries, and repurposed industrial properties, to name just a few. A recent economic impact study done in the province of B.C. will soon be released, and indeed, half of the music spaces in the province were not originally identified as music venues. In large cities and small towns, places for musical creation and performance are emerging from unique raw materials. Similarly, creative hubs do not fit a tight definition. I encourage you to think in broad terms about what qualifies as a creative hub.

Second, this network of cultural spaces is composed of a mix of for-profit and not-for-profit, and both are critical for the sustenance of our cultural sector. The same artists—I'm speaking specifically here of music—who perform at not-for-profit venues also perform at for-profit venues. It really makes no difference to the artist.

Our cultural districts are also made up of this mix. Commercial entities—as an example, music venues and music studios—are important tenants in cultural districts and struggle with some of the same challenges facing their non-profit cousins, but typically do not qualify for federal funding programs. Federal funding for non-profit—let me be clear—is really important, so I'm not suggesting diverting in any way.

Let me give you an example. Queen Street West was mentioned in the department's testimony. One of Queen West's most iconic and longest-serving operators, the Horseshoe Tavern, is only able to maintain its space thanks to the generosity of the building's owners. Should the landlords choose to charge market rent, the Horseshoe Tavern could not remain in that space.

Other jurisdictions have recognized the important contributions of the commercial sector and that they too face affordability pressures and heightened demands from nearby residents—for instance, to mitigate sound—and they have made loans or grants available to venues to upgrade their facilities or to acquire specialized equipment. This is something that could be considered in an enhanced funding program.

I applaud you for your study. I commend all of my fellow presenters. I'm learning a lot here this morning. Thank you. I look forward to expanding on this in the Qs and As.

[The Vice-Chair, Conservative, Peter Van Loan]

Thank you very much, Ms. Terrill.

We will now hear from Mr. Pierre Fortin and Mr. Jacques Primeau, from the Quartier des spectacles partnership.

[Jacques Primeau, Chair, Quartier des Spectacles Partnership]

Good morning. I am Jacques Primeau, Chair of the Board of Directors of the Quartier des spectacles Partnership. I am accompanied by Mr. Pierre Fortin, who is our Executive Director.

We thank you for having accepted the brief we tabled, and for this opportunity to submit a few potential avenues for reflexion.

The Quartier des spectacles de Montréal has now become a world-class cultural hub. It was born about 20 years ago from a desire to build a cultural, new-generation space to support a variety of cultural and civic events. It was built thanks to the concerted action of dynamic cultural actors in the downtown area, and thanks to the support of the City of Montreal and the governments of Canada and Quebec. More than $200 million was invested in the public spaces, for instance.

A quarter of all show tickets sold in Quebec are sold in the Quartier des spectacles. That means more than 1.5 million performance tickets, in one of the most concentrated cultural spaces in North America. In this neighbourhood, there are multiple summer festivals, in seven public areas. One obvious example is the Festival international de Jazz de Montréal, but there are also around 40 other festivals that take place in these public spaces, and they remain active throughout the year.

It is the partnership's responsibility to bring about a dynamic balance between the residents, the retailers, the business community and the cultural actors, all of whom benefit from the increased foot traffic generated by this cultural crossroads. The challenge consists in maintaining the residents' quality of life despite all of this effervescent activity.

Public investments in the Quartier des spectacles have also attracted private real estate projects. Over the past 10 years, these projects generated economic real estate spinoffs of more than $2.2 billion.

This development has created major pressure on real estate values and on the cost of establishing households and cultural organizations in the area. Ultimately, if nothing is done, the Quartier des spectacles could become an unaffordable area for many of its creators and its most dynamic venues.

The additional number of visitors drawn to the downtown area by the cultural crossroads that is the Quartier des spectacles benefits all of the economic actors of the metropolis, and that regularly raises questions about the equitable sharing of costs and benefits.

[Pierre Fortin, Executive Director, Quartier des Spectacles Partnership]

There are other challenges, such as the challenge of producing French-language cultural performances or events, an issue that affects Montreal particularly.

Over the past 10 years, we have seen the emergence of cultural hubs on the periphery of Montreal. Several production and outreach activities left the downtown core and migrated toward the suburbs and these new hubs. This move runs the risk of eroding francophone production, as these peripheral hubs do not have a sufficient critical mass, and don't have enough synergy to sustain the type of production and the scope of activities that is made possible by the central location of the Quartier des spectacles.

The Global Cultural Districts Network was created in 2013. It is a group of cultural neighbourhoods in the great cities of the world and the partnership has been a member from the beginning. The GCDN sponsors research on topics such as the development and animation of public spaces, or governance models in cultural neighbourhoods. It also funds an international network of public artwork exchanges between neighbourhoods, which allowed the Impulse installation, which is normally located in the Quartier des spectacles, to travel to about 10 cities throughout the world since 2016.

