Pixar closes its Vancouver studio after 3 years

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Walt Disney Co. abruptly closed its Vancouver-based Pixar Canada studio, leaving 100 employees out of work just three years after opening with a promise to make the city a "beacon" for artists across the country.

The global entertainment giant has been refocusing its efforts on larger projects in recent quarters and consolidating its operations as it develops a new Star Wars franchise following its $4-billion purchase of Lucas Films and also looks to dedicate more resources toward its Marvel properties.

Vancouver appears to be a casualty of the retrenching. The studio was created to develop animated shorts featuring Pixar characters from movies such as Cars and Toy Story, which would be packaged with DVDs or featured on screens through its theme parks as a way to draw attention away from long waits for popular rides. A company spokesperson said the work done in Vancouver would be transferred to the company's headquarters in Burbank, Calif.

"The team at Pixar Canada has produced a wonderful slate of short films since opening in 2010, including Air Mater, Small Fry and Partysaurus Rex," a Pixar statement read. "As the dynamics of the animation industry continues to change rapidly, we continue to fine-tune our studio and its production processes. We have made the determination to refocus our creative and business efforts and resources under one roof. Pixar Canada will cease operations immediately."

Pixar launched in British Columbia amid the arrival of such U.S. studio heavyweights as Digital Domain and Sony Pictures Imageworks, with Pixar touting Vancouver's talent base, proximity and shared time zone with Los Angeles and a digital animation tax credit offered by the B.C. government.

Provincial Jobs Minister Shirley Bond said, in a statement, that it is "disappointing" that Pixar is leaving the province, but that she saw the decision as tied to the company's overall business strategy as opposed to the B.C. business climate.

She noted the interactive digital media sector received $26-million in tax breaks in 2012-2013 with an additional $350-million allotted for the film and TV industry.

According to the Vancouver Economic Development Commission, more than 1,300 digital media companies in British Columbia employ 22,000 people and generate about $3-billion per year in revenues. About 60 per cent of those companies are in Metro Vancouver.

"It's my hope that we will see Pixar return when they get new productions in the pipeline – and we'd be happy to welcome them back," Ms. Bond said

In its last quarter, Disney, the world's largest entertainment company, earned $1.58-billion (U.S.). Revenue increased 4.4 per cent to $11.5-billion, slightly below analyst estimates. While its large media network division saw revenue increase by 8.8 per cent, the studio arm that makes movies (and includes Pixar) saw a 2-per-cent decline largely because of the whopping failure of The Lone Ranger.

Disney started 2013 with an internal review aimed at finding cost savings, particularly in the studio division which is its least profitable and has seen overlap in some of its operations since the acquisition of Lucas Arts and the 2009 purchase of Marvel Entertainment. More recently, Disney earmarked up to $8-billion for a share buyback intended to boost shareholder returns as it slows its capital spending.

Observers of the animation scene in Vancouver shrugged off Pixar's departure, suggesting the industry is robust enough in the province to easily absorb the displaced Pixar workers.

Dennis Chenard, director of industry relations at the Centre for Digital Media, noted that Pixar employees are among the most senior and experienced in Vancouver's animation sector. "They are going to be scooped up in a heartbeat by a lot of the other companies that are hiring," he said in an interview Wednesday.

Still, he said he expects there will be a continued debate about incentives government at all levels is providing to lure and satisfy such companies. The current tax credit for digital animation and visual effects is 17.5 per cent of B.C. labour expenditures attributable to digital animation or visual effects.

In a rare point of unity, the governing Liberals and opposition New Democrats agree on the level. During last spring's election campaign, the NDP proposed deepening tax credits, but said they would maintain the 17.5-per-cent level for animation and visual effects. The re-elected Liberals have said the current regimen of tax credits for the sector is generous enough.

New Democrat MLA George Heyman said Wednesday he wouldn't read too much into Pixar's departure, especially in a week when social media management company HootSuite was hiring to fill 100 positions in Vancouver.