March 22, 2021
By Nick Krewen
Special To The Star
A year and a bit after the Canadian live music industry suddenly ground to a halt with the advent of COVID-19, Toronto venue owners are ranging between guarded optimism and gnawing uncertainty as to whether their businesses are going to reopen before the end of the year.
“It’s a tricky one,” says Shaun Bowring, proprietor of Toronto clubs The Garrison and The Baby G.
“Right now the Garrison and the Baby G are aiming for September – realistically, October for booking stuff, so that’s a form of optimism. But we’re still struggling to get there without any revenue.”
Some are happy just to have survived this far – in a year where the Canadian Music Live Association (CLMA) claiming the industry, which contributes $3 billion annually to the GDP, has lost 92% of its annual revenue due to the pandemic.
“We’re still here, so I guess that’s a victory,” says Lisa Zbitnew, co-owner of The Phoenix Concert Theatre and Ottawa’s Bronson Centre.
“If you’d asked me last March, I never would have guessed that we’d hit a year anniversary and be closed the entire time.
“I was confident we’d make it through 2020, but when everyone on New Year’s Eve was saying that 2021 was going to be great, it was the first moment I hit a wall. Because I thought, ‘2020 was just a dry run.’
“Our challenges are still way ahead of us.”
It was around St Patrick’s Day last March when the Federal and Provincial governments shuttered all venues and cancelled all concerts due to the advent of the pandemic, immediately sending musicians, agents, promoters, venues and the cottage industry that supports them – vendors, restaurants and hotels/motels – scrounging for work, if there was any to be had.
International and U.S. borders, which provided venues with a pipeline of talent, are still closed – and what was predicted to last only a few weeks or months has stretched into a timeline where the resumption of live music with any regularity remains a mystery.
In the meantime, bills continue to pile up for venues that have either received no income – or a very limited one, if they offered food service and were able to briefly open during the few periods of lighter restriction that the Provincial government allowed in 2020.
Otherwise, they continued to pay rents in the four-and-five figure range – $45,000, in the case of the Phoenix – taxes and insurance.
Luckily for local music venues, there’s been one lifeline that was passed by the city of Toronto and is not tied to the pandemic: a renewable and annual 50-per-cent property tax break.
Zbitnew says the property tax cut “equates to more than a month of rent relief.”
“The fact that we can count on it in the future is a Godsend,” she says.
Both Federal and Provincial governments have also stepped in, with the former under the Department of Canadian Heritage announcing a $500 million fund for the culture, heritage and sports sectors last July that included $20 million to help the live music industry, and a further $40 million on March 10 in support for workers in live arts and music.
A day later, the Ontario Government announced a one-time grant of $2 million to the Unison Benevolent Fund, the non-profit, registered charity that provides counselling and emergency relief services to the Canadian music community and a separate $500,000 grant to the Canadian Live Music Association (CLMA) to develop and implement music city strategies in a post-COVID-19 economy – a community-driven prospect that binds municipalities closer to their local music scenes.
“Formalizing relationships between municipalities and their music industries is really necessary,” says CLMA president and CEO Erin Benjamin. “Cities in Ontario that have engaged in Music Cities have done extremely well by it.”
Benjamin is also thrilled that the government support and acknowledgment of Canada’s live music industry – previously ignored by them – couldn’t have arrived at a better time.
“I’m feeling optimistic for the first time in a year, “ says Benjamin. “Not because there’s a finish line and not because we can even see the finish line, but because there’s a real recognition of government that what we do, matters. And that came through loud and clear with this announcement.”
As a result of some of these announcements, local and national venues have received rent subsidies.
“I’m grateful every day that I have two venues in Canada because the Federal government subsidies and city support – that stuff has really been the lifeline that we’ve needed to keep going and that just isn’t available everywhere,” notes Zbitnew.
But it’s clear that these are stopgap measures, band-aid solutions to what lies ahead. There are still plenty of threats looming on the horizon.
“We got the rent subsidies and the last couple of months Ontario’s helped with the utilities,” says The Garrison’s Bowring.
“But the accumulated year of all the other expenses that aren’t covered by subsidies are mounting and there are debts now, too. That’s the scary part for all the venue owners.”
Some venues have opened their doors to ticketed streaming concert events – where the artist, supplemented by a minimal technical crew, plays to a virtual audience – but both Zbitnew and Bowring say they make little money – if any – hosting those events.
“One of the struggles I have is that we still are having this conversation about the pivot to streaming,” says Zbitnew. “It’s the wrong conversation to have. We’ll be doing 20 streams in April and losing money.
“It’ll get artists paid, some technicians paid, but it’s not a replacement – and frankly, it’s immensely costly to us.”
Bowring agrees.
“I see streaming as an augmentation to the industry in the future,” he allows. “But as a revenue replacement, it’s a non-starter.”
Now that the promise of en masse vaccination is close to reality, both club owners say the only answer to ensuring their survival will be venues re-opening at a capacity that makes business sense: colour-zone restrictions won’t cut it, especially those that only allow gatherings of 10-to-50 people.
“The full vaccine rollout would have to be in place before we open without any restrictions,” Bowring explains. “Because opening with 20% or 50% capacity allowed or 50 people for bigger venues is just not financially viable. There’s no math that you can do that says, ‘this works.’”
Zbitnew goes one step further.
“It will be the nail in the coffin for venues like The Phoenix because we just can’t justify 50 people in a venue that has 1300 capacity,” she notes. “I’m hoping that the Ministry of Health will engage us in this conversation because ultimately, how do you take a 18,000-sq.ft venue in one hand and a 2000-sq ft venue in the other and suggest that 50 people across the board will work?”
There is also another obstacle that has yet to be resolved: liability insurance.
Most venues either can’t get it or are receiving reduced coverage due to underwriters pulling out of the hospitality industry.
“It’s scary because most venues have leases that require a certain amount of insurance,” Zbitnew explains. “How ironic would it be that we’ll get through all of this and then find out as a sector that we can’t be insured.”
Benjamin agrees, and says the CLMA is attempting to make inroads to resolve the issue.
“Insurance continues to be deeply problematic,” says Benjamin. “We’re working very hard towards something that we call a “best in class” program, where it would be administered by the CMLA working with a broker and an underwriter to get affordable appropriate insurance to the live music industry.
“It’s taken way longer than any of us would like and where it’s backed up is with the underwriters who are assessing their risk. We’re hoping for a happy ending on this one – and soon.”
Of course, any solution will come too late for some: 80 music venues have permanently shuttered across the country, including some well-known establishments: Toronto’s The Mod Club, Waterloo’s Starlight Social Club and Calgary’s The Ranchman.
Fifteen venues have been affected in Toronto and The Garrison’s Shawn Bowring believes there will be more casualties before the business bounces back.
“That’s pretty devastating,’ says Bowring. “There’s big holes in the whole network now and there will be more.”
Bowring says any recovery has to be planned well in advance.
“It’s not a business where you just flip the lights on and open the door,” he says. “It has to be planned six-to-nine months ahead.”
Venues aren’t the only business to take a hit: Canadian Music Week had to cancel its annual conference twice last year – and CMW President and Founder Neill Dixon says the 39th edition of the music business networking event – which usually generates $20 million for the city coffers – is going virtual for 2021.
“We disappeared for a year – we didn’t want to disappear for a second year,” says Dixon about his decision to stage the conference, which runs May 18-21 and will feature speakers like Hipgnosis Songs Fund creator Merck Mercuriadis and producer-guitarist Nile Rodgers.
“Plus, I can’t go wrong with digital.”
He admits that the missing U.S. and international component, which accounts for 30% of attendance, is disappointing, but he’s “bullish” on business returning to normal for 2022, not only for CMW, but for venues as well.
“There’s a real desire for people to get out and socialize and enjoy music,” he notes. “That’ll pop back up really quickly and the guys who survived will be fine – and finer sooner than later. Clubs will come flying back.”
Lisa Zbitnew is also optimistic, even though she admits that “business closure is going to have a ripple effect for some time in terms of being able to recover financially.”
“There’s going to be a bit of a renaissance,” she states. “We may even experience the Roaring 2020s.”