"Droit de suite" and the Canadian Art Market

A composer receives a royalty when her work is played over the radio. A writer whose articles are reprinted is paid a fee. A painter whose work is re-sold at a profit receives….. nothing.

This is the current situation for visual artists in Canada, most of the U.S., Asia, and New Zealand. However things are different in the countries of the European Union, Australia, and California. There artists receive a percentage of the re-sale value when their work is sold at auction. If the artist is deceased, his or her heirs are paid until copyright is expired, usually in seventy years. This fee, called “droit de suite,” is a way for artists and their families to benefit from the increase in value of their work over time. It is different from copyright, which visual artists usually retain over their work. Droit de suite originated in France in the years after WWI as a way to help the widows of artists killed in the war. The amount received by an artist depends on the price of the work at sale, but usually amounts to about four percent. The maximum royalty payment an artist can receive for each re-sold work is 12 500 euros, or about $17 500 Cdn.

The EU agreed on the adoption of droit de suite in 2001, although it was only put into effect in the U.K. in 2006. Australia adopted the Resale Royalty Right for Visual Artists Act in 2010, with the exploitation of aboriginal artists particularly in mind. Here, the Canadian Arts Representation (CARFAC) has been lobbying politicians to add a resale right to Canada’s copyright legislation. As European countries pay resale fees to artists of all nationalities, they would like to see Canadian auction houses respond in kind. The Globe and Mail recently discussed the issue of droit de suite with an article featuring the painter Mary Pratt. A painting she sold for $50 in 1966 is expected to bring between $10 000 and $15 000 at Sotheby’s auction of Canadian art later this fall. Pratt is now 75 and suffers from health problems; I imagine she might appreciate a financial windfall.

There was a lot of controversy in the UK when a harmonization of droit de suite across Europe was first suggested. Because few wanted to be seen as arguing against a measure that would benefit artists, most of the arguments put forth against resale royalty rights tended to be practical or pragmatic, rather than strictly moral. For example, it was said that the fees would be difficult to administer, and that the payments would tend to benefit the heirs of established dead artists, rather than impoverished living artists. It was also suggested that artists already benefit from higher re-sale prices for their work, as they tend to push up the prices for new work as well.

The strongest argument offered in the UK against the adoption of droit de suite came from the auction houses, who argued in effect that it would create an un-level playing field for them in comparison with auction houses in the U.S., Switzerland, and Asia. If the transaction costs for selling a work are higher in the UK than in these other markets, then collectors would be likely to move to these other markets. Imagine a Japanese collector with a Picasso to sell. If it would cost him an extra $17 500 to sell the work in Paris or London as opposed to New York, it is not difficult to imagine that he would opt to sell the work in New York.

It is too early to tell in what ways the adoption of droit de suite in the U.K. has affected the art market there. What would be the effect if Canadian politicians voted to adopt some form of droit de suite? It would be very interesting to see some industry projections. How much would living artists benefit? What percentage of the art market in Canada is made up of Canadian works, and how much is international? If the auction houses do most of their business with Canadian works, then droit de suite might have only a minimal effect on their bottom line.