Impact of the Inuit Arts economy

Secondary sales

The casual reselling of Inuit arts and crafts does not represent significant new economic activity. However, the large-scale auctioning of many pieces conducted by auction houses does generate an economic impact through the work of curating, photography, design, the production of catalogues, restoration, the building of bases, insurance, marketing, and the storing of artistic pieces. Two auction houses dominate the secondary sales of Inuit art in Canada: Walker’s Fine Art and Estate Auctions, and Waddington’s Auctioneers and Appraisers. Based on publicly available data on realized prices at auction and the costs associated with buying and selling Inuit art at both Walker’s and Waddington’s, the economic impact of the secondary sale of Inuit art at auction is included in our analysis and it is presented in the second-from-bottom row in Table 2.

Impact by region

The total economic impact of the visual arts and crafts economy in Nunavut was $37.3 million in 2015. This estimate comprises the total contribution from artists producing for income ($27.6 million), and those producing for consumption ($9.7 million). This total is not directly comparable to previous estimates of the economic impact of Nunavut’s arts and crafts sector because no prior study included the impact associated with the production of arts and crafts for consumption. A more comparable estimate, the impact originating with artists producing for income, shows a decline of 9 percent since 2013 (Nordicity Group and Uqsiq Communications Ltd., 2014), though this measured decline is largely a function of methodological differences in the calculation of the indirect impact. Direct and induced component estimates, which are generated using similar methodological approaches but entirely different data sources, show a slight decline between and 2013 and 2015. This suggests that, after accounting for methodological differences, a significant decrease in wholesale activity has been mitigated by an increase in direct-to-consumer ^{Footnote 2} (primarily online) sales.

For the remaining regions of Inuit Nunangat and outside Inuit Nunangat, our estimates serve as the baseline measure of the total economic impact of the Inuit arts and crafts economy because there has been no formal assessment of the economic impact of Inuit arts and crafts in any region outside Nunavut.

In Nunavik, the total economic impact of Inuit arts and crafts in 2015 totals $11 million. This estimate comprises $7.9 million from the activities of artists producing for income and $3.1 million from the activities of artists producing for consumption.

In Nunatsiavut, the total economic impact of Inuit arts and crafts in 2015 totals $2.9 million. This estimate comprises $2.3 million originating with the activities of artists producing for income and $0.6 million originating with the activities of artists producing for consumption. Relative to other regions in Inuit Nunangat, the economic impact in Nunatsiavut comes disproportionately from artists producing for income.

In the Inuvialuit Region, the total economic impact of Inuit arts and crafts in 2015 totals $3.2 million. This estimate comprises $2.4 million originating with the activities of artists producing for income and $0.9 million originating with the activities of artists producing for consumption.

Outside Inuit Nunangat, the 2015 total economic impact of Inuit arts and crafts in 2015 totals $9.6 million. This estimate comprises $5.5 million originating with the activities of artists producing for income, $2.8 million originating with the activities of artists producing for consumption, and an additional $1.4 million attributed to the activities of the secondary sales of Inuit art at auction in Ontario.

Distribution channels

There are three primary distribution channels used to bring Inuit art to market: direct-to-consumer, retailers, and wholesalers. Direct-to-consumer sales (primarily online) are of increasing importance in all regions and the growth in this distribution channel offsets some of the decline in retail and wholesale channels.

Table 3 outlines the direct impact in terms of payments to artists net of their expenditures from each distribution channel.

Overall, 67 percent of the direct impact originates with direct-to-consumer sales. Artists earn $22.1 million net of their expenses through direct-to-consumer sales. Online sales networks, primarily local Facebook buy/sell groups and the 26,300 member "Iqaluit Auction Bids" have increased the importance of the direct-to-consumer distribution channel for artists.

Retail sales accounts for 18 percent of net payments to artists and wholesale accounts for the remaining 15 percent of the direct impact. The wholesale channel is likely to have a diminished importance in 2016 relative to 2015 because a major wholesaler ceased operations at the end of 2015.

The importance of each distribution channel varies by region. For example, in Nunavut wholesale sales account for 20 percent of the direct impact while wholesale sales in other regions do not exceed 6 percent of total direct impact. The importance of wholesale sales in Nunavut can be attributed to well-established oranizations such as Nunavut Development Corporation. Retail is particularly important for the Inuvialuit Region, with 27 percent of the direct impact originating with retail sales whereas other regions’ retail components do not exceed 20 percent.

