Good afternoon.
Festivals and Major Events Canada, also known as FAME, and the Regroupement des événements majeurs internationaux, or RÉMI, represent over 500 festivals and events across the country. Together, the coalition has a direct and affiliated membership active in the tourism and culture sector, which is responsible for generating over $1 billion in revenue a year. That attests to our members' significant contribution to the country's GDP.
These associations have joined the coalition of the hardest-hit businesses and are calling for an increase of the Canada emergency wage subsidy for the category of businesses most affected by the pandemic, as well as greater support for fixed costs and better access to liquidity.
FAME and RÉMI welcomed a number of the measures announced yesterday, particularly the enhanced wage subsidy. I want to take this opportunity to thank the many members from all parties who supported us, as well as the government. I will, of course, share a few of our reservations and talk about what still needs to be done, but overall, we find the measures encouraging. The measures announced yesterday are a step in the right direction, and I want to make that clear.
It is important to understand that the emergency wage subsidy needs to provide considerable flexibility while taking into account the hyperseasonal nature of our business. Asking an event operator to compare their summer revenue to their January revenue would be pointless. When it comes to liquidity, we still believe the government needs to intervene financially through a fund to reduce the deficits of cultural organizations, including festivals and events. That financial support cannot be limited to loans; it must also be subsidy-based.
The majority of festivals and events are non-profit organizations, with no loss provisions or capitalization. According to a survey, FAME estimates that festivals and events currently have a combined deficit of at least $150 million. Why? Because, in the six months before the pandemic, event organizers made the usual expenditures in anticipation of the 2020 installments of their events, but were prevented from generating any revenue during the three to 10 days of the event or festival, as they normally would have.
We had called on the government to immediately renew investments in the two main programs that support festivals and events. The investments were made in 2019, but only for a period of two years. Thankfully, the government renewed that funding yesterday. My only concern is that the funding is yet again limited to one year. At some point, we will need predictable funding to operate. It's incredibly challenging for event and festival operators to cope when the government reduces funding to later cancel it outright. Ideally, agreements would cover multiple years.
Until 2018, approximately $31.5 million of the $50 million in funding delivered through the two main programs for presenters was divvied up among more than 1,050 festivals. That figure jumped to around $42.5 million in 2019-20. The government provided an additional $10 million or so in 2020, in response to the pandemic, bringing the government's spending on festivals and events to more than $50 million. In 2021, the investment will once again total at least $42.5 million, but the fear that it will drop back down to $31.5 million in 2022 looms. That worries us.
Furthermore, we recommended that the government establish a transition fund for green digital events, and in yesterday's economic statement, the government set out funding to support the planning and presentation of COVID-19-safe shows and events delivered both live and digitally. Once the details are released, we will know whether that funding aligns with our recommendation.
As far as the recovery goes—which, I know, is what the committee is keen to hear about as part of its pre-budget consultations—we urge the government to set up a program modelled on the former marquee tourism events program, which the Conservatives introduced after the 2008 crisis. The program would require a $225-million investment over three years. No doubt that is what the Minister of Canadian Heritage was referring to when he appeared on the television show Tout le monde en parle and said that he was having discussions with the Minister of Economic Development. The marquee tourism events program was administered by Industry Canada.
We are proposing that the new iteration of the program be managed by Canada's regional development agencies. In yesterday's economic statement, the government recognized the importance of providing events and festivals with unique support. In our view, such a program would go a long way towards providing the support the sector needs. The new program would deliver stimulus while attracting more tourists through festivals and events. Initially, the program would support domestic tourism, but would help draw international tourists when the situation allows.
A quarter of festival goer dollars are spent on hotels and accommodations, and one-third on restaurants. By helping festivals and events as part of the economic recovery, the government would be providing indirect support to restaurants and hotels, which have been hard-hit by the crisis, as well as transportation operators, artists and performers.
The government needs to act swiftly so the sector can keep its teams in place. The sector must prepare now for festivals and events in 2022.
Thank you.
We recommend moving quickly to keep the teams we have in place. To put on festivals and events in 2022, we have to start getting ready now. Thank you.