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Arden's Notebook

January 19, 2009

Bullwinkle the Moose: "Eeeny meenie chili beanie, the spirits are about to speak.

Rocky the Squirrel: "Are they friendly spirits?"

Bullwinkle the Moose: "Friendly? Just listen!"

Every time I think about or hear a reference to a crystal ball, the first thing that comes to mind is this oft-repeated moment from a childhood cartoon program, "The Rocky and Bullwinkle Show". So the idea of calling this now-and-then-if-something-comes-up-big-or-small-that-I-think-you-should-know-about "Peering into the Crystal Ball," quickly deteriorated into "Staring Bleakly into the Void" and other equally grim titles.

And I just couldn't shake the vision of Bullwinkle and the notion that my ability to read the future was no better than a cartoon ruminant, even if the moose is one of our national symbols.

In any case, there are often items of information, of some size or other, that don't quite fit into any of our other ways of communicating with you, so we thought we'd give this rather informal method a try.

Let's start with the big issue - the sorry mess that is our economy. The last few months have shaken up every single thing. Just take a look at your RRSP statements, if you are brave enough to open the envelope when it comes in. There is no question that this mess will have an effect on our business. We just don't know how although I think our fevered imaginations can come up with a few of the ways.

Our community took a big hit in the summer when the Conservative government decided to lop millions of dollars out of arts and culture funding (the final figure is probably in the vicinity of $60 million) That raised the ire of artists from coast to coast but no where more so than in Quebec. Just before Christmas, Mr. Harper made a number of comments which did nothing to endear him to the citizens of La Belle Province and many are suggesting that he was denied his majority as a result of alienating the arts community and that now he has lost Quebec permanently.

I would be very surprised if the budget due later this month didn't include the restoration of some or all of that $60 million. The other parties have made it very, very clear that they would restore (and in some cases, increase) funding to our sector. If you subscribe even partially to the economic and social theories espoused by Richard Florida, you will see these monies not as subsidies or hand-outs but smart investments in the new Creative Economy. However, just because the sitting government has figured out it might have made a mistake poking us with a sharp stick doesn't mean that they suddenly have been converted to our cause either. So, my first murky view into the crystal ball doesn't see a ton of new money for the arts anytime soon. But we'll get something. I'm pretty sure of that. The government surely doesn't need a bunch of enraged artists making an even bigger stink if we get shut out of the stimulus package.

However, government investment is only one part of the picture and the impact of the sliding economy on the average citizen is likely to have an even bigger impact on us.

A number of our bigger cultural institutions are in the fortunate position of having a bit of a piggy bank, whether in the form of an endowment fund or a carefully invested surplus. Just like our own RRSPs, these funds have taken a beating in the market and may not be generating any revenue for the organization. There is always the possibility that the capital itself has also declined. The dollar value of that damage is unknown. Further, many others rely on the contributions and donations, large and small, from both corporations and individuals who wish to support their work. No one is sure how these contributors will respond in the coming months but it is a fair guess that the money will be less than in the past. Ticket sales provide a substantial portion of revenue for most and here is where things may be the most vulnerable.

It is impossible to predict how people will decide to spend whatever disposable income they have left. Will they save it and not spend it at all? Will they use it to pay down debt? What portion will be reserved for discretionary spending and will any of that be on us? If the price of gas stays down through the summer, many people may decide to take their vacations closer to home and that could bode well for places like Stratford and Shaw. If there is only a certain amount of money to be spent, will they keep their season tickets to their regional theatre? It's cheaper than a trip to the Bahamas but will it be the choice that gets made? I guess we'll get a better idea over the next couple of months when many of the companies do their annual push for season ticket renewals. How that goes might give us an idea of what we can expect. But it would be irrationally cheerful to imagine that there will not be a downturn in our sector.

And when people become choosier about where they spend their entertainment dollar, does that change the kind of programming we can expect? Does it become more mainstream? Or do people take the opportunity to create new and exciting types of experiences in the hopes that it will put more bums in seats? If people stay home and watch TV, is it only "spectacle" that will get them out and paying? I believe that the power of live performance hasn't diminished just because our disposable income has. So, here's another fearless prediction - the same old, same old won't do anymore as audiences will be looking for good reasons to reach into their pockets. Just "okay" won't be enough and "really good" will be what makes the difference.

What this means for Equity is that when we begin the budgeting process for 2009-2010 Doug Irons (Controller and Keeper-of-All-Important-Information) and I will be looking at a very conservative budget with an assumption of, at best no growth and at worst, a decline in revenues. We have a responsibility to ensure that we continue to provide the highest level of service to the members with the resources we have available and to ensure the financial stability of the Association. Your Council has mandated that there be a substantial "stabilization" fund in place and Equity is healthy financially. At this point, I see no reason to dip into that fund for any reason but as the year unfolds we'll see how hard it's raining...

A new structure has been created internally to oversee the administration of the RRSP plans, with representatives from both Council and Staff. Our advisors at Proteus are working closely with us to come up with guidelines that will help the Committee decide when to make changes to the plans and what our investment strategy should be in this volatile time. We will meet again next month and by then we will have had a new federal budget in Canada and a new President in the United States and we should be able to get a sense of whether or not confidence is being restored in the marketplace.

Two other small items that might interest you - we are working with colleagues in all sectors of the arts community on a project to examine the situation affecting senior artists. Many of our most respected and revered members began their careers at a time when things like RRSPs didn't exist and they were not in a position to contribute to plans to help them in the twilight of their careers. (That's a hint to all of you younger members out there who aren't thinking that far down the line to make regular contributions to your plan and leave it in there, regardless of the ups and downs of the markets) Over the next three years, we will be examining the needs of our senior artists, identifying those services that exist and advocating to create those that are still needed. This is an exceptionally important project as there is one thing that we all will inevitably share, regardless of our discipline - we will all be older one day and in need of services specifically designed to meet the needs of artists.

Secondly, I want to refer you to the first of three articles published by The Toronto Star about the real situation for artists working in this country. The series will look at members of our community at all stages - emerging, mid-career and those who may be nearing the end of their careers. These articles will hopefully serve to educate the public about the true nature of the artistic practice and help dispel the notion that we are pampered, privileged gala-attending, cappucino-swillers. (And what exactly is so wrong about drinking cappuccinos anyway???)

This column/newsletter/rant will appear on a completely random schedule; whenever there is something going on that I think we should talk about. If there are issues relevant to our business that you think we should be chatting about, please feel free to drop me a line and let me know.

In the meantime, I'll go back to trying to see the pictures in the crystal ball and hope that I'm better at it than the cartoon moose.

All the best,