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As Iceland shows, the arts can be a valuable business asset for Canada

'That's easy to answer," said Svanhildur Konradsdottir, when asked what is the most important thing her city does as a business centre. "We promote our artists and we promote our culture. It's what we are. It's in everything we do."

Ms. Konradsdottir is director of culture and tourism for the Icelandic capital of Reykjavik. When she uttered these words at a business breakfast at the Edmonton Chamber of Commerce earlier this month, she may not have been aware how strongly the same sentiment is growing in Alberta's capital.

Ms. Konradsdottir was part of a group of leaders from Iceland, which included the Prime Minister, promoting business and economic links with Edmonton. The Alberta capital now enjoys a new non-stop flight on Icelandair to Reykjavik – and has much to learn from the tiny but thriving island economy. Iceland was hit hard in 2008, suffering a near total collapse of its banking and financial system. But thanks partly to the fact that it kept its own currency and wasn't tied to the euro, it is rebounding rather nicely.

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How does a country in the middle of the north Atlantic, with a population a bit bigger than Saskatoon and few resources other than fish, manage to have 4 per cent unemployment and one of the highest rates of literacy and life expectancy in the world? It isn't through low taxes. With Scandinavian-style rates of corporate, personal and consumption taxes, it makes Canada look like a tax haven.

"We don't think of ourselves as 'off-the-beaten-path,'" said another Icelandic business leader at the Edmonton event. That speaks volumes. The business attitude in Iceland has none of the defeatist tone that so often permeates other jurisdictions with small populations and no major consumer market. The fact that business leaders mention the arts, not tax breaks or subsidies, as the way to promote the country's economy is telling. Its artists are economic assets, not some bothersome special-interest group.

Arts and culture in Canada – which in my definition includes everything from opera and theatre to hockey and rodeo – are thriving. Still, in this era of government deficit slaying (and really, when are we not trying to slay a deficit?), public funding for arts and culture can be a tough sell. I'd guess that voters in every province would prefer more hip replacements to more subsidized spoken-word festivals.

Without question, governments do have a responsibility to financially support arts and culture. And as Iceland shows us, it's just as much about business and economics as it is about artistic expression and the human spirit. The challenge is to find ways governments can be supportive beyond the traditional means of doling out cash. As useful as many of the government grant programs have been, such as the Canada Council for the Arts, they represent old models of doing things – ones that need to be complemented by new government actions.

There are some very creative ways governments can support the arts that don't cost taxpayers a dime. For example, last week securities commissions in seven provinces announced proposed rules to regulate the raising of limited amounts of capital, and the selling of shares, through crowdfunding websites. While intended to reduce the cost of regulatory compliance for small companies, these changes could also be great opportunities for arts groups looking for capital. Crowdfunding has proven to be an effective means by which groups can raise money – and it offers supporters of the arts a way to effectively become "shareholders" in the venture, rather than just passive donors of cash.

Canadian artists have for too long been marginalized. Not only do they contribute to the quality and livability of our communities, they offer us all the chance to become more creative thinkers. As Iceland has shown, arts and culture can play a significant role in promoting our economy to the world. Artists deserve to be more than professional grant-application filers – they deserve to be recognized for the role they can play in raising Canada's profile in the international business community.

Todd Hirsch is the Calgary-based chief economist of ATB Financial, and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline.

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About the Author

Todd Hirsch is the Calgary-based chief economist of ATB Financial and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline. More

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