A Taxing Time for Artists

July 17, 2018 News no comments

For several months, we’ve been hearing stories from artists that have recently been reviewed, reassessed, and even audited by the Canada Revenue Agency. In May, CARFAC released this statement, and we have been working with an Artist Taxation subcommittee of the Canadian Arts Coalition on this issue. The Coalition has posted a briefing note here.

If you are an artist who has been reassessed and/or audited by the Canada Revenue Agency, please share your story with the Canadian Arts Coalition and CARFAC.

The Artist Taxation committee was created in partnership with many National Arts Service Organizations. April Britski of CARFAC National has been leading this committee, with support from Co-Chair Kate Cornell from the Canadian Dance Assembly. The Committee is focused on the fair treatment of professional artists regarding taxation. The Committee is in regular communication with the Canada Council for the Arts and with senior officials at the Canada Revenue Agency. This significant file is moving quickly, and the government is listening. Please see the Canada Council statement here.

The Coalition will also work with NASOs to discuss various policy options in the coming months. In partnership with Mass Culture, we will invite stakeholders to regional meetings to talk about taxation policy issues, so that we may engage in dialogue and be able to present an enhanced picture of the issue.

A renewed scale agreement with the National Gallery of Canada, CARFAC & RAAV

June 1, 2018 News Comments Off on A renewed scale agreement with the National Gallery of Canada, CARFAC & RAAV

On May 28th, visual artists from across Canada have once again voted to approve a new scale agreement with the National Gallery of Canada.

In January and March of 2018, negotiation teams from CARFAC, RAAV, and the National Gallery of Canada met about the terms of our scale agreement, first signed in 2015. The negotiations were successful, and our members have ratified a new four-year agreement that includes fee increases for many categories offered to living Canadian artists who are engaged by the gallery.

The agreement covers terms and conditions for the exhibition and reproduction of works of art, as well as the provision of professional services by living Canadian artists. It includes mandatory minimum fees and working conditions offered to artists by the gallery. Artists remain free to negotiate above these minimums, but they can never be offered less.

The agreement includes significant increases in fees paid for temporary exhibitions (for example, $9,500 for a solo exhibition, and $17,500 to represent Canada in a solo show at the Venice Biennale), and reproduction fee categories have been streamlined. All professional services fees have increased, and artists will be compensated for their work in preparing and installing an exhibition, providing lectures and participating in other speaking engagements, attendance at media events and exhibition openings, and offering skills workshops.

“It’s great news for all artists everywhere in Canada. This historic scale agreement between CARFAC/RAAV and the National Gallery of Canada, significantly improves conditions for artists working with the NGC but also sets a standard for galleries across the country. Big thanks to our membership for taking the time to vote and making this happen!” said CARFAC National president, Ingrid Mary Percy.

“We are very pleased to acknowledge that the scale agreement with the NGC was renewed, this time for a longer period, and with significant increases in fees paid to artists. We also note the improvements regarding the management of the scale agreement, which will ensure stability for many years,” said RAAV president, Moridja Kitenge Banza.

The agreement will be in place from June 1, 2018 for a period of four years, and it is available online on the websites of CARFAC and RAAV.

Voting for this agreement closed on May 28th. Most members of CARFAC and RAAV voted online, and results were collected and reported externally by Sémato-Sondage polling services on May 29th. Members who voted by paper ballot returned their ballots by May 28th and ballots were delivered to external vote scrutinizers at ACTRA and Illustration Québec, who reported back to us on May 29th. All scrutinizers involved reported that CARFAC and RAAV members were overwhelmingly in favour of ratifying the terms of the agreement between CARFAC/RAAV and the National Gallery of Canada. Over 30% of CARFAC and RAAV members voted, with all but two members voting to approve the agreement.

Statement from CARFAC about artists facing CRA audits

May 4, 2018 News Comments Off on Statement from CARFAC about artists facing CRA audits

As the date for filing taxes approached earlier this week, artists across Canada were alarmed to hear that artist Steve Higgins is being audited by the CRA.

On one hand, it’s not surprising that artists may be scrutinized by CRA. You are more likely to be at risk for assessment if you are self-employed, if you regularly report a business loss, or if your income varies considerably from year to year.

However, the circumstances of this audit are of unique concern because it appears that CRA declares his practice is a personal endeavor, or hobby, rather than a business. This is based on their assertion that income generated from grants, honorariums, and awards rather than sales of art are not eligible to claim related expenses against. This decision is worrisome for several reasons. Firstly, CRA bulletin IT-504R2 states factors used to determine if an artist has a reasonable expectation of profit and has achieved professional status. Mr. Higgins adequately proved he meets these criteria. Moreover, the disregard of public funding as an eligible income source from which expenses can be deducted not only shows a fundamental misunderstanding of how contemporary artists work in Canada, but it is inconsistent with CRA’s own advice on Artists’ Project Grants.

CARFAC is providing Mr. Higgins with assistance during his appeal process because the potential for his case setting a precedent for all artists is untenable. We are now aware that other artists have been audited or reassessed recently for a variety of reasons, and we are working to determine if there are any other worrisome trends. We invite artists to contact us if they have experienced an audit from CRA recently, so that we can gain a greater understanding of the issue.

On a larger advocacy front, the Canadian Arts Coalition has formed an Artist Taxation Working group which is writing a letter to the Minister of National Revenue about our concerns regarding recent audits of Canadian artists, and to request a review of policies that affect artists as it relates to taxation. We will help people who want to get involved by writing to their MP and relevant ministers – details to come soon. We also hope to convene a meeting of National Arts Service Organizations and other stakeholders to talk about taxation policy issues, so that we may bring forward meaningful recommendations for change, such as income averaging, or tax breaks on grants, awards, and copyright royalties.

We are hopeful that Mr. Higgins has a positive outcome in his appeal process, and that his experience is an unfortunate anomaly rather than a change in direction at CRA. We also hope that the discussions coming out of this situation will lead to positive policy change for all artists.

 

In solidarity,

April Britski,

National Executive Director, CARFAC and Co-chair of the Canadian Arts Coalition’s Artist Taxation Working Group.

Has the artist been paid? Mais avez-vous payé l'artiste?