Canadian Heritage Committee on April 4th, 2022

[Tim Uppal, Conservative, Edmonton Mill Woods, AB]

Okay. Thank you.

It's been quite established that “What is art, and who is an artist?” has always been changing, obviously, but because of digital new technology, I think it's that much more now.

This question is for not only Canadian Heritage but also the other organizations. How is your organization changing, and how are you reaching out to artists who are non-traditional artists? Mr. Ripley mentioned doing a survey. What more can you do to ensure that their views are heard and also take action to ensure that they are also supported by your organization?

[Thomas Owen Ripley]

Perhaps I can start, and then Monsieur Brault might also want to jump in.

You referenced the survey. We made a really intentional effort to include online creators in our outreach for that survey so that their input was included. I believe my colleague Kelly spoke to this. We do make an effort to engage with stakeholders on a regular basis and also reach out and hear from those who are not regular clients of the department.

To your point, it is important to make sure that the programs and policies of the department remain aligned with today's reality. We're at an exciting moment in time. There is a lot of change taking place, so there's a real opportunity to make sure that the policies and the programs that the department is responsible for do reflect the needs of new creators, or creators who feel that the way that those programs or policies are currently structured do not reflect their needs or interests. We're certainly happy to continue to engage with them to make sure their input is taken on board—

[Tim Uppal, Conservative, Edmonton Mill Woods, AB]

Perhaps the Canadian Council—

[The Vice-Chair, Conservative, John Nater]

We're going to have to leave that there.

[Tim Uppal, Conservative, Edmonton Mill Woods, AB]

Okay. Thank you.

[The Vice-Chair, Conservative, John Nater]

Thank you, Mr. Uppal.

Ms. Hepfner, you have four minutes.

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

Thanks very much.

I'll pick up where my colleague Mr. Uppal left off.

First of all, Mr. Ripley, you keep talking about this survey that your department did. I'm wondering if you have some sort of summary or report that came out of that survey. Maybe you can provide it to the committee so that we can have use of it for our study.

I'd like to ask you also about digital creators. This question might be prefaced on whether or not Bill C-11 receives royal assent. I'm wondering if digital producers could be considered producers under the SAA. Could the Status of the Artist Act possibly serve as a model for collective bargaining for digital producers?

[Thomas Owen Ripley]

We'd be happy to share a high-level summary of the results of the survey. The actual data tables will be published in the next few months on the department's website, but we're happy to get you a high-level summary in the interim.

On your second question, I believe as I mentioned to Mr. Waugh at the beginning, the definition of artist is quite a broad one. Our view would be that it includes online creators and it includes those creators making content for digital platforms. The second piece of the puzzle is that they be independent. The Status of the Artist Act doesn't apply to employer-employee relationships but to independent artists. Certainly, it would apply to them, again, as long as the person that they were sitting across the table from was a federal producer within the meaning of that term.

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

Picking up on that, maybe I'll direct this question to Ms. Brazeau, because you talked about how it's federal legislation and the SAA doesn't cover all artists. Provincial and territorial legislation comes into play for a lot of artists.

Can you talk about that division of power and maybe the need for other legislation at the provincial and territorial level?

[Ginette Brazeau]

You're absolutely right; there is a distinction between federal and provincial producers. The Status of the Artist Act applies uniquely and solely to federal producers, and they are defined very clearly in the act. It has to be a broadcasting entity regulated by the CRTC or a department or a federal organization listed in the Privacy Act. A very circumscribed list of entities are covered by the act.

We know that Quebec has a similar statute. I think we have two other provinces that have similar models.

If artists are to access a collective bargaining regime, the majority of them would fall under provincial jurisdiction, so they would certainly benefit from provincial regimes that are similar to the federal piece of legislation.

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

Thank you.

I have 20 seconds left.

Mr. Ripley, do you want to just pop in on that same question about jurisdiction?

[Thomas Owen Ripley]

No, I think my colleague, Ginette, did a good job of summarizing it, that the flip side of this is that many of the kinds of working relationships that artists and creators enter into would fall under provincial jurisdiction.

We see that there is a robust regime in Quebec. The Quebec government is currently studying changes to it. It probably has the most robust regime at the provincial level.

