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Federal Gov’s increased fees for visiting performers is bad for business and entertainment districts

 

A petition has gone online urging Jason Kenney, Minister of Employment, Social Development and Multiculturalism, to repeal a recent policy that adds a back-breaking raise in application fees to visiting performing artists entering the country to play. Any Business Improvement Area or Downtown Association in the Country with live music venues in their catchment area or nearby should be concerned about this. So should anyone who likes to take in live music occasionally.

Here’s why.

Canadian venues cannot survive on Canadian content alone, and if we lose these venues for lack of booked shows we lose jobs and cultural vibrancy in our entertainment districts or commercial areas. Oddly enough these are two focus areas identified in Jason Kenny’s title, Employment and Multiculturalism. For a Government presumably eager for international trade this kind of added burden to the flow of cultural goods seems anathema, akin to a protectionist tariff or levy we might have seen on beaver pelts and lumber 200 years ago. It’s the kind of red tape and transaction costs that most conservative governments seek to get rid of.  Why did ours introduce it?

The answer, Foreign Temporary Workers. The kind of which we’ve seen brought in to work in mines, the oil patch or agriculture. The kind of foreign temporary workers that have more than doubled as our domestic unemployment peaked. But that’s another story.

According to the Calgary Herald:

“The new rules, which quietly came into effect July 31, will double, triple or even quadruple the cost of bringing in international artists to perform in bars, restaurants or coffee shops, affecting such local venues for music lovers as The Palomino, Ironwood, Broken City, Blues Can, and the Ship & Anchor, and their counterparts across the country.”

Many have rightly been concerned from the standpoint of musicians and the music industry, but this is also about vibrant, economically healthy downtown cores, business improvement areas and entertainment districts because that’s often where these venues are located.

Our entertainment districts and venues thrive when a broad range of content is available to book, especially content that is in demand, that includes content from outside the country, multicultural content (for a multicultural Canadian audience). It also includes emerging acts or artists that are often touring on a shoestring budget, building their audience. These are particularly important for smaller and mid-sized independent venues – which are the majority of venues in Canada. So while the cultural impact of this is important I feel like I need to relate this problem in language that anyone concerned about jobs and the economy will resonate with. In this first context it is a supply and demand issue. There is a demand for foreign content, small and mid-sized venues are an important part of ensuring supply.

A $425 per artist fee may make sense for the Rolling Stones when they play Rogers Arena, but not for the vast majority of other bands who play small and mid-sized venues in Vancouver throughout the rest of the year. The kicker is that this fee wouldn’t apply to a mega-band playing Rogers Arena, only smaller bars and venues. It’s dumbfounding just how anti-small business this policy is, particularly when as a total portion of the overall workforce small businesses account for over 48% of Canadian jobs and 98% of total registered employer businesses.

An application fee of $150 to enter the Country and play for audiences in Canadian cities has been in effect for years. Canadian bands have had to pay similar fees to play in the U.S. if you want to play by the rules. Here in Canada though that $150 one time fee has now been jacked up to $425 per band member and also includes supporting crew and technicians. So a four member band on a Western U.S. tour that also includes a single Canadian date in Vancouver (which you would be surprised to know are quite common) now has a serious economic trade-off on their hands or venues themselves now can’t afford to bring them to town, severely limiting their available “product” so to speak. I guess we could introduce the term “opportunity cost” here. By increasing a transaction cost we’ve now introduced or increased the corresponding opportunity cost. That band might see that it’s in their interest to play another date in Washington State instead, perhaps it’s a better opportunity. Can the venue in Canada now afford to pay them? Will it come out of the promotional budget resulting in poor marketing of the event? Will the venue be understaffed to save costs, creating a negative experience for show goers or the band itself? Maybe it’s just less hassle to pay Bellingham instead.

Tripling or quadrupling the transaction cost of bringing a cultural product to market like this quickly makes that Western Canadian date in Vancouver far less attractive or feasible, perhaps not feasible at all. That potential show is often bringing people in from Victoria, Kelowna, Whistler, even Alberta sometimes if the band has a devoted enough following or significant buzz around it. Those visitors then stay in our hotels, eat in our restaurants, and buy things from our retailers. By unnecessarily and unfairly punishing small businesses with no good cause this policy results in the loss of these shows, creating a negative hit to the economy with losses of additional related revenues to those surrounding businesses (call it spinoff effect or the multiplier effect) and to the overall cultural vibrancy of a community and business district. Tell me how on earth, as Minister Kenny purports via twitter (according to the Toronto Star), this protects Canadian jobs? Because in two short paragraphs I think we’ve been able to demonstrate using economic concepts familiar to any first year college student that this is damaging to businesses, threatening to  jobs, limiting a supply of cultural goods into our economy and potentially kneecapping downtown cores and entertainment districts where thousands of these businesses are located.

One also wonders how the American market and regulators, or other foreign markets, might react in regards to Canadian talent visiting their respective cities and venues? Whatever the rationale behind this increase it will hurt Canadian cities in the end as we de-incentivize touring artists or bands from filling our venues and commercial districts with people eager to support those acts and the businesses they perform in.

So whether you’re thirsting for multicultural content or a conservative who cares about jobs and the economy I encourage you to sign the petition asking Jason Kenney to consider the negative consequences of this strange new policy and have it reversed or amended in the interest of both jobs and multiculturalism, two things we assume he is interested in the health of.

http://www.change.org/en-CA/petitions/canadian-government-to-charge-international-touring-artists-425-per-band-member-per-performance-in-canada-previously-a-1-time-150-fee?share_id=RNHoVgMptj&utm_campaign=signature_receipt&utm_medium=email&utm_source=share_petition

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