Late last year, when a Canadian federalelection was called for January 23, there was a ripple of fear in the Canadianfilm industry and the culture sector as a whole. After 12 years in power, thescandal-marked Liberal government was doomed.

The prospect of a Conservative victory hadmany worrying that tax-cutters would hold sway and start hacking budgets at thepublic sector subsidy system, particularly TelefilmCanada, upon which indigenous Canadian production depends. The Conservativesdid win the election but not enough for a majority government; now everyone issighing with relief.

They might as well as save their breath.

The culture community has an inflated senseof its importance on the national stage, particularly the film industry - atleast outside the French-language province of Quebec. In Toronto and Vancouver,the two principal production hubs in English-Canada, the status quo holds. Withever-rising production costs and no sign of new dollars, that isn't sayingmuch.

"Telefilm justdoesn't have enough money," says Steve Hegyes,co-president of Vancouver-based Brightlight Pictures,which is casting Bruce Sweeney's AmericanVenus and in pre-production on Canada-UK co-production White Noise 2. "The low-budget allocation [monies earmarked forfilms micro-budget films] for all of Western Canada is only $2m [US$1.7]."

Hegyes saysthat a production system based on the Telefilm modelof Canadian content production is untenable; rather Vancouver producers looksouth to tap their long history of servicing LA productions.

But instead of making the films as employees,the new model sees Canadian producers putting equity into productions and thenearning a stake in the back-end. William Vince's Infinity Features did justthat with Bennett Miller's Capote.

"The film world has changed dramatically notjust from the Canadian subsidy perspective but from Hollywood's perspective aswell," says Vince. "Studios don't want all the risk of production. They want todistribute. They're interested in packages they can take and distribute."

Infinity fully-financed the $7.5m productionbased on a $5m minimum guarantee from United Artists (prior to its take-over bySony Pictures Classics) for world rights. The balance of the budget came from$1.5m of private equity and various Canadian tax credits - the prairie provinceof Manitoba substituted for the film's Kansas location - worth $1m.

The film is Canadian in the sense that theproducer, originator and owner of the copyright are Canadian. But it does not qualifyas Canadian in the context of Canada's Genie Awards, thanks to its mainly UScreative team and cast, including Miller and lead actor Philip Seymour Hoffman,who won a Golden Globe and is nominated for an Academy Award, as well asCatherine Keener (also Oscar-nominated) and Chris Cooper. Bruce Greenwood isthe highest profile Canadian in the cast.

Now Infinity is on to another similarproject, Butterfly OnThe Wheel, starring Pierce Brosnan, Maria Bello and Gerard Butler to be co-produced by Infinity alongwith Icon Entertainment and Irish Dreamtime, the production company of Brosnan and Beau St Clair. Shooting is scheduled for Marchin Vancouver on a story Vince describes as "a cautionary thriller."

"You don't need a snow goose or a beaver tomake a movie Canadian," says Hegyes. "We want toproduce for the global market."

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