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FACTOR: Emergency Support Funding

FACTOR: Emergency Support Funding

FACTOR: Emergency Support Funding – Introduction

Are you a musician who has been negatively affected by the COVID-19 pandemic? Or perhaps you are a concert promotor or music festival that hasn’t been able to host a live music event in many months?

If the answer is yes, you and many other individuals and businesses in the live music sector who have been affected by the ongoing pandemic may be able to apply for FACTOR’s new Emergency Support Funding program.

FACTOR (the Foundation Assisting Canadian Talent on Recordings) is a public-private partnership that supports Canadian musicians and Canadian music companies. Recently, FACTOR announced a new program to provide $50 million of funding to support Canada’s live music sector and Canadian artists affected by COVID-19. The funding is to be distributed via the Canada Music Fund (CMF) from 2021 through to 2022.

Who do they assist?

The new funding aims to support the Canadian music industry, which continues to face headwinds due to the COVID-19 pandemic and public health directives that limit public gatherings. The funds will be available to many entities which have historically not been eligible to receive CMF funds. FACTOR seeks to use the funds to promote a diverse Canadian music industry, to improve competitiveness (both at home and abroad) and to contribute to Canada’s creative economy.

The new funds will be distributed through three distinct “streams”, each of which are described below:

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Stream 1

An extension of the Emergency Support Fund established in 2020-2021, half of the new funding ($25 million) will be distributed in Stream 1. FACTOR will distribute the funds to the anglophone market, and Musication will distribute the funds to the francophone market.

Stream 2

Stream 2 is aimed at resuming live, in-person concerts. Specifically, funding is targeted towards infrastructure improvements for health and safety for in-person concert venues, supporting the presentation of hybrid concerts (in-person and online streaming), and the presentation and promotion of Canadian artists’ live performances to help rebuild audiences. $20 million will be available for distribution under Stream 2.

Stream 3

Stream 3 targets Canadian artists, with the objective being to ensure that a level of stable funding for artists is maintained.

FACTOR: Emergency Support Funding Eligibility

To receive FACTOR funding, applicants must meet the following eligibility criteria:

Artist-entrepreneurs. A Canadian artist-entrepreneur must:

  • be active and have released an eligible Canadian sound recording (individual title or collection of titles) after April 1, 2018;
  • have performed on stage in 2019 or in 2020 and incurred commercial expenses in connection with such performances (e.g. hiring musicians, service contracts to support music activities, etc.); and
  • control and administer their own touring rights, directly incur tour expenses and receive revenues through an entity that is fully and owned and controlled by the artist.[1]

Artist Managers & Booking Agents. Artist managers and booking agents must show that:

  • at least 50% of revenue from the last fiscal year completed prior to March 2020 came from music-related activities connected to Canadian artists;  or
  • at least 50% of the artists on their roster are Canadians.

Concert Promoters. Concert promoters must show that:

  • at least 50% of revenue from the last fiscal year completed prior to March 2020 came from music-related activities connected to Canadian artists.

Live Music Venues. Live music venues must:

  • be permanent spaces with infrastructure for musical performances, such as a stage, sound and lighting systems;
  • show that at least 25% of 2019 programming was live musical performances featuring original commercial material (musicals, tribute bands, dinner-theatre, charity or corporate shows are not considered to be “commercial” and are therefore not eligible); and
  • show that at least 50% of 2019 musical programming was performed by Canadian artists.

Music Festivals. Music festivals must show that:

  • at least 50% of programming in its last pre-pandemic edition was musical performances by Canadian artists.

Service Companies. Companies supplying services to the music industry must:

  • show that at least 25% of activities for the last fiscal year prior to March 2020 were activities related to musical performances in Canada and, of these activities, at least 50% were provided to Canadian artists (i.e., their services allow Canadian artists to perform on an indoor or outdoor stage); and
  • employ technicians with expertise in the production of live music events (e.g. technicians who work on lighting, sound, stage management, machinery, staging, etc.).
  • for freelancers specifically:
    • be incorporated;
    • have had commercial expenses in 2019 (e.g. fixed operating costs, salary, etc.); and
    • not eligible for the Canada Recovery Benefit (CRB).

On the website there is a list of ineligible applicants, which includes foreign-owned companies, service companies that specialize only in the sale/rental of staging equipment, radio and television broadcasters that deliver streaming services, venues with capacities greater than 3,500 and venues that associate with cities, municipalities or educational institutions.

Financial Assistance

The financial assistance available in this fund aims to support operating and administrative costs, promotion, and the growth of Canadian live music activities. Financial assistance may not be used to cover lost revenue or expenses already covered by government support. Financial assistance may be used for the following expenses:

  1. salaries and benefits, professional and artist fees;
  2. administration expenses;
  3. fixed operating costs (e.g., rent, utilities, insurance);
  4. production and promotion costs related to live music events; and
  5. other costs within FACTOR’s discretion that are related to live music events.

Eligible expenses must be incurred between April 1, 2021 and March 31, 2022.

Applications and Deadlines

Applications for FACTOR funding must be made through the online application portal on FACTOR’s website.

As part of their application an applicant will need to include:

  1. a report on activities carried out;
  2. a financial report of eligible expenses and revenues;
  3. a report that demonstrates that the applicant meets COVID-19 public health and safety requirements; and
  4. other statistical information specified in the application form, such as jobs maintained by the company.

The next deadline to apply is September 2, 2021, at 5pm EST.

FACTOR: Emergency Support Funding – Conclusion

If you have further questions about FACTOR or its new fund, we encourage you to visit its website or to reach out to an entertainment lawyer.

Footnotes:

  1. Note: we have contacted FACTOR for clarification on these requirements, what it means to control and administer ones own touring rights as well as whether an artist without an GST/HST number can register now to become eligible for the fund. We will update this blog when we have heard a response

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Updated to August 24,2021

Author: Michael Duboff, Entertainment Lawyer

Edwards Creative Law is Canada’s Entertainment Law Boutique™, providing legal services to Canadians, and international clients who partner with Canadians, in the Music, Film & Television, Animation, Interactive Digital Media, Game, Publishing and Software industries.

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© 2021 Edwards Creative Law

* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.

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