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Issue 5: Funding Strategies for Digital Conversion

Digitization facilitates new ways of communicating information. The economics of digitization and subsequent dissemination are, however, different from those of conventional publication. Accordingly, the Government of Canada must show leadership by exploring innovative methods for digitizing its holdings and encouraging new funding approaches and strategies. This must become a priority, particularly in light of decreasing resource levels. The bulk of Canada’s government information holdings, both scientific and cultural, are not accessible in electronic format because the cost of conversion is prohibitive, particularly in the current fiscal environment. This is especially true with the digitization of legacy collections. With little or no additional allocations from government or other sources specifically earmarked for electronic conversion of significant retrospective collections, little digitization of valuable older materials will be accomplished. Increasingly, government departments, agencies and Crown corporations are adapting to the digital environment. Through reallocation within existing appropriations, digital access to government information holdings has been achieved for a limited subset of material, primarily material acquired or generated in the last two to five years. In the Task Force’s survey of federal digitization activities, 75 percent of federal institutions reported the primary source for funding for digital products as the federal government. Departments and agencies have thus achieved some success in providing electronic access to current materials.

The Canadian Museum of Civilization: A Funding Case Study Ongoing Digitization The Canadian Museum of Civilization (CMCC) digitizes all new acquisitions. It also creates digital records for items from the collection that are exhibited, travel to other institutions, or are made available on the Web site or for other outreach initiatives. Digitizing Retrospective Collections through Partnerships Partnerships have been beneficial in making some of CMCC’s retrospective collections available in digital form. Since entering a strategic alliance with Kodak Canada in 1994, CMCC has digitized over 250,000 images at a cost of $2 million. This represents approximately 25 percent of the collections CMCC would like to digitize. Over this four-year period, 14 full-time equivalents were created within the museum and Kodak hired three full-time employees to work on site at CMCC. Other private sector partners have been attracted to the Museum as a result of digitization initiatives. The 3D Imaging project, a joint collaboration between the National Research Council and Hymark Imaging, is one example. Other private sector partners include Corel, which has purchased over 600 images from the digitized collection; Corbus, which has licensed up to 5,000 images; and Academic Press, which will provide Web access to thousands of Museum images with royalties flowing back to the Museum. Future Digitization of Retrospective Collections Due to an environment of fiscal restraint, funding for the digitization of the remaining retrospective collections is difficult. Although it continues to be a priority for CMCC, without additional funds access to these collections will be limited.

Where the federal government has begun to make some information holdings available electronically to increase efficiency, improve access and lower costs, Canadians have shown remarkable expressions of interest. Examples of this can be seen through the high use of many federal institutions’ Web sites. Moreover, it can be demonstrated that electronic access to government information has the potential to increase public awareness of non-digital information held by government. This awareness often leads to public demand for materials that are not digitized; these demands create pressure to digitize more materials. However, government agencies will need to continue to publish information in paper formats for the foreseeable future. Providing both conventional and electronic publications has implications for resources, especially in the short term.

The 1995 IHAC report suggests that government may solicit competitive bids from the private sector in its digitization initiatives (Connection, Community, Content, p. 125). However, the private sector will not invest without adequate incentives. In fact, the survey results show that only 25 percent of respondents are involved in digitization partnership agreements. Of the federal institutions involved in partnership arrangements, 28 percent are partnering with the private sector, 22 percent with not-for-profit organizations, 11 percent with educational organizations, and the remaining 39 percent with other types of organizations, primarily government. Currently, neither the regulatory environment nor the potential for revenue generation or cost-recovery encourages such partnership.

Continuing changes in standards and network protocols, technological innovations and new types of media and assets all demand radical shifts in the way the federal government manages information and provides access. These changes may be accommodated through reallocation of resources within existing appropriations, but in some cases additional funding may be required to ensure that the federal government can respond to the changes while continuing to meet public expectations and policy objectives.

Given the range of funding challenges, new government investment is required to support digitization. Decisions to make digital copies available and to convert retrospective collections should be based on a sound business-like methodology and sufficient user demand. The private sector can be encouraged to participate in this effort. Within a framework of five funding strategies, the following recommendations are proposed:

Strategy 1: Use Available Resources

5.1 Existing departmental and agency allocations must continue to absorb the costs of ongoing operations and practices in the provision of access to already digitized material. Digitization must be recognized as an essential component of existing and planned programs. Funding of existing and new programs should include specific allocations for digitization.

Strategy 2: Exploit the Policy Framework

5.2 Treasury Board should take responsibility to ensure that guidelines are in place to facilitate collaborative arrangements, to limit government costs and to exploit private sector funding possibilities. In addition, some flexibility should be allowed for departments and agencies seeking to reinvest revenues in digitization projects.

5.3 Repayable advances from Treasury Board for specific digitization projects, which can be supported by a business plan, may be available within the existing funding processes.

Strategy 3: Encourage Joint Action by Departments, Agencies and Crown Corporations

5.4 Federal institutions should be encouraged to collaborate with other public sector institutions, where complementary mandates exist and where Treasury Board infrastructure encourages flexibility in program delivery.

5.5 The government should encourage jointly funded digitization projects through federally initiated education and awareness programs. These programs should target both public and private sector organizations. This will lead to the development of expertise as well as create greater potential for innovative funding solutions for digitization projects.

5.6 Federal departments, agencies and Crown corporations should link their digitization initiatives to other government objectives, such as youth employment and the development of the Canadian digitization and multimedia industry.

Strategy 4: Involve the Private Sector

5.7 Federal institutions should develop flexible partnership arrangements with the private sector for joint investment and revenue sharing. Such a partnership allows the government to take advantage of private sector expertise and flexibility and also provides a stream of revenue through the licensing of its products to assist in more product creation.

5.8 The government should encourage joint public-private digitization initiatives through appropriate tax exemptions and licensing arrangements for the private sector participants.

Strategy 5: Target New Government Investment for Priority Digitization Projects

5.9 The federal government should establish a central fund for digitizing legacy collections, including digitization projects whose primary justification is the provision of information relating to the "public good".

A central fund accessible to both small and large federal institutions can provide the means for digital content development in Canada. Centralization of funding for nation-wide digitization projects will unify government priorities and directives and promote the selection and accessibility of Canadian digital content.