Film Fund Cut Clobbers B.C. Projects

Handwringing about the fate of the B.C. film and television industry is a provincial pastime. Unions will drag us down, Canadian costs will go up, the federal government will ignore us again, and, mainly, the Americans will go away.

But for many B.C. filmmakers, struggling to leverage our talent and infrastructure into a provincial industry that tells Canadian stories well, it's not threats from the south that have them worried. It's cuts in Victoria.

Domestic production has taken a nosedive, and it suffered another blow in March when the B.C. Feature Film Fund was discontinued. In fact, the $414-million foreign-film industry has never been healthier. And it's helped to keep the industry's value to the economy close to $1 billion, despite the decline in TV production, caused in part by the proliferation of reality TV.

The domestic industry has always depended on government subsidies to sustain it. The tiny market for domestic films in Canada can't by itself support an indigenous industry. Both the provincial and federal governments have helped the fledgling domestic industry by providing tax credits and, until this month, critical direct investment in domestic production.

Although indigenous production has been falling, the government investment was beginning to pay off with movies able to draw both acclaim and audiences. Three B.C. films - The Corporation, The Delicate Art of Parking, and The Snow Walker - are currently enjoying national and international success. But B.C. filmmakers hoping to duplicate their accomplishments will have a much harder time now that the provincial funding is drying up.

Fund attracted federal money

The B.C. Feature Film Fund was established in April 2001 at the same time as Canadian Heritage announced a $100 million annual commitment to feature films in Canada. The goal for both levels of government was to have Canadian films control five per cent of Canadian box-office revenue by 2006, up from the current level of about 0.9 per cent. The federal funding was promised over the next five years, to both film production and marketing.

The provincial government committed $4 million over three years. The intent was to give a competitive edge to B.C. filmmakers who want access to more substantial federal funding, said Michael Francis, chair of B.C. Film, a non-profit organization that manages the film and television tax credits and provincial funding - including the B.C. Feature Film Fund.

Twenty-three feature films were funded through the program since its inception, and B.C. films have never done better than they are doing now, Francis said. Francis hoped the provincial funding would continue for at least the next two years to match the federal government's commitment.

Budget cuts in the Ministry of Small Businesses and Economic Development, which funds B.C. Film, prevent the ministry from extending the contract, said Linda Chase Wilde, senior advisor in the economics services branch at the ministry. However, she added that if more resources become available, they might reconsider funding the program.

In the meantime, Francis expects the loss will cut the number of productions partially funded by B.C. Film in half- from the present 10 or 12 features per year to five or six. They'll find the money for that in B.C. Film's core funding, and will reassess the organization's spending
priorities.

B.C. shortchanges culture

Provincial funding, Francis said, is one of the only sources for seed money to develop films in their early stages. Without this help, he said, the projects will suffer in quality, making it harder for them to compete for additional funds from the federal government and the private sector. That's if they get off the ground at all.

"If we look to Ontario, when they had similar cutbacks, all of a sudden their indigenous production fell," Francis said.

"This government, this province, has a tradition of being at the very, very low end of cultural expenditures," said Francis, who has also chaired the Vancouver International Film Festival's board of directors for the past 15 years. "It is not just this government; this is since the beginning of my knowledge. The province and the city of Vancouver have always been very low in terms of cultural expenditures."

"Development funding is the most important funding," said Rob Merilees, producer of The Snow Walker, which is nominated for best picture at the Genie Awards, which will be handed out in May. "You really have to scrape it together," Merilees said. "B.C. Film was very proactive in
providing that funding." Merilees said B.C. Film's lack of development funds will definitely hurt the indigenous industry.

Puzzle is missing a piece

Rob Egan, president and CEO of B.C. Film, agrees. He said the number-one rule in producing films is that production follows money. "Where there is money, that's where the deals go and are closed," Egan said. The feature film fund afforded B.C. producers added  credibility when they were competing for federal funding.

B.C. Film's core budget-exclusive of the fund-Egan said, has also steadily decreased from $4.85 million in 1998 to $2.28 million now, forcing it to reassess its role in the domestic market. "With that sort of money we won't be able to do all the things we were once able to do.. There is going to be some pain somewhere. We just don't know where that pain will be," Egan said.

Trish Dolman, president and executive producer at Screen Silent, which produced the Genie award-winning Flower and Garnet, said for every dollar B.C. Film puts into a production, on average, B.C. producers could expect nearly $8 in federal funding and close to $7 from the private sector. "Financing a film is like doing a puzzle," Dolman said. "Now we see a chunk missing"

The majority of provincial investment in indigenous feature films now comes in the form of tax credits, which could in theory add up to 50 percent of a film's domestic labour costs, though films seldom qualify for all the credits. American "runaway" productions qualify for a
possible 30 per cent credit against labour costs.  Location, the level of technology used, and the number of British Columbians hired and training given all affect the level of credit received. In 2003, provincial tax credits totalled nearly $17 million.

Tax credits are too late

Dolman said tax credits are not much help to new filmmakers because they sometimes take up to two years to collect. For more established production companies, this waiting period impedes their ability to grow; for new filmmakers, it makes producing more films nearly impossible.

The waiting period, Dolman said, often requires production companies to get interim financing from banks while they wait for their tax refunds. Interim financing, Dolman said, is not often given to new filmmakers. If it is, they pay substantial interest on the money borrowed.

Dolman said interest charges can eat up to five percent of a film's budget and that paying $100,000 in interest charges on a $2 million project in order to get tax refunds seriously affects a production company's-and the industry's-ability to grow.

The face of the domestic market has changed considerably over the past few years. In 2000, the 27 domestic films shot in the province spent $60 million on production. The number of films dropped to 22 in 2002, with only $47 million being injected into B.C.'s economy, according to Susan Croome, B.C.'s film commissioner. At the same time, however, Croome, who just got back from L.A, where she was promoting B.C. in Hollywood, said foreign film production in the province has increased steadily from $364 million in 2000, to $414 million in 2002.

Projects will head east

The domestic industry is likely to continue to shrink, as B.C. filmmakers move to other provinces where better incentives are offered.

Kevin Eastwood of Anagram Pictures produced The Delicate Art of Parking in B.C. The Canadian mocumentary had a higher sales-per-screen average than any other film in Canadian cinemas when it was released on Easter weekend this year. However, Eastwood said Anagram is thinking of shooting its next picture-which could range into eight figures - in Saskatchewan or Manitoba because they offer higher tax credits and the [equity] investment that B.C. Films is no longer able to match.

"If B.C. Film was still able to give us money, we would be looking more seriously at shooting in B.C.," said Eastwood. "We would have liked to drop that money into B.C.'s economy."

Yet because of the provincial government's elimination of its feature film fund, it's one more Canadian project that likely won't be shooting here.

Scott Deveau is a recent graduate of Langara College's journalism progam who has worked for the CBC and the Courier.