The fate of the local Scottish Festival and Highland Games could be tossed over if a considerable fundraising effort fails.
The festival board of directors issued a public appeal for help in a bid to keep plans for next year’s festival afloat.
Poor weather this year, plus a break-in and theft at the festival shed and a Canada Revenue Agency requirement that the event no longer be deemed a tax-free amateur event have resulted in the board having to dip into its financial reserves.
“We’re in the hole about $70,000,” festival president Warren Trask told the Advertiser. “We’re reaching out to the community to see what support we can get.”
In a press release issued by the festival, Trask explained, “For the past 67 years, the community of the Fergus Scottish Festival has come together to present a celebration of all things Scottish. During this history, we have overcome low attendance figures, dreadful weather conditions, and less than favourable working conditions to present our community with a world class event.”
Trask continued, “Globally when you travel, the town of Fergus and the Scottish Festival are synonymous,” he added, referring to athletes from around the world who compete in the Highland Games.
“Over the past festival year, the organization has undergone significant challenges. In December 2011, the Fergus Scottish Festival was reviewed by the Canada Revenue Agency and is no longer deemed an Amateur Athletic Event. The festival is now subject to 13% tax on all revenue.
“The decision by the CRA was retroactive for two fiscal years, resulting in an assessment of $78,000. To avoid penalties and interest accumulation, this assessment was due immediately. On behalf of the festival, the board of directors paid the outstanding amount, eliminating the rainy day reserves.
“Subsequently, the festival took a shot to morale, with the break-in to the festival shed, and vandalism to infrastructure. Pressure was placed on volunteers to repair and rebuild in time for the 2012 festival.
“Lastly, after more than 60 days with no measurable precipitation, the week of the festival saw predictions of upwards of 100 millimeters,” Trask said of the 2012 festival.
“This caused a rise in expenses for groundskeeping, and our patrons decided to stay home. Ticket revenues on the week prior to the festival dramatically decreased and gate revenues were 30 per cent of the anticipated sales. Despite efforts from the venue chairs, their budget reductions were not enough to compensate for the abysmal gate revenues.”
The board, according to Trask, thought the amateur status was in place until it was notified by Revenue Canada that status did not apply. Trask said because of that, HST was included in ticket prices. The $78,000 payment covers the HST retroactive to the past two years. The decision to include the HST was also based on keeping ticket prices down to attract more people.
“We hoped we wouldn’t wind up as bad as we did,” he said in an interview.
“They (revenue officials) gave us options. They said we could fight it and they’d go back five years.”
That was a scenario the board, which is liable for all festival debt, decided not to pursue.
“Although the insurance company is involved in the break-in and theft investigation, some items cannot be replaced, as they have been accumulated over time and the full extent of the damage was not known until the festival set up took place.
“To add insult to injury, the festival is also dealing with the theft of the Chieftains Heritage sword. These are still open investigations; any information would be appreciated by the police and the festival.”
Trask said the festival board does have the option to borrow money, but with debt liability on board members, the decision was made to make a public appeal for help to rebuild the reserve account.
The festival has also employed the services of Ralph Basset Associates Inc. in its fundraising efforts and has established a fundraising committee to help find ways to save money. The committee is looking at community fundraisers, ticket prices and ticket gift packages in a bid to raise money.
“We’re seeing where we can cut and reduce costs,” he said. “Any fundraising idea we come up with, we’ll do.”
Trask said the board is confident it can overcome its financial difficulties with public assistance.
“It does bring a lot of money into the community,” he said of the festival. “The longevity and history of this festival form the basis and the passion to overcome the obstacles at hand.”
“It is the desire of the board to continue with a 68th annual Fergus Scottish Festival. This cannot be done without the dedication and persistence of our membership and volunteers. Soliciting financial assistance will be the focus of our immediate future,” the board stated in its public appeal.
“We know this will not be an easy task, so we are asking for your help to restore the reserve funds that were lost through the challenges this year.
“Please consider how you can help with the continuance of our Festival whether it be through sponsorship, patronage or purchasing a ticket to an event or raffle that maybe held.”
