Canadian Heritage Committee on Oct. 30th, 2020

[The Chair, Liberal, Scott Simms]

Welcome, everyone, this is the opening of our new study, but before we get to that I just wanted to say thank you. I understand that we're still waiting on one member, but we're going to start relatively on time. We've done our sound checks as required and now we're moving on.

Today we have two designated hours. The first hour is to launch our new study, and the second hour will be for committee business. Let's not forget that we have a different password for the committee business section. I can remind you of that again a little later, but for now we're all logged in and ready to go. Our study begins on challenges and issues faced by the arts, culture, heritage and sport sectors during the COVID-19 pandemic.

As usual we start with departmental officials. We have with us today Madame Hélène Laurendeau, deputy minister of the Department of Canadian Heritage; David Dendooven, assistant deputy minister, strategic policy and corporate affairs; and Jean-Stéphen Piché, senior assistant deputy minister, cultural affairs. I hope I've done some justice to your names and not managed to foul this up, but I hope you will correct me in the subsequent round if necessary.

Just as a quick reminder to everyone, the way this works is that if you're listening to us on ParlVU, welcome along. We have three witnesses who will be given five minutes for their opening statements. The witnesses have provided the committee and the chair with a copy of their statements in advance. Thank you.

Following that, six minutes will be allocated for the first questioner and then each party as follows: in round one, we'll have the Conservative Party, Liberal Party, Bloc Québécois, New Democratic Party. For the second and subsequent rounds, we'll get to that when we get there. In the meantime I have a question for Madame Laurendeau.

Is that five minutes just for you, or would you like to share it minutes with the other witnesses as well?

[Hélène Laurendeau, Deputy Minister, Department of Canadian Heritage]

I will make the opening statement on behalf of the department for all of us and then we will be open to questions.

[The Chair, Liberal, Scott Simms]

Thank you very much.

That being the case what I can do is that if you go over the five minutes, I'll be rather generous in policing it.

For the opening statement, Madam Laurendeau, the floor is yours.

[Hélène Laurendeau]

Thank you very much, Mr. Chair.

I want to apologize for my technical problems. We will have those fixed for our future appearances.

I'm speaking to you from Gatineau, Quebec. I would like to acknowledge that we are on the traditional Algonquin Anishinabe territory.

I would like to thank the members of the committee for inviting us here today to talk about this important initiative—the COVID-19 emergency support fund for cultural, heritage and sport organizations.

The focus today is on the cultural, heritage and sports sectors, which collectively employ 750,000 Canadians, contribute $61.9 billion annually to the national GDP, and whose products—arts, books, music and participation in sports—have provided Canadians with the comfort, community and sense of common identity that are so important in these turbulent times.

As you know, the cultural, heritage and sports sectors were among the first to suffer widespread closures, cancellations and associated losses due to the pandemic, and of course, public health guidelines, which imposed instantaneous containment on the entertainment and sports sectors from the outset of the pandemic. These sectors were among the first to experience the impact of the pandemic, and will likely be among the last to suffer. These sectors are already highly vulnerable, due to being overwhelmingly comprised of small-to-medium organizations, heavily reliant on not-for-profit models of operations. As a result, they have suffered severe damage.

Real GDP in the arts, entertainment and recreation sub-sector stood at $7.3 billion in July 2020 against $15.6 billion in February 2020. This is a decrease of more than 50% in just four months.

The total labour force in the performing arts, sports, entertainment and related industries decreased by 19.2% in September 2020 compared to September 2019.

The current situation demonstrates the fragility of sectors that are particularly vulnerable to the impact of this pandemic. Without financial assistance, many organizations would have ceased operations already, and many are still at risk.

As the pandemic unfolded, the government responded on April 17, 2020, when the Prime Minister announced $500 million to establish a new COVID-19 emergency support fund for cultural, heritage and sport organizations.

Very quickly after this announcement, the department went on to design the fund to complement the government's existing COVID-19 support measures, the Canada emergency response benefit and the Canada emergency wage subsidy. The department designed this to make sure that gaps left by those benefits would be addressed.

The key principles, besides the emergency support funding, were that the funds had to flow as quickly as possible, as time was of the essence, that the process be streamlined wherever possible and that applicants who are not normally recipients of PCH program funding be included in the disbursement of funds.

The emergency support funding built on pre-existing measures announced on March 25 to simplify the process for submitting and processing requests for 2020-21 funding for the Canada book fund and the Canada periodical fund, which allowed eligible beneficiaries to complete applications and access financial assistance much more quickly than usual.

