Economic impact study of 17 major Canadian events : final report

A large economic impact study of 17 major Canadian events

A new economic impact study of 17 major Canadian events shows that FAME’s request for the federal government to establish a program dedicated to the growth of the events industry is more relevant and timely than ever.

The KPMG study estimates that a group of 17 events generated a combined $290.8 million in economic benefits (added value at market prices). This calculation is based on $396.4 million in eligible expenditures (operations and tourist). The study estimates that the 17 events created or maintained the equivalent of 4,606 jobs (full-time equivalent) and generated tax revenues of $66.6 million ($49.3 million for the Government of Québec, $17.3 million for the Government of Canada).

The study, commissioned by KPMG at the request of the Regroupement des événements majeur internationaux (RÉMI), included nine FAME members. It also concludes that the Government of Canada is receiving 1.78 times what it invests in the events thanks to taxes and other levies.

Read the final report

The events who participated in the aggregate study are: the Carnaval de Québec, the Rogers Cup presented by National Bank, the Festival d’été de Québec, the Montréal International Jazz Festival, the Just for Laughs Festival, the Festival de Lanaudière, the Montréal Fashion and Design Festival, the Festival Montréal en Lumière, the Festival Western de St-Tite, Montréal Pride, the Francos de Montréal, Igloofest, the International de montgolfières de Saint-Jean-sur-Richelieu, the International des Feux Loto-Québec, OSHEAGA — Festival Musique et Arts, the Grands Feux Loto-Québec and the Régates de Valleyfield.


Large economic impact study of 17 major Canadian events : Impressive numbers that further justify FAME's request for a federal program dedicated to the growth of the events industry

A new economic impact study of 17 major Canadian events published today shows that FAME’s request for the federal government to establish a program dedicated to the growth of the events industry is more relevant and timely than ever.

Read the study 

The KPMG study estimates that a group of 17 events generated a combined $290.8 million in economic benefits (added value at market prices). This calculation is based on $396.4 million in eligible expenditures (operations and tourist). The study estimates that the 17 events created or maintained the equivalent of 4,606 jobs (full-time equivalent) and generated tax revenues of $66.6 million ($49.3 million for the Government of Québec, $17.3 million for the Government of Canada).

The study, commissioned by KPMG at the request of the Regroupement des événements majeur internationaux (RÉMI), included nine FAME members. It also concludes that the Government of Canada is receiving 1.78 times what it invests in the events thanks to taxes and other levies.

These figures are obtained under a so-called “restrictive” approach that only takes into account the spending of tourists who came to the destinations mainly because of the events. The numbers are even more impressive when including tourists who came to the destinations partly because of the events. This is another approach provided in the Québec government’s Guide méthodologique pour la réalisation des études sur l’impact économique des grands festivals & événements. In this case, the 17 events generate economic benefits of $355.1 million (added value at market prices), based on $483.5 million in eligible expenditures (operations and tourist). The number of jobs created or maintained rose to 5,598 (full-time equivalent) and tax revenues to $84.2 million ($62.4 million in Québec, $21.8 million in Ottawa).

The events industry can therefore be highly lucrative. The more funds are injected, the greater the economic rewards; as demonstrated by the experience of the Montréal International Jazz Festival, the subject of studies in 2016 and 2017. With $4 million in subsidies from the City of Montréal and the Québec and Canadian governments, the event generated $39.1 million in 2016. In 2017, additional contributions from the Canada 150 Fund and theSociety for the Celebration of Montréal’s 375th Anniversary raised the total subsidies to $5.5 million. These helped to extend the event and, as a result, increased the economic benefit to $48.5 million. This is an additional argument to sow more in order to reap more.

The KPMG study also shows that the holding of events encourages tourists from outside the province, often from abroad, to travel to the venues specially to attend the events and spend “new money” in the economy. Of the 17 events analyzed, 190,603 visitors came from another province or from outside Canada, spending an average of $778.34 per stay and leaving a total of $148.5 million in “new money” in Québec – nearly a quarter on hotels or lodging and one-third on restaurants. FAME believes that with more resources, major Canadian festivals and events will be more attractive and draw more tourists, including international tourists.

