Why are so many Canadian festivals struggling or cancelling?

Some of Canada's most iconic festivals are cancelling or scaling back this year as they weather financial struggles.

Festival organizers say they are still recouping losses from COVID-19 pandemic shutdowns while they contend with inflation, increased competition and a loss of corporate sponsors.

It costs 30 to 40 per cent more to organize a festival this year than it did in 2019, according to Martin Roy, executive director of Festivals and Major Events Canada, and revenues are not following suit. 

He noted that many popular festivals are free to the public, which affects them further. 

"The sponsors and the grants are not increasing at the same pace as the expenses. So there's a huge problem there. It's a basic mathematical problem."

The Just for Laughs comedy festival announced in March it would cancel its long-running event in Montreal and Toronto this summer, laying off 75 employees. It cited reasons including pandemic-related lost revenues and reduced network budgets.

It sparked concerns across the country and highlighted a number of other festivals facing similar struggles. 

Sponsors are also pulling out and taking their money with them. Bell, for example, pulled out of the Toronto International Film Festival (TIFF) last year after 28 years, providing millions as its leading sponsor. TIFF cut 12 employees in December, citing effects from the pandemic and the SAG-AFTRA strike.

More events has also meant more competition for available funds. 

"I've never seen such a situation," Roy said.

"I can sense that it's everywhere in Canada."

The president of Hot Docs, North America's largest documentary festival, recently said this year's event could be its last without a boost in funding. Marie Nelson said the Toronto festival, launching April 25, is expanding to become more of a "cultural hub," with events like author talks, but is still feeling a "hangover" from the pandemic.

"The bottom line is that when you have all of these deficits that you're carrying with you, it's like we're growing and we can see the plane taking off, but we're just running out of runway," she said.

Hot Docs also saw a mass exodus of programmers and its artistic director shortly after its announcement.