Unlike other reports that rely on a new survey of cultural groups, the report includes an estimate of the overall revenues and net value-added of the cultural sector, largely based on Statistics Canada’s discipline-based reports and the Conference Board’s macroeconomic models of the Canadian economy. Total cultural sector revenues were estimated to be $72.2 billion in 2008, while net value-added was estimated at $46.8 billion. (The report notes that “value-added or net output is the difference between total revenue and the sum of expenses on parts, materials and services used in the production process. Summing the value-added output across all industries yields the gross domestic product (GDP) for Canada.”)

These estimates were then adjusted based on projections for the economy and, in particular, five key revenue sources (individual consumption, foreign consumption, government spending, business spending, and other sources, such as endowments and gifts).

The report indicates that “the cultural sector of Canada’s economy will be hit harder by the global recession than the overall Canadian economy”. The real value-added output in the cultural sector “is expected to be 4.8 per cent lower in 2009 than it would have been had there not been a recession”. This reduction, which amounts to $2.2 billion, is more significant than the 4.0% reduction expected in the overall Canadian economy.

Total cultural sector revenues “are expected to be 4.3 per cent – or about $3.1 billion – lower in 2009 than they would have been in the absence of a global recession”. The decline in revenues is expected to be most severe for written media (a 6.1% decrease) and broadcasting (4.8%). Other sectors expected to experience a substantial decrease in revenues include the film industry (a 3.0% decrease), the performing arts (2.9%) and festivals (2.6%). The four other sectors are expected to see less of a decrease in revenues (1.4% for heritage organizations, 1.2% for sound recording and music publishing, 1.0% for the visual arts, and 0.9% for libraries).

Endowment, donations and other revenues are expected to be most strongly affected (a 16% reduction), due to the weak economy and the decline in stock markets. The report indicates that this will likely have the largest effect on the performing arts and heritage sectors. Business advertising will also be lower, which will impact written media and broadcasting the most.

Given the high level of self-employment in the cultural sector, the overall number of people working in the sector is not expected to decrease by as much as the overall Canadian economy (2.3% vs. 3.6%). However, average earnings are expected to decrease by 2.2% in the cultural sector, compared with only 0.8% in the overall Canadian economy. “Creative and artistic production occupations”, including artists, are expected to see the largest decrease in earnings (3.5%).

Interestingly, the report indicates that “the largest source of revenues for the culture sector is Canadian businesses, which generate 52.6 per cent of all spending in this sector”. Canadian households account for 26.1% of all spending in the cultural sector. Government sources account for 14.1% of total cultural sector revenues.

The most significant sources of revenue vary by area within the cultural sector: written media and film rely most heavily on business spending, while the visual arts, festivals, sound recording and performing arts sectors are most reliant on individual spending.