Toronto’s Harbourfront Centre does not have a ‘sustainable operating foundation’, says federal report

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The federal government wants managers at Toronto’s Harbourfront Centre to diversify the struggling downtown cultural complex’s funding sources, particularly as it grapples with an expected $106-million in deferred maintenance over the next two decades.

The recommendation is part of a report on Harbourfront’s federal funding during its five most recent fiscal years. The document, released Monday by the Department of Canadian Heritage, says Harbourfront “does not yet have a sustainable operating foundation.”

Harbourfront operates with a mix of revenue sources, including government funding, sponsorships, events and facility rentals. But as it reckons with a pileup of maintenance bills, “it also does not have adequate revenues to support much needed capital improvements which will in turn help to attract revenues including sponsorships and other sources of funding,” the report says.

The centre is a non-profit that occupies 10 acres on the city’s Lake Ontario shoreline, where it hosts events such as the Toronto International Festival of Authors and the Indigenous Fashion Arts Festival. It includes a concert stage and the Power Plant Contemporary Art Gallery. Prior to the pandemic, Harbourfront hosted nearly 4,000 events and ran close to 500 programs each year, alongside camps and school visits for 30,000 youth.

Like many arts organizations across Canada, Harbourfront has struggled with attendance and revenue since the pandemic began four years ago. And in recent months, it has also suffered from instability in leadership. In December, it parted ways with Marah Braye, its chief executive officer of nearly a decade. Its chief programming officer, Iris Nemani, is leaving to run Stanford Live, a performing arts organization at Stanford University, in April.

Harbourfront has cut staff and reduced spending in recent years. Several spaces in the complex are now empty, and its popular skating rink has been closed since last year, even though the organization received $20-million from Ottawa in 2021 to cover “urgent” refurbishment work.

Monday’s report recommends that Harbourfront’s management set deadlines for developing a fundraising plan and for diversifying the complex’s revenue. And it says Ottawa could help to “facilitate discussions with current and potential private and public funding partners.”

The Heritage Department is also recommending that Harbourfront review how it administers its programs to “determine whether there are alternative program administration models that would improve overall efficiency.”

The report says Harbourfront’s management has accepted all of the government’s recommendations.

“Recognizing the critical importance of revenue diversification for our sustained financial health, Harbourfront Centre is fully committed to closely collaborating with governmental funders and other essential stakeholders to achieve this pivotal goal,” Harbourfront board president Tenio Evangelista said in a statement. He noted that his team would review the report, which it received at the same time as the public, in more detail in coming days.

In the five years covered by the federal review, Harbourfront’s total revenue ranged from a high of $37-million in the 2019-2020 fiscal year to a low of $28-million the following fiscal year, when the pandemic depressed attendance at in-person events across the world.

The Heritage Department’s Harbourfront Centre Funding Program provides the complex with $6.5-million in operations funding annually, up from $5-million before the pandemic.

“In recent years, there has been a decline in non-government revenue streams, which include ticket sales, parking fees, corporate sponsorships, and individual donations,” the report says. It notes that Harbourfront’s operations funding from the City of Toronto also fell, from $1.3-million in 2021 to $1-million in 2022.

Though the report likens the Toronto centre to Charlottetown’s Confederation Centre of the Arts and Winnipeg’s The Forks complex, Harbourfront lacks a critical income source those other facilities have: an endowment fund. Though the Toronto complex was initially intended to operate with an endowment funded by the sale or disposition of federal real estate, the fund was never established.

Instead, the foundation created to manage the endowment “plays a limited fundraising role,” the report says, “and acts as a conduit for revenues received through rental incomes and the operation of a parking lot.”

In an e-mail, Ariane Joazard-Bélizaire, a spokesperson for Heritage Minister Pascale St-Onge, said the minister’s office is aware of Harbourfront’s financial situation and is still planning to support it with funding. “We continue to provide historic levels of funding and support to the cultural and artistic sectors that continue to face challenges, including substantial funding for the Harbourfront Centre,” she wrote.

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