Tax hike on touring musicians a horrible idea for Canadian business

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It’s dumbfounding just how anti-small business this policy is, particularly when as a total portion of the overall workforce small businesses account for over 48 per cent of Canadian jobs and 98 per cent of total registered employer businesses.

An application fee of $150 to enter the Country and play for audiences in Canadian cities has been in effect for years. Canadian bands have had to pay similar fees to play in the U.S. if you want to play by the rules.

Here in Canada, though, that $150 one-time fee has now been jacked up to $425 per band member and also includes supporting crew and technicians. So a four member band on a Western U.S. tour that also includes a single Canadian date in Vancouver (which you would be surprised to know are quite common) now has a serious economic trade-off on their hands or venues themselves now can’t afford to bring them to town, severely limiting their available “product” so to speak.

I guess we could introduce the term “opportunity cost” here. By increasing a transaction cost, we’ve now introduced or increased the corresponding opportunity cost. That band might see that it’s in their interest to play another date in Washington State instead. Can the venue in Canada now afford to pay them? Will it come out of the promotional budget resulting in poor marketing of the event? Will the venue be understaffed to save costs, creating a negative experience for show goers or the band itself? Maybe it’s just far less hassle to pay Bellingham instead.

Tripling or quadrupling the transaction cost of bringing a cultural product to market like this quickly makes that Western Canadian date in Vancouver far less attractive or feasible, and perhaps not feasible at all. That potential show is often bringing people in from Victoria, Kelowna, Whistler, even from Alberta sometimes if the band has a devoted enough following or significant buzz around it.

Those visitors then stay in our hotels, eat in our restaurants, and buy things from our retailers. By unnecessarily and unfairly punishing small businesses with no good cause, this policy results in the loss of these shows, creating a negative hit to the economy with losses of additional related revenues to those surrounding businesses (call it spinoff effect or the multiplier effect) and to the overall cultural vibrancy of a community and business district.

Tell me how on earth, as Minister Kenney purports via twitter, this protects Canadian jobs? Because in two short paragraphs I think we’ve been able to demonstrate using economic concepts familiar to any first year college student that this is damaging to businesses, threatening to  jobs, limiting a supply of cultural goods into our economy and potentially kneecapping downtown cores and entertainment districts where thousands of these businesses are located.

One also wonders how the American market and regulators, or other foreign markets, might react in regards to Canadian talent visiting their respective cities and venues? Whatever the rationale behind this increase it will hurt Canadian cities in the end as we de-incentivize touring artists or bands from filling our venues and commercial districts with people eager to support those acts and the businesses they perform in.

So whether you’re thirsting for multicultural content or a conservative who cares about jobs and the economy I encourage you to sign the petition asking Minister Kenney to consider the negative consequences of this strange new policy and have it reversed or amended in the interest of both jobs and multiculturalism, two things we assume he is interested in keeping healthy. 

See more on the Hastings Crossings BIA website. 

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