Jan 242013
Film industry demands local governments cover more and more of their costs.
By Bill Tieleman
"Free is too much!"
– Desk sign at Hollywood film producer's office, 1998
If there's one thing that both BC Liberals and New Democrats can agree on it's this: giving money to Hollywood is almost irresistible!
So if you want to get literally hundreds of millions of tax dollars to subsidize your already highly profitable $1.2 billion industry, just send a few movie stars and producers up to British Columbia, smile sweetly about how you love the place and then threaten to leave.
Works every time.
And given that more than 1,000 rightly worried film and television workers met January 22 at North Shore Studios for a Save BC Film information session that will got blanket media coverage, and an online petition hit 25,000 signatures, watch the pressure build on both parties to outbid each other with your money.
No matter what BC does, other jurisdictions in Canada, the US and elsewhere have engaged in an unlimited bidding war for Hollywood's favour, with tax credits as high as 35 percent in Louisiana.
In 1998 I went on a "fact finding" mission to Hollywood representing labour, along with a BC government deputy minister and film industry representative.
The trip was needed because Ontario had just introduced an 11 percent tax credit on labour used in film and television production — excluding foreign actors and crew — and BC was under pressure to match it or (we were warned) the industry would die hard with a vengeance.
We spent two days meeting movie executives and in one producer's office was a big sign at his desk that epitomizes the whole situation: "Free is too much!" The penny — and a several million dollars — dropped for me then.
The same producer said his firm would shift a $2 million television movie of the week from Vancouver studios to Toronto if it could save just $10,000 in total from Ontario tax credits.
"Seriously?" we asked incredulously. "Even with more experienced crews, the time zone difference, better weather, the extra distance from Hollywood, the variety of locations and sets?"
"Yes," was the straight answer back. And it may be true.
Scripting a bidding war
BC paid up then, even when the dollar hit as low as 63 cents US, and kept jacking the tax credit from 11 percent to an astonishing 33 percent today on all local labour costs, plus additional credits for shooting outside Vancouver, spending around $285 million a year to keep up to 25,000 jobs here. Currently the industry says the unemployment rate is about 90 percent.
BC paid up then, even when the dollar hit as low as 63 cents US, and kept jacking the tax credit from 11 percent to an astonishing 33 percent today on all local labour costs, plus additional credits for shooting outside Vancouver, spending around $285 million a year to keep up to 25,000 jobs here. Currently the industry says the unemployment rate is about 90 percent.
But Hollywood has a good script and we now see the results of Ontario and Quebec starting a shameless bidding war for film industry jobs and investments, with an incredibly generous tax credit hike to 25 percent of total costs that puts BC 10 percent to 13 percent behind them.
Better investments
Just think for a minute about that — would the restaurant or forest products or construction industry like to get a one-third tax credit on all its labour costs? A tax credit that really means you get all tax paid back and then a cheque from the government for the remaining value of that cost?
Just think for a minute about that — would the restaurant or forest products or construction industry like to get a one-third tax credit on all its labour costs? A tax credit that really means you get all tax paid back and then a cheque from the government for the remaining value of that cost?
You bet! Would they invest that money in BC to create more jobs? Sure!
Would spending $300 million a year building 1,000 or more units of housing for the homeless create lots of great jobs and put a needed roof over people's heads too? You bet!
But unlike the film business, other sectors can't easily get up and leave town. Movie and TV shoots, unfortunately can and do.
And they're not shy about making that clear.
Movie production manager Warren Carr made it clear in an interview with CKNW radio's Sean Leslie on Sunday."Yes, we need a little help on the tax credit," said Carr, who helped produce The Bourne Legacy and Diary Of A Wimpy Kid.
The movie moguls were also big fans of BC's outgoing Harmonized Sales Tax, which also put more money in their pockets at consumers' expense. They advocated strongly for it in 2011's binding referendum when I was strategist for Fight HST, the group that successfully opposed the tax.
Today the industry's Save BC Film online petition also puts it plainly — give us tax money:
"Vancouver's ability to remain a competitive film market relies heavily on the support of the provincial government and their enthusiasm for maintaining an attractive taxation scheme.
"With a strong Canadian dollar, this is the only way to ensure and build upon the long-term success that has been established."
Fair enough from the film industry perspective — and no one wants to see workers unemployed — but the rest of us may not agree that ever-rising levels of tax rebates from the public coffers are a good way to save jobs.
Let's direct our own fate
No matter what BC does, other jurisdictions in Canada, the US and elsewhere have engaged in an unlimited bidding war for Hollywood's favour, with tax credits as high as 35 percent in Louisiana.
No matter what BC does, other jurisdictions in Canada, the US and elsewhere have engaged in an unlimited bidding war for Hollywood's favour, with tax credits as high as 35 percent in Louisiana.
So what's the solution if throwing more money at Hollywood isn't?
There has to be a sustainable plan for BC's film and television industry; one that isn't completely dependent on massive tax credits or a depressed Canadian dollar to survive and grow. But it won't be developed in the heat of a panic campaign or with advice from self-serving movie moguls.
And Hollywood's love of whip-sawing province against province, as well as American states and foreign countries, for the biggest, fattest tax credits imaginable has to hit the cutting room floor at last.
Premier Christy Clark and her government have done a pretty miserable job with the industry, considering how much money they spend on it, alienating both workers and bosses with their indifference to what really is a very difficult situation of high unemployment and fewer productions in BC.
But both parties would be smart not to jump when Hollywood yells: "Action! Throw us big bucks and make it look sincere!"
With a sensible strategy, BC's film and television business won't fade to black and the hit movie "Tax Credit Bandits" won't keep producing expensive sequels.
About Bill Tieleman
Bill Tieleman, president of West Star Communications, is one of BC's best known political commentators and communicators. Read political commentary from Bill every Tuesday in 24 hours, Vancouver's free weekday newspaper (also online) and in The Tyee — BC's award-winning online magazine.
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