Budget 2022 Recommendations to the Department of Finance from the Canadian Independent Music Association
Budget 2022 Recommendations to the Department of Finance from the Canadian Independent Music Association
Submitted February 25, 2022
Following is a list of CIMA’s recommendations:
Recommendation 1:Accelerate the commitment to a permanent increase to the Canada Music Fund (CMF) from $36 million to $50 million in 2024-25 by two years to 2022-23.
Recommendation 2:Ensure that new funding mechanisms emanating from Online Streaming Act reforms to broadcasting include provisions for funding to be directed to the Canada Music Fund or a complementary fund.
Recommendation 3: Extend the term of copyright to 70 years plus the life of the creator, as part of the Budget 2022 process, in order to bring our laws into alignment with our trading partners as part of the USMCA agreement.
Supplementary Recommendations 4:Move forward with amendments to the Copyright Act in an expedited fashion and support reforms that benefit Canadian independent music
Budget 2022 Recommendations
- 1.Accelerate the commitment to a permanent increase to the Canada Music Fund (CMF) from $36 million to $50 million in 2024-25 by two years to 2022-23.
As illustrated in a Nordicity report, the impact of the COVID-19 pandemic on Canada’s independent music industry has been significant and will likely take at least three years for the industry to recover to return to pre-COVID revenue levels. Accelerating the permanent increase to the CMF into this fiscal window would provide better and more stable funding for the independent music sector as it continues to deal with the effects of the pandemic while at the same time providing a major building block towards success for the sector in the post-covid economic recovery period.
Overall, the intended effect of this recommendation is to ensure that the Canadian music industry’s funding bodies, FACTOR and Musicaction, are provided with the resources necessary to both ensure that their existing programs can be effective and have the financial flexibility to develop new programming and augmented administrative support specifically designed to propel the recovery.The initial need for this increased funding was to alleviate program capacity in the pre-pandemic period, and that need has only increased as the music sector struggles to recover.
The mandate letter from the Prime Minister to the Minister of Canadian Heritage clearly calls on the government to increase support for the Canadian music sector by “increasing annual contributions to the Canada Music Fund to ensure better and more stable funding for the music sector.”This increase in Budget 2022 would achieve that goal.
- 2.Ensure that new funding mechanisms emanating from Online Streaming Act reforms to broadcasting include provisions for funding to be directed to the Canada Music Fund or a complementary fund.
If Bill C-11, the Online Streaming Act is passed, estimates from the Department of Canadian Heritage indicate over $800 million per year of funding would be generated by 2023 to be invested in Canada’s cultural industries, including music. That said, the details of this funding, including how much of it would be allocated to music, remains undetermined.
As it will take two to three years from presenting a bill to Parliament to creating the mechanisms and collecting and allocating funds via the CRTC, any new funding could be considered as the medium-term replacement for a shortage of recovery funds directed toward the music sector. Moreover, due to the significant decline in commercial radio revenues that flow funds to the music sector, the infusion of funds via reforms to the Online Streaming Act would a long-term support mechanism that would be complementary to an increase to the Canada Music Fund, outlined in Recommendation 1.
- 3.Extend the term of copyright to 70 years plus the life of the creator, as part of the Budget 2022 process, in order to bring our laws into alignment with our trading partners as part of the USMCA agreement.
As part of the USMCA agreement, Canada has committed to extend the term of copyright to 70 years plus the life of the creator by Dec. 31, 2022. This will finally give Canadian creators and the businesses that invest in them, many of which are SMEs, the same benefits at home that they already enjoy with its North American major trading partners. Implementing this provision in legislation such as the Budget Implementation Act would help these SME owners and copyright holders in the creative industries to benefit sooner rather than later, thus contributing to economic recovery. Further delaying this implementation would hinder the economic benefits of this long-overdue alignment of term in North America and reinforce barriers to international trade.
- 4.Move forward with amendments to the Copyright Act in an expedited fashion and support reforms that benefit Canadian independent music
The mandate letters for both the Minister of Canadian Heritage and Minister of Innovation, Science and Industry call on the government “to amend the Copyright Act to further protect artists, creators and copyright holders.”2022 will mark 10 years since the Copyright Act was last amended, with significant need for revision coming more into focus over the course of the decade.
The 2019 statutory review of Canada’s Copyright Act marked key areas for modernization and advancement that, if implemented, would increase opportunities to monetize copyrighted content. This would increase the value of copyright holdings, encouraging investments in the creation, acquisition, and commercialization of existing and future copyrighted content.
Changes to copyright legislation ensure that it is further harmonized with that of Canada’s major trading partners but would also ensure Canadian rights holders could compete internationally on a leveled playing field and provide a long-term, market-driven solution to the current decline in music revenues, by generating potentially $50 million to $60 million in new revenue every year.
Key components of proposed changes include (but are not necessarily limited to):
- amending the definition of ‘sound recording’ under the Act;
- narrowing the radio royalty exemption (i.e., repealing the $1.25 million broadcaster exemption)
Conclusion
As the Federal Government looks towards a post-Covid economic recovery, the Canadian owned independent music industry stands ready to be an active and proactive partner in diversity, equity, inclusion, and innovation; developing Canadian owned IP that can be exported around the world; where the profits from these innovations flow back to Canada and are then reinvested in good, green, middle-class jobs that build and strengthen Canadian culture and the Canadian economy.
Thank you for your time and consideration of CIMA’s pre-budget submission. We would welcome the opportunity to meet with the office of the Minister of Finance to discuss these recommendations further. We look forward to growing a strong, dynamic Canadian music sector together.
--
About CIMA
CIMA is a not-for-profit national trade association representing English-language, Canadian-owned and controlled businesses of the domestic, commercial music industry. CIMA represents a diverse membership of small businesses including: record producers, record labels, recording studios, managers, agents, licensors, music video producers and directors, creative content owners, artist-entrepreneurs and other professionals from across the sound recording industry.CIMA represents close to 400 Canadian companies and professionals and 6,200 Canadian artists including: Tanya Tagaq, Serena Ryder, Terra Lightfoot, Tegan and Sara, Whitehorse, The Sheepdogs and METRIC.