Fairness and redistribution requested

For FAME, one of the current problems is one of equity in Canada. With the exception of Canada Economic Development for Québec Regions, the other regional economic development agencies do not make the event industry a priority and do not support it.

Also, if the Government of Canada supports, for example, the Canadian Formula 1 Grand Prix to the tune of $7 million per year – recognizing its economic and touristic importance – it does not do the same with the major events cited in the study.

At the Department of Canadian Heritage, which recognizes the role of cultural presenters more than events, budgets of the Canada Arts Presentation Fund (Programming support component: Professional Arts Festivals and Performing Arts Series Presenters) and of the Building Communities Through Arts and Heritage (Local Festivals) program, have not been meeting the demand for a long time. They have not been increased for nearly 10 years. Under these two programs, FAME members receiving grants from Canadian Heritage share approximately $4.5 million annually.

Even if major events lead to a chain reaction in the economy, for example, in transportation, restaurants and hotels, they receive only a small part of the wealth created, with the exception of tickets, when applicable, and a few autonomous revenue items. FAME calls on governments to actively play their role as “redistributors” of some of the wealth in order to keep the wheels turning and enable festivals and events to obtain financing, renew themselves, and grow.

Watch featuring containing results from the study 


2018 Federal Budget: FAME Disappointed to See Festivals and Events Ignored

Following the presentation of the federal budget for 2018–2019, Festivals and Major Events Canada (FAME) is disappointed that, despite its Creative Canada strategy and its desire to make Canada an all-star international destination, the federal government did not see fit to support the development and growth of the event industry at this time.

The association, which represents 29 events in Canada, plans to continue its advocacy work with Heritage Minister Mélanie Joly and her colleague in charge of Tourism, Bardish Chagger, and hopes to convince them of the importance of investing in an industry that pays all sorts of dividends.

“It was the perfect opportunity to recognize the role of festivals and events as economic and cultural drivers, release the brakes and send a strong signal for their development,” said FAME Executive Director Martin Roy. “There’s always next time,” he added.

 


Canada's Largest Festivals and Events : An Economic Impact Study

In 2009, the Canadian Festivals Coalition commissioned a report that measured the substantial economic impact of 15 Marquee Tourism Event Program (MTEP) stimulus fund recipients.

The groundbreaking Economic Impact of Canada’s Festivals and Events study revealed:

  1. Millions attend Canada’s largest festivals and events each year
    • Estimated 12.6M visits at Canada’s 15 largest events
    • 3.3M visits by tourists including 1M from outside Canada
  2. More than $1B in new spending generated by the largest events
    • Estimated $780M spent by tourists visiting 15 largest festivals and events
    • Additional $300M in local event-related operational expenditures
  3. New spending at events contributes $650M in GDP to local economies
    • GDP derived from tourism and operational spending
    • Average large festival contributes $43.2M to local GDP
  4. Spending support considerable employment and tax revenue
    • Equivalent of 15,600 full-year jobs supported by the largest events
    • Spending supports $283M in tax revenue at all three levels of government

Measureable economic impact

Festivals and Major Events Canada (FAME) aims to the raise the awareness of the importance of the festivals and major events sector to the Canadian economy, and our direct contributions to the tourism industry.

FAME members are seeking a form of public sector venture capital to leverage additional money from earned revenue and sponsors to facilitate incremental expansion, improved programming and enhanced promotional initiatives – not funding to subsidize existing budgets.

Our funding recommendations reflect the challenges and opportunities facing our sector and are consistent with the government’s efforts to increase revenues through strategic investments, resulting in measurable economic impact.

Investment brings results

The Marquee Tourism Event Program (MTEP), while a short-term stimulus program, was very effective. The two-year, $100-million investment program breathed new life into the sector, even in the midst of an economic downturn. Through the stimulus fund, festivals and events were able to leverage partnerships, find matching dollars from the private sector, including sponsorships, and expand marketing efforts. This resulted in attendance growth, job creation and major economic spinoffs at both the regional and national levels.

