e-2995 (Culture and heritage)

The Government would like to thank the petitioners for their recognition of the importance of music to Canadian cultural identity and well-being, and for expressing their concerns regarding the financial impact of COVID-19 on Canada’s music industry, musicians and live music venues.

This country’s music industry, which is a major economic driver, is facing extraordinary challenges because of the COVID-19 pandemic. The pandemic immediately halted the live music sector and caused significant financial losses across the value network. Live music had become the largest economic driver for the music industry and its absence has created further challenges to develop and promote Canadian artists, much of which relies on building audiences through live performances in Canada and abroad. The live music industry faces a long slump; this sector was the first to cease all activities and they will be the last to resume.

On September 9, 2020, the Minister of Canadian Heritage held a townhall on the music industry to better understand the financial pressures facing cultural organizations and artists. Participants discussed new models to improve artist remuneration and proposed measures to support the sector’s recovery.  

The Government's financial support to the music industry and artists is multifaceted. The commercial orientation of the

Canada Music Fund (CMF) and the artistic direction of the Canada Council for the Arts (CAC) are complementary. Both provide direct financial assistance to Canadian artists and support the development of music. Further, the Canada Arts Presentation Fund (CAPF) supports music festivals and performing arts series in communities all across Canada.

The Department of Canadian Heritage undertook a rapid, coordinated response to provide urgent relief to the music industry, arts and cultural organizations through the Emergency Support Fund (ESF) delivered via the CMF, CAPF, and the CCA.

The Government of Canada continues to provide financial support to Canadian artists and the music industry during the COVID-19 crisis through various mechanisms described below.

Canada Music Fund

The CMF is the federal government’s main support program for commercially driven Canadian music, providing direct financial support to Canadian music artists and entrepreneurs for the production and marketing of commercial music recordings, touring, showcasing, conferences, award shows and other events that enhance the visibility of Canadian artists. The CMF is administered by FACTOR for the Anglophone market and Musicaction for the Francophone market.

The CMF’s current reference level is $24.75 million. In Budget 2019, the CMF received $20 million over two fiscal years (2019-20 and 2020-21) to support a program modernization, which among other things, opened envelope funding to a wider spectrum of entrepreneurs who develop and promote Canadian artists. The additional resources also funded key export initiatives, training to entrepreneurs and artists to develop modernized marketing skills (boot-camps, conferences, hiring of metadata experts, etc.), and risk-based activities with strong potential for long-term success. The 2020 Fall Economic Statement extended that additional funding for 2021-22.

The CMF supports Canadian artists and entrepreneurs from different gender and identity groups, including Canadian artists from all racialized backgrounds, in different musical genres and in both the Anglophone and Francophone markets. 

In a typical year, the CMF supports:

• The production of over 500 albums by Canadian artists from a wide variety of genres.
• Over 2,500 artist marketing, touring and showcasing projects allowing Canadian artists to expand their fan base at home and abroad.
• Some 800 performances of artists from official language minority communities.
• Bootcamps to support the development of artists’ business and artistic skills to reflect changes in their revenue streams and support new digital skills required for livestreams.
• Around 300 collective promotional projects including:
  • Events showcasing hundreds of Canadian artists to international audiences and talent buyers.
  • Projects promoting Canadian music on a multitude of digital platforms.
  • Numerous conferences, award shows and other industry events.On April 1, 2020, the CMF was modernized with a reformulated objective to increase the focus on artist promotion and to foster an environment where a diversity of Canadian music artists connect with audiences everywhere. The program was also restructured according to new business models, opening flexible comprehensive envelope funding to a wide range of entrepreneurs who are integral to building audiences for Canadian artists.The modernized CMF is well positioned to directly assist Canadian artists and music entrepreneurs amidst this unprecedented industry upheaval. The funding flexibility offered through the modernization’s expanded comprehensive envelope will support entrepreneurs’ key activities, with incentives to invest in new artists, Indigenous artists, artists from racialized groups and official-language minority communities. In addition, the modernized CMF will continue to emphasize the development of artists' business and artistic skills, more critical than ever in the face of constant change.Emergency Support FundOn May 8, 2020, the Minister of Canadian Heritage announced a $500 million Emergency Support Fund (ESF) to provide temporary relief to the culture, heritage and sports sectors.For the culture sector, the fund was distributed through departmental programs and portfolio agencies such as the: Canada Periodical Fund, Canada Book Fund, Canada Music Fund (via two third-party administrators), Canada Arts Training Fund, CAPF, Harbourfront Centre Funding Program, Building Communities Through Arts and Heritage Program, CCA and Telefilm Canada. The CMF delivered a total of $32.9 million in emergency support to 876 Canadian music entrepreneurs and organizations, including those in the live music sector that do not normally receive funding from the CMF, such as music venues, booking agents, concert promoters and for-profit festivals. Recipients had to demonstrate that their main activities are central to the career development of Canadian artists, the promotion of Canadian music content and audience development.The CMF ESF funds were used to maintain jobs and help companies stay in business during the pandemic. Specifically, the funding supported the Canadian portion of eligible music activities related to Canadian artists, including payments to artists and freelance workers, administrative expenses, and fixed operational costs. Funding must not have been used to cover expenses already supported by other COVID-19 government emergency measures. Note that some recipients used a portion of their funding to present virtual live performances.Support for Workers in Live Arts and Music SectorsOn March 2, 2021, the Minister of Canadian Heritage, in collaboration with the Canada Council for the Arts, provided details of the rollout of funds supporting arts and live events workers in response to COVID-19, as announced in the Government of Canada’s Fall Economic Statement. A total of $181.5 million will be invested in 2021–22 to support the planning and presentation of COVID-19-safe events in the arts and music sectors, both live and digital, and provide work opportunities in these sectors. Funding will also help stabilize the overall environment for the arts and music sectors by providing a one-year renewal of funding for three Canadian Heritage programs originally provided in Budget 2019. The Canada Council for the Arts will receive $116.5 million, to be invested as follows:

• $50.5 million for a new digital innovation initiative enabling artistic groups, collectives and organizations to adapt or create works to be shared with virtual audiences; and
• $66 million of new funding to stimulate increased research, creation and production of new work through the Explore and Create program.The Department of Canadian Heritage will receive $65 million, which will be delivered through existing departmental programs:

• $40 million in new funding for initiatives aimed at stimulating short-term contracting of workers through the creation and digital broadcast of live arts and music events, to be delivered through the following programs:
  • Building Communities through Arts and Heritage;
  • CAPF; and
  • CMF.

• $25 million in funding allocated to the above-mentioned programs as a one-year extension of Budget 2019 resources.Arts, culture and music play a vital role in the social and economic life of Canadians. The Government is committed to supporting Canadian artists and cultural workers through this difficult time.It should be noted that public school music education falls under the responsibility of the provinces.The Government recognizes the importance of ensuring fair and transparent remuneration for musical artists. The Minister of Canadian Heritage is working with the Minister of Innovation, Science and Industry to ensure that the revenues of web giants are shared more fairly with Canadian creators and media as well as to require online platforms to contribute to the creation, production and distribution of our stories on screen, in lyrics, in music and in writing.Specific to the Broadcasting Act, Bill C-10 recognizes the importance of online audio services supporting the creation and production of Canadian music. It will also provide the CRTC with the power to regulate these services and impose discoverability requirements to raise the profile of Canadian artists and their music. Bill C-10 provides the CRTC with powers to require online broadcasters to make financial contributions to support the creation and production of Canadian content.  Traditional Canadian broadcasters (radio and satellite stations, television stations and cable and satellite companies) have done this by complying with expenditure requirements or by contributing to production funds.  If the CRTC requires online broadcasters to contribute to Canadian music and stories at a similar rate to traditional broadcasters, contributions from online broadcasters could amount to as much as $830 million per year by 2023. For example, in the case of music, the CRTC could require an online audio service (such as Spotify, Apple Music, or QUB Musique) to contribute a percentage of its Canadian revenue toward funds that support the Canadian music industry, similar to current Canadian Content Development contributions that are required from traditional radio broadcasters.  As well, it could impose discoverability requirements intended to raise the profile of Canadian artists, including Francophone and Indigenous artists. It is important to note that the aforementioned $830 million figure is an illustrative estimate of the potential impact of Bill C-10; it is not a target and support for Canadian programming is not guaranteed to increase by this amount.   Once Bill C-10 receives Royal Assent, the Minister of Canadian Heritage intends to bring forward a policy direction to the CRTC that will include instructions to consider which regulatory tools are most suitable to facilitate fair and transparent remuneration for musical artists. Through the policy direction, the CRTC would be directed to consider how regulatory tools such as incentive based tools, Canadian programming requirements, discoverability requirements, reporting requirements, charges and expenditures, or any other appropriate tool, could be used to support and promote fair and transparent remuneration for music creators in the modern broadcasting system.