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FYI

StatsCan Report: Financial Impacts on Arts & Entertainment in 2020

The pandemic has led many workers in creative sectors to reconsider their careers, with as many as one in four Canadians thinking of changing jobs.

StatsCan Report: Financial Impacts on Arts & Entertainment in 2020

By External Source

The following is taken from a Statistics Canada report written by Marie-Christine Bernard and Megan McMaster and released Aug. 17, entitled Financial impacts of the pandemic on the culture, arts, entertainment and recreation industries in 2020.


 

The Covid pandemic has had a massive impact on the culture, arts, entertainment and recreation sectors, with preliminary estimates gauged by Statistics Canada suggesting that operating revenue fell in all industries in those sectors in 2020 except the sound recording industries.

Similarly, despite government assistance, salary, wage, commission and benefit expenses fell in all industries.

According to the agency, several factors contributed to these extensive declines, including the in-person nature of the sectors; venue closures; the cancellation of events, festivals and performances; operating restrictions; and changing consumer preferences for physically distanced, at-home and online activities.

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As per StatsCan reporting, the ability of businesses to use digital technologies alleviated some financial pressures and staffing issues as companies could continue to operate using alternative methods for cultural creation, digital distribution networks, accessibility and engagement. The digital transformation was well underway before the pandemic hit, and was accelerated by changing economic conditions.

The sound recording industries were affected by the pandemic, although to a lesser extent than most other cultural industries in Canada. In fact, the sound recording industries as an aggregate were the only segment of the culture sector not to experience a decline in operating revenue and to hold their labour-related expenses relatively constant.

The sound recording industries are segmented into record production and distribution, music publishers, sound recording studios, and other sound recording industries.

While many musical groups and artists depend on live concerts and events for much of their income, this is not the case for most companies in the sound recording industries.

 With increasing access to music on mobile platforms, revenue from streaming services accounts for a significant part of the record production and distribution industry’s revenue. Overall, estimates suggest that except for sound recording studios, all other segments experienced modest growth in operating revenue in 2020, with moderate declines in salary, wage, commission and benefits expenses.

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Significant impacts for recreation service industries

With advisories against non-essential travel, border restrictions, and strict lockdowns in several provinces and territories, the financial strains and workforce adjustments in the arts, entertainment and recreation sector were significant in 2020.

Live events such as theatre plays, dance performances, music concerts and sports events were cancelled for the season across Canada because of business and gathering restrictions. While some businesses were able to operate in innovative alternative ways by operating digital shows, classes or events, it was not enough to mitigate the financial pressures.

Preliminary estimates suggest that nearly all industries in the arts, entertainment and recreation sector generated less than half of their pre-pandemic operating revenue in 2020. However, the contraction in labour-related expenses was not as steep, owing to a number of government support programs and several grants and funding opportunities. Workers and employers affected by the economic difficulties related to the pandemic could receive temporary benefits under a number of government support programs, including the Canada Emergency Wage Subsidy (CEWS). More than half of active businesses in the arts, entertainment and recreation sector received CEWS support in 2020.

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Conclusion

Challenges remain for the culture, arts, entertainment and recreation sectors. In its April 2021 budget, the federal government earmarked close to $800 million in specific funding to help rebuild the sectors, complementing the relief programs already in place.

It is unclear how many workers and businesses will remain active in the creative and recreation sectors once restrictions are lifted. The pandemic has led many workers to reconsider their careers, with as many as one in four Canadians thinking of changing jobs. There is also uncertainty as to what consumer activities, habits and spending will look like and whether increasing digital reliance will be permanent.

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Many performing arts industries will be among the last to reopen, and it may take significant time before audiences, visitors and tourists return and companies can resume operating at the same scale as before the pandemic.

For other industries that were already restructuring before the pandemic, such as newspaper publishers, the pandemic has further exacerbated a downward trend in operating revenue and labour expenses. These industries may not rebound similarly as other culture and arts industries.

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