The department also accelerated the distribution of its regular funding to eligible recipients in order to provide support quickly.

The emergency funding began in May 2020, and was disbursed in two phases—a first phase took advantage of existing funding mechanisms to advance approximately $307 million in temporary additional funding to recipients already benefiting from program funding, via a number of departmental funding programs and from the Canada Council For the Arts and Telefilm Canada.

Phase II funding was disbursed based on gaps identified after phase I, related to program coverage, diversity/equity and regional distribution—it included $45 million for special measures in support of journalism under the Canada periodical fund, $25 million for independent broadcasters investing in news and community broadcasts, and $52.1 million to arts and culture organizations that were not previously eligible for funding from regular Canadian Heritage programs.

In the distribution of these funds, the department was able to rely on the support of its partners, in particular the Canada Council for the Arts, Telefilm Canada, the Canada Media Fund, as well as FACTOR and Musicaction, for their assistance in distributing the funds through a streamlined process that facilitated the rapid distribution of funding in a consistent and equitable manner across organizations.

Apart from the COVID-19 emergency support fund, the government supported broadcasters by flowing funding to the CRTC to enable the waiving of part I licence fees for the 2020-21 fiscal year. The government also earmarked $25.7 million for national museums and the National Battlefields Commission to enable them to maintain their operations and offer some tours during the summer.

As the COVID-19 emergency support fund winds down, we are administering a survey to recipients of the emergency support fund to help assess the effectiveness of the funding in terms of financial relief, employment impacts and various social impacts. The results of this survey are currently being compiled.

Already, phase 1 COVID-19 emergency support fund recipients responded in high numbers to the survey and 77% of respondents said the fund helped them stay in operation to a large or moderate extent.

Just to wrap up and to give you an idea of the speed at which this all occurred, the Prime Minister made his announcement on April 17. Minister Guilbeault announced the launch of the program proper on May 8. Other measures I referred to were rolled out in parallel with the emergency support fund in the summer. Over 96% of the funding—which is $482 million—was distributed by the government-wide deadline of September 30. The remainder will be distributed by December 31. We're talking about approximately $18 million that is left to distribute between us and other partners.

The department is well aware that more needs to be done to support the sector during and following this pandemic. We are currently developing policy options regarding recovery. These options will be informed by the results of a series of 22 town halls and round tables that were conducted by Minister Guilbeault with stakeholders. These round tables occurred in September and October, and they highlighted the vulnerable state of the sector and potential areas to be acted upon going forward.

I'd like to thank the committee. This completes my opening remarks. I hope the sound was palatable. We would be happy to take your questions.

Thank you very much, Mr. Chair.

[The Chair, Liberal, Scott Simms]

Thank you, Madame Laurendeau, for that presentation.

Just before we get into it, folks, I have a couple of pointers.

Because our witnesses are not in the room itself—as a matter of fact, the vast majority of us are not in the meeting room—I have some advice. If there's a specific question to a specific person, please say that person's name before you ask the question. It sometimes can be a little awkward when we can't see who exactly we're talking to.

Otherwise, I can assume, Madame Laurendeau, that you will probably be taking the questions and referring them to your ADMs or senior ADMs if you so please.

That said, we're going to begin with Monsieur Blaney, for six minutes.

Go ahead, please.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Good afternoon, Mr. Chair. Quebec and Newfoundland and Labrador are together for this meeting of the Standing Committee on Canadian Heritage.

Good afternoon, Ms. Laurendeau. I am happy to see you in this unusual context. I listened to your presentation and I heard you say that 96% of the announced amount had been disbursed. Congratulations. Perhaps it's a bit like the decor around you: it seems like you've been on a big construction site over the past few months. That's one way of expressing our appreciation, because the federal public service has risen to the challenge before it.

You mentioned that there have been two $500-million announcements, one in April and a more concrete one in May. I had spoken with the minister and asked him for more details, as did my colleague Alain Rayes. I think that you have nevertheless succeeded in supporting the central agencies that are the usual partners of Canadian Heritage. Twice in your presentation, you mentioned that you had sought to broaden your support somewhat. You mentioned amounts, and I'd like to hear more about that.

For example, an organization in my riding, the Festival jazz etcetera Lévis, is a partner of Canadian Heritage. It was very pleased and grateful to be able to count on you. However, there are organizations that are not necessarily part of the organization chart or structure. How have you been able to help these organizations?

I'm going to ask my second question right now. You are indeed helping the core organizations, but the effects are not being felt in the communities. The consumer may not have seen them because of the cancellation of events.

