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FACTOR – Envelope Funding for Music Companies (2022)

Information Template
Maurice
Posted: January 9, 2022

Amount:

$650,000

Type of Program:

Grant

Description:

The Envelope Funding for Music Companies program is allocated once a year for a recipient to undertake a suite of activities fostering the development of Canadian artists and the promotion of their music. This can include expenses related to the production and marketing of sound recordings, domestic and international tours and showcases, music publishing, artist management and business development activities.

Comments on Funding:

In response to challenges created by the COVID-19 pandemic, the administrative expense cap will be waived to offset all necessary operating expenses. This adjustment will apply to the entirety of the 2021-2022 fiscal year.

The maximum funding level for individual companies is $650,000; affiliated companies are capped at $800,000.

When It Ends:

Closed for 2021-2022 fiscal year

Deadline:

Next deadlines to be announced.

Eligibility:

  • Record labels, music publishers and artist managers. For artist managers, they must have the competencies to advise their artists on all matters related to their musical careers and be actively involved in promoting their artists’ music.
  • Canadian music companies that:
  • are Canadian-owned and -controlled and have its headquarters based in Canada;
  • have a business that relates to the production and marketing of Canadian sound recordings, domestic and international touring and showcasing of Canadian artists, Canadian artist management, publishing of Canadian musical works and business and skills development;
  • be prepared to make substantial investments in eligible activities that justify the allocation of an annual funding amount which is in line with the company's investment history;
  • have completed three years of continuous operations as a Canadian music company; - be able to demonstrate its financial viability and its history of effective use of public funding
  • have minimum eligible annual gross revenues (before royalties and fees) of $250,000, not including public funding, in the most recent fiscal year from eligible activities related to music by Canadian artists (sound recordings, touring and showcasing, management and publishing) as detailed in the Application Form (the program’s definition of royalties and fees is found in the revenue sections of the Application Form);
  • have carried out eligible activities (production of sound recordings, marketing of sound recordings, tours and showcases and management) for at least two Canadian artists, who are not owners of the company, and have released at least one eligible Canadian sound recording within the reference period (April 1, 2018, to March 31, 2020) AND/OR for eligible publishing activities, have a minimum of four Canadian songwriters, who are not shareholders or officers of the company, and have promoted at least fifteen new eligible Canadian musical works within the reference period (April 1, 2018, to March 31, 2020);
  • have fulfilled all its contractual obligations with respect to artist royalty payments;
  • be (and its affiliates) in good standing with the Crown as a result of agreements entered into with Canadian Heritage or any other government department as well as with third-party administrators FACTOR and Musicaction; and
  • for Record Labels: Have the receipts from Library and Archives Canada for a “Legal deposit” for each eligible Canadian sound recording. Note that Envelope Funding recipients will be required to submit receipts from the past fiscal year (April 1, 2020 – March 31, 2021) in order to receive their first payment.
  • Canadian companies which invest in:
  •  the production and promotion of sound recordings by Canadian artists;
  • tours and showcases by Canadian artists;
  • publishing of Canadian musical works; and,
  • the management of Canadian artists.
  • Companies which undertake concert production activities may be eligible to the program if they demonstrate that they are responsible (i.e. artistically and financially) for all aspects related to the live activities of their artists. This relationship must be enshrined in a contract between the company and their artists.
  • A company with earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 15% or greater in each of its last three financial years is ineligible.

Be advised that eligibility criteria may change in future fiscal years as the program is further developed.

Applications Steps:

1

Companies that are interested in this program and are new to the FACTOR system must create an Applicant Profile at least 5 business days prior to the program deadline. 

2

Companies that intend to apply and have existing Applicant Profiles meeting program eligibility must contact their Project Coordinator for access to the application.

Documentation Needed:

Applicants must submit:

  1. 1
    an application form (Excel spreadsheet) - Uploaded to Component Information tab in application component. Affiliated groups must report their revenues and investments under one single form and detailed information for live music activities is required (see "Live Performance Revenues Y1" tab).
  2. 2
    a business plan (PDF) - Uploaded to Component Information tab in application component.
  3. 3
    Financial statements for the past 3 fiscal years (PDFs) - Uploaded to Gross Revenue section of Applicant Profile. The financial statements must be prepared by a Chartered Accountant. FACTOR will accept audited financial statements, review engagement reports, or notice-to-reader statements. Applicants are required to submit audited financial statements if their 2020-2021 contribution exceeded $250,000.

FACTOR projects approved prior to April 1, 2021: Envelope Funding recipients for 2021-2022 will be required to complete any active project components in other programs with expenses incurred prior to April 1, 2021. Completions for project components in the project system must be submitted within 60 days of accepting the Envelope Funding offer. No new project components will be approved after April 1, 2021.

Other Things to Note:

Program guidelines for 2021-2022 were published in July 2021.

Program Contact:

Envelope Funding for Music Companies

FACTOR_Envelope_Funding_Music_Companies_Program_Guidelines.pdf

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About the author 

Maurice

Maurice (Moe) Muise learned the ins-and-outs of government while an employee of the Government of Canada in Ottawa for 10 years. His current focus is helping small businesses in Ontario to identify and maximize government grants to grow their business.
Click here to learn more about Moe's background and how he can help your business.

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