Save B.C. Film? Who from? What for?

[NAB]

There's a whole lot more behind the decline of the BC Film industry than trying to suggest that having a VAT would save it from itself. For rich Hollywood Moguls even "Free" is not usually good enough, and they are really good at playing jurisdictions such as B.C., Ontario, and Louisiana off against each other for local taxpayer subsidies. Saying "NO!" to subsidizing these low grade leaches any further than we already are is one position I support.
Nab

Excerpt from: http://staging.rabble.ca/blogs/bloggers ... m-who-what

""Save B.C. Film? Who from? What for?

By
Michael Stewart
| January 28, 2013


Critics say that the tax credit game hurts workers, since Miramax & Co. will always go to the lowest bidder, institutionalizing a climate of displacement and unemployment. Tax credits to billionaire production companies continue to escalate while labourers, who don't see a red cent of income tax deducted, are repeatedly forced to uproot and move their lives to whatever state or province has decided to outbid last year's A-list tax cut. Advocates, 3000 of whom jammed inside the dilapidated former set of Judge Dredd last week to show support for the increased tax credits, say that the credits will pay for themselves through some ancillary economic mysticism -- a theory that coincidentally underwrites the plot for 2012's runaway scatalogical sleeper hit, Movie 43.

I'll let the economists argue over which position has a better chance of Matt Damon's and George Clooney's endorsements; but the question no one has asked yet is: does the B.C. Film Industry deserve to be saved?

The film industry would appear to offer an ideal dénouement to B.C.'s cultural pickle -- with the sole exception that movies made here are awful. Peter Leitch, head of the Motion Picture Production Industry Association of BC, pointed out, presumably to strengthen his case, that Twilight: Breaking Dawn, was not wholly filmed in Vancouver like the previous iterations of the erudite political thriller/sexy vampire agit-prop, but chose Louisiana's business-friendly fiscal effulgence instead -- nary a word for the cost to the social fabric for foisting the first two Twilight films on not only the citizens of British Columbia, but the world.

It's hard for me to support any market incentive which helped bring Smokin' Aces 2, Air Bud: Strikes Back and White Chicks into the world. Indeed, the only justification for having a film industry in B.C. at all is the fact that it produced both Rocky IV (the most sensitive reflection on Soviet-NATO relations in the Cold War era) and, of course, Battlestar Galactica (seasons 