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Jorn Weisbrodt, artistic director for the arts festival Luminato, is photographed during a press conference.Fred Lum/The Globe and Mail

"Do I think there will be Luminato in 2015? Yeah, of course."

The voice of optimism was none other than that of Luminato chief executive officer Janice Price, on her cellphone in the back of a cab en route to a plane that would whisk her to the 15th Canadian Arts Summit in Banff. Just two days earlier, Ms. Price had gotten the news, courtesy Ontario Finance Minister Dwight Duncan, that the ambitious Toronto multi-arts festival she's helmed since its inception in 2007 would be taking a 37.5-per-cent cut in provincial funding in 2013 and one of 44 per cent the next year. While several other Ontario cultural attractions also heard they would be getting less provincial money over the next few years, none was hit as hard as Luminato.

The blow, though, was not entirely unexpected, according to Ms. Price. "We didn't have any specific indication of the magnitude of the cuts," she said. "[But]we knew it was going to be a challenging budget for the province. We knew that every business sector … would have to come to the table."

The cuts, in raw dollars, don't seem especially severe – $1.5-million in 2013, $2-million the next – for an organization with an operating budget of about $13-million a year that each June mounts an event lasting 10 days.

But they were the first significant bruise in what has been a charmed life for the festival, delivered by the government that, until this week at least, had been the soul of generosity. After all, it was the McGuinty Liberals, convinced that Ontario needed an international cultural tourism showcase – and pronto – who gave Luminato its start-up investment of $2-million in 2006. Two years later, they were handing over $15-million, then, in October 2010, another $15-million, divided into four instalments – $3-million for 2011, $3.5-million for 2012, $4-million for 2013, $4.5-million for 2014. (It's from these last two instalments that the government is getting its $3.5-million clawback. Immediately following the budget, Luminato was spinning the cut as a 23 per cent loss – but that calculation, in effect, presumed the festival hadn't already spent $6.5-million of the original $15-million investment for presentations last year and this year.)

The size of this investment, its seeming instantaneity and the speed of Luminato's rise stunned many in the province's arts community who, in their own practice, had adopted an ethos of build it slow, build it steady, one grant, one season at a time. Speculation ran rampant that Luminato's founders – civic booster David Pecaut and publisher Tony Gagliano – were in deep cahoots with McGuinty and company, not least because Mr. Pecaut's wife, Helen Burstyn, had worked in Mr. McGuinty's office and, in 2004, been named chair of the Ontario Trillium Foundation.

Whatever the circumstances, the cash from the province was a boon to Luminato's ambition to, as Ms. Price puts it, "finance large-scale future work in advance … [It]came in a time frame that allowed us to have the cash flow to fund or partner in projects, at the development stage, that the public wouldn't see for one, two, even three years later." (Examples of this would include last year's epic One Thousand and One Nights and the upcoming presentation of the Philip Glass-Robert Wilson opera Einstein on the Beach.) To boost attendance and give itself a more populist cast, Luminato also wanted to have a large number of free performances and events, many of them outdoors.

Ms. Price argued that "this high percentage of free programming," coupled with the commissioning/development costs of ticketed events, has meant Luminato operates with a higher percentage of public-sector funding – "around 40 per cent," according to Ms. Price – than other festivals with world-class aspirations. For the Toronto International Film Festival, it's around 19 per cent, for the Stratford Shakespeare Festival roughly 10 per cent. Ms. Price clearly realizes this scenario is untenable. And, in fact, Luminato is nearing the end of a year-long facilitation with Toronto's Lord Cultural Resources to prepare a strategic plan. Part of that plan, to be released later this year, calls for "a reduction on dependence on public-sector funding," Ms. Price said – funding, she stressed, that was necessary to get Luminato up and running and to establish its presence and profile. It's still necessary – "but we knew [that public-private]balance was something we wanted to redress ourselves."

Ms. Price said she doesn't construe this week's budget cuts as a sign that the Ontario-Luminato love-in is over. "We know the government believes in us. We know they're not going to abandon us. We're grateful for our funding. We have an open dialogue." Indeed, "we have no reason to believe the government is going to completely cut our funding after 2014 … we just need to adapt, that's all. We're not at risk; we're solid. We're going to continue."

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