Yes. It seems that the problem is with Apple. I'm now using a [Technical difficulty—Editor] PC. I just managed to switch. [Technical difficulty—Editor] I'm going to go ahead in French.
Good evening, members of the Standing Committee on Finance.
Festivals and Major Events Canada, also known by its acronym FAME, has more than 500 members across the country, both direct and affiliated members, of all sizes and in nine provinces. FAME works closely with REMI, the Regroupement des événements majeurs internationaux, which, in Quebec, brings together some 30 major events.
Because they are both extremely social and extremely seasonal, because they have one foot in tourism and the other in culture, these events are in the eye of the storm.
The reality is that festivals and events spend year-round but generate revenue from activities that last only 3 to 10 days a year. Over 80% of this revenue disappears when events are cancelled for public health reasons. Depending on the location in Canada, this leaves 10% to 20% of the revenue, consisting of grants from cities, provinces and the federal government.
This was in fact the first request put forward by REMI and FAME, which asked all levels of government to maintain their grants, even if events were cancelled, so that they could cover some of the expenses already incurred since last fall, in salaries, for example. For the most part, this has been promised, not only by the Department of Canadian Heritage, but also by Ontario and Quebec, and we are pleased with that.
Our second request concerns the emergency wage subsidy. For many festivals, it will be difficult to demonstrate a 15% to 30% drop in revenues over the identified period if they are generally non-existent at that time, but it will be very easy to demonstrate one in the order of 80% or 90% for another period. A great deal of flexibility will therefore be required in that regard; failing this, another way will have to be found to maintain the teams and expertise in place, with the help of Canadian Heritage, unless a fourth reference period is added for June, a fifth for July, and so on until September.
Also, we know that the subsidies will not cover all the costs already incurred and the costs related to the cancellation. Most festivals and events will run a deficit this year. The size of the deficit will depend on the size of their budget, but also on when organizers made the decision to cancel their events, or when they were asked to make that decision in certain cities or provinces.
Considering that the organizations are non-profit, without provision or capitalization, their survival is at stake. The crisis could lead to the disappearance of many festivals and events.
If the sales of all festivals and events in Canada represent between $1.5 billion and $2 billion, a deficit on the order of 10% will require loans or grants of between $150 million and $200 million. That is why we are asking for financial assistance, as are other sectors of the economy. That is our third request.
Every day we see event cancellations, from the Calgary Stampede to the Quebec City Summer Festival to the Ottawa Bluesfest, that make headlines, cause great sadness among festival-goers and cause consternation among hotels, restaurants and many other businesses, which normally rely on festivals and events for a large part of their annual sales. This is to be expected, since a third of festival-goers' spending goes to restaurants and a quarter to hotels.
We will have to focus on festivals and events in the post-crisis period. This will allow their revival, of course, but also their participation in what will be called “social healing”. It will also help get these economic and tourism engines back on track, with all the benefits that this will bring to a host of other players revolving around the events, including, of course, the artists themselves, in a myriad of disciplines. This is our fourth and final request.
In this regard, we submitted the example of the Marquee Tourism Events Program, or MTEP, which, after the 2008 crisis, injected close to $100 million over two years into events and is still positively evaluated on the Canadian government site today. We believe that a new version of this program, an “MTEP 2.0”, can be designed and we are obviously willing to participate in its development.
If we moved quickly on this issue, with a relaunch in 12 or 18 months in mind, we would have enough time to ensure that the effect of this investment is maximized, while keeping the teams in place.
In the meantime, we'll be working on two projects. One is to imagine events that can be put on next year in compliance with public health directives, and the other is to make innovative additions to the programming, all in the hope of making our industry a little more COVID-19-proof.
Thank you.