Entertainment industry grants don't help Canadian economy: Report



There is little evidence to support funding Canada's entertainment industry using taxpayer dollars, a new report claims.

In 2012-2013, the federal government spent more than $1.6 billion on entertainment industry grants and subsidies - a large portion of which went to the CBC. The government said this helped strengthen the industry's role in the Canadian economy, the Fraser Institute report says.

But Steven Globerman, who wrote the report released Wednesday, said the industry doesn't do enough to influence the economy.

"These grants are deemed appropriate, in part, to promote Canadian identity, but Canadian identity is influenced by numerous factors, and popular entertainment is far from the most influential factor," Globerman wrote.

"The arts, entertainment and recreation industries combined for about 1% of the GDP produced by all service industries in 2012, so it's a great exaggeration to say that the entertainment industry makes a major contribution to Canada's economy."

He also wrote it's "unfair" for Canadians to help foot the bill of talented Canadians who want to make a go of their art in foreign markets, "especially considering the large financial rewards realized by successful entertainers."

Canadian-content regulations "are costly and inefficient instruments to promote increased production and consumption" of made-in-Canada music, TV shows and movies, he says.

Globerman also notes preventing foreign ownership within the industry is based on the idea Canadian-owned companies will be more willing to buy and present Canadian-made content.

"But there's no reason to believe that Canadian-owned entertainment businesses are less profit-oriented than foreign owners. And if Canadian businesses have an advantage in finding Canadian talent, they shouldn't need protection from foreign competition," Globerman wrote.

He suggests even if a market failure is imminent, "society might still be better off without any government intervention if the social costs of the intervention exceed the social benefits.-¨

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