Read the study


More tourists, more wealth: An appeal to the Government of Canada

Martin Roy, Executive Director, Festivals and Major Events (FAME) and Regroupement des événements majeurs internationaux (RÉMI)*

It’s happening: a very hopeful tourism season is starting now in Canada with Tourism Week from May 28 to June 3 and the first major events and festivals being rolled out everywhere in this year of Canada’s 150th Confederation and Montreal’s 375th anniversaries.

For a long time, the stars have not been as propitious for our destination – which has topped the New York Times and Lonely Planet’s annual list – to attract more international tourists than ever. If the federal government has acted resolutely in favour of the industry since 2015, it can and must do more to seize the largest share of the market, a “pie” that is literally exploding before our eyes globally and in which we should have the largest possible share.

Each year, there are more than a billion international tourists who travel the world in search of a change of scenery and new experiences. The World Tourism Organization predicts that this will increase to 1.8 billion in 2030, which represents an average annual growth of 3.3 %. In 2016, Canada welcomed nearly 20 million foreign visitors, the highest level in the past 14 years, and this could make it climb a few rungs among the top 20 international destinations when it did not do better than ranking 18th in 2015.

This increase is certainly the result of favourable circumstances and also the intervention of the government of Canada, which has stopped requiring visas from certain countries and reinvested in Destination Canada so that the organization can work on convincing more Americans to visit. From our point of view, this effort focusing on marketing and access must be combined with an effort to develop the tourism offering, the “product” that we offer to tourists.

On the occasion of the launch of the festival and events season, Festivals and Major Events (FAME) would like to ask the federal government to take a step further in promoting the arrival of international tourists and generating benefits by creating a program for the growth of these major events, such as the Ottawa Bluesfest, the Montreal International Jazz Festival, Just For Laugh Festival, Vancouver International Jazz Festival and the Festival d’été de Québec, which are held in most of the provinces. To this end, they suggest perpetuating a part of the 150th anniversary budget allocation.

In addition to having a positive social and cultural impact, festivals and events act as very appealing products for the destination by concretizing vague travel intentions to Canada into not-to-be-missed dates. In 2009, we estimated that a group of 15 major events would alone generate more than a billion dollars of spending and $ 650 million in GDP for the country. It has also been established since then that each dollar invested by the governments in festivals pays off two and a half times in terms of tax revenues and incidental taxes. Many festivals and events are attended by more than 10% of festivalgoers from outside the country. The example of Osheaga, in which more than two-thirds of participants come from outside of Quebec, is persuasive enough to be reproduced across Canada.

Elsewhere, various jurisdictions have understood the importance of investing in festivals and events, which are increasingly becoming worldwide social phenomena as well as significant tourism opportunities, as evidenced by the success of Coachella in California, Tomorrowland in Belgium, and SXSW in Texas. In the last case, the state alone invests nearly $ 40 million in a fund for events while the City of Austin contributes more than $ 12 million.

Here, Quebec and Ontario recently announced reinvestments, each increasing their program budgets to more than $ 20 million, but since the end of the Marquee Tourism Events Program in 2010, the federal government’s participation is still awaited. Through Canadian Heritage and economic development agencies, Canada indirectly supports up to 4 % of a sector that is proportionally funded to a greater degree by the French, Swedish and Irish governments, to name just a few. In the United Kingdom, the public revenue share in British Arts Festival Association members is as high as 28 %.

To enable Canadian festivals and events to be more attractive and competitive on the international scene and offer a higher quality “product” and enhanced experience to their client base, FAME asks the government to intervene conscientiously in the context where the Canadian Council of Tourism Ministers is already evaluating the possibility of collaborating with this significant, but fragile industry.

* FAME represents 22 festivals and major events across Canada while RÉMI is active in Québec with 27 members