CANADA GOVT CHARGING $ 275 PROCESSING FEES FROM FOREIGN TOURING MUSICIANS HAS BACK FIRED AND CANADA INDEPENDENT MUSIC ASSOCIATION WRITTEN LONG LETTER TO IMMIGRATION MINISTER AGAINST THIS FEES WHICH HAS AFFECTED THEIR BUSINESS Thursday, November 21, 2013 at 8:05AM The Federal Governments temporary foreign worker fee has backwired in some quarters. What was supposed to prevent banks and other large corporations from outsourcing Canadian jobs to offshore workers ended up stabbing hard-working musicians by accident. Someone didnt think this through and as a result weve run into some unfortunate unintended consequences. In other words, if you want to categorize this as the Harper governments war on the arts, you might as well stop. Thats not what this particular issue is about. Lets start from the beginning. A new fee levied on foreign musicians touring through Canada has rightly caused a lot of upset in the music industry. It requires a new $275 charge slapped on every single foreign musician for every single gig theyre booked to play in this country. Well, thats not really true. There is a huge long list of exceptions to the rule, which has only contributed to the confusion. Bottom line, though, is that the perception of Canada from outside is that were not friendly to artists who want to perform here. Crazy, no? The good news, though, is that right-thinking people at all levels--including in the Federal Government--seem to understand that the effects on the music industry need to be fixed. One organization thats been leading the way is the Canadian Independent Music Association. Theyve been collecting evidence on how harmful these new measures are are in the process of keeping political pressure on the feds to do something. The more they (and others) prove that this is an issue, the faster all this bullshit will be resolved. That means that if you have a story to tell, make sure you tell it to CIMA. Heres what CIMA has sent to the government: November 18, 2013 The Hon. Jason Kenney Minister of Employment and Social Development Human Resources and Skills Development Canada Office of the Minister of ESDC 140 Promenade du Portage Gatineau, Quebec K1A 0J9 The Hon. Chris Alexander Minister of Citizenship and Immigration Department of Citizenship and Immigration Canada 365 Laurier Avenue West Ottawa, Ontario K1A 1L1 Dear Ministers: RE: Temporary Foreign Worker Program The Canadian Independent Music Association (CIMA) would like to reiterate its position that recently enacted changes to the Temporary Foreign Workers program, specifically the new Labour Market Opinion fees for foreign musicians performing in Canada, continue to have serious, detrimental effects on the Canadian music industry. Since our original letter dated August 29, 2013, CIMA has communicated to your office numerous real-life examples detailing how the changes to the Temporary Foreign Workers program, and the new fees for Labour Market Opinions, continue to negatively impact Canadian jobs, investment, music exporting opportunities, and limit foreign direct investment into this country. With respect, a simple and effective solution to this untenable situation would be to extend the Labour Market Opinion exemption to cover all music venues, including bars and restaurants. It is the latter – bars and restaurants, the small businesses that serve as the backbone of the domestic music industry -- at centre of the difficulties described in this letter. We would be pleased to meet with you and your officials to discuss the issues that are before us today in detail. By way of background, CIMA is the not-for-profit trade association representing the domestic independent music industry, specifically almost 200 Canadian-owned and operated companies and professionals engaged in the worldwide commercialization of English Canadian independent music. CIMA’s membership consists of Canadian-owned and operated companies and their representatives who are involved in every aspect of the music and music-related industries. They are exclusively small businesses which include: record producers, record labels, recording studios, managers, agents, licensors, music video producers and directors, creative content owners, venues, artists and others professionally involved in the sound recording and music video industries. Let us be clear on this point – the changes to the Temporary Foreign Worker program, while intended to apply to foreign musicians performing in Canada, have already borne several negative consequences for CIMA’s membership and the broader Canadian-owned music industry. As we have previously noted, the changes to the regulations will significantly increase costs for Canadian booking agents, promoters, managers, independent labels and those venues who book international artists to perform in bars and restaurants across Canada. The non-refundable fee of $275 per musician, as well as any associated entourage, to obtain a Labour Market Opinion (LMO) has already caused economic damage both here in Canada and around the world with our trading partners. It has already negatively impacted Canada’s reputation in the global music industry, which we rely on in the export market. Although this may be an unintended consequence of your government’s recent changes to the Temporary Foreign Worker program, it is nevertheless one that can readily be addressed to everyone’s satisfaction. In order to understand why a $275 per-person fee is having such a dramatic effect on the Canadian music industry, one must understand the industry is a complex ecosystem. According to CIMA’s 2013 report, Sound Analysis, an Examination of the Canadian Independent Music Industry, the independent music sector in English Canada is not a homogenous industry – it is a community of Canadian-owned small businesses (46% are sole proprietors), in which 60% earn less than $50,000 in gross revenues each year. Only the top 10% of businesses earn more than $500,000 annually. Like any small business in Canada, access to capital and cash flow are two of the industry’s biggest and most significant challenges; meaning that the increased