Good afternoon.
My name is Émilie Grandmont-Bérubé, and I own a contemporary art gallery in Montreal. I'll make my presentation in French, but please feel free to ask your questions in English. Perhaps it will help refresh my English a bit.
I am on the board of directors of the Association des galeries d'art contemporain, AGAC. I also served for several years on the board of directors of the Art Dealers Association of Canada, ADAC.
I am here mainly to discuss the issue of resale rights. The Canadian Artists' Representation, or CARFAC, has proposed that this resale right be included in the Copyright Act. This proposal is of great concern to us from the point of view of the art market and, above all, from the point of view of the primary market, consisting essentially of the galleries that AGAC represents.
Right off the bat, when we talk about the primary market, we are talking about the first time a work is sold, that is, when it leaves directly from the artist's studio. It is a sale from which the artist benefits. The secondary market is all the sales that follow.
Finally, resale rights are a tax on resale. The goal of this tax is to ensure that artists benefit from the added value of their works when they are sold in private galleries and auction houses.
From the outset, it is very important for us to recall the obvious role of gallery owners, who have a very privileged position in the art world in general. They are the only ones with such a long-term relationship with artists. We support them when things are going well and when things are not going well, in fact, at all stages of their careers.
There is no doubt that all gallery owners fully support the goal of helping to improve artists' incomes and socio-economic conditions. The income of gallery owners depends directly on the sale of the works of the artists they represent.
Gallery dealers, especially those in the primary market, who therefore deal directly with artists, practise a form of patronage. They believe deeply in art and artists, and they put their money where their mouth is. They personally invest their time, energy and money to defend with incredible passion the artists they represent and in whom they believe, hoping one day, perhaps, to reap the benefits of all this work.
It is a very high-risk enterprise. This is evidenced by the increasing number of galleries that have closed in recent years in Montreal, Toronto, Calgary and Vancouver. It's a little scary, actually. Galleries don't close because gallery owners no longer believe in their artists or their mission, but because the market doesn't allow them to survive.
The proposal to include resale rights in the Copyright Act may be very attractive at first sight, but it has major weaknesses that have been identified in several studies published in countries that have adopted this measure. The main weakness of this measure is that it does not benefit artists who really need it. There is no doubt about that and the figures prove it very clearly. This measure benefits established artists, the 1% of artists who have a very strong market. They are the ones who will receive royalties.
The studies published in France, the UK and Australia clearly show that resale rights, which aims to improve the situation of visual artists, misses its target and is based on the somewhat romantic idea that all works of art will be sold at a profit and that artists would deprive themselves of perhaps huge royalties. However, in reality, very few works of art sold end up on the secondary market and are even less sold at a profit.
One of the problems with the proposed resale rights measure is that it does not make any distinction. The tax would still be applicable on the sale of a work, whether it is sold at a loss or at a profit.
This meagre 1% of the artists generally receive between $50 and $100 in royalties per year. This is clearly not what will improve their socio-economic conditions.
In France, 70% of all royalties collected were distributed to seven artists, or seven estates, because this is of great benefit to the estates of dead artists, ultimately, and not to living artists who really need it. In the United Kingdom, 80% of all royalties collected were distributed to 10 artists. Once again, we are basically talking about their estates.
As my colleagues mentioned in their presentation, the situation of artists is extremely precarious. They are scraping by and often have to take jobs in different fields. They scrape by while hoping to find their place in the community and establish themselves one day. They dream of making a living from their work and from selling their works. The sale of works is the best way to improve the socio-economic conditions of artists. It is also the most respectable, and that is their goal. However, implementing resale rights in Canada will not achieve that objective at all. On the contrary, this right weakens an already extremely precarious market.
I mentioned the lack of nuance, the fact that the resale right could apply to a work sold both at a loss and at a profit. This would make collectors more inclined to take fewer risks and move towards better known works. Once again, the emerging artists most in need of selling their works would be left out.
By reselling a work at a loss and then having to pay a royalty on the resale, we would be doubly penalized for taking a risk. We would not have made a good investment and, in addition, we would have to pay for it. According to published studies, this would harm the market for emerging artists.
Another potential perverse effect of the measure is the shift of the resale of works outside galleries and auction houses. Canada is very close to the United States. It would be very easy to sell works in the United States, by mutual agreement between individuals, and thereby avoid both taxes and the resale right. That would also result in lost revenue for galleries and, ultimately, for artists.
It has been proposed to incorporate resale rights into the Copyright Act to correct an apparent inequity between visual artists and literary, musical or film artists. Yet, the ownership of rights already applies in the visual arts in the same way as it does in other settings. Unless visual artists have surrendered their rights, they may also monetize their authorization to reproduce their works in books, magazines, films, and so forth. That's why CARFAC's role is very important in maintaining reproduction rights.
AGAC strongly hopes that the government will put in place measures to improve the socio-economic conditions of artists. They deserve to be able to earn a decent living, we all agree on that. However, we believe that, in order to reach all, not just some, artists, the solution lies mainly in measures that will stimulate not weaken the buyers' market. For example, instead of taxing collectors when they resell works, why not encourage them to buy more works from the primary market by giving them tax credits, for example? Why not remove the capital gains tax on the sale of a work of art or take inspiration from the United Kingdom and its Own Art program, which encourages the acquisition of works by living artists?