Artists plan next move in battle to win tax-free status for copyright income

The Canadian Conference of the Arts (CCA) hasn’t given up hope that the federal government will introduce a new tax exemption for copyright income, despite the Oct. 4 defeat of a private member’s motion proposing similar relief. The motion – which would have allowed artists, writers and performers to earn up to $30,000 tax-free – was put to a vote earlier than expected, and before its proponents could put forward an amendment that would have resulted in broad bilateral support for the idea. MPs from both the Bloc Quebecois and the Canadian Alliance said they were prepared to support the NDP-tabled motion, if the tax exemption was tied to copyright income. "The motion was broad – far too broad – so we’re not surprised it was voted down," says Philippa Borgal, the CCA’s associate director. "Although we recognize the motion is dead, the issue is not." The CCA may have another opportunity to pitch its idea before the Standing Committee on Finance next month, assuming Prime Minister Jean Chretien doesn’t call a federal election, which would suspend all parliamentary business. In its pre-budget brief to the Finance committee, the CCA said after years of having its recommendations ignored by politicians, it has opted to put its lobbying muscle behind just one proposal – one it says would result in equitable tax treatment for individual artists and creators. The proposal is modeled on a similar tax exemption offered in Quebec, which entitles artists and creators to an annual tax exemption on copyright income of up to $30,000. The CCA says such legislation would primarily benefit artists and creators at the low end of the pay scale. The CCA writes: "painters, sculptors and other visual artists rank below taxi and limousine drivers, hotel front desk clerks and hairstylists and barbers in the full year-full time scale, while artisans and craftspersons come even lower, after general farm workers, cashiers, and ironing, pressing and finishing occupations. Not enviable positions." The CCA describes the cultural labour force – which is nearing one million people – as the fastest growing sector in the country. Using language many senior bureaucrats and politicians will find familiar, the CCA talks about the importance of Canada’s cultural work force in fueling innovation, and making Canada a leader in the new economy. It also points to the government goal of making Canada the most connected nation in the world. "The CCA cautions, however, that in its rush to do so, government must not become preoccupied with technology rather than content, and must ensure that artists’ rights are not trampled underfoot," the group writes in its pre-budget submission. The CCA describes the creation of copyrighted work as "artistic research and development", and one deserving of similar tax incentives as other more industrial sectors. "Canada has a long history of supporting research and development in scientific, industrial, medical and technological fields. It is now time to recognize and celebrate the importance of Canada’s cultural innovators in a similar fashion." Borgal says she’s confident that the tax exemption issue will remain on the political radar screen. Canadian Heritage has suggested it may conduct a study that would look at using the Quebec exemption as a model for the rest of Canada. "As well, Pierre deSavoye, the Bloc’s cultural critic, has said he wants to bring a motion to the Standing Committee on Canadian Heritage to ask the new CCRA (Canada Customs and Revenue Agency) to do a study," she adds. Borgal says her group will also continue to lobby for some form of income averaging for all self-employed individuals, not just those in the cultural sector. Income averaging would recognize that artists may receive a lump sum payment for work done over a period of time, and tax that income accordingly. "We don’t believe income averaging is dead," says Borgal, "even though there is no political will in the finance department to do it."

Artists plan next move in battle to win tax-free status for copyright income

Broadcast | October 13, 2000

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