While artists in all regions rely primarily on direct-to-consumer sales, artists in Nunavik and outside Inuit Nunangat rely on direct-to-consumer sales for 79 percent and 80 percent of their total net payments to artists respectively.

Income

Visual arts and crafts are labour intensive. Artists spend many hours creating each unique piece of work. Unlike a recording artist or author whose creation can be replicated and sold many times at a low marginal cost, artists producing visual arts and crafts, apart from some printmakers, invest their time and are paid once for each piece of art they produce. In addition, each piece of art requires expensive inputs, and this further affects the profitability of visual arts and crafts. As a result, Inuit artists producing visual arts and crafts, on average, earn only $12.17 per hour net of their expenses. Artists’ incomes and hourly earnings from art are widely dispersed as would be expected in an industry where some artists produce one or two items for sale per year, and others work full-time on their craft.

To estimate the average income earned from art by Inuit artists, we estimate a distribution of annual income earned by Inuit artists from their arts activities. This distribution also allows us to estimate the number and proportion of artists earning incomes in various ranges (Table 4). The estimated income distribution is highly skewed, with the estimated median annual income from art activity at $2,089, while the mean art income is $7,810.

The skewed income distribution is consistent with a large number of artists making relatively small incomes from art as a supplemental form of income and a smaller number earning large incomes as a full-time endeavor. Further evidence for this can be seen in the percentages of artists in low art-income ranges compared to the percentage in high art-income ranges, as seen in Table 4. Just under half of artists (2,081) earned less than $2,000 from their art activities in 2015, but 22 percent (913) earned $10,000 or more from art activities in 2015.

Even when it is not an artist's main source of income, income from art is important. Table 5 shows the average total income for artists ^{Footnote 3} in each region, compared to the average total income for non-artists, and the difference between the two. Except for in Nunavik, artists generally earn significantly less than their non-artist counterparts.

On average, artists producing art for income earn 31 percent of their total income from art, though the proportion of total earned income from art is likely even higher. For many artists, that supplemental income is critical to their own and their family's well-being.

Because Inuit artists have relatively low incomes, each additional dollar earned from their art is especially valuable. For Inuit artists living in the North, the problem is exacerbated by the high cost of living. Food can be up to three times as expensive as in the south (Nunavut Bureau of Statistics, 2015) and decent housing is out of reach for many.

Artist income and production type by gender (visual arts and crafts)

Product types by gender

The large differences in male and female art incomes can be explained by examining the types of art that each gender engages in. Table 7 compares the proportion of artist incomes in direct distribution channels to the proportion of retail and wholesale sales by product type. Males and females produced significantly different product mixes, especially when it comes to carvings and sewn goods. Men reported earning 56 percent of their earnings, on average, from carvings, while women reported earning just 4 percent from carvings. On the other hand, females earned 57 percent of their earnings from clothing and other sewn goods, compared to 3 percent for males. However, males and females earned roughly the same proportions of their earnings from jewellery and other product types.

Comparing the product mixes by gender to the product mix for retailers and wholesalers helps explain why men tend to earn so much more than women do. Men account for the vast majority of carvings, which represented three quarters of retail and wholesale sales. The same is true for print graphics, the other major retail and wholesale product category, although to a lesser extent. Conversely, although women produced the vast majority of sewn goods, these only accounted for 7 percent of retail and wholesale sales.

Employment

The production and sale of Inuit arts and crafts produces substantial employment in each region of Inuit Nunangat and outside Inuit Nunangat. Table 8 provides an overview of employment attributable to the production and sale of Inuit arts and crafts. Employment is broken down into the constituent components of the industry: the direct, indirect, and induced components representing different employment types and full-time equivalent costs.

Collectively, the production and sale of Inuit arts and crafts creates or supports 2,129 full time equivalent jobs (FTEs). A majority of those jobs (1,150) are in Nunavut. The vast majority of FTEs (1,423 or 67 percent) are attributable to the direct impact - payments to artists net of expenses. While there are many more than 1,423 artists producing for income, if we account for the part-time nature of the work for many artists, the measure of full time equivalent work is 1,423 jobs.

