Arts & The Economy

Going from Okay to Worse - The bad economy hits local arts hard
Written By Greg Beneteau

The death of the King Street Theatre Centre was a long time coming.

I covered a film festival last February at the iconic Kitchener building, which opened in 2001 to much fanfare by arts groups who rented it out for various events. The $3.7 million performance space was a gem in the city’s downtown, but the centre’s manager, Brad Hutton, let me know quietly that the business wasn’t brining in enough to justify its existence. Around the same time the centre’s founding stage troupe, Theatre and Company, went under.

The final nail in the coffin came this year when the King Street Theatre announced it would close its doors for good at the end of February, being unable to meet its $30,000 per month expenses. A press release on the website blamed the closure on “insufficient forecasted revenue from rentals, increased operating expenses, and the current economic downturn.”

Hutton was unavailable to comment, being in the middle of the centre’s final audit. But it seems like a number of performing arts groups, including Kitchener-Waterloo Opera and the Waterloo Entertainment Centre, have succumbed to tough times recently.

Some have pointed out the bad financial times are nothing new for arts groups. “I’ve actually been contacted by several media outlets doing this kind of story - how the economy is affecting artists and arts organizations - and one of the things I always note is that most artists are used to struggling to exist,” noted Sally Wismar, spokesperson with the Guelph Arts Council. “[T]hey are creative by nature and usually can respond more quickly than, say, General Motors and they often find creative ways to deal with tough times.”

Creativity aside, there is evidence that a perfect storm of factors may have a severe impact on the performing arts in Canada. Three signs that the curtain call is coming:

The economy is hurting their supporters

In the last decade, performing arts organizations have become more dependent on corporate sponsorship and individual donations to keep themselves afloat. A November 2008 report by Hill Research Strategies, a Hamilton-based group specializing in Canadian arts and culture, examined sources of revenue from 216 performing arts organizations in 2006, with a total value of $557 million.

Though the nation’s theatre companies, orchestras and dance troupes relied on various funding streams (half of all revenues came from earnings, and another $151 million from governments), the two largest benefactors of the $130 million in private revenue came from individual contributions ($43 million) and corporate sponsorships ($34 million).

For 106 organizations that kept records between 1996 and 2006, the report found that the fastest growing source of new funding came from these two sources, with private donations doubling and corporate sponsorships growing by 64 per cent over a ten-year period.

Only time will tell if the recession causes businesses to cut their advertising budgets or philanthropists to tighten their belts. (Some charities have reported drops in charitable giving, while others say it’s keeping steady or increasing).

However, some anticipate that performing arts groups will experience the same spending slump that has affected other parts of the economy.

“Like everyone else in the world, we were surprised by the scale of the economic crisis,” said Janet Stubbs, Director of the Ontario Arts Council (OAC), a body created by the Ontario government to help arts organizations manage private investments. “It was unexpected… and it’s going to be hard on organizations that count on consistent funding and donations from various sources.”

Endowments are another part of the arts funding equation. Half of all performing arts organizations in the Hills Study reported holding endowments, which had a total value of $171 million or 41 per cent of their total revenues.

Endowments can be portfolios set up with private firms or public programs like the OAC’s Arts Endowment Fund, which matches money from small arts organization with provincial funds for investment in perpetuity.

In Ontario, more than 270 art organizations, including the Guelph Arts Council, the Guelph Jazz Festival and the Kitchener Symphony Orchestra, benefit from the $27 million in returns paid out by the AEF since 1997.

But endowment funds, which tend to be highly diversified and have a lot fixed income returns, aren’t immune from market trends. Stubbs estimated that the AEF, valued at $40 million, lost 12.3 per cent of its value in the past year.

“We’re not in the position you read about in the paper where you’ve got portfolios that have lost 30 to 40 per cent of their value,” she pointed out, “but it’s not a happy situation to be in, either.”

“It will be difficult to be paying out in the year that we’ve had,” Stubbs admitted.

Performing artists are already undervalued in Canada

While many Canadian performing artists have successful careers in their specialties, many more are underemployed and do not qualify for the same benefits as workers in other sectors.