costs imposed by the new temporary foreign worker fees will have a tangibly negative impact on these businesses. CIMA solicited a series of examples from our membership and industry partners, demonstrating how the new rules governing the Temporary Foreign Worker program are affecting various aspects of the Canadian Music industry: VENUES Bars and restaurants rely on the revenues that touring musicians attract in order to sustain themselves. This revenue keeps these business afloat, which, in turn, gives our Canadian artists a greater array of venues in communities across the country in which to perform. Below are some of many examples that demonstrate how venues are being affected by the new Temporary Foreign Worker program rules: “The changes to the temporary foreign workers program effectively halt Amigos from seeking and taking advantage of any foreign bands (entertainers) who may be touring in Canada. The increased fees make these performances unaffordable. As a small music venue and restaurant, most of the foreign bands we hire are paid fees ranging from $400 to $1500 for one night’s performance. With most bands having between 4 and 6 members, the new fee results in increased costs of approximately $1100 to $1650. As a small venue we are unable to absorb these increased costs ourselves, or pass them on to consumers. The impact this will have is that we will be able to host fewer nights of entertainment throughout the year, which will greatly affect our bottom line. This decrease to our overall business will likely result in a decrease in present employee numbers. In addition, due to fewer nights of entertainment, local bands will not have opportunity to play in the night’s support-act position, reducing income and exposure for these Canadian performers. Fewer nights with quality performances will further reduce our ability to remain a premier music venue, and over time will reduce our status in the community, threatening our bottom line. In general, our business viability will be greatly reduced, with a real possibility of needing to close our business on a permanent basis. In addition, the way the current changes affect some music venues but not others is troubling. Businesses like ours, which rely on a diverse revenue stream to stay afloat, and who hire a large number of Canadian residents on a permanent basis are required to pay the new fee. However other, larger concert halls who only hire staff for evenings, on an irregular basis when they have a performance, have been exempted. This certainly puts a business such as Amigos at an unfair advantage financially, and greatly reduces our ability to remain competitive in this very competitive market.” Brant Palko, Promoter, Amigos Cantina, amigoscantina. “There are some immediate consequences that the TFWP changes have brought, namely confused booking agents with tours that are a mix of exempt and non-exempt venues. We are facing cancellations for what could be very promising events. Were being told by agencies abroad that given the higher fees, were essentially out of the business of foreign entertainment. While its not impossible to fill these dates with local entertainment, the general idea with a thriving music venue is to present a wider array of artists. As a venue, we do typically depend on local/regional talent for most of the calendar year. That said, we have much bigger nights where there is a touring band performing in our club, often a band from outside of Canada. Those big nights (where we hit our capacity) go a long way to help the club sustain itself when local bands, on a modest average, tend to put the room at 40 - 60% capacity. There are exceptions, but we cant reasonably expect the majority of local talent to consistently fill the venue. What tends to work best with touring acts is having local talent perform in an opening slot. We dont expect locals to do it for charity, either - we pay them to play. The problem with the very steep increase in work permits under the new TFWP is that our situation immediately becomes untenable. Where our room is able to establish a budget to pay a touring act X amount of dollars based on a ticket price of Y, the new regulations make a typically reasonable budget totally unrealistic. The government has told small venues that the cost of business to work with any single band outside of Canada has tripled (at a minimum) based on a group of four players, or four players with a sound technician (or merchandise seller, or tour manager, or guitar tech). I am not sure what the economic situations of similar sized rooms east or west of the one I work at are, but I can confidently say the new policy is telling small venues to get out of the business of producing concerts that feature anything other than local or Canadian content. Our room has lost more business already than I can replace with local/Canadian bands. I dont want to guess what that means for the venue in the long run, but it will translate to fewer shifts available for bar staff, security, box office and sound technicians beginning in October. These changes make so little practical sense for small business. Its very disheartening.” Sam Smith, Talent Buyer, Windsor Hotel, Winnipeg. FESTIVALS While festivals are exempt from requiring an LMO for foreign musicians performing at their event, they are still, nevertheless, affected by the new process. Many emerging, independent musicians travelling to Canada to perform in a festival can only afford do so by organizing additional performances in local bars and restaurants. This provides some revenues for the artists, which help offset their costs of travelling to Canada and participating in the Canadian festival. The new LMO fee structure is now creating a cost-barrier for many of these foreign acts to perform in Canada, therefore putting at risk the ability of Canadian festivals to attract these same foreign acts. INDEPENDENT LABELS Many Canadian independent record labels also have foreign artists and bands signed to their roster, in addition to domestic artists. Showcasing these artists in Canada is an integral part of their business