Appeared in the Toronto Star on April 4, 2016 as Ontario Music Fund Oversight Hits a Sour Note

The Canadian music industry gathered in Calgary last weekend for the Juno Awards, the industry’s biggest awards gala that has grown into a week-long event. While the award show is the public face of the Junos, behind the scenes are years of negotiations with governments to provide millions in public funding.

With Ontario hosting the Junos twice in three years – Hamilton hosted in 2015 and Ottawa is slated to host in 2017 – the provincial Liberal government has committed to enormous taxpayer support. According to internal documents recently obtained under the provincial access to information laws, that funding has sparked concerns within government departments due to the mushrooming budgets, inflated claims about the economic impact of the awards, and what officials have described as a “breach [of] the integrity of the objective grant assessment process.”

Earlier this year, I wrote about the problems associated with the Ontario Music Fund (OMF), the provincial government’s flagship funding program for the music industry. The fund, which is administered by the Ontario Media Development Corporation (OMDC), has doled out nearly $30 million in two years despite little public transparency on how the money has been spent and questionable claims about job creation.

It represents a major lobbying victory for Music Canada, which counts the three major foreign record labels (Sony Music Entertainment Canada, Universal Music Canada, and Warner Music Canada) as its primary members. Those three companies averaged more than $830,000 per award in the first year of the fund, far beyond the benefits received by domestic record companies.

Music Canada has close links to the Liberal government, contributing thousands of dollars in recent years to party coffers under the political financing rules that Premier Kathleen Wynne has now promised to amend after reports last week revealed demands that cabinet ministers raise hundreds of thousands of dollars from business and labour groups.

The OMF record label funding has raised eyebrows within the industry, but it is the diversion of fund support for the Juno awards that sparked internal controversy. The issue started with a July 2013 letter from the Canadian Academy of Recording Arts and Sciences (CARAS), the organization that administers the Juno Awards, to the office of then-Minister of Tourism, Culture and Sport Michael Chan requesting funding support for the 2015 and 2017 awards. The letter was copied to the OMDC and Music Canada.

The government moved quickly on the issue, envisioning using the music fund, which was only finalized after the initial CARAS letter, to provide the majority of support. There were questions, however, about proposed budgets that were far higher than previous Ontario-hosted Juno awards. For example, OMDC provided $195,000 for the 2011 Junos held in Ottawa (Celebrate Ontario contributed another $200,000). This time, the OMDC was being asked for at least five times that amount for the 2015 Junos alone.

Chan wrote to CARAS in October 2013, indicating that it should submit an application to the music fund. The application was delivered one month later and quickly reviewed by the OMDC. While it provided supportive comments to the government, ministry officials were concerned that there was still no detailed budget and that the economic impact figures included double counting, which officials said “inflates the true impact of the awards in Ontario.”

Those concerns were relayed to the OMDC, which remarkably redrafted some of the CARAS materials. That led one ministry official to write that “I do not feel it is appropriate for the CEO of OMDC to be revising and expanding on an argument from an applicant for why they should be funded, especially since, if funded, the funding would flow through the OMDC. This seems to breach the integrity of the objective grant assessment process. I understand that other staff members in our unit have similar concerns.”

Despite the concerns, the Ontario government announced plans several weeks later to support the 2015 Juno Awards with the OMDC providing $1 million in funding. When asked about the decision making process, a ministry spokesman stated that “funding decisions are made by an Oversight Committee including senior executives from both OMDC and the Ministry of Tourism, Sport and Culture.” Last fall, the Liberal government sang a similar song, promising $750,000 to support the 2017 Juno Awards in Ottawa.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.