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How Canada partied on Add to ...

The recession has battered companies and caused job losses at a frightening speed, but it hasn't been able to crush our cravings.

While almost every sector of the economy has contracted since it stopped growing last July, there has been a key exception: Arts, entertainment and recreation.

As international trade was collapsing, Canadians were going to the theatre. As auto companies closed plants, Canadians bought hockey tickets. As liquidity in global credit markets dried up, Canadians quenched their thirst with more beer. And this winter, as risk aversion sent markets into a tailspin, Canadians embraced risk of a different kind: gambling.

Canadians are saving more and have cut back on big-ticket purchases, but they don't seem to be cutting back on fun. The economy shrank by 3.1 per cent between July, 2008, and February, 2009, but the arts, entertainment and recreation industry has managed to grow a decent 2.5 per cent during that time.

"They want to keep these small benefits. They want to have fun in a relatively cheap way," said Sebastien Lavoie, an economist at Laurentian Bank in Montreal. "They want to forget that they may not have a job six months from now."

Employment in entertainment and sports has grown too, especially in the past few months. Sports and fitness, in particular, as well as performing arts, have been a source of hiring, according to Statistics Canada analysts.

Analysts have noted a similar pattern in the United States, although escapism, American-style, seems to involve wine and chocolate, while Canadians prefer hockey and beer.

Still, analysts can't completely explain why this is happening now, but didn't in the last two recessions. In the early 1990s, arts, entertainment and recreation contracted at about the same pace as the broader economy. In the early 1980s, the entertainment industry fared even worse than the economy overall.

Part of the recent surge in cultural industries may be linked to increased government funding, said Statscan analyst Gordon O'Connell. The federal government had withdrawn some funding last year, but changed its mind in November under pressure from lobbyists and the public.

Plus, Ottawa hosted the World Hockey Junior Championships in late December and early January, and drew a sell-out crowd, lured by the prospect of a Canadian gold medal. Team Canada obliged, for the fifth year in a row, and the 31-game, 10-day tournament attracted a record attendance of 453,282 spectators.

From an economy point of view "it's like adding another hockey team" to the Canadian entertainment industry, Mr. O'Connell said.

Cineplex Entertainment LP, for one, saw the trend coming. The Canadian movie theatre company views itself as "recession-resistant" and has forged ahead with plans for expansion this year despite the recession.

"During difficult economic times, people's need for escapism is magnified. Going to the movies is affordable," said Pat Marshall, the company's vice-president of investor relations.

The company just posted its best quarter ever, in terms of attendance, as well as revenues from box office and concession sales. Recession-stricken movie-goers aren't even cutting back on the popcorn, and spent more per person during the first quarter of 2009 than ever before, Ms. Marshall said.

"It's all part of the treat factor - especially if you're not going to go on vacation."

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