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The Art of the Matter: Funding Hollywood North

23 Feb 2008

Earlier this month, I awoke out of my slumber with one topic infesting my consciousness. BAIL OUT!!! Like many political nerds old and new, we were aware that this day was a monumental day in U.S. history.    

The Emergency Economic Stabilization Act of 2008, which is more commonly referred to as the Bail Out package was amended to authorize the United States Secretary of the Treasury to spend up to 700 BILLION DOLLARS, to purchase assets from banks.  On October 3rd the house voted 263 to 171 to enact the bill into law.  On that afternoon President George W.  Bush signed the bill into law.

Apparently the Governator, Arnold Alois Schwarzenegger, the 38th Governor of the state of California, will need a meager 7 Billion of those charitable dollars to help the State of California avoid further financial woes.  Now why wouldn’t he get what he is asking for and maybe a little more?   

But, wait!  The Feds did recognize the need to help Hollywood.   

The Bailout package includes tax breaks that may help to reduce the production of movies and television shows outside of the U.S. to areas such as Canada.  These breaks may save U.S. movie and T.V. producers up to approximately $470 million dollars over the next decade.  

According to the L.A. Times, the legislation would allow filmmakers who shoot in the U.S to qualify for a tax deduction that was previously granted to U.S. domestic manufactures that capped the top tax rate at 32% rather than 35%. 

Prior to the Bail Out package film producers only had a tax deduction for productions that cost less than $15 million dollars.  Since, most films cost much more than that most productions were exempt from the deduction.  The Bail Out bill allows producers to deduct all production costs up to $15 million dollars regardless of the movie’s total budget.  The budget also allows for the extension of an existing credit, which was due to expire this year to December 2009.

The Feds hope that these breaks will encourage productions to remain in the U.S. and keep jobs in the U.S.    

Now for those of you, my fellow Canadians, who didn’t say OH-OH, during the course of my commentary thus far, now ask yourself one question; what does this mean for Canadian film and Television? 

Over the last year our film industry has been at the butt of politics.  From Bill C-10, this amended the Income Tax Act. The proposed cuts by the Harper government to arts funding does not help either.    

Bill C-10 included provisions that would allow the Canadian Heritage department to deny tax credits to Canadian film or TV productions.  The heritage department would base decisions on whether the production contained graphic sex, hatred or extreme violence, or anything that the Minister believes should not be financed by Canadian taxpayers, which the department deemed to be inappropriate and “contrary to public policy”.   

Whatever that means!   

When the department finds a production inappropriate for the tax credits it will ask the film makers to repay funding that was provided by Telefilm, the federal film funding agency, or the Canadian Television Fund, the federal funding agency for TV. Foreign U.S. products filming in Canada who apply for the tax credit will not be denied because they create jobs for Canadians.   

What?  Are they saying that Canadian film does not create jobs?  I’ll get back to this!  

Film makers are concerned that they will be creatively crippled by the bill.  They will be plagued with a dark cloud of concern over being prevented from receiving the tax credit after the film is completed and funds have been invested, assuming they get loans from banks in the first place.  Instead they will be burdened with paying off a debt due to one minister’s subjective critique of their films. 

The Harper Government has proposed cuts to arts funding, which he suggests are not necessary for the arts community and not important to the average Canadian.   

So does that mean that the rest of us Canadians who enjoy Television and Film are not average, which implies that we are not the norm, which implies that we are Abnormal?  

Among Harper’s compressions is a cut to the $4.7 million ProMart program -- an artists'' travel support fund, and the $9 million Trade Routes program that supports film and music exports.

In a Toronto Star Article public affairs director Maxine Bailey said:

"The ProMart and Trade Routes funding we received allowed us to host 400 international buyers and programmers at the Festival, to produce a book promoting the films we screen, to take 40 Canadian filmmakers to 32 countries for 400 screenings of Canadian films for overseas buyers, and to promote Sprockets, our children''s film festival, to potential foreign programmers ..."

You may notice that I say the Harper Government rather than the Conservative government.  Growing up in a household with Liberal Jamaican Immigrants as parents I was always told that the conservatives only cared about making money.  What happened to the adage, you need to spend money to make money.  From a business persons perspective Bill C-10 and the cuts to arts funding are anti-economic growth.  

I am an arts fanatic. Therefore, yes, I have a partisan bias for the arts community.  However, from a business perspective and considering the threat of a recession looming, it makes more sense now more than ever for our government to increase investment in our economy, which includes the arts. 

The arts provides jobs for film makers and supporting staff, such as sound and lighting, construction, make up artists, set designers, graphic artists, film editors and even cleaners, while providing entertainment to Canadians. 

Canadian film has been progressing on a positive trek.  I was ecstatic when I read about the construction of the project Film Port, which will have the largest sound stage in North America.  Why? It sends a message to the film industry that Canadians are serious about creating quality productions and supporting film while attracting work for Canadians.   

The arts create jobs. 

The Americans are doing what they can to stabilize their economy and give it a boost in most areas of business including film.   Canada must do the same.  Invest in yourself!  Whether in manufacturing, technology, health or the arts; sacrificing industries that create jobs is not the way to boost our economy.  Sacrifices should only be made to create jobs and keep Canadian spirits up. But who am I to say?  I’m just a lawyer who likes to eat sushi and read graphic novels in his spare time.

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