Can Arnold Terminate Our Film Biz?

TheTyee.ca

In June of 1999, a technician attending the annual Los Angeles-based show business conference ShowBiz Expo took the microphone during a panel discussion entitled "The American Film Industry: Competing in the New Millennium." The man, who was on crutches, told the audience of producers, union leaders and government representatives that he had a name for the car that had caused his injuries. "I call it Canada," he said.  "It came out of nowhere and changed my life." 

Five years later, life has changed for those who work on this side of the border.  In retrospect, the ShowBiz Expo conference of 1999 was probably the first time many people in the film industry were aware that there was an intense dislike for the Canadian industry in the United States. Just a day earlier, Ian Waddell, the B.C. government minister responsible for the film industry, had predicted that the province's film and television industry would hit the $1 billion mark in revenues derived from production. "It's a billion, baby," Waddell had boasted to a press conference in Vancouver.

Sympathetic coverage of the ShowBiz Expo panel appeared on the front page of the two Los Angeles daily papers and the industry dailies.  By August, Brent Swift, the founder of a pro-California industry group called the Film and Television Action Committee (FTAC), had begun to put together a coalition, one that eventually attracted the powerful Screen Actors Guild. Swift was hitting out at the provincial and federal government's tax credit policies. Within a year, FTAC was lobbying to have the tax credits declared illegal.

In July of 2001, an Arkansas Senator, Blanche Lincoln, introduced a bill in the U.S. Senate asking for federal tax credits and subsidies to bolster the fading industry potential of smaller American states.

Throughout this period, the Canadian governments continued to encourage the industry. Tax credits increased on both the federal and provincial levels with two prairie provinces, Saskatchewan and Manitoba, offering foreign producers a whopping 35 percent credit on salaries paid for local labour. The federal government announced in 2003 that they had increased the film and video and television tax credit from 11 percent to 16 percent.  (The B.C. tax credit on labour costs is 11 percent.) The tax credits were considered to be as good as gold to L.A. producers, who could come to Canada and be reimbursed as much as 50 percent of their labour costs after filing expenditure reports to Revenue Canada.

Why Arnold's hands are tied

In October of 2003, the issue of runaway production became front-page news in Canadian papers.  Arnold Schwarzenegger, an actor who had made several films in Canada, became the Republican governor of California on the promise that he would bring jobs back to California.   Film industry jobs would be among those brought home. However, to bring the work back to California, Schwarzenegger would probably need the state's Democrats, who control the Legislature, to agree to the introduction of tax credits.

B.C. Film Commissioner Susan Croome and other film industry officials, including B.C. Council of Film Unions spokesperson Tom Adair, feel the new governor will have his hands full reducing the estimated $35 billion dollar deficit that was the downfall of former governor Gray Davis. Croome told reporters following Schwarzenegger's election that the film industry is probably not a Legislature priority. Adair says it would be unlikely that any California politician would support tax credits as a way to help reduce the state's deficit.

"They just don't have the money," he says.  "(Tax credits) are not going to happen." Adair says his California counterparts at IATSE will not be choosing to side with SAG in its support of FTAC's questioning of the legality of Canadian tax credits.  "There are 18 locals in California," he says. "They may want to strike out against tax credits on their own but the fact is that they are bound together as a collective bargaining unit for common concerns. Under the International's union laws, bargaining rights are the responsibility and sole purview of (IA president) Tom Short."

Adair says Short has made it clear that challenging the legality of tax credits under the free trade agreement (NAFTA) is not an option.

B.C. in the 500 channel universe

Some IATSE locals in California did join the lobby to support a stronger California industry, but those forces were defeated in the Legislature last year.  Democrats approved a budget for 2003/2004 that ended funding for Film California First, a three-year-old incentive program that subsidized fees paid by producers for some government services. The legislatures also slashed funding for the state's film commission, leaving it with only $1.2 million to operate during the current fiscal year.

That's the good news.  The bad news is that B.C.'s modern film and television industry was founded on television.  While Ontario and Quebec has relied on a mix of Canadian television and U.S. films to employ its crews, B.C. has been a prisoner of television and its advertisers.  The much-hyped 500-channel universe has created the need for more programming but has also created more options for viewers and less financial support for network dramas and movies of the week, a staple of B.C.'s film and television industry since the mid-1980s.

Although the B.C. film commission was able to bring in several movies costing more than $100 million in 2002 and 2003, the quantity of productions has dramatically decreased.  There is almost as much movie money in the province now as there was in the 1990s but there are fewer jobs.

Understanding that job opportunities were on the decline, some local companies and individuals began to align themselves with European filmmakers.  The Europeans, like the Canadians, had already seen American productions sweep into theatres and onto television networks in their own countries and were looking for a way to create affordable domestic productions.

Making new alliances with Europe

Vancouver filmmaker Alex Downie, who joined forces with British-based producer Nick Meredith in 2000, says co-productions are the only reasonable alternative to the loss of American support.  "The Brits are a good bet because they have name actors who can sell films and get the distribution that we need." 

If the most recent British/Canada co-production, Emile, is any indication, Downie is probably on the right track.  The film's producers were able to shoot in British Columbia and tell a Canadian story and to sell the movie throughout Europe thanks to the participation of Lord of the Rings co-star Ian McKellen.  Said Meredith when he and Downie first formed their alliance, "The ideal situation would be a swift enough interface between the Canadian, British, and Irish film communities and other European Union members to say, 'We will form our own United States so that we will work in one standard language and eliminate a lot of the paperwork.'"

Despite California's lack of a cohesive plan to bring movies back home, Adair believes that the Canadian dollar, which until recently had been much weaker than the U.S. dollar, could still have a part to play in the unfolding drama.  "We had a 79 cent dollar in 1992 and we had just $325 million in service production," he says.  "If you look at how much money was spent here in Canadian dollars a year ago and count the same expenditures now, you would already be down 25 percent even if you had the same number of productions."

Adair, like most film industry veterans, admits that the industry has been able to withstand several assaults over the last 20 years and could again weather the storm.  No-one is ready to throw in the towel or embarrass themselves with gloomy predictions.  Most can remember the headline of a local paper back in the early '90s after two television series had been cancelled on the same day. "Boom Gone Bust," it read. 

More than a decade later, there is no clear indication that the boom is here to stay.  However, with most of the city's sound stages rented for at least six months, it is unlikely that parades of celebration have been scheduled in the streets of California.

Ian Caddell is the editor of Reel West Magazine.