Starving Artist: Not Just A Figure of Speech
By: Joel Secter

 Introduction

The Canadian Council for the Arts' (the "CCA") recent proposal to allow the first $10,000 of net income earned from artistic activity to be free from federal income tax liability is not only interesting in itself but is also the latest chapter in a history of initiatives to help the archetypal starving artist. Interestingly, the proposal may be seen as a way for the government to make amends for the 2010 federal budget's cutting of 12 positions from the relatively unknown Canadian Council on the Status of the Artist[1]. This almost forgotten initiative was established by the Status of the Artist Act, which is the focus of a recent paper, 'Status of the Artist in Canada', released by the CCA.

The paper was published in advance of their 2010 conference 'Artists: Powering the Creative Economy?' Not coincidentally, this year marks the thirtieth anniversary of the United Nations Educational, Scientific and Cultural Organization ("UNESCO") Recommendation concerning the Status of the Artist (the "Recommendation") and the paper seeks to evaluate the impact of the initiative in Canada. When the Recommendation was adopted in Belgrade on October 27, 1980, hope glimmered in the hearts of creators around the world, particularly in Canada where the socio-economic condition of artists had deteriorated to the point that the income of many if not most Canadian artists classified them as highly specialized working poor.

Status of the Artist Act

Even though Canada joined the other UNESCO member countries in becoming a signatory to the Recommendation in 1982, it was not a binding document on federal or provincial governments. In 1986, a task force was commissioned to consider how the Recommendation could be applied in Canada. The task force found that artists in not one discipline of the arts in Canada earned an average income above the poverty line. Labour relations emerged as the most critical issue because it was still illegal for self-employed artists to bargain collectively at that time. While it took a decade, from signing the Convention to enacting legislation, Canada was the first signatory of the Belgrade Convention to pass federal legislation.

Officially named An Act respecting the status of the artist and professional relations between artists and producers in Canada, the Status of the Artist Act received Royal Assent on June 23, 1992, coming into force between 1993 and 1995. Not only did the statute recognize artists' economic and social rights, it established the Canadian Artists and Producers Professional Relations Tribunal, creating a legal framework for collective bargaining. Certification issued by the Tribunal gives the certified association exclusive bargaining rights for the sector. Notwithstanding that many of these organizations had been working on behalf of self-employed artists beforehand, they had no legal recognition per se. For example, ACTRA (the Association of Canadian Cinema Television and Radio Artists), which was created in 1975, was not officially recognized as a union until after the legislation came into force. Unquestionably, it is this part of the Status of the Artist Act that has had the most relevance. (The part referred to by Minister Moore, establishing the Canadian Council on the Status of the Artist - to act as an advisory body to the Minister of Canadian Heritage - never got the seal of approval from the Governor in Council and effectively ceased to function shortly after it was implemented.) Beyond that, the legislation has not done much to improve the social and economic circumstances of professional artists.

An Update on the 30^th Anniversary of the UNESCO

The CCA paper notes the atypical way that artists do their work and goes to some lengths to describe the challenges facing Canadian artists and their professional organizations in areas including taxation, social benefits, training and professional development, health and safety and a number of other issues. Key issues raised with respect to the taxation of artists and their income include:

• Some professional artists continue to be considered as hobbyists by the Canada Revenue Agency ("CRA") and are thus ineligible to deduct their legitimate expenses against income.
• The CRA periodically reassesses artists on longer-term contracts to be employees rather than independent contractors, resulting in the disqualification of legitimate business expenses for the artists and a requirement to pay Employment Insurance premiums.
• The income of artists can fluctuate greatly from year to year which results in these artists paying higher taxes than they would if their income were more stable.
• Grants and prizes artists receive from arts councils, competitions, foundations and other sources are taxable unlike other analogous income, such as lottery winners and athletes, who are not taxed on this income. 

The high risk associated with being a professional artist could preclude the tax authorities from categorizing artists with other taxpayers, yet the CRA has done so on numerous occasions and in different ways. Arguably, this has the effect of undermining the financial survival, not to mention artistic development, of Canadian artists.

Conclusion

The economic footprint of Canada's cultural sector was $84.6 billion in 2007, or 7.4 per cent of Canada's total real GDP.[2] This provides the basis for the policy rationale of the proposed amendment to exempt the first $10,000 of net income earned from artistic activity from federal tax liability: "To ensure success in the digital and knowledge economy, Canada must find a way to ensure it has the artists it needs to drive that economy. This incentive would be a strong tool to achieve that goal." Considering the imperative to balance the books and resultant trend to cut arts and cultural programs, this artist-centred amendment merits consideration; it is also in the spirit implied by the Status of the Artist Act. That said its promotion will probably do little more than raise awareness of the plight of artists in Canada.