These are glory days for Hollywood North – however you define it. (Vancouver? Toronto? Canada?) Business is booming and so is profile. The Revenant – filmed primarily in Alberta and British Columbia – won three Oscars last weekend. Brie Larson won best actress for Room – a Canadian co-production filmed in Toronto and written by Irish-Canadian Emma Donoghue based on her novel. Room also gave the Academy Awards its 2016 darling, nine-year-old Vancouver native Jacob Tremblay. Spotlight – which won Best Picture – was filmed mostly in Toronto. Brooklyn – which was also up for a bunch of Oscars – is another Canadian co-production, shot partly in Montreal.
Meanwhile, Deadpool, shot in B.C., is burning up the box office, claiming the No. 1 spot domestically for three straight weeks and earning more than $620-million (U.S.) worldwide.
Fuelled in large part by a low Canadian dollar, 2015 was a record year for film and TV production in Vancouver. It was up 40 per cent over 2014, with 353 productions shot in the city. Deadpool alone hired more than 2,000 crew and cast members.
Sure, it was a pain when they closed a viaduct connecting East Vancouver with downtown for several hours a day for a period last year, but in return we got all kinds of Ryan Reynolds sightings and funny hometown boy tweets. Oh, and more than $40-million in production spending.
Currently, there's a long list of productions shooting in B.C. – films, TV series, pilots.
And now the province seems poised to mess with this and reduce the production tax credit. "We're not prepared to see payouts grow at the rate they have," B.C. Finance Minister Mike de Jong told The Globe and Mail's Ian Bailey.
Mr. de Jong's comments come as the return of production tax credits has become an election issue in Saskatchewan. On Wednesday, the NDP held a news conference to pledge reinstatement. The Liberals and Green Party are also making that promise.
"The economics of the tax credit make sense to them and they've seen the devastation that's happened," Nova Alberts, who heads the Saskatchewan Media Production Industry Association (SMPIA), said in an interview this week.
In B.C., the economics look like this: The tax credits cost about $343-million in 2014-15 – and are projected to cost $493-million in 2015-16 (up from an annual average cost of about $255-million), according to the recent budget.
But in 2014-15 the industry brought in $2-billion.
In its budget, the province compares B.C.'s spending on tax credits to that of California, where the industry is worth $17-billion (U.S.) annually and the state spends $330-million on tax credits. This comparison misses the obvious point: California is the industry's natural home. The incentives were cooked up in other jurisdictions, such as Ontario and B.C., to lure business away from California. And it has worked. As a result, California has been in a panic about what it calls "runaway production."
(Ontario lowered its rate for foreign productions last year; 2015 production stats are expected next week.)
The B.C. budget also weirdly mentions Saskatchewan as an example of how other jurisdictions have addressed the cost of film tax credits.
That move decimated the industry, which once employed about 1,200 people; it's now down to between 125 and 175 people, according to Ms. Alberts (whose position with SMPIA is volunteer; she lost her job when the organization was downsized after the tax credit cut).
In Nova Scotia, there was an uproar when the film tax credit was cancelled last year. Even with a replacement grant program (which, as announced this week, is providing more than $800,000 in funding for Trailer Park Boys Out of the Park: Europe), the move has sent people in the industry up and packing.
"It's completely over here," special effects co-ordinator Gary Coates told me Thursday. "We've done exactly $100 worth of business since last October."
He is packing up his company's Halifax warehouse full of wind and fog machines and other gear "that is literally collecting dust at this point," and storing it all. "The Trailer Park Boys, bless their hearts, they're getting something done, but that's not going to drive an industry."
Back in B.C., the same government that is worried about film tax credits is continuing to shove its eggs into the liquefied natural gas basket – an industry that for all intents and purposes doesn't yet exist here.
The recent Speech from the Throne referred to "20 active projects at various stages of development."
But there is not a single LNG plant under construction; no projects have been green-lit. The B.C. budget included zero LNG revenue projections for the next three years.
And yet the province has been pouring incentives into the oil and gas industry – $587-million in 2014 (deducted from royalties).
So it's bad economics to incentivize an industry that markets fantasy, but it's good policy to support an industry that is a fantasy?
Why not protect the thriving film and TV production sector – one that actually exists, providing real jobs now – and greener jobs, too? The only fra(c)king that goes on in Hollywood North is in Battlestar Galactica – also shot in Vancouver.
The film industry loves to talk about the great crews in B.C., the studio infrastructure, the locations, the quick flight between Los Angeles and Vancouver, the time zone. That is all valid. But the real draw is financial.
Right now, the low Canadian dollar is a huge factor in this booming industry. That may not always be the case. The tax credits are an important incentive; they, in fact, helped build the industry.
Why risk that? The bottom line is that Hollywood productions come north because of the bottom line; without the financial incentive, they won't.