Creative Export Strategy – A Budgetary Analysis
This report provides a budgetary analysis of the Creative Export Strategy.
Summary
This report is in response to a request by Member of Parliament Michelle Rempel Garner, P.C. (Calgary Nose Hill) for a budgetary analysis of the federal government’s Creative Export Strategy (CES).
In October 2017, the Government of Canada announced the CES. The Government’s stated objective for the CES is “to help Canadian creative industries to maximize their export potential.”
In June 2018, $125 million was allocated to the CES over a period of five-year, ending in 2022-23 ($25 million per year). In 2021-22 and 2022-23 $16.8 million in additional funding was allocated to the CES through the Main and Supplementary Estimates, bringing the total available funding to $141.8 million.
Over the period from 2018-19 to 2022-23, total actual spending under the CES amounted to $125.2 million (Table S-1). That is $15.9 million lower than planned or an average gap of $3.2 million per year.
The largest initiatives funded by the CES were the Creative Export Canada (CEC) program ($36.2 million) and the Frankfurt Book Fair ($14.5 million). Additionally, $18.1 million was used to fund costs to administer the CES, including salary, employee benefit plans and corporate costs.
Although not all spending was tracked by location, more than 90% of spending dedicated to specific locations was spent in Germany ($18 million), Canada ($15.8 million) and the United States ($1.8 million).
The Fall Economic Statement 2022 and Budget 2023 announced $62 million over three years to renew the CES (Table S-2). Canadian Heritage expects to spend an average of 31.6% of its allocated funding on administrative costs, which seems significantly above other similar programs. Parliamentarians may wish to enquire to the department about this high proportion.
Introduction
This report is in response to a request by Member of Parliament Michelle Rempel Garner, P.C (Calgary Nose Hill) for a budgetary analysis of the Creative Export Strategy (CES).
In October 2017, the Government of Canada announced the Creative CES.[^1] The Government’s stated objective for the CES is “to help Canadian creative industries to maximize their export potential."[^2]
In June 2018, $125 million was allocated to the CES over a period of five-year, ending in 2022-23 ($25 million per year). Canadian Heritage received $18 million per year, Telefilm Canada $1 million per year and Global Affairs Canada $6 million per year.
In 2021-22 and 2022-23, Canadian Heritage received additional funding estimated at $16.8 million, which was comprised of:
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$7.2 million obtained via Supplementary Estimates (B) 2021-22 to support the one-year extension of Canada as Guest of Honour at the 2021 Frankfurt Book Fair;[^3]
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$2.1 million obtained from the Covid 19 - Recovery Funds through Supplementary Estimates (A) 2021-22;[^4]
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$7.5 million obtained from the Covid 19 - Recovery Funds through Main Estimates 2022-23.[^5]
The Fall Economic Statement 2022 and Budget 2023 announced $62 million over three years (2023-24 to 2025-26) to renew the CES.
While information on the funding allocated to the CES was publicly available, actual and planned spending data by fiscal year, initiative and location were provided by Canadian Heritage, Telefilm Canada and Global Affairs Canada in response to PBO information requests. The details are highlighted in the sections that follow.
Creative Export Strategy
From 2018-19 to 2022-23, total actual spending under the CES amounted to $125.9 million (Table 1-1).
Canadian Heritage spent $102.4 million, Telefilm Canada $5 million and Global Affairs Canada $18.5 million.
Actual spending compared to planned funding
Figure 1-1 shows that actual spending under the Creative Export Strategy (CES) was lower than the planned funding.[^6]
Over 2018-19 to 2022-23, total spending under the CES amounted to $25.2 million per year, or 88.8 per cent of total planned funding. This is an average gap of $3.2 million per year.
Canadian Heritage spent $102.4 million or 96.5 per cent of its planned funding, Telefilm Canada spent $5 million or 100 per cent of its planned funding and Global Affairs Canada spent $18.5 million or 61.6 per cent of its planned funding.[^7]
Canadian Heritage
Telefilm Canada
Global Affairs Canada
Office of the Parliamentary Budget Officer
Canadian Heritage
Telefilm Canada
Global Affairs Canada
Office of the Parliamentary Budget Officer
Totals may not add due to rounding.
Actual spending by initiative
Initiatives funded by Canadian Heritage
In response to PBO’s information request (IR0696), Canadian Heritage provided actual spending information by initiative.
The largest initiatives funded by the CES were the Creative Export Canada (CEC) program ($36.2 million) and the Frankfurt Book Fair ($14.5 million). Additionally, $18.1 million was used to fund costs to administer the CES, including salary, employee benefit plans and corporate costs.
Appendix A of this report provides a summary of the descriptions of the initiatives presented in Table 1-2.
Initiatives funded by Telefilm Canada
In response to PBO’s information request (IR0696), Telefilm Canada provided actual spending information by initiative.[^8] CES funds were used to support Canadian audiovisual co-productions. Telefilm indicated that no funds were earmarked for administrative costs.
Initiatives funded by Global Affairs Canada
In response to PBO’s information request (IR0695), Global Affairs Canada was able to provide only high-level details on actual spending information by initiative.
The department did not provide any information on costs related to the administration of the CES.
Appendix A of this report provides a summary of the description of each initiative presented in Table 1-4.
Actual spending by location
Actual spending under the CES from 2018-19 to 2022-23 can be grouped into three categories:
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Spending that is not dedicated to specific locations. This category includes administrative costs and amounts spent by Global Affairs Canada on Cultural Diplomacy initiatives, which are not tracked by location.
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Spending dedicated to projects and companies that export worldwide.
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Spending dedicated to projects, events and activities in specific locations.
Table 1-6 shows that more than 90% of spending that was dedicated to specific locations was spent in Germany ($18 million), Canada ($15.8 million) and the United States ($1.8 million). This funding was mainly used to support export-related activities in the music sector in Canada, Canada’s participation as Guest of Honour at the Frankfurt Book Fair and Canadian creative exports to the United States.
The remainder of the funding was spent in different countries and regions, including France, United Kingdom, China, Sweden, United Arab Emirates, Netherlands and Italy.
The renewed Creative Export Strategy
The Fall Economic Statement 2022 and Budget 2023 announced $62 million over three years (2023-24 to 2025-26) to renew the Creative Export Strategy (CES) (Table 2-1).
Canadian Heritage will receive $19 million per year for three years (2023-24 to 2025-26) and Global Affairs Canada will receive $2.5 million per year for two years (2023-24 to 2024-25).[^9]
Initiatives funded by Canadian Heritage
Canadian Heritage annual planned funding over 2023-24 to 2025-26 is, on average, equal to the sum of its funding ($18 million) and Telefilm Canada’s funding ($1 million) over 2018-19 to 2022-23, that is under the original CES.
Its administrative costs, estimated at $18 million (31.6 per cent) (Table 2-2), will represent the second most expensive “initiative”, which seems significantly higher than what would normally be expected for a program of this nature. Parliamentarians may wish to seek explanations from the Department on this high ratio. In addition to administrative costs, Canadian Heritage plans to fund the Creative Export Canada Program (CEC) and four other initiatives (the Creative Export Advisory Service, the Creative Industry Advisory Table, trade policy and trade operations).
Initiatives funded by Global Affairs Canada
Global Affairs Canada will receive $2.5 million per year for two years beginning April 1, 2023, to support creative export companies and organizations through the Trade Commissioner Service.