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After releasing the 2011 Main Estimates several weeks ago, the Hon. Minister of Finance, James Flaherty, today tabled a much anticipated 2011 federal budget. Titled: The Next Phase of Canada’s Economic Action Plan: A Low-Tax Plan for Jobs and Growth, this is the first budget following the end of the government’s Economic Action Plan.

According to the government, the recession has ended, and thus, the economy no longer requires stimulus funding. The big question was whether the budget would offer enough goodies to at least one of the opposition parties to keep the government in power and avoid an election. As it turned out, all three parties, including the NDP, rejected the budget immediately and it is evident that Canadians will soon go to the ballot boxes.

Today, the CCA provides a first blush review of how the 2011 federal budget would have impacted Canada’s arts, culture and heritage sectors had it been passed.

Tell me more

The general thesis of the 2011 budget claims that the government will build on the success of the Economic Action Plan. Support for the creative economy in the Economic Action Plan amounted to $335 million in investment. According to the government, the next phase’s low-tax plan for jobs and growth will lay the foundation for long-term prosperity by supporting key drivers of economic growth – innovation, business investment, families, communities, education and training – in a responsible manner that preserves Canada’s fiscal advantage.

Cultural Funding

In this version of the 2011 budget, we see the next phase of Canada’s Economic Action Plan put into place to support culture and communities, and investing in innovation, education and training.

In terms of arts and culture, we see more or less the status quo, including funding continued to grants and contribution programs, some on an ongoing basis, as well as a handful of one-time investments:

• Renewal on an on-going basis (as opposed to an annual renewal) of $100 million per year to the Canada Media Fund to invest “in the creation of convergent digital content across multiple platforms, including television and leading-edge applications for Internet, wireless and other emerging platforms”;
• On-going funding of $15 million per year to the Canada Periodical Fund to support a broad range of publications and ensure a diversity of Canadian content in 2011-12 and 2012-13;
• $25 million over five years to renew funding for the Harbourfront Centre in Toronto;
• Renewal for 2011-2012 of the $60 million granted to CBC/Radio-Canada for the “production of high-quality Canadian programming”;
• Granting of a one-time investment of $7.5 million to the Royal Conservatory of Music to launch a national examination system in partnership with Carnegie Hall

In this budget, we also see a targeted focus at ‘driving innovation’ through Canada’s Digital Economy Strategy – for which the CCA contributed a brief in the summer of 2010. The budget recognizes that the digital economy is woven into a modern knowledge economy and it sets the stage for the release of Canada’s Digital Economy Strategy later this spring. The budget does so by introducing new measures focused on accelerating adoption of information and communications technologies at small and medium-sized businesses, preparing students for careers in the digital economy, and building Canada’s digital content through the Canada Media Fund.

Building on the end of the Economic Action Plan and its $3.8 billion to advance Canada’s knowledge economy, the March 22nd budget establishes 10 new Canada Excellence Research Chairs. Some of these new chairs will be active in fields relevant to Canada’s Digital Economic Strategy. These investments are meant to help develop and attract talented people, to strengthen Canada’s capacity for world-leading research and improve commercialization, to accelerate private sector investment to enhance the ability of Canadian firms to participate in global markets, and to create an advantage for Canadian business.

Tax Credit

The budget is peppered with a series of tax credits for a number of Canadians, and there is one that concerns the arts. This is possibly the only new item for the arts in this 2011 budget, and is in fact the reintroduction of a promise made during the 2008 election. The proposed 15% Children’s Arts Tax Credit, provided on up to $500 of eligible expenses for programs associated with children’s artistic, cultural, recreational, and developmental activities, would translate into annual returns of $75 for parents. The CCA originally asked for this tax credit in April 2006 and welcomes it as a recognition by the government that arts training is just as important as physical training for Canadian children.

This credit will be based on the eligibility conditions for the Children’s Fitness Tax Credit. The credit will be available for children under the age of 16 years old for registration costs associated with participation in qualifying supervised activities. According to the budget, this measure will apply to eligible expenses paid starting in the 2011 taxation year. It is estimated to reduce federal revenues by $25 million in 2010-11, and by $100 million in each of 2011-12 and 2012-13.

Review of all Government Expenditures

As noted in the CCA's 2010 budget analysis, federal government departments and agencies are currently under a spending freeze and over the past four years, all of them have undergone strategic reviews. Last year the National Film Board of Canada, Telefilm, CBC and the Canada Council for the Arts were subject to such reviews of their direct program spending. However, no reallocations were necessary as programs delivered by these organizations were found “to be aligned with the priorities of Canadians.” The strategic review process is generally conducted on a rotating basis every four years.

Moving away from this model, the 2011 budget announces a comprehensive one-year Strategic and Operating Review across all of government in 2011–12. The Strategic and Operating Review will examine direct program spending, as appropriated by Parliament. About $80 billion of direct program spending will be reviewed with the objective of achieving at least $4 billion in ongoing annual savings by 2014–15 or 5% of the review base. The review will place particular emphasis on generating savings from operating expenses and improving productivity, while also examining the relevance and effectiveness of programs.

What can I do?

Read the 2011 federal budget and comment on our blog on how you think this budget will affect Canada’s arts, culture, and heritage sector. Please also consult our list of all mentions of the words: “art”, “arts”, “culture” and “cultural” found in the 2011 federal budget.

Alain Pineau
National Director / Directeur général
Canadian Conference of the Arts / Conférence canadienne des arts
406 – 130, rue Slater Street 
Ottawa Ontario K1P 6E2 
Tel / Tél: (613) 238-3561 ext.12 / poste 12
Fax / Télécopieur: (613) 238-4849 
| www.ccarts.ca

The Canadian Conference of the Arts (CCA) is the national forum for the arts and cultural community in Canada. It provides research, analysis and consultations on public policies affecting the arts and the Canadian cultural institutions and industries. The CCA fosters informed public debate on policy issues and seeks to advance the cultural rights of Canadians.