Music business in Canada looks for ways to grow
Export expansion, tax credits, education among report highlights
Canada is neglecting the music industry’s potential to drive economic activity, create jobs and contribute more to the tax base, says the country’s recording-industry lobby group.
Music Canada has come up with17 recommendations in a report, “The Next Big Bang: A New Direction for Music in Canada,” released during Canadian Music Week festivities this week.
The missive is fuelled by a 2012 PricewaterhouseCoopers study that Music Canada commissioned, which found that music companies made expenditures and investments in Canada exceeding $398 million in 2011.
Although last year, the global recorded music sector marked the first year of growth in more than a decade, following the shift to digital, the sector is still battling online pi- racy and less-lucrative revenues from digital music sales.
A new focus on the bottom line instead of cultural importance was necessary to earn increased support from the government and technology and telecom companies, Music Canada president Graham Henderson said.
“We had to recast our pitch,” he explained. “That doesn’t mean that were abandoning culture . . . but it reflects realities. You want to get listened to? Find the language they speak and speak in it.
“There’s always been awareness that there’s a music industry, but it wasn’t until the PwC economic impact study that we really started to make inroads, with people saying ‘Oh, OK, this is a significant sector.’”
But it’s not as significant as it could be, Henderson said, citing the annual $1.6-billion spinoff of Austin, Texas’ commercial-music industry.
“They’ve got a city a third the size (of Toronto) and yet their economic impact is almost two-and-a-half times ours,” Henderson said. “We should top out over $5 billion if we do it right. And it will all be new money.” That requires new programs and recasting some that were established in the analog era. For example, the Canadian content rules that govern what radio and television play don’t help the country’s musicians as well now that consumers more often listen to music online. “It induced people to produce records in Canada, and that created a wave of studios that popped up out of nowhere,” Henderson said of the Cancon strategy. “And then we ended up with some of the top producers in the world, like David Foster. AC/DC was going to Vancouver to produce with Bob Rock. That’s what we want to replicate.” Expanding the existing music-tax credit to include foreign-owned companies would generate $60 million in economic activity and create 1,300 jobs in Ontario, Music Canada said. And the GTA’s already vibrant recording industry could be a big player. “A structure like that would help to keep Canadian artists recording in Canada; but moreover it could definitely act as a lure to major American and international acts to come here,” said Kim Cooke, who co-owns Toronto’s Revolution Recording. Donny DaSilva, manager of the downtown’s Noble Street Studios, frequented by rapper Drake, agreed. “Musicians tend to follow whichever producer or engineers they would prefer to work with,” he said. “An act from here who wanted to work with a particular U.S. producer would fly down; if there were incentive for the producer to fly up instead, the record companies or management companies would almost insist.”