How can we maintain cultural vitality and see its effects? Sometimes organizations raise funds, but their event does not take place and the funds are not used. How do you see this playing out?

In summary, can you talk about helping organizations that are not in your usual matrix, and then what happens next?

[Hélène Laurendeau]

Thank you very much, Mr. Blaney.

First of all, there are two things. As for unusual organizations, they were mostly small organizations, such as museums, but there were others as well. With the help of our colleagues at Shared Services Canada, and building on the portal that had been created for the emergency funds at Human Resources Development Canada, we set up a portal for people to apply for the second phase. This allowed them to tell us who they were and how we could contact them to talk to them to determine what funding they were eligible for under the second phase of the $500-million fund.

I would say we had a fairly high success rate. In fact, we've been able to make contact with organizations that were not covered by our regular programs.

With respect to other organizations and the work that needs to be done for the recovery, I'm going to ask Mr. Piché to share with you some ideas about the impact on the entertainment sector, both in terms of our emergency measures and the ideas we are considering following Minister Guilbeault's round tables.

With your permission, Mr. Chair, I'm going to give the floor to Mr. Piché.

[Jean-Stéphen Piché, Senior Assistant Deputy Minister, Cultural Affairs, Department of Canadian Heritage]

Thank you, Mr. Chair. Thank you, Deputy Minister.

Thank you for your very pertinent question. As you know, at the beginning of the pandemic, the first reflex was to help clients known to Canadian Heritage, that is, those who were already benefiting from its programs. At the beginning of the pandemic, we made GDP projections for each category of the cultural industry to see which ones would be most affected.

For example, we knew that the sector that encompasses the performing arts and everything else related to entertainment would suffer enormously. Some of these components were already clients of Canadian Heritage, while others were not. So our first instinct was to work with our known clientele and make sure the money came out quickly.

Very quickly, we identified communities or arts groups that were more vulnerable, such as those involved in live music performances. We support music production in the department, but we didn't have a program that supported live music venues. So in the second phase, we earmarked about $20 million specifically for the live music sector.

Also, with respect to our existing client base, some of the organizations renew their applications for our programs from year to year, but not all are successful every year. In the second phase, we have therefore decided to provide additional support to those who did not get funding this year.

We have done the same by working with Telefilm Canada, the Canada Media Fund and the Canada Council for the Arts. All three have expanded the accessibility of programs to allow a broader group of stakeholders to participate.

I have only given you an overview, but there are examples in all areas.

[The Chair, Liberal, Scott Simms]

Thank you.

As a reminder to my colleagues, I'm fairly strict on time, but I will be lenient with witnesses who wish to go over time so they can complete their thoughts and testimony.

Mr. Louis, for six minutes, please.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Mr. Chair.

Thank you, witnesses, for being here, and please thank your departments for stepping up. It's amazing to see the response from so many people in so many departments helping out Canadians. It truly was inspirational.

What I was even more proud to hear was how, when you talked about supporting our arts, you used the words consistent, rapid and simple, helping existing programs already with pipelines and helping people who weren't helped.

Monsieur Piché talked about the performing artists and how much they suffered immediately. I'll speak from experience, because until about a year ago, almost to the day, I had been a performing artist my entire life. Artists are used to being on the downturn—they're the first to be let go and the last to come back from downturns—but this happened all of a sudden and all at once. These are people who usually are self-reliant. There are a lot of self-employed and small businesses that just hustle in that gig economy itself.

These very artists are the ones we turn to. Everyone turned to these artists to get us through when we were in isolation. I know that besides my office being hit with many, many requests for support, my personal cellphone just exploded. I had a husband and wife who worked for the Kitchener-Waterloo Symphony together and now all of a sudden entire seasons have been blown out, with musicians who have no place to perform.

Can you explain to me in simple terms how much the CERB helped artists, especially in that kind of an area where it wouldn't normally apply? Also, with regard to the wage subsidy, I've talked to a number of the smallest of theatres and brick and mortar places who said that maybe the stage was dark, but they were able to keep their staff online and look toward the future.

Can you explain how that helped the arts in general, before we even get into other programs?

[Hélène Laurendeau]

Thank you very much for that very important question.

I will give a partial answer and I will turn again to Mr. Piché for the interplay between CERB and the wage subsidy.

What I should mention is that you will remember that very early on the definition for CERB eligibility really emulated that set for people who were eligible for employment insurance, which you know very well doesn't necessarily address very well the reality of people who are self-employed or, as you mentioned in particular, in the gig economy.

We were very seized with that very early on and spent a fair amount of time explaining internally to our colleagues that it was very important that we either extended CERB or provided complementary measures.

