Canadian locations fight stronger competition

According to the British Columbia Film Commission, total motion picture production spending and the numbers of projects in the province were up almost 30% in 2008 over 2007. More crucial: the majority of the increase was foreign-financed feature film activity. Non-Canadian companies, mainly US studios, spent $442m in 2008, an increase of 146% or $262m over 2007. The province has been host to such major features as Watchmen, Fantastic Four and Night At The Museum and their subsequent sequels.

‘We had a pretty good year,’ says Peter Leitch, the chair of the Motion Picture Production Industry Association of British Columbia (BC) and president of North Shore and Mammoth Film Studios, two of the major venues in the province’s impressive infrastructure. ‘It shows that even when the (US) dollar is high, BC is a real film centre.’

The Canadian dollar reached an all-time high of C$1.1030 against the US dollar in July 2007. Now the dollar has settled back to its ideal - as far as Canada’s service industry is concerned - in the neighbourhood of $0.80. Leitch is confident that 2009 will be solid. Right now the province has Fox 2000’s Percy Jackson And The Lightning Thief from long-time Vancouver fan Chris Columbus while Walt Disney’s Tron 2.0 is gearing up.

While BC is by far the nation’s leading production centre, Ontario has been in the doldrums.

‘We already had our economic downturn,’ says Ken Ferguson, president of Toronto Film Studios. Filmport, Toronto’s long-awaited mega-studio opened its doors last August just as the economy was skidding into the ditch. ‘Last year is the worst we’ve been through in our 10 years.’

Total foreign production in the province was a skimpy $102.9 (C$126.6m) in 2008, down more than 40% from 2007’s $237.6m (C$292.4m).

‘Service production is down,’ acknowledges Donna Zuchlinski of the Ontario Media Development Corp, which she attributes to the higher dollar, the threat of labour unrest and the fact that Filmport did not become fully operational until the middle of 2008.

All about the dollar

Zuchlinski and Ferguson are confident 2009 will be strong, particularly with Filmport operating at full capacity and the Canadian dollar back in the $0.80 range. ‘We’d love to say we are smart and our marketing is terrific but the dollar makes a big difference,’ says Ferguson. ‘This is like a 20% discount from this time last year. The big studios see that.’

Zuchlinski also points to the decision by Ontario’s finance ministry to make its labour-based tax credits permanent. ‘That sends a message that it’s reliable at a time when a number of jurisdictions have changed their tax incentives.’

Filmport’s Ferguson says: ‘The difference between (the tax credit system in) Canada and some of the big ones in the US is the US ones put aside a (finite) pool of money. We don’t do that.’ He adds: ‘The tax credits we give out are far less than the benefit coming in,’ pointing to Michigan which offers a 40% credit on all costs. ‘If you have a too-high tax credit you’re never going to get that back. Ours are lower but sustainable.’

The finance ministry of British Columbia has taken a similar path. ‘They’ve removed the expiry date from the tax credit,’ says Leitch. ‘There’s no period where people hold their breath and wonder if it’s going to be reinstated.’

Shawn Williamson, co-president of Vancouver-based Brightlight Pictures, says that consistency, in both the federal and provincial systems is becoming more valuable to foreign producers. ‘The Canadian tax credits are A-plus paper. There’s no concern that it will hit a cap and stop financing tax credits.’

The simplicity of the system is a bonus, says Williamson. ‘You are simply filing a corporate tax return and getting a cheque.’ He says his outside accountants speak of providing productions accessing tax credits in US states with so-called ‘comfort letters’, in essence assurances for banks.

That said, although Brightlight is one of the province’s leading production houses, with experience on films such as The Wicker Man and international co-productions such as Fifty Dead Men Walking, its service business could stand to pick up pace. Still, things are better than last year, when he was only getting nibbles. ‘Now those nibbles have increased to a dull roar,’ he says.

Williamson shares the overall confidence in the BC industry. ‘We have an incredible infrastructure. You can make an A-list film in Vancouver without bringing anyone but the director and the stars.’ As Leitch puts it: ‘We don’t have to be the cheapest anymore. We just have to be consistent in providing an excellent product.’

As for Quebec, Hans Fraikin, film commissioner for the Quebec Film and Television Council, says the province’s traditional strengths in French-language production and international co-production mean it is less reliant on Hollywood product than other Canadian jurisdictions. Still, he says, the phones have been ringing steadily since New York State’s popular tax credit ran out of money in February. ‘Montreal cheats so well for New York,’ says Fraikin. ‘Given that most programmes that shoot in New York are set in New York, we’re getting the calls.’

FOREIGN PRODUCTION SPEND IN ONTARIO
$102.9m (c$126.6m) - 2008
$237.6m (c$292.4m) - 2007