National artists' group calls on CRA to change tax deduction rules
'If that becomes a precedent, that’s going to be a problem for all artists of all disciplines'
A national organization representing artists is wading into what it calls a potentially precedent-setting tax issue for a Halifax-area sculptor.
Steve Higgins is facing a $14,500 bill from the Canada Revenue Agency after it rejected his expense claims for a project because it was done with public funding and wasn't sold privately.
The CRA also declared Higgins, a part-time instructor at the Nova Scotia College of Art and Design who has been a practising professional artist since the 1970s, a hobby artist.
Now the Canadian Artists Representation has stepped in to try and help. They've been referring Higgins to accountants and lawyers who specialize in the field, as well as striking a working group with the Canadian Arts Coalition to look at issues related to taxes and artists.
'It's bigger than we thought'
Executive director April Britski said in the week since Higgins story became public she's heard from 20-30 people who are concerned they could be facing similar problems.
"That's just from visual arts and I know there are more," Britski said in a phone interview. "It's bigger than we thought."
Britski said the CRA's audit decision regarding Higgins could potentially affect about 18,000 visual artists in Canada.
It could also spill into the fields of dance, media arts and other disciplines, she said.
She said her organization will be requesting National Revenue Minister Diane Lebouthillier make changes to the way the agency is interpreting deductions rules. The group also wants the CRA to re-examine anyone who's faced a similar audit result as Higgins, in hopes of reversing those decisions.
What's most concerning for Britski is the agency's decision to declare Higgins a hobby artist because income he claims more often comes from public sources, such as grants, than private sales.
"If that becomes a precedent, that's going to be a problem for all artists of all disciplines but certainly for visual artists where getting grants and awards are common, and certainly exhibition fees is part of how an artist gets their income," she said.
"Sales are not always the main source of income for many artists, especially in Canada."
Higgins said he's concerned the CRA's decision, if allowed to stand, will affect "any number of people that don't make, essentially, widgets to sell to the public."
He's particularly worried about what appears to be a gap in understanding between the Canada Council for the Arts and the CRA when it comes to how professional artists work. If that gap isn't closed, he said, it could damage the development of culture in Canada.
"If artists can't perform at their highest levels because they can't make ends meet, then the only thing that's going to suffer is Canada's cultural impact — not only on the nation but also internationally — and that's a travesty, as far as I'm concerned."