Canada’s live music scene is shrinking, and with it, the stages where Canada’s next generation of artists make their debut.
The latest loss is Velvet Underground, a 350-person capacity venue on Queen Street West in Toronto that announced earlier this month it will permanently close at the end of October.
It joins a growing list of closures across the country, including the Dakota Tavern in Toronto, 648 Kingsway in Vancouver, Blue Dog Bar in Montreal and The Dream Cafe in Penticton, B.C.
In an interview with CTV’s Your Morning Monday, Jonathan Bunce, artistic and executive director of Wavelength Music, says these shutdowns reflect deeper issues in Canada’s live music ecosystem.
“In research that we did in a study called Reimagning Music Venues, we found that the biggest factors affecting small and grassroots music venues are the economic factors,” Bunce explained. “The profit margins are really small.”
Bunce pointed to a U.K. study by Music Venue Trust that found the average profit margin for a grassroots music venue is about 0.5 per cent.
Bunce says, usually, smaller music venues are “driven by a passionate entrepreneur or a collective of entrepreneurs who are really just struggling to stay alive and they just love music.”
Even Velvet Underground, which has been owned by global giant Live Nation since 2019, couldn’t keep its doors open, Bunce said.
While their reason for closure remains unknown, an official statement posted to their Instagram said “The lease term comes to an end ... the property will be returned to the owner for a new chapter.”
He said venue operators across Canada are reporting rising costs, including insurance and labour to artist fees.
“Artists are making less money touring, so they’re asking the promoters and venues for bigger fees to help cover their costs,” he said.
Why small venues matter
Bunce warns that the loss of grassroots spaces has ripple effects on the entire music industry.
“Original live music is actually one of the Canada’s biggest cultural exports, and without these vital spaces to incubate original music, we might see this die out,” he said. “It’s really important that there’s spaces for new artists to perform, to test their craft, to hone their craft, to test out their songs.”
Canadian singer Tate McRae performed at the Velvet Underground in 2020 before going out to sell out arenas like Toronto’s Scotiabank Arena.
“You can’t get all the way out to the Rogers Stadium without going along all the steps on the ladder,” Bunce said.
Shifting habits are shuttering venues
Music commentator Eric Alper says the struggles facing music venues can’t be separated from the way music consumption has changed.
“Back in the day, you’d make your song and get it on a album, make a video, and then tour coast to coast ... you would graduate to medium sized-venues, to bigger venues, to stadiums,” Alper told CTVNews.ca in an interview
He says younger artists he works with now don’t dream of that.
“They want a lot of followers on social media. They want to get influencers to listen to their music,” he said.
That shift, he explains, makes it harder to fill grassroots spaces.
“There’s endless digital access to concerts. Live music competes with real, high-quality live streams and recorded performances. Younger fans may be viewing these in-person shows as occasional luxuries, not regular habits.”
The loss of places that are “real breeding grounds for emerging artists,” according to Alper, disrupts a pipeline of growth.
“When those doors close forever, so do those memories, and there’s no place to revisit it.”
At the same time, economics and urban growth is squeezing out venues, Alper says, listing rising insurance premiums, liquor licences fees, staffing costs and inflation.
“There’s a lot of competition out there for the entertainment dollar,” Alper said. “You’re competing with Netflix and YouTube.
“Music has never been more more listened to, more viewed, more watched, more money spent on than any other time in history. It’s just that the way that that is being done is different,” Alper added.
What needs to change?
Bunce believes both audiences and policymakers have a role to play.
“Part of it does start with the show goer,” he said. “Instead of people spending $200 to see one big stadium show, think about for that same money, you could see 10 smaller shows where you’re going to see the band up close and have an experience.”
But he adds that public support is essential.
“We need to start thinking about music venues the same way we do parks or community centres,” Bunce said. “Live music has a huge economic impact.”
A 2023 study by the Canadian Live Music Association found that live music contributed $10 billion annually to the Canadian economy. According to the study, Canada is home to more than 3,750 and counting venues, music festivals and events, promoters, rehearsal spaces, and more.
In some cities like Toronto, city-owned spaces are being repurposed for music and arts groups.
“It’s Ok Studios, that was a shoe store owned by the City of Toronto and was given over to a Black-led collective, who were able to transform it into a space not just for music, but also for coworking and art galleries,” he said.
Venues like Toronto’s Hughes Room Live have reinvented themselves as charities, enabling them to raise donations and buy a church in the city’s east end, Bruce added.
---
This article has been updated to correct that The Dream Cafe is located in Penticton, B.C., and not St.John’s.
