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British Columbia risks losing its competitive edge as a mecca for film and TV production if it doesn't give companies more labour flexibility, a report released Thursday concludes.

Justice David Tysoe of the B.C. Supreme Court recommended five major changes in an industrial inquiry commission report for the B.C. government.

They include:

-A separate master collective agreement covering lower-budget productions.

-Changes to the dispatch system to allow production companies to hire crew members by name.

-A new grievance process that will provide faster and less formal resolution with formal arbitration on matters affecting the B.C. Council of Film Unions only if the council approves.

-A three-strike rule giving employers the right to refuse to hire union members who've been fired for cause from three or more productions.

-Acknowledgement that collective agreements take priority over internal rules and policies.

"British Columbia is no longer considered to be user-friendly as it once was," Tysoe told a news conference held in a vacant sound stage at Lions Gate Studios.

On the labour front, jurisdictional disputes between the industry's various unions and a high number of grievances is souring Hollywood producers on shooting here.

Tysoe noted one dispute where two union locals battled over whose member had the right to drive a golf cart around a shooting location.

He said that during his inquiry fingers often pointed at Teamsters Local 155, and noted Ontario, where the Teamsters aren't active in the film industry, doesn't have the same level of labour spats.

But he was quickly attacked by Teamsters' representatives at the news conference, who argued they are simply defending their members' rights.

"If you're saying that Teamsters 155 is going to bend over and not back up the members that built this industry, then you've just declared war," Diana Kilmury, the local's trustee, told Tysoe.

Kilmury said individual members of her 1,100-member local have invested $70-million as owner-operators of equipment such as the big trailers used as dressing rooms.

They also developed innovative ways of keeping down the size of crews to help reduce costs, she said.

"And now because the exchange rate has changed, you're going to come along, tear up our collective agreement and threaten the stability of our industry that allowed for this investment to take place," she said. "We're not going to stand for it."

Labour Minister Graham Bruce, who commissioned the Tysoe inquiry last November, said the judge now would lead discussions to implement his recommendations.

Bruce set June 1 as the deadline and Tysoe hinted that if the various unions don't co-operate, the judge might recommend a merger of some unions.

Such a move likely would see the Teamsters' swallowed up by one of the larger craft unions.

Teamsters are responsible for many grievances, said Doug Frank, field representative for Local 669 of the International Alliance of Theatrical State Employees (IATSE).But the B.C. Labour Relations Board can take up to a year to reach an arbitration decision.

The Teamsters are also pushed in jurisdictional matters by IATSE local 891, Frank said.

"The blame is not 100 per cent clear but they're a big part of the problem," he said. "People think [amalgamating]the unions would work."

Studio executive Peter Leitch played down the sense of confrontation.

"I think that can be expected," said Leitch, vice-president of Lions Gate Studios. "We've got a long history, actually, of very stable labour in British Columbia in the film industry."

Bruce launched the inquiry because of concerns labour disputes were hurting the $1-billion film and TV production industry, which employs about 50,000 people.

B.C. Film Commission figures show the budget for productions in the province peaked in 2000 at $1.18-billion, declining to $994-million in 2002.

Last year's figures have not been published but Bruce said he's been told it will decline further to about $988-million.

Factors behind the drop include a stronger Canadian dollar, lower TV advertising revenues, the mushrooming growth of reality TV shows that have replaced B.C.-shot dramas and competition for productions from other parts of Canada, as well as Europe, New Zealand and Australia.

Bruce acknowledged getting a consensus on Tysoe's recommendations could be tough.

"Both the production side and the union side know that they've got some challenges in trying to keep the film industry alive and growing in British Columbia," Bruce said in an interview.

"Hopefully, with having people sit down and work through those recommendations, we can find a way to reach a resolution on all of the recommendations."

Tysoe said his most important recommendation concerned changes to the seniority dispatch systems used by the two major unions, allowing companies to request members by name.

They can already do that but the Teamsters Local 155 often overrides the choice through its seniority list, the report says.

Kilmury said she likes the three-strikes idea, already used in Hollywood, but said the Teamsters won't discuss the dispatch system before the current collective agreement expires in two years.

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