Thank you, Mr. Chair.
Festivals and Major Events Canada, or FAME, and the Regroupement des événements majeurs internationaux, REMI, represent more than 500 festivals and events in Canada, through direct and affiliated memberships, in a sector of the tourism and cultural industry that alone generates more than $1 billion of the country's GDP each year.
Today, I will be addressing you on the topic of Bill C-14 regarding the implementation of the fall 2020 economic statement, as well as on the heels of FAME's submission of a new three-step roadmap for the recovery of the festival and events sector.
I want to take this opportunity to acknowledge the work you have done here in the pre-budget consultations. We are pleased with recommendation 55 in your report, and we very much hope that the government will take it up in full.
The first phase of our roadmap is a survival phase, which we are still in, where festivals and events are deprived of the opportunity to bring people together and generate self-sustaining revenues, which typically make up more than 80% or 85% of the financial packages, with the rest being grants from cities, provinces and the Canadian government.
It is primarily through the emergency wage subsidy that you can really help us achieve the first step of the plan, keeping teams together and expertise alive. We understand that this program is very expensive for taxpayers. That said, we caution elected officials who would want to end it too soon or opt for declining support. If choices must be made, we believe that fewer businesses should continue to be supported, but at a high rate, keeping eligible only those that continue to be most affected, such as those in the tourism and cultural sectors, where revenue losses can be as high as 100%. We believe the wage subsidy will be vital, until we fully recover our business models, likely in the first or second quarter of 2022.
I also emphasize the importance of thinking about the hyper-seasonality of festival operations and revenues to keep them eligible, especially when it comes to reference periods.
Also related to this stage of the plan, we emphasize the importance of maintaining regular grants as the lifeline for festivals and events, which now account for almost all revenues. As for the Canada emergency rent subsidy, it is an interesting complement for festivals and events, but not in the same way for everyone. On the one hand, there are small festivals run out of a single office, and on the other, there are large institutions, such as the Toronto International Film Festival or the National Bank Open, formerly the Rogers Cup, that have large facilities that are very expensive to maintain and will likely exceed the maximum threshold of the program.
The second phase of our roadmap is about public health and the gradual recovery of our operations. We need to instil confidence in Canadians. We are asking the government to facilitate a discussion between festivals and public health authorities across Canada to see what can be done this summer. We need to do this soon and know within the next month or so what framework we can operate under in June, July, August and beyond.
Events may be held soon. They will not necessarily be cost effective, nor will they be able to take place with the same capacity, but they will be organized in a safe manner from a health perspective. For example, outdoor amphitheatres with facilities that force distance are possible. We have solutions for just about every problem you can think of. So we need to discuss them.
The federal government can play a role by supporting test concerts, for example. This summer, cancelling events altogether or instituting gauges without regard to the capacity of the organizers, for example, limits of 250 people, would be a form of intellectual laziness on the part of the authorities.
The third phase of our plan is to stimulate tourism and economic recovery by reviving festivals and events. Like you, we recommend creating a new program based on the model of the marquee tourism events program, which was established after the 2008 crisis, and funding it with $225 million over three years.
We know that festival-goers spend one-third of their money on food and one-quarter on hotels. So there would be a trickle-down effect to other sectors that are very much affected, not to mention, of course, the artists, musicians and the entire ecosystem, including stage and technical equipment suppliers.
We believe that this program should be managed by the regional economic development agencies, in collaboration with Canadian Heritage. Not all festivals are recognized as cultural, but they all have an economic and tourism impact. Think of sporting events, fireworks festivals, culinary or wine festivals, for example. Tourism and the economy are a common denominator.
In closing, there is also an important social dimension to our project. Canadians will want to come together after the crisis. They will need social healing. In fact, that is why we propose to call the program “Celebrating Together Again.”
Thank you.