Earlier this month, the British Columbia government unveiled a new $15 million music fund to support the local music industry. The fund matches a similar Ontario initiative that has doled out nearly $30 million over the past two years with a commitment from Premier Kathleen Wynne to make the Ontario Music Fund a permanent program to support the industry.
The millions of taxpayer dollars earmarked for the music industry represents a major success for the industry lobby, which shifted several years ago from focusing on digital copyright reform to identifying new sources of government financial support.
My weekly technology law column (Toronto Star version, homepage version) notes that despite the industry accolades, the Ontario program suffers from a surprising lack of transparency with virtually no public information on how the money is actually spent. Moreover, according to documents obtained under provincial access to information laws, the Liberal government has exaggerated the impact of the first round of funding with the creation of relatively few new full-time positions and limited international investment in the province.
The Ontario Media Development Corporation (OMDC), which administers the program on behalf of the government, announced the first round of Ontario Music Fund recipients in September 2014. The big recording company winners were the three major foreign record labels (Sony Music Entertainment Canada, Universal Music Canada, and Warner Music Canada), who averaged more than $830,000 per company. By comparison, the 36 successful Canadian record companies garnered an average of $115,000.
The OMDC identified the recipients and the total grant amount, but it provided no details on specific projects, programs, or how the money would be spent. I subsequently filed an access to information request for the records associated with 10 of the largest funding awards. The OMDC responded with a fee estimate of $11,659.10 for the information, which was only reduced after an appeal to the provincial Information and Privacy Commissioner.
After months of delay, the released documents excluded virtually all relevant information about the funding applications. The OMDC redacted the objectives of the funding, the planned activities, recipients’ track record, communications plan, timeline of activities, anticipated outcomes, and financing. An appeal is currently before the Commissioner.
When asked about the appropriateness of the lack of disclosure, a ministry spokesperson responded that “program guidelines and evaluation criteria are made public. Applications are evaluated according to this criteria and applicants are provided with feedback if they request it once the funding decision is communicated to them.” In other words, the Ontario government supports the secretive approach in which the public has seemingly no right to know how its money is spent.
Not only is the lack of transparency surprising, but government documents suggest that the initial results are underwhelming. When asked about the results in an interview last year, Michael Coteau, the Minister of Tourism, Culture, and Sport, claimed that the fund created 2,000 jobs and that more than $24 million in revenue was brought into the sector in the first year alone.
Those claims led to a second access to information request on the program results. Once again, the OMDC was unwilling to release specific details on the results of any funded organization. Instead it provided a spreadsheet with de-identified data on all program recipients.
The data indicates that contrary to Coteau’s claims, there were only 263 new full time jobs created by the fund, a cost to taxpayers of $57,000 per new full-time job. In addition to the new full-time jobs, another 569 full-time jobs were retained, still well short of the 2,000 figure.
The investment results were not much better. Recipients reported spending less than $7 million in private equity and support, less than half of the provincial government investment. Moreover, while Coteau promoted the benefits of attracting recording to Ontario, the data indicates that only 15 international artists recorded in the province and that the total international investment in Ontario recording studios was $213,277.
As the Canadian cultural sector faces new challenges and opportunities in the digital age, there is unquestionably an important role for government support. Yet the secrecy associated with the Ontario Music Fund and the results to date provide a cautionary tale on the need for greater transparency, oversight, and accountability in public funding programs.