Auction Houses in North America Don’t Have to Give Artists a Cut of Sales. This Small Canadian Business Decided to Do It Anyway

It’s rare for a business to voluntarily decide to give up part
of its profits. But a little auction house in Canada has done just
that—because it believes that business as usual in the art market
is unfair. This fall, Peter Estey Fine Art decided to begin paying
resale royalties to artists whose works they sold at auction, even
though they are not required to do so under Canadian law.

The small auction house, which was founded just two years ago,
does not sell expensive artworks by any stretch—prices typically
range between CA$100 and $2,500 ($75 to $1,880). But that’s the
point, according to its founders. “One of our mandates is to
demystify the auction experience
and allow people to buy secondary market work affordably,” say Jay
Isaac and Caitlin Lapeña, who co-direct the Toronto-based business.
They had their first sale that included an artist resale royalty of
five percent this September.

North America remains one of the rare parts of the world without
a mandated resale royalty for visual artists, although it exists in
other creative fields (most notably, music). Outside of the United
States and Canada, visual artists in as many as 70
countries—including those in the European Union and the UK—are
entitled to a portion of the proceeds when their work is resold at
auction. (Transactions in California used to be subject to such a
law, but the rule was struck down definitively in
court last year.)

The size of the royalty varies from country to country. In
France, the percentage depends on the value of the work: there is a
four percent levy on artworks valued up to €50,000 ($55,000), but
just 0.25 percent for works costing more than €500,000 ($550,000).
Last year, Christie’s France won a major lawsuit
over who should pay the fee, definitively placing the onus on the
collector.

Of course, Peter Estey Fine Art’s payouts are so small that they
are largely symbolic, and the emerging auction house is happy to
pay it out of their cut. From that first online sale this
fall, $15 will be paid to the estate of indigenous Ojibwa
artist Carl Beam for a mixed-media work on paper that sold for
$300. Another $20 will go to the estate of Nunavut-based Martha
Haqpi following the $400 sale of her felt wall-hanging. These
numbers are minuscule compared to major auctions in Canada and the
US, but the directors maintain that their decision is about
financial support as well as giving artists a “sense of
empowerment.”

The Pushback

Not everyone believes resale royalties are a good thing. Some
caution that the added fee, particularly when it results in higher
costs for collectors, will simply drive business away, leaving
deserving artists out in the cold. “The truth is that introducing a
resale right will weaken an already precarious market and penalize
the vast majority of artists, because collectors will take fewer
risks and pass young artists over, choosing instead to invest in a
very small group of risk-free, already known artists,” Canada’s
Contemporary Art Galleries Association (AGAC) said in a statement
to Canadian Art last month.

Both Isaac and Lapeña disagree. “From our perspective, this
statement by the AGAC maintains the capitalist status quo and power
structures that mostly benefits everyone except the artist,” they
say. As artists themselves, they maintain that they understand the
“precarious nature of [artists’] financial situations” and are sure
that resale royalties would help, particularly in a field where the
talent often lacks benefits, workers compensation, and
pensions.

At a time when labor issues are top of mind for the art
world, the auction house plans to continue with its resale
royalty roll-out—and hopes the government will consider following
its lead.

“We are pro-worker and labor rights, and believe artists are
cultural providers that should be given a living wage,” Isaac and
Lapeña tell Artnet News. “Having as many frameworks of possible
incomes for artists is a necessity. We believe that if auto workers
can be taken care of through unions then artists can be too. This
is simply a step in that direction.”

The post Auction Houses in North America Don’t Have to Give
Artists a Cut of Sales. This Small Canadian Business Decided to Do
It Anyway appeared first on artnet News.