Using data from Statistics Canada’s 2006 Census, Hill Strategies examined the wages of 140,000 Canadians who reported artist as their primary occupation. The report found that artists made an average of $22,730 in 2005, compared to $36,300 in the overall workforce. Adjusted for inflation, artists’ earnings actually decreased from 2000, when the average salary was $26,300.

“That was a surprising and fairly depressing statistic. We knew from the 2001 census work that we did that artists’ earnings were low but … seeing them go down from even that low level is quite disappointing,” researcher Kelley Hill told The Toronto Star of the results, released February 4th.

The lowest earning workers in the arts were dancers ($13,167), visual artists ($13,976), musicians and singers ($14,439), artisans and craftspersons ($15,187), other performers ($16,250) and actors and comedians ($17,866).

Producers, directors and choreographers ($43,776), authors and writers ($32,045) and conductors, composer and arrangers ($27,488) reported the highest annual earnings.

The report found that underemployment was one of the primary reasons artists have a difficult time earning full wages. About 42 per cent of people employed in the arts worked part-time in 2006, compared to 22 per cent in the general workforce. Only 68 per cent of employed artists reported being able to work between 40 and 52 weeks of the year, compared to 77 per cent of all workers.

Artists were also six times more likely to be self-employed than all other workers, which generally results in decreased wages.

Underemployment can make it difficult for artists to qualify for Employment Insurance and other benefits extended to those out of work. The self-employed can’t access EI at all, though the Harper government has promised to examine the feasibility of extended EI to this segment of the workforce.

Considering that the arts now employ more workers than Canada’s automotive manufacturing sector, Hill said a review was overdue.

“I do believe that [artists] are a dynamic and growing component of the labour force and it does need to be nurtured,” Hill said.

The Government isn’t Investing in Performing Artists

The arts community was rightfully thrilled when the Federal Conservatives devoted two whole pages of its 2009 budget to various arts and culture programs.

Among the $276 million in new spending promised by the Tories over the next two years was $60 million in much-needed infrastructure funds for community cultural and heritage institutions, $100 million for marquee festivals to promote tourism, $30 million to support access to Canadian magazines and newspapers and almost $50 million in increased funding to the Canadian New Media Fund and National Arts Training Contribution Program.

But there were two glaring omissions that caught performing artists’ attention. The government failed to revive the PromArt and Trade Routes Programs, which promoted Canadian touring companies abroad. The programs were part of $44.5 million in arts funding cut to the anger of many during the Federal election.

Robert Sirman, Director of the Canada Council for the Arts, told The Globe and Mail that accessing cultural markets abroad was crucial to helping Canadian artists achieve success.

“We’d like to be a part of some kind of solution that provides greater opportunity to Canadian artists to access international markets. This seems to be what the arts community is most conscious of and is telling us is their No. 1 priority,” Sirman said.

The CCA was also left out of this year’s budget, despite the fact it plays a key role in distributing grants directly to organizations and is broadly knowledgeable about the arts economy.

One prominent example of this snub was the creation of the Canada Prizes for Arts and Creativity. The $25 million endowment, conceived by Toronto’s Luminato Festival architects David Pecaut and Tony Gagliano, will benefit emerging international artists at an annual gala held in Toronto.

While applauding attempts to bring top talent to Canada’s shores, some have wondered aloud why the money couldn’t help Canadian artists instead.

“The intent is certainly positive, but what’s disturbing about this is the Canada Council does not seem to have been part of the process. It’s there really to promote and to maintain the highest standards of artistic practices,” Jacoba Knappen, executive director of the Toronto Alliance of the Performing Arts, told the Globe.

NDP Culture Critic Charlie Angus criticized the package for focusing on large festivals, saying the money was being used as political pork to improve the Tories’ image.

“The conservatives cut $30 million for domestic arts programs to welcome international artists at a gala in Toronto,” Angus pointed out. “The Prime Minister said ordinary people hated the arts for holding tax-subsidized galas for rich people. Well, there’s one.”

He said any “stimulus package” for the arts should help artists promote their works domestically and internationally.

“This is supposed to be a stimulus package, but the funding is not geared toward stimulating the creative economy. Big questions need to be asked about that.”