I'm proud to say that we were successful on both fronts. We wanted to be very clear that all of the $500 million should not overlap or duplicate the wage subsidy or the CERB, but should be complementary, with elements that would go to organizations to help maintain the employment of people as much as possible.

So we have two big pillars: the CERB and the wage subsidy. On top of that we designed the distribution of the $500 million for organizations so they would have a little bit more and something more specific to their reality, particularly because they are, by and large, non-profit organizations that are supporting artists who are self-employed.

The way we did that was by requiring every applicant to attest to the fact that the funding would not duplicate either the wage subsidy or, in the case of individuals, the CERB.

Jean-Stéphen, do you want to add something?

He spent a lot of time on that, and I would like to congratulate him because he was the mastermind behind that idea.

Monsieur Piché.

[Jean-Stéphen Piché]

Yes, thank you, Deputy, and thank you, Chair.

The issue of flexibility was paramount. As you know, there were flexibilities introduced into CERB to allow classes of artists to have access, such that temporary workers were now eligible. The wage subsidy was hugely helpful. Even the business loans were helpful. But we were very clear in our parameters that we had to be consistent with those measures and could not duplicate the application of measures.

As the deputy mentioned, the issue of working on an attestation really fast-tracked things by adding flexibilities in the civil service to be able to manage this process without compromising accountability. That is always a tricky situation, but I think we have a very good story to account for. We have a record base; this is all a very much documented process. That has really helped.

I think the cultural organizations have appreciated that flexibility. CERB has helped a lot on the employment front. Our measures have helped to maintain the structural integrity of organizations as they were undergoing very difficult times, so that they will ready when we discuss recovery issues are ready to “relaunch” the economy, as we call it, while not forgetting that throughout this period the creative sector has been extremely innovative in trying to provide artistic expression while the pandemic is taking place..

I think we've acted on multiple fronts and, of course, we're not the only actors in that. There have been contributions from the provinces and municipalities as well. They have contributed significantly also, so it has really been a joint effort.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you very much. I can assure you that the artists are ready to get out there as soon as possible. Thank you for your time.

[The Chair, Liberal, Scott Simms]

Thank you, Mr. Louis.

Folks, I have a quick technical update. Because we had some technical issues at the beginning, we're going to extend this meeting from 2 o'clock to 2:05 Eastern time before we break to go into committee business.

Monsieur Champoux, please, for six minutes.

Mr. Champoux, you have six minutes.

[Martin Champoux, Bloc, Drummond, QC]

Thank you very much, Mr. Chair.

I too would like to thank the witnesses for their availability.

The Department of Canadian Heritage has shown a real willingness to help artists, artisans and the cultural community during the crisis. Indeed, we must salute the speed with which you put the programs in place. You allocated $500 million in assistance to them in two phases, as you explained. You also took advantage of the fact that there were already well-structured organizations in place to distribute the aid to the most affected sectors.

I would like to know how you made sure that the money that was distributed was disbursed in a structured and intelligent way, according to the needs of each sector.

Did you attach accountability requirements to programs and money to allow you to track the progress of the assistance that was delivered?

[Hélène Laurendeau]

Thank you very much for your question. The simple answer is yes, but let me tell you more.

First, for the first phase, we have relied heavily on our existing programs, including the infrastructure of our existing contribution agreements. By maximizing existing authorities, we ensured that all accountability mechanisms were maintained. Of course, this has been quite straightforward for our larger partners, such as Telefilm Canada and the Canada Council for the Arts. However, even in the case of individuals, although we accelerated the process, we kept our control and accountability framework in place to ensure that it was going to apply.

You should also know that throughout the first phase, we were dealing with partners we knew and used to check periodically. So we were able to evaluate the cost of the applications fairly accurately, because we knew their financial situation very well. However, we still wanted to make sure, with respect to the attestations, that we were aware of some of the accountability elements that we don't control, that is, whether these same organizations had accessed other government programs, to avoid overlap, as we explained earlier.

It was the same for the partners we knew a little less. We still had the attestation in place and we did some checking before issuing payments to make sure that they were existing organizations that were entitled to operate in Canada.

Given the circumstances, because we built on our existing accountability structure and added certain measures to ensure that there was no overlap, I would say to you very humbly that I am confident that we are capable of ensuring accountability down to the last detail.

[Martin Champoux, Bloc, Drummond, QC]

I know that you've helped the print media sector a great deal. These media outlets have received a significant amount of assistance. We know that they were already going through a fairly major crisis even before the pandemic. Regional media outlets in particular are dealing with the reality of advertising. This is obviously a major crisis. Local businesses can barely afford to buy advertising anymore, since many businesses are closed.

Last year, it was pointed out that the government invested almost $52 million in digital advertising directly, or almost directly, through the GAFA group. This put small regional media outlets at a disadvantage. At the end of the day, the outlets were left with nothing but crumbs. You clearly wanted to review these practices.

During the pandemic crisis, have you had time to make some adjustments and to ensure that government advertising is placed more directly in regional media outlets, especially on their digital platforms, to prevent the web giants from becoming richer at the expense of our local media?

[Hélène Laurendeau]

I'll be perfectly honest with you. We've had to put a number of things on hold during the management of the pandemic. We've dedicated all our resources to the emergency funding. The reflection process hasn't been abandoned. Quite the contrary. However, if you ask me whether we're as far along as we could be, I can tell you that we aren't yet. Nevertheless, as we return to our usual activities, this reflection process is still taking place.

That said, government advertising is the responsibility of all the departments under Public Services and Procurement Canada and the Treasury Board. We're contributing to the reflection process. However, it would be misleading to suggest that the Department of Canadian Heritage could resolve this complex situation on its own.

The simple answer is that the reflection process remains ongoing.

[Martin Champoux, Bloc, Drummond, QC]

I have one last quick question for Ms. Laurendeau.

A study is under way to assess needs based on the situation that you've observed in recent months. How much time do you think you need to assess the assistance required by the cultural industry?

In your opinion, how much time is needed to quickly implement assistance measures that exceed $500 million?

[Hélène Laurendeau]

The work is being done.

Thank you for the question. I want to reassure you. The reflection process is ongoing.

As I said in my remarks, Minister Guilbeault has consulted extensively with stakeholders over the past two months. The department is developing options.

Of course, the Department of Canadian Heritage doesn't have control over all the investments. However, we're involved in the government's efforts to develop a number of options for recovery mechanisms. These mechanisms concern the arts, culture and heritage sectors, and also the amateur sports sector. We don't talk about it much, but the amateur sports sector has suffered as well. We've implemented some fairly special measures for this sector.

I can tell you that the work is being done as we speak.

[The Chair, Liberal, Scott Simms]

Thank you.

[Martin Champoux, Bloc, Drummond, QC]

Thank you.

[The Chair, Liberal, Scott Simms]

Ms. McPherson, you have six minutes, please.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair.

I'd like to thank the witnesses for coming and sharing this information with us. It's very interesting.

I'm from Edmonton Strathcona. That's my riding. As many of you will know, it is sort of the heart of the theatre industry in Alberta. Certainly, we host the Edmonton fringe festival, which of course is the largest and oldest fringe festival in North America. In addition to the round tables that the minister did, I also did some round tables with theatre folks in my community. I was really impressed. They are very innovative. They've used technology to produce shows, and to find ways to have smaller live audiences that are safe, and to follow protocol.

But in every case, it was more of a way the artists saw themselves getting by or reminding audiences that they still exist. It's not a solution to their financial problems. It's not going to save these cultural organizations, of course. They're grateful for the funding they received through the COVID-19 emergency support fund, but the funding won't be enough. We were initially planning on this going until maybe the fall. We're now looking at it going again into the summer and for who knows how long.

Will there be another round of emergency funding so that these theatre organizations can survive? If so, when, and can you show us any details about that?

[Hélène Laurendeau]

You are quite right that we are at the moment when many of the emergency measures are getting to their limits and the needs, particularly with the resurgence of wave two, remain. The dilemma right now is to determine whether we jump into the relaunch or maintain the current type of support. I am not in a position to tell you exactly when, but I am in a position to tell you that we are looking at those two sets of options. Do we need to reconduct this momentarily while we work on the relaunch, or do we actually have to jump and get into what would be the relaunch of the economy?

One thing that is clear for all of us is that the impact has not resolved itself, particularly since the capacity to gather publicly remains fairly limited and will be for a fair amount of time. That being said, though, as you mentioned and as we totally agree, we can trust creators to be creative. Elements of a new type of business are emerging that will probably sustain the test of time. They deserve to be looked at and supported as being different or as alternatives to the existing more traditional business models.

Collectively as a team, with David and Jean-Stéphen, we are quite aware of the fact that we will have to embed into these elements of relaunching the economy a space for those new business models that are currently emerging. It would be disappointing to see that innovation go backwards if we were to just try to recreate the status quo. I think the activity that we see demonstrates that there will be different alternatives to arts, and to arts business models, that will deserve our attention.