The indirect component of the Inuit arts economy consists of payments for inputs into the artistic process, including retail and wholesale margins. Retail and wholesale activities are inputs into the production process, even though they provide services after the creation of the art, because they contribute to the value of the product at the point of purchase. The indirect component contributes 462 FTEs nationwide. A substantial proportion of the indirect FTEs is attributable to the large number of artists producing works for consumption. While they tend to produce fewer pieces and spend fewer hours per week working on their artistic projects, the 9,420 individuals (70 percent of all artists) producing arts and crafts for consumption contribute to the Inuit arts economy through the demand they create for artistic inputs and the spinoff impact that results from that expenditure.

Finally, the induced component, which includes the spinoff impact related to the expenditure of income earned in the direct and indirect components of the Inuit arts economy, contributes 244 FTEs. These positions are concentrated in retail and service sectors and as a result, the FTE cost tends to be lower than for those attached to the indirect component of the arts economy, which are more concentrated in extractive industries.

Social media sales

In October 2010, Facebook introduced "Groups", pages that can be created by individuals related to a particular topic. Groups allow Facebook users to exchange ideas, photos, videos, questions, notices, and other content related to the group topic. Soon after the introduction of Facebook Groups, community Groups became a forum for the local exchange of information and as a platform for Facebook users to remain connected to a community regardless of their geographic location. Groups specializing in news and current events, buy/sell, recreation, and community bulletins ^{Footnote 4} appeared for most communities, North and South alike.

The change to Groups that took place in February 2015 facilitated and formalized the sale of goods and services and it has increased the effectiveness of these Groups as a sales platform. Some Groups specializing in the sale of arts and crafts have mushroomed into large networks facilitating the sale of a significant amount of Inuit arts and crafts. The best example is "Iqaluit Auction Bids" (IAB), which was founded by David Alexander in November 2011. By March 2012, the group had over 7,500 members. At the time of writing, IAB membership is at over 26,300, a growth of over 300 percent since 2012. The description of IAB reads "Homemade products, arts, crafts and the tools to make the product(s) are all welcome to this site, please no more store bought items such as footwear (shoes, boots, clothing, nose studs and so on), non-homemade items will be removed without notice." IAB is an active grassroots marketplace for visual arts and crafts in the North with an increasing number of buyers and sellers from the South. Artists who participated in our information sessions mentioned the effectiveness of the platform for selling their works and their surprise at the prices they are able to receive. Part of the success of IAB and similar groups is attributable to the connection consumers feel to the artist. Consumers are glad the money is going directly to the producer instead of supporting a long supply chain: "The prices are good. I noticed the kamiks [sic] — they run fairly high, but when you're buying direct from the people making them, it's worth it, to support them" said Liz Fullenwider, IAB customer (CBC News, 2012).

IAB and local buy/sell Facebook pages have created a direct-to-consumer (online) distribution channel at a scale that is new in the Inuit arts economy. Due to the seasonality of sales (higher in winter and lower in summer) this study was unable to measure the impact of Facebook online sales directly, however, statements by participants of the information sessions held across Inuit Nunangat indicate the rise of online sales is driving the increased importance of the direct-to-consumer distribution channel.

Igloo Tag

The Government of Canada is transitioning the Igloo Tag to the Inuit Art Foundation (IAF). This transition provides an opportunity to review the Igloo Tag critically, and it provides a window for change and improvement.

In the 2016 Survey of the Inuit Arts Economy undertaken to inform this project, retailers, wholesalers, and consumers were asked how much they value the presence of an Igloo Tag when considering the purchase or sale of a piece of Inuit art. Interestingly, retailers and wholesalers ^{Footnote 5} assign a relatively low average value to the Igloo Tag ($7.27) whereas consumers assign a much higher average value to the Igloo Tag ($117.23). Table 9 presents these estimates with their associated standard errors and a 95 percent confidence interval. ^{Footnote 6}

There are six licensees issuing approximately 30,000 Igloo Tags annually. An average consumer value of $117.26 implies an annual aggregate value to consumers of just over $3.5 million dollars. The cost of maintaining the Igloo Tag, including database maintenance, printing, and marketing, is around $100,000 annually, so the net value conferred by the Igloo Tag is significant.

Employment impact

Table 11 provides an overview of the estimated FTE costs for direct, indirect, and induced components of the economic impact. We estimate 495 FTE jobs were created or sustained by Inuit performing arts and performing arts-related occupations in 2015.

While the employment impact of Inuit performing arts in Canada is significantly smaller than, for example, visual arts and crafts, this is partly attributable to the higher direct FTE cost in the performing arts sector. Full time performing artists tend to earn more than full-time visual artists.