they've been doing it for 25 years. Its put on by the public dreams society which has been around since 1986 apparently, but that group ended and both events were taken over by another group called the dusty flowerpot cabaret in 2013.
They also do an event in the summer called luminaries. people make or bring paper lanterns and they walk around in a parade and there are bands etc.
It is held at trout lake in east van but it falls on the same day as the fireworks in english bay, its sort of an alternative event for people who don't want anything to do with the fireworks. They tried doing it at canada place one year and i believe they did it in gastown as well before, but people seem to prefer the east van location.
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