It would be interesting if the Canadian cultural hubs could get together in a network like the GCDN. The Government of Canada could be a catalyst by actively supporting the creation and operation of such a network.

The dynamism of a cultural hub is not only of benefit to the city it is in. The Montreal example is interesting in that regard; the metropolis benefits from the influx of talents and the expertise of the regions, while serving as a showcase and springboard for the creativity and innovation of those same regions.

The expertise we have acquired over the past years allows us to better define the many contributions culture makes to the vitality of cities and to their international outreach. The main challenge is twofold: we must allow the city to act as an incubator and as a space where all forms of culture can be expressed, while optimizing the very important contribution culture makes to the city and to Canada's presence abroad.

That is why the partnership is very favourable to your committee's initiative and hopes to make a positive contribution to it. We make eight recommendations in our brief, and I invite you to read them. I will mention them briefly here.

[Jacques Primeau]

First of all, we must recognize the importance of cultural hubs and neighbourhoods, and we need public policies and mechanisms for financial or fiscal support.

[Pierre Fortin]

Secondly, we recommend that a process be put in place to add to the knowledge we have, and to plan research on cultural hubs and neighbourhoods.

[Jacques Primeau]

Next, we recommend that a program be developed and put in place to encourage creators, artists and cultural dissemination spaces to remain in the cultural neighbourhoods and hubs.

[Pierre Fortin]

In addition, we recommend that there be specific measures to encourage affordable housing in the cultural hubs and neighbourhoods.

[Jacques Primeau]

In fifth place, we recommend that you actively support the creation of a Canadian network of cultural hubs and neighbourhoods, and that you support the exchange of works and expertise, as well as innovation.

[Pierre Fortin]

We also recommend that you develop and implement a program to increase the international outreach of the cultural hubs and neighbourhoods of Canadian cities.

[Jacques Primeau]

Our seventh recommendation is to put in place financial and fiscal measures to support innovation in the animation, use and development of urban cultural spaces.

[Pierre Fortin]

Our eighth and last recommendation is that you take note of the analyses carried out by the Partenariat sur la gestion et la mutualisation des risques, the partnership on management and risk-sharing, concerning the risks involved in the funding of venues and producers.

[The Vice-Chair, Conservative, Peter Van Loan]

Thank you very much for your presentation.

We will now go to the rounds where we get to ask questions, which you'll find are also incredibly short. Each is seven minutes, and we will have four sets, switching between parties.

The first seven minutes are for the Liberals. We will begin with Mr. Hogg.

[Gordie Hogg, Liberal, South Surrey—White Rock, BC]

Thank you.

A number of you have made reference to both business and non-profits and looking at ways in which the government can assist you, whether it's reducing taxation or assisting with other types of relief. Are there references between non-profits and business...? Are there other models around the world that we might learn from that would address some of those concerns?

What I'm thinking of is that in England they have community interest corporations and different models for blending non-profit and business models. Have those been explored? Do you have anything you could advise us on around how that might assist and support your projects' programs as well as cultural hubs?

[Oliver Pauk]

I don't have any specific examples, but in terms of structures that might be of interest, co-ops could be worth investigating more. That's something we've started to do on our end very recently.

[Amy Terrill]

We're seeing in music that because of the pressure on grassroots venues in particular it's become a topic of great concern around the world. It's primarily because of the growing residential component within downtowns, which is putting pressure on music venues in particular.

We're starting to see some programs, in Sydney, Australia, for instance, and in Austin, Texas, through which they've made public funds available for sound mitigation in particular so that there are fewer complaints. There's a public service component of that, but it's also to sustain those venues so they can remain in place. That's something we've seen both in grants and in non-interest loans.

[Pierre Fortin]

The Quartier des spectacles Partnership is a non-profit organization. However, its board of directors is made up of representatives from institutions, but also of owners of venues and festivals, which are for the most part for-profit organizations.

There are various partnership models all over the planet. The study done by the Global Cultural Districts Network on the governance of cultural hubs in the world is rife with information on this subject. I invite you to read it. We have appended it to our file.

[Erika Shea]

We've recently introduced community interest corporations in Nova Scotia so an entity can incorporate in that way. I think it remains to be seen how provincial and municipal governments are going to interpret that structure and how flexible and innovative they'll be in opening up different tax concessions and, typically, non-profit-oriented funding programs to those new entities.

[Gordie Hogg, Liberal, South Surrey—White Rock, BC]

What is your expectation when you look at that and as you understand the legislation in Nova Scotia, which is relatively new? Have there been many experiences with it? Do you see some opportunity or potential with respect to them?