What was worst about Harper's art cutbacks was that he said "ordinary people" do not relate to art, which I think is utter bullshit, and I think it's stupid that he isn't respecting artists as "ordinary" people, as if they are less or soemthing. I think cutting back in arts in Canada particularly is a bad idea, but thats political, and this is about art, so I'll put it aside unless you want to discuss it.
What is the importance of art? The short answer is that it is important because it is awesome. The other importance is that it gives some identity and meaning to things. I was in Chicago this summer and I think now, what would it be without the sculptures and museams of Millenium Park? They make the city. The architecture makes the city. Business could go on as usual if it wasn't stunning and artistically beautiful in it's architecture and parks, but it is elevated to so much more by it's art. Chicago is also famous for it's music history. Art is part of culture, culture is very important. If the art suffers, the culture suffers too. Maybe thats all part of evolution, but I think it is also regressive to turn it off completely. Stopping evolution of art would be to not let it change, stopping it altogether o partially is just bad for culture.
But Canada is somewhat of a unique case because our culture is always on the verge of being taken over by the US culture, so I personally think the cut back on arts is a bad idea. Without government support of art and artists, they would not be able to do what they do. If they stayed invisible our culture would surely get overwhelmed by the US.