model. Consider this feedback from a Montreal-based independent label, typical of the stories CIMA has been receiving from our record label members: “This had an impact on me today as I think I am going to have to cancel one of my (international) acts coming to Canada (Toronto) for some dates in November I was offered. Now it becomes financially not feasible.” Contributor opted to remain anonymous. EXPORTING/FOREIGN DIRECT INVESTMENT Canada has a great wealth of musical talent and diversity to showcase to the world, and the independent sector is a vital part of the equation. Canada ranks as the seventh largest music market in the world and the third largest supplier of English-language music after the United States and the United Kingdom. While 73% of the Canadian-owned music industry’s revenues are earned in Canada, approximately 19% are earned in the United States, 3% from the UK, 1% from New Zealand and Australia and 4% from the rest of the world. Though the Canadian independent industry is largely a domestic one, these numbers highlight the fact that international export is among the key strategic objectives for the industry, and that tremendous business opportunities exist in foreign markets. Unfortunately, CIMA has been informed by numerous foreign artists, booking agents and managers that “Canada is now off the touring map,” meaning our country will not benefit from the foreign direct investment these bands bring when they perform here. They will not collaborate either economically or culturally with our own artists; they will not spend their money on our hotels, restaurants, gas stations, car rental agencies; the venues in which they would perform will not see the revenues such shows generate, meaning fewer patrons attending these establishments and less staff to work in them. But it doesn’t stop there. Music, like politics, is a business based on relationships. In the music industry, partnerships and collaboration are key to the success of any band or company. This is no less important when engaging in exporting and international trade. Consider how the Temporary Foreign Worker program has already cost an Ottawa-based independent label thousands of dollars in lost revenue: “One concrete example is with New Country Rehab (NCR), a Canadian band which has enjoyed success in Canada. They have also had the opportunity to play some significant US folk festivals this summer (such as Grey Fox in NY state, Red Wing in Virginia and Four Corners in Colorado) and get great press on NPR and other outlets. The next step for them is to have a good US support tour. The band has ally bands in the US, and a common strategy is to swap dates with US bands, giving them good show opportunities in Canada with the hope that they will reciprocate in the US. One band in particular called Joy Kills Sorrow have an interest in supporting NCR up here in mid-February with dates that are already booked, and in turn offering support dates in key markets where we are trying to build where JKS have built a solid audience, including Boston, New York, Philadelphia and DC. These opportunities would put NCR in front of the right audience, and help propel them forward in 2014. Now, the entire tour is in jeopardy and JKS management is not interested in having to spend thousands in order to come up to Canada for 5 shows. Therefore, our US show opportunities will also fall through. The revenue impact will be small for this tour, but the point of the tour is that its a building exercise. We would essentially break even giving them a split on our Canadian shows in order to get $300- 400/show in the US. The loss is in the longer-term gain...if we can jump from 50-100 to 500 person venues in the US. We’ll instantly build our email list, potential merchandise sales, and audience infrastructure in key markets. Our short-term loss for these February dates will be around $1,000-$2,000, but if you look at 12 months from now, the difference in income could be as much as $15-20k on a single tour if we were to jump from 50-100 capacity rooms to 150-200 capacity rooms for the band. It would potentially allow us to have our first profitable US tour, and likely have a lot of other spillover effects (future opening tours, press hits, label interest, publisher interest, promoter interest, festival interest) which are mostly hard to gauge, but could be estimated at anywhere from $20-100k over the course of 18 months-plus.” Jon Bartlett, Kelp Records, Ottawa, kelprecords. In closing, CIMA understands that members of the Canadian Federation of Musicians/American Federation of Musicians (CF of M/AF of M), are exempt from paying for the LMO when performing in Canada. However, we must point out that this exemption only applies to US artists and bands that are members of this union – meaning non-US artists from around the world, and non-union members, must still apply for the LMO when performing in bars or restaurants in Canada. Given that there are so many exemptions already, and that Canada’s small businesses are bearing the burden of the new fees, we respectfully request that the government extend the exemption to all music venues, including bars and restaurants. Thank you for your time and consideration of this issue, Ministers. I look forward to talking with you or your staff about this further, and to answer any questions that you may have. If you would like to arrange a meeting, or if you have any questions or comments, please contact my administrative assistant, Emy Stantcheva, at 416-485-3152 ext. 221, or [email protected]. Yours sincerely, Stuart Johnston President CC: The Right Honourable Stephen Harper, Prime Minister Honourable Shelly Glover, Minister of Canadian Heritage and Official Languages Neil Yeates, Deputy Minister. Citizenship and Immigration Canada Colleen Swords, Deputy Minister. Canadian Heritage Ian Shugart, Deputy Minister, Human Resources and Skills Development Wayne G. Wouters, Clerk of the Privy Council and Secretary to the Cabinet Privy Council Office CIMA members
Posted on: Tue, 26 Nov 2013 03:57:35 +0000
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