As Ginette mentioned, there are a couple of other provinces and some that are thinking about it, but those are really important pieces of the puzzle.

[The Vice-Chair, Conservative, John Nater]

We have to leave it there.

Mr. Champoux, you have the floor for two minutes.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Mr. Chair.

I congratulate Ms. Hepfner for asking Mr. Ripley a question when she had only 20 seconds left. She is very adept at using her speaking time to the max.

I'm going to address Mr. Ripley or his colleague from the Department of Canadian Heritage.

At present, a producer can get funding from the government without having to guarantee minimum conditions of engagement for the artists.

Do you think that is something that should stay in place?

Is that a measure that the Department of Canadian Heritage could fix without waiting for the committee's recommendations when this study is completed?

[Thomas Owen Ripley]

Thank you for your questions, Mr. Champoux.

I'm going to let my colleague Ms. Beaton answer those questions. Because she manages several arts programs, she is probably in a better position to do that than I am.

[Kelly Beaton]

Thank you, Mr. Ripley.

I just want to confirm something, about what you said, Mr. Champoux. The Status of the Artist Act only applies to federal institutions. When we talk about producers, that can mean departments, agencies such as the Canada Council for the Arts, or broadcasters regulated by the CRTC.

Regarding how to make improvements, of course we have to follow all the laws to ensure adequate terms of engagement for artists. That is why we have mechanisms in place to resolve disputes or difficulties. Ms. Brazeau can correct me if I'm wrong, but we have 26 associations that are able to act as bargaining agents, and I think...

[Martin Champoux, Bloc, Drummond, QC]

Okay. I have only a few seconds left and I absolutely want to ask Mr. Brault a question.

Earlier, I referred to the Canadian Council on the Status of the Artist, which has ultimately never been created. Do you think it would be worthwhile to put the creation of that kind of council back on the agenda? Would it complement the work of the Canada Council for the Arts, do you think?

[Simon Brault]

In all honesty, I think the situation is extremely complex. For arts funding in Canada, there is the system of federal legislation and there is the system of provincial legislation.

At present, at the Canada Council for the Arts, when we support an organization, we make sure that it undertakes in writing to comply with federal legislation, provincial legislation, and legislation enacted by all other authorities, and to offer artists optimum terms regarding health and safety, among other things. When we realize that this is not the case, we can intervene by giving the organization a warning or, ultimately, ceasing to fund it. Those are the kinds of methods we can use at present.

It's very hard for me to argue that one provision or another of the Act would resolve the entire situation. We are in an extremely complex situation in which people from all kinds of sectors are involved.

[The Vice-Chair, Conservative, John Nater]

Thank you, Mr. Brault.

Mr. Julian is the last questioner of this round, for two minutes please.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you, Mr. Chair.

I would now like to ask Mr. Brault, from the Canada Council for the Arts, two questions I asked the representatives of the Department of Canadian Heritage earlier.

The first question concerned basic income for artists, something that exists in other countries. We know there is a glaring need. Several witnesses attested to the problems artists experience in this regard. Do you think it would be worthwhile to follow the best practices that exist in other countries and provide our artists with a basic income?

Second, do you think it would be useful for the Status of the Artist Act to provide for binding arbitration, to put artists on a more level playing field with the organizations?

[Simon Brault]

Thank you for your questions.

I won't answer the second question, because it is really outside my field of expertise and competence.

Regarding artists' income, as my colleague Mr. Ripley explained earlier, we are following what is currently happening on the international scene very closely and keeping up to date on the approaches used for providing artists with more stable income. At present, there are a lot of pilot projects coming out of what was learned during the pandemic.

In addition, some other systems have been in place for a long time. In France, for example, there has been a law about entertainment industry casual workers since 1936. So this is by no means something new. It's a system that is actually based on recognition of casual work in the entertainment industry. In fact, it is an employment insurance system based on a certain number of hours worked. I think that system is worth considering.

I know that this precise responsibility in no way lies with the Department of Canadian Heritage or the Status of the Artist Act, but as Director of the Canada Council for the Arts, I think we have to argue for improving the systems for funding artists. As we know, this is one of the very rare sectors in society where there are more workers than jobs. There is no labour shortage in the arts sector. On the contrary: that sector is created and maintained based on the idea that there have to be more artists than available jobs. If we are prepared to accept that this is a necessary condition for our arts sector to be interesting and captivating, we have to find a fair way of remunerating artists, rather than obliging them to run from one contract to another, knowing full well that they will have long periods when they have no work.

[The Vice-Chair, Conservative, John Nater]

Thank you, Mr. Brault.

That is it for time for this first panel of witnesses.

Thanks to all of the witnesses for their comments.

We will suspend very briefly as we bring on the second panel of witnesses, and then we'll begin our second round.

Thanks again. We are suspended.

[The Vice-Chair, Conservative, John Nater]

Good afternoon, I welcome everyone back to the second panel of witnesses of the Standing Committee on Canadian Heritage.

To our witnesses, welcome, it's nice to have you with us today.

Just as a quick word of welcome, interpretation services are available for both of you. At the bottom of your screen, you can choose “floor”, “English” or “French”. If interpretation is lost at any time, please let us know as quickly as possible so that we can remedy that.

When speaking, please speak slowly and clearly. When you are not speaking, please have your microphone on mute.

We will begin our second panel of witnesses. Both witnesses have five minutes for opening comments, and then we will have our question periods.

We will begin with Monsieur Philippe Beaulieu.

You have the floor for five minutes.

[Philippe Beaulieu, Chartered Professional Accountant, As an Individual]

Thank you, Mr. Chair.

The Status of the Artist Act should recognize the legitimacy of businesses operated by professional artists. Those businesses do not have the same expectation of profit as all other businesses. Too often, their status as businesses is questioned by the Canada Revenue Agency because their income is so much less than expenses and they have recurring operating losses.

Professional artists' incomes are essentially composed of grants, often in the form of fellowships, royalties from their works, and the sale of works. They depend primarily on grants in order to produce artistic works or projects, those grants being made by peer committees established by organizations such as the Canada Council for the Arts. So that source of income may vary widely from one year to the next, depending on the projects submitted to those organizations. As a result, artists' incomes depend on government assistance. That is quite often what allows them to survive and to create, sometimes in very difficult financial circumstances.

The CRA should become more familiar with the operation of these types of business so that it has a better understanding of their income. It should have a separate tax slip or a separate box on the T4A slip for arts projects, to avoid any confusion about how this type of income is treated and reported, for both professional artists and the people who prepare tax returns at CRA. At present, grants and fellowships are reported in the same box on the T4A slip. These grants should be reported on form T2125, not on line 13010, which also includes the value of scholarships.

A specific deduction should be allowed for grants that have been received but for which expenses remain to be incurred. At present, professional artists are having to pay tax on any balance of grants received for which expenses remain to be incurred in the next year. The pandemic has accentuated this phenomenon because creation centres closed and this delayed the creation of the projects funded.

The revision of the act should be accompanied by new tax measures to support professional artists in their practice and encourage the public to consume Canadian cultural products, because that contributes directly to the health of this industry. Some of these measures are already in place at Revenu Québec, in fact.

A tax deduction for copyright could be offered on royalties generated by the works of professional artists, to reduce a portion of the tax on this type of income.

Since a professional artist's income varies significantly, depending on the projects completed, purchase of an income-averaging annuity should be available to reduce the taxation of any exceptional income by averaging that income over several fiscal years.

To encourage the consumption of cultural products, the CRA should allow a deduction for accelerated depreciation for the purchase of works of art by Canadian artists, by businesses that want to support professional artists. At present, the Income Tax Act provides a 20% depreciation rate for this type of property.

The purchase of season tickets consisting of at least three performances should be 100% deductible as entertainment expenses for businesses.

A tax credit for the purchase of cultural property should be offered to all taxpayers, to encourage the consumption of our culture in Canada.

As a final point, there should be an order that 1% of the total budget for the construction of government and municipal buildings be allocated to the purchase of works of art created by professional artists, who could apply through nation-wide public art competitions.

These are a few of my observations arising out of my practice as a chartered professional accountant working with professional artists in Canada.

[The Vice-Chair, Conservative, John Nater]

Thank you, Mr. Beaulieu. You gave your presentation in exactly five minutes.

We will now hear the presentation of Costa Dimitrakopoulos from the Canada Revenue Agency.

You have the floor for five minutes.