Action needed before film industry fades to black

Premier Christy Clark needs to pay a lot more attention to the dilemma facing the rapidly shrinking film industry in Vancouver.

Premier Christy Clark needs to pay a lot more attention to the dilemma facing the rapidly shrinking film industry in Vancouver. This is a billion dollar industry we can’t afford to lose.

Ten years ago, this was a thriving industry. In 2003, 169 productions were filmed in B.C. for a record $1.4 billion. Chilliwack capitalized as a location source in that year, generating over $478,000 for the local economy.

Back then, of course, the economy was different. We had a low Canadian dollar. And we were in front of the pack boasting lucrative provincial/federal tax credits, skilled professional crews, a fully equipped production infrastructure, a town in the same time zone, and scenery to die for, all of which kept Hollywood producers trekking north. But in 2010, production spending had dropped to $1.02 billion.

Now the dollar is at par. Other provinces are bettering the province’s 33 per cent labour-only refundable tax credits. Ontario offers a 25 per cent tax incentive for all production expenses which can be combined with the federal film tax credit of 16 per cent on labour. With more attractive incentives, producers are going to Toronto and skilled labour in Vancouver is looking at relocating.

Only seven productions are listed on the B.C. Film Commission website, one of which has already wrapped and two wrap in February. Right now, there is reportedly a 90 per cent unemployment rate in the film and television production industry.

Last week NDP leader Adrian Dix visited movie moguls in L.A. on a fact-finding trip to see how to lure them back to B.C.  No doubt the message was get more competitive.

We’re the victim of our own success. Other cities have torn a page from Vancouver’s film script and re-written it to their own advantage with alluring tax benefits and a staging crew of their own.

The province’s beauty has always been a huge location attraction. But the bottom line is all in the numbers. Right now, shooting a $100 million film in Toronto compared to Vancouver will net some $5 million in savings.

The Clark government repeatedly focuses on the ‘cost’ (i.e. the tax incentive) of the industry. This is actually misleading since the incentives are not a subsidy paid for by taxpayers. They are rebates on money spent on labour. If the production dollars don’t get spent in the first place then no returns are paid back. At the end of production, the company totals the taxes deducted from employees and is rebated 33 per cent of the total.

There is no argument that the industry’s success here has been driven by competitive production costs. The industry generates jobs with specialized knowledge and talent, something B.C. crews have excelled in. In addition, the spin-off benefits to satellite industries are staggering. They include transportation, equipment and specialty rentals, restaurants, construction supplies, electrical supplies, catering and many more.

The rules of the game have changed. It’s far more competitive to win those production deals now that all government leaders across the country want a cut of the entertainment action.  We’re getting a hard lesson in how portable the movie industry is. They can go anywhere.

So why is the government lagging behind, putting at risk a $1 billion industry ($1.18 billion in 2011)? In a time of budget restraints and cut-backs, the province can’t afford that kind of loss. Crunching the numbers to shrink the differential by whatever financial means to draw back production companies, keep 25,000 people employed, and an entire satellite industry humming seems like a no brainer to me.

Total tax revenues may match the tax credits underscoring their value as an incentive investment and never a ‘cost’.

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