OTTAWA -- It began as a celebration of international friendship commemorating the 100,000 tulip bulbs given to Ottawa by the Netherlands, a gift for providing a safe haven to their exiled royal family during the Second World War.
A couple of generations - and many incarnations - later, the Canadian Tulip Festival is a $2-million venture mounted by 1,200 volunteers that attracts more than 500,000 visitors for 18 days each May. There's an international pavilion offering the food and customs of 25 countries. A Tulip Ball for 540 local glitterati. A "magic mirror tent" featuring performances and talks by eminent speakers (last year's headliner: Salman Rushdie). And, oh yes, 3 million tulips planted around the city (only 20,000 of which come as an annual gift from Holland.)
But the number that brings a shine to the eyes of local merchants, tourism and revenue officials is the $50-million the event brings to the nation's capital each year in restaurant meals eaten, hotel beds slept in, souvenirs snapped up and goods and services bought in its staging. Another $14-million comes in taxes to all three levels of government.
Consider that the annual tulip extravaganza is one of 40 or so festivals and events presented in Ottawa, and 3,500 that bloom across Ontario each year, and the numbers begin to add up.
"We are bringing in a lot of money," says Doug Little, marketing and finance director of the Canadian Tulip Festival, one of four year-round staff members of the non-profit organization that runs the 57-year-old event. "We have an enormous economic impact in the community."
Tracking the ripples
Special events from carnivals and agricultural fairs to cultural, sporting, ethnic, historical and regional festivals are big business. They also represent an important source of identity, branding and pride to communities across Canada, which can also have an effect on the bottom line.
As more and more festivals are being created or reinvented, governments, sponsors and organizers are studying their impact and offering them means of support and expansion.
Getting a fix on what festivals mean to the economy is a job for companies such as Enigma Research Corp., a Toronto firm that specializes in analyzing such events.
Adrienne Catlos, a senior project manager at Enigma, says the company's surveys of attendees at festivals usually find that a lot of "outside" spending goes on around events that are free or low-cost. Participants feel more inclined to open their wallets for discretionary purchases.
Most of Enigma's clients are surprised to find how widespread the economic impact of their event is, because the surveyors include spending on such things as gasoline, groceries and additional entertainment.
Julian Armour, president of Ottawa Festivals, an association of 40 major events in the capital, as well as a director of the Tulip Festival, says that one of the most interesting statistics is how many residents of Ottawa choose to stay in the area for their vacations to take in the cultural events it offers. "The potential for growth is huge."
Last August, for example, saw the launch of Ottawa's new Rideau Canal Festival, an event that will be held each Civic Holiday weekend to celebrate the canal, newly designated as a UNESCO world heritage site. Just down the road in Lanark, Ont., an environmental festival ("the Art of Being Green") celebrated its second year last summer by increasing attendance to 7,000 from 4,500 participants, who filled every bed-and-breakfast within a 30-minute drive.
The greater the distance that visitors travel to special festivals, the more money they typically spend, because they usually opt to stay in hotels and dine in restaurants, and they're likely to visit other attractions, too.
"To make money out of tourism you have to get people into bed," quips Geoffrey Wall, a professor of geography and environmental management at the University of Waterloo, who specializes in tourism development and planning.
Dr. Wall says that as festivals grow in size, "the economic components differ in their magnitude and their distribution." Festivals can have all kinds of socio-cultural effects that lead to economic impact, he says. "Some people will be more attracted to a place that has some vibrancy to it, and festivals are a part of that."
One of Canada's best-known festivals, the Calgary Stampede, is developing a brand that extends year-round, says spokesman Doug Fraser. As much as half of the Stampede's annual business is done in smaller events on the 78-hectare site where the 10-day rodeo is held each July.
"The Stampede is a gathering place for people who want to celebrate the Western heritage and values that are so predominant here in Alberta and Western Canada," Mr. Fraser says.
No one needs to convince Stuart Allan, the owner of the Buzzards Restaurant & Bar and a neighbour of the Stampede, of the economic spin-offs of festivals. His cowboy-themed restaurant's business triples during Stampede days, and Mr. Allan has to increase his staff to 50 from 30 and hire live bands at a premium to play through the day and night to compete with neighbouring eateries. Buzzards holds its own Stampede events, such as its Testicle Festival, which this year served up bulls' testicles flavoured with a chili-garlic sauce or a Jack Daniels demi-glaze).
The cash-flow challenge
When it comes to smaller events, one challenge for organizers is cash flow, says Mr. Armour of Ottawa Festivals. Many festivals are free, he explains, and have little in the way of budget beyond a smattering of sponsorships and government grants; revenues often come long after expenses are incurred. Many also take place outdoors and are vulnerable to poor weather.
The National Tulip Festival suffered a near-death experience in 2006 after several years of rain that led to poor ticket sales at outdoor concerts (which organizers had scheduled to compete with hugely popular summer music festivals held in Ottawa.) The festival found itself $750,000 in debt and seeking bankruptcy protection; it was relaunched in 2007 with a model that puts all but the tulips under tents and features big ideas instead of big bands.
Mr. Armour's organization has created a financial pool, now valued at $1-million, that can help festivals if they hit trouble.
Festivals in rural areas and small towns have a unique role to play both financially and in terms of local identity, says Jordy Merkur, artistic director of the Red Barn Theatre in Jackson's Point, Ont., which celebrates its 60th anniversary next summer.
Mr. Merkur, vice president of the 22-member Association of Summer Theatres 'Round Ontario, says the Red Barn brings $750,000 to the surrounding township of Georgina, buys supplies from local businesses and is a big draw for people to come to the area.
"The histories of these festivals are intertwined with the histories of the towns themselves," he says. "When we have successful seasons, the ripple effect is huge."
Small town, big success
One of Canada's largest theatre festivals is the Shaw Festival in Niagara-on-the-Lake, Ont., which began in 1962 with four weekends of shows. Today it has an annual operating budget of $27-million, a full-time staff of 100 and some 600 seasonal employees.
A 2003 study by Genovese Vanderhoof and Associates found that the festival generated $95-million in economic activity for the Niagara region and the Canadian economy through ticket sales, spin-off spending and taxes.
Festivals of this size can be a mixed blessing, says UW's Dr. Wall, as small towns like Niagara-on-the-Lake end up with a surfeit of fudge shops for tourists rather than shoe stores for local residents. However, Colleen Blake, executive director of the Shaw Festival, says that the town maintains its local character, including a grocery and liquor store on the main street and butcher and cheese shops nearby.
"When the Shaw started, Niagara-on-the-Lake was a dusty little vacation town on the shores of Lake Ontario," she says, adding that the festival provided "the impetus to open restaurants, hotels, and B&Bs, as well as an early impetus for the [Niagara region] wine industry."
And the loss of major events can be devastating for communities. The decision of Formula One to drop the Canadian Grand Prix in Montreal from the 2009 race schedule was seen not only as an issue of civic pride or a blow to race fans but also a loss to local businesses: the annual race brought in $100-million along with 320,000 spectators, about half of them from outside Montreal.
Gary Masters, executive director of Festivals & Events Ontario, the largest festival organization in Canada, estimates that special events in the province bring in more than $500-million annually, represent tens of thousands of jobs and require endless services. And there are benefits that aren't directly financial: "You're bringing the community together to share the experience of that community with outsiders."
With the downturn in the world economy, festivals and events "may be in a marginally advantageous position," Mr. Masters adds. "People will still choose to travel, but will choose to make relatively short-haul trips, and a strong attractor for them can be our myriad of festivals and events."
Fuelling the buzz
The Ontario government encourages community special events with a $9-million program called Celebrate Ontario, which offers up to $400,000 to groups that want to expand their festivals.
Ontario Tourism Minister Monique Smith says the grants, which began two years ago, have been used for a variety of purposes.
For example, a classical music festival in Elora, Ont., last summer received a grant to bring soprano Dame Kiri Te Kanawa to give a concert, which increased the festival's ticket sales by 25 per cent.
The Cisco Ottawa Bluesfest, meanwhile, got money to open a new stage, bringing in more out-of-town visitors to the 11-day party in July that drew more than 300,000 music fans.
"We provide this funding as a catalyst to expand their market, expand their festivals and boost the economic activity in the region," Ms. Smith says. "These events create a buzz."
Mary Gooderham
By the numbers
$500-million
Estimated value of special events in Ontario each year.
3,300
Number of workers at this year's Calgary Stampede.
$100-million
Value to Montreal businesses of the Canadian Grand Prix Formula One race.
$67-million
Estimated economic impact of annual Toronto International Film Festival.
40
Number of festivals in the
City of Ottawa every year.
Mary Gooderham
Counting on festivals
Big festivals and events can carry sizable economic clout, as seen in this sampling of studies by Engima Research Corp. The Toronto-based research company particularly examines the impact of festivals and special events in Canada and the United States.
| EVENT | YEAR | ATTENDANCE | ECONOMIC IMPACT | NEXT EVENT |
| Pacific National Exhibition, Vancouver | 2002 | 281,766 | $139-million | Aug. 22-Sept. 7, 2009 |
| Calgary Stampede | 2008 | 1,236,351 | $120-million | July 3-12, 2009 |
| Pride Toronto | 2007 | > 1,000,000 | $80-million | June 19-28, 2009 |
| Canadian Tulip Festival, Ottawa | n/a | about 600,000 | $50-million | May 1-9, 2009 |
| Montreal Jazz Festival | 2006 | about 2,000,000 | $100-million | July 1-12, 2009 |
| Memorial Cup, London, Ont. (location varies annually) | 2005 | 71,240 | $15-million | May 2009, Rimouski, Que. |
DOUGLAS COULL/THE GLOBE AND MAIL // SOURCE: ENIGMA RESEARCH CORP.
© The Globe and Mail
