Tuesday, August 19, 2008

Cutting Art Subsidies a Good Plan


Tory subsidy cuts to arts groups is an important first step in freeing taxpayers from buying art they don't want.

We must remember that government subsidies to any business person, including artists, are paid for with tax dollars. Travel subsidies can create wasteful, if not perverse outcomes - after all, if Canadians produced world-class art, and then marketed it effectively, people would notice.

Worse yet, artists who aren't subsidized must now pay higher taxes to fund those who are somehow determined worthy by government bureaucrats or handmaidens. Not only that, subsidized artists may create more art than there is a market for, making it even more difficult for unsubsidized artists to live from their art.

Taxpayers shouldn't be on the hook to finance the international junkets of anyone.

12 comments:

claudan said...

Every dollar spent on helping the Canadian film industry turns into four dollars of economic activity, from which the government then culls more income.

Tax credits, as with other subsidies, are money-making economics that help both the industries they directly support and the actual people and their families in them--in Canada.

Seeing as the USA's biggest export is intellectual property, and one of our biggest industries is the cultural industry (of which film is a part), why then the hatred of film/culture?

Canadian cultural industry: 40B$/year to our economy, more than 7.4% of our real GDP.

And NOW you want to destroy it? In THIS economic recession? Do you WANT a depression?

The government's recent cuts to culture are amongst the stupidest things it's done, and this group's support of those cuts should embarrass you. It makes you look stupid too.

Squinter said...

Every dollar spent "helping" one industry or another is still choosing winners and losers. Is the government funding all films? I hope not, because there are a lot of trash films I don't want my money spent on. Even if it funded all players in the film industry, it is still picking film making over some other activity as the best use of those dollars. How can the government possibly know that?

Also, when the government funds one activity or another, it creates a dependency by all who participate in those activities on the government. What happens when the government changes its mind (eventually, it always does) and decides that activity is no longer in favour, and instead funds something else? If it had never been funded, everything would remain pretty much unchanged. Those funded companies shrivel up and die.

Secondly, every dollar spent helping the film industry is still taken involuntarily from the pockets of the residents of Canada. Once you add all the layers of government, management, bureaucracy, public servants, kickbacks, etc, it will expand to mean much more than one dollar. So even though it may "turn into four dollars", it may cost as much as four dollars. Again, as above, those dollars could have been put to uses that would be considered even more profitable, but thanks to the glorious destruction of wealth we know as government, we will never know.

There are films the government has paid for that are complete garbage, that are not being watched by significant numbers of people, and have no cultural value. Is this the kind of activity you really want to "help"? Is that really the kind of "culture" you want to export? If the government does the funding, it will fund trash, because the government can't tell trash from gold before it reaches an audience, the people who should be paying for it in the first place.

Tax credits are government grants, the same as any other, just with another title. It is easy to point at the money being "made" in response to the grants. It is much harder to quantify how much damage is being done at the same time by diverting that money away from other activities. Look up the "broken window fallacy" some time.

There is no hatred of film/culture. The frustration is disgust at all the needless things that are paid for with our money. If the art was good, it would be valued, and so the funding would be unnecessary. If it isn't good, the funding would also be unnecessary.

claudan said...

Dear 'Squinter', you have many questions, let me answer them for you as you don't know what you're talking about.

--BEGIN LESSON

What you said:
Every dollar spent "helping" one industry or another is still choosing winners and losers. Is the government funding all films? I hope not, because there are a lot of trash films I don't want my money spent on. Even if it funded all players in the film industry, it is still picking film making over some other activity as the best use of those dollars. How can the government possibly know that?

--Tax Credits are an incentive to HIRE CANADIANS. They are given to any film that is A) not pornographic, B) that are real films, not awards shows, not industrial films, not advertisements, not variety shows, not game shows. They are based on percentage of purely the labour expenses (audited cash payments during production and post-production). They are based on the added value to our economy from the activity of employment and in some ways tied to the predicted added taxes that the money paid to the labour will increase the velocity of money in that territory which will produce further tax revenue for the government(s). They are an incentive to produce films in whatever area they are directed towards in an effort to attract employers to those markets because this activity improves the local economies of the area, and the lives of everyone in them.

What you said:

Also, when the government funds one activity or another, it creates a dependency by all who participate in those activities on the government. What happens when the government changes its mind (eventually, it always does) and decides that activity is no longer in favour, and instead funds something else? If it had never been funded, everything would remain pretty much unchanged. Those funded companies shrivel up and die.

-- Yes, our local Canadian companies in the field will shrivel up and die, but not because they are 'used to' the funding. They will die because there will be no ability or reason to make films in their own territory any longer. The filmmakers that these companies represent will move elsewhere, like all the foreign producers that shoot in our country and will leave to shoot elsewhere also. They will make films in another territory that provides better incentives--like NYC (just increased their tax credit %300, or like Michigan that gives %40 of the entire budget).

What you said:

Secondly, every dollar spent helping the film industry is still taken involuntarily from the pockets of the residents of Canada. Once you add all the layers of government, management, bureaucracy, public servants, kickbacks, etc, it will expand to mean much more than one dollar. So even though it may "turn into four dollars", it may cost as much as four dollars. Again, as above, those dollars could have been put to uses that would be considered even more profitable, but thanks to the glorious destruction of wealth we know as government, we will never know.

--Tax money that is spent by government as an investment in our future is always involuntary. The government realizes it can make money bringing film production to its territory. If you think you have a better idea for that investment instead, perhaps you should come up with a business plan instead of assuming they can do better with it rather than investigating, planning, and making a prospectus for more appropriate investment should you think that rewarding domestic and foreign investment and employment is such a bad idea.

What you said:

There are films the government has paid for that are complete garbage, that are not being watched by significant numbers of people, and have no cultural value. Is this the kind of activity you really want to "help"? Is that really the kind of "culture" you want to export? If the government does the funding, it will fund trash, because the government can't tell trash from gold before it reaches an audience, the people who should be paying for it in the first place.

--Let's get this straight, finally: the government doesn't PAY FOR our films, they help finance them--it's different. We have to PAY BACK the vast majority of government investment, should our films be lucky enough to be chosen (between 3% and 5% of applications are successful) for that great honour. To say that there are bad films is one thing, to say that there are films that are complete garbage is extreme and disingenuous. To say they have no cultural value is a meaningless statement--it is your opinion and only that. And yes, the majority of Canadians DO want to invest in their country's culture. You appear to think that there is no culture worth exporting. I disagree with you, and so does the rest of the World. Our filmmakers and artists in Canada have been receiving the highest awards for their work around the World for many years now. Our music industry is the most interesting and viable on the Planet. Your 'trash' talk about our cultural production is disgusting frankly and sounds like the whining of someone who has no natural talent and is very, very annoyed that anyone else could be more talented.

What you said:

Tax credits are government grants, the same as any other, just with another title. It is easy to point at the money being "made" in response to the grants. It is much harder to quantify how much damage is being done at the same time by diverting that money away from other activities. Look up the "broken window fallacy" some time.

--No. Again, tax credits recognize the economic boost that film production gives to a certain local economy, and rewards the film production strictly based on how much money they pay Canadian workers. They are not a grant. Grants are applied for by artists to pay for their art: individuals making individually created art. Film is a business, and a lot more money and people are involved. The film business alone directly employs over 125,000 people in this country, and supports more than 100,000 families. Taking away our tax credits will drastically reduce employment to these real people, these real families. Taking away our tax credits will stop production in Canada. We will employ Americans instead, because they will give us better tax credits. All you will achieve by taking away our tax credits is putting 125,000 people out of work, and chasing all our best talent out of the country. Instead, we will take our films, and our intelligence, and our money, and we will make films somewhere else that's more interested in the economic boon that filmmaking is. The second part of your point in the above paragraph is also strange (other activities). If the government thought they could make more money putting it somewhere else, they would.

What you said:

There is no hatred of film/culture. The frustration is disgust at all the needless things that are paid for with our money. If the art was good, it would be valued, and so the funding would be unnecessary. If it isn't good, the funding would also be unnecessary.

--The argument that if the art is good it wouldn't need funding is just so wrong on so many levels it's difficult know where to start. It presupposes that art is monetized easily. It presupposes that there are private investors in filmmaking in Canada. It presupposes that in art, the best way to finance it is through market capitalism. All these things are wrong and false. Art should be unfettered from market capitalism, because it's about who we are as HUMAN BEINGS, not about who we are as CONSUMERS. Films are expensive. Unlike other businesses, you have to make your product completely before you can start selling it. A film has to raise all the money, then make the film, then exploit the film. It takes between three and ten years to get to the point in a film project that you can start exploiting it financially (from the germ of the idea). From production commencing, it takes between a year and two years. During this time the money you've borrowed to make the film costs interest, so it's not because we're lazy that it takes this long. It takes this long because it's one of the most complicated things to do that one can contemplate. Film is the Opera of our time. It is the one art that combines all others.

Final Word: The recent cuts to the arts in Canada have crippled our artists ability to monetize their art nationally and internationally. The %7.4 of our real GDP that comes from our cultural sector will diminish quickly and produce immediate negative impact on our whole economy. Many of the most talented and brightest stars (upcoming and resident) will leave the country. The destruction of the 125,000 jobs that the film industry represents will start an unemployment snowball that will further destroy wealth and employment in other sectors (remember we do business with Banks, Insurance companies, IT, government workers, city workers, police/fire, lawyers, just to name a few). And all the money that we spend (and that foreign film productions spend here) will dry up: Billions and Billions of dollars.

So, good job, pat yourselves on the back. I'll leave you to your culture-less, whining, broke country.

Scott Hennig said...

Interesting discussion. The whole economic benefit argument is weak at best. Burger King's employ Canadians and "create economic benefit" but you don't see governments giving them tax credits for their labour costs.

Moreover, a Saskatchewan Government Film tax credit study showed that even after you factor in all the economic benefits taxpayers are still subsidizing direct and in-direct jobs to a tune of $8,000 each.

Plus, your assumption that every one of those 125,000 (not sure where you got that number from…) people would be unemployed if the government eliminated tax credits is completely wrong. Some may leave to ply their trade in other locations, some would stay here and work on productions that didn’t need government money to survive, and others would get jobs in different professions.

There is no god-given right to have the government subsidize your profession. Just because my dream is to be a street poet, doesn’t mean that the government should have to pay me to do it, because nobody else will.

So, the only argument you have is that we need people to tell "our" stories.

Last time I checked, the tax credit was for both "our" stories and for "theirs."

Brokeback Mountain was not "our" story, it was set in Wyoming. Capote was not "our" story, nor was Happy Gillmore, Elektra, Good Luck Chuck, The Jackal, Lucky Number Slevin, or dozens of other Hollywood films that were supposed to be set in US or foreign locations, yet was filmed in Canada.

Trailer Park Boys Movie, FUBAR, and Men with Brooms, are films you may be able to argue are "our" stories. But they are a drop in the bucket compared to the ones that are just here because the government cut them a cheque.

But that still doesn't justify cutting them government cheques.

It's not up to governments to decide what is worthy art and what isn't. Be it film, music, paintings or hanging dead rabbits from the trees.

If Canadians aren't willing to support these ventures than neither should their governments.

claudan said...

Two things: Film counts as an industry. Just like manufacturing, or forestry, or even general business. There are government programs that support and/or give tax credits to all kinds of industries, including those too. Why should the cultural industries be disadvantaged in comparison to the Oil industries for example? The Oil industries get government support too. I guess that you think we're lay-abouts? I'd like to see you try to do my job.

Second thing: if you think our nation's cinema is in such bad shape I would recommend you come see my film "Sheltered Life". Watch the festival line-ups as they come out these next few weeks. Hopefully you'll hate that it's a story set in a women's shelter. I bet some people will think that stories shouldn't be set in a women's shelter--especially in this forum. But I can guarantee you that you will be: entertained, moved, and proud that my film came from this country and not from somewhere else.

claudan said...

two more things:

--The cultural industries of Canada employ 616,000 people in this country. The film industry: 125,000. Look it up if you don't believe me:

http://www.cbc.ca/arts/story/2008/08/22/carroll-stpierre.html

--you say "even after benefits" that these jobs are costing 8K each to the taxpayer. I don't think you're reading the numbers right: for an equation to work you have to look at both sides of it. Clearly you are ignoring that each job is creating 100K+ of further economic activity. If you spend 8K$ subsidizing a job in order to attract a production spending 100 Million Dollars to your locale, you're MAKING MONEY. If you were from a small town, you would understand more acutely that when 100 Million Dollars rolls into your town everyone wins.

claudan said...

You say: "It's not up to governments to decide what is worthy art and what isn't. Be it film, music, paintings or hanging dead rabbits from the trees."

Damn right! That's why the film tax credit portion of Bill C-10 (I gave witness to the Senate on this) is so very wrong--the Minister of Heritage shouldn't have the ability to use their own bias to pull tax credits from films AFTER they are made (bankrupting the filmmakers) unless, somehow that's never happened before, the filmmakers actually break the law in making their film.

However, governments around the world support their own country's industries so that they can compete in the Global marketplace. Canada has proven it can compete in this industry, and all cultural industries. You might not like one or two, or even a few of the films we make. But it's outrageous that you think you have the right to shit all over us just because we work differently (not less hard) than you do.

claudan said...

Here we are in the playground.

Harper's beating up the artist in the middle of the field and his gang of yes men are egging him on: "kick her in the head!! Yeah, you damn lay-about, feel good?" [thud-crack!].

They've formed a ring around the artist, the rest of the playground watches in horror as their classmate, the artist, is bloodied and twitching on the ground.

But Harper continues to batter her, breaking bone and slashing skin--blood pouring out on to the gravel--mashing her face into it..."Now who's boss? Yield--Yield!".

But Harper's having so much fun and his gang is so transfixed on the violence they don't notice that all the rest of the school is now closing in on them, forming a circle enclosing theirs. The people of the playground, silently picking up rocks, sticks, anything they can get their hands on as they move in around the Harper-ites.

The artist may be beaten for now, but there is another battle to be fought and it's coming soon...

Scott Hennig said...

To respond to a couple points:
Two things: Film counts as an industry. Just like manufacturing, or forestry, or even general business. There are government programs that support and/or give tax credits to all kinds of industries, including those too. Why should the cultural industries be disadvantaged in comparison to the Oil industries for example? The Oil industries get government support too.

We would agree, film is an industry, and just like some of those others you mentioned should not get government assistance.

The CTF has loudly opposed all forms of corporate welfare. So, don't just think we're picking on film, we pick on all government grants, loans and assistance to corporations.

I recently wrote a column calling the Alberta government's $2-bil "investment" in Carbon Capture and Sequestration corporate welfare.

http://www.taxpayer.com/main/news.php?news_id=2927

I guess that you think we're lay-abouts? I'd like to see you try to do my job.

What? Where did you get this from?

if you think our nation's cinema is in such bad shape I would recommend you come see my film "Sheltered Life". Watch the festival line-ups as they come out these next few weeks. Hopefully you'll hate that it's a story set in a women's shelter.

Again...what? Why would I hate that you directed a film that's set in a women's shelter. I hope your film does very well and that lots of people want to pay to see it. I hope you make a huge profit allowing you to make future films without using my tax dollars.

You might not like one or two, or even a few of the films we make. But it's outrageous that you think you have the right to shit all over us just because we work differently (not less hard) than you do.

I think you may have some sort of inferiority complex. Nobody here, not I nor "squinter" has suggested that you are lazy or don't work hard. Nor has anyone here suggested that we hold our position -- that government shouldn't fund art, but instead art lovers should -- because we hate art. I love films, I love the theatre, I love music, and I enjoy paintings. In fact, last Thursday I spent my own hard earned after-tax dollars to see a couple of plays at the Edmonton Fringe Festival.

Our BC director used her vacation this year to take a painting workshop, as she is an artist.

Nobody is "sh*ting" on you because we don't like your films. But you are missing our point. Again, we don't like government's funding films. We like consumers funding films.

If you want to direct a film that is one continuous three-hour shot of a man watching paint dry, I say go right ahead, just don't ask taxpayers to fund it. The same goes for you directing the next Citizen Kane. Go right ahead, just don't ask taxpayers to fund it.


Look it up if you don't believe me:

http://www.cbc.ca/arts/story/2008/08/22/carroll-stpierre.html


That is a news story that suggest that a group of different arts groups used that number in a letter. I'm still wondering how that number was derived.

As for the economic activity argument, it's still very questionable. Most economic activity studies are bunk, because they discount substitution effects.

It's like suggesting that all 125,000 people would be unemployed if the government stopped subsidizing films. It's just not true.

I don't think you're reading the numbers right

Feel free to have a look at them yourself: http://www.tpcs.gov.sk.ca/EconomicImpactFilmVideo-FinalReport

claudan said...

Scott,

Sorry if I took you to be more art-hating that you might be. There's a lot of art-haters out making comments these days.

You appear to only have 2 real points. So, let's deal with them in isolation for a second.

From what I understand you think:

1) That you don't think 'your tax dollars' should be spent on supporting any industries.

2) That consumers, rather than government, should dictate the viability of artistic ventures (especially, apparently, films).

First of all, the 'I'm a taxpayer' argument is tired, old, pointless and needs to be put to bed. We are all taxpayers and each of us could find something the government spends money on that we don't like or that we think could be done better - saying 'I don't want to pay for _____' is a pointless cyclical argument that leads nowhere. Yes you're a taxpayer, that means that you won't get arrested for tax evasion, congratulations. I am also a taxpayer, and I don't want 'my tax dollars' going to schools or roads in Western Canada because I neither have children nor drive in Western Canada. So what? Exactly.

Secondly, Art isn't about the consumer. Art is not a service industry. It is about creative activities that CREATE new and exciting ideas about ourselves and our existence.

My films are 'counter-culture' films. As such, they don't sell easily at the beginning of the process because they aren't based on pre-existing films (like genre films tend to). They are original films that defy comparison to others. They play well only after they are made. So, how can I raise the money for them beforehand from consumers? Let's face it, nobody would invest in them unless there was some kind of tax-shelter incentive (which I'm not against--I suggested it in the Senate). Investors invest their money based on prior success. But, Arts are always new and different. So, you see, the only Arts that investors would back would be -- American Genre Films. Yay! If we followed your advice we'd only be able to see bad American entertainment.

The problem you end up with in the strictly Adam-Smithian Utopia that this site tends to promote is that it leaves no room for originality or creativity in Art because it reduces are to purely a business--to a bottom line.

Art is about more than a bottom line.

Geographically, Canada is a massive country and it's population is small and spread-out. Our artists have one-tenth the population to sell our wares to, and farther to travel to do so than practically any Artists in the World have to go. Travel grants level the playing field, ever so slightly. Taking them away basically eliminates our ability to promote our creations to even our own country--let alone world buyers.

You continue to suspect my numbers & sources. Here's some more for you:

According to the Board of Trade arts and culture, both directly and indirectly employ 1.1 million people, generate 84 billion in economic activity and accounts for 7.4% of GDP.

Arts and culture, according to the Canada Council employs "roughly the same number of jobs as agriculture, forestry, fishing, mining, oil & gas and utilities combined".

According to the Government of Canada's website for Trade Routes Canada's cultural exports equal 5 billion dollars annually.

There are a number of ways we can look at these numbers but any way you look at it Canadians are getting alot of bang for their buck. If it helps, don't think of it as 40 million in arts subsidies, think of it as a 40 million dollar investment that returns (from exports alone) $125 for every dollar invested. That's a return on investment of 12,500% - which any banker will tell you, isn't too shabby. If that still doesn't help think of it this way: they're not your tax dollars - the government takes $4 per year (.25 cents per month) from the paycheque of everyone who makes their living for the arts - think of what it would cost the government if those 1.1 million people were suddenly unemployed and didn't pay taxes?

No matter how you want to look at it the math is indisputable. These subsidies are a huge money maker for Canada and are essential to the Canadian economy.

So, the people who favor this cut as far as I'm concerned do so because they dislike art and artists so much that they are willing to throw away thousands of jobs and do serious damage to the economy just as a way of lashing out at artists. Arts and culture give back far more than they take both culturally and economically and that is fact, not opinion.

Rick Vaile said...

claudan I have read both arguments with an open mind. I have a couple of questions.

The tax Credit is based on a projection of what the film income may be and what the tax would be ?

So how do they determine if it will make that back or not?

If it does not what happens to the monies owed?

If you can procure funding from private sources do they get a tax break? if the Film makes or doesn't make money.

If you make money do you add up all the films you made that year be it 1 or more and pay a corporate tax or small business corporate tax on your earning if it is classifeid as an Industy ( Which I agree it is).

Should we as taxpayers have to pay for this..... National Gallery of Canada purchases Vanitas: Flesh Dress for an Albino Anorexic, by Montreal artist Jana Sterbak. The dress is made from fifty pounds of salted, pounded raw steak, which is then hand-stitched together. In the weeks following the installation, 200 people mail food scraps to the Gallery to protest the work, which Sterbak says deals with issues of power, sexuality and control. When the dress decomposes after six weeks, it is replaced with another $300 worth of raw meat, which Gallery staff were trained to piece together.

How about the voice of fire for 1.8mil... http://en.wikipedia.org/wiki/File:Voice_of_Fire_photo.jpg

Bear with me because I am very green when it comes to the Arts. Film is only one aspect of it.

I for one side with Scott. To me if an Artist needs subsidies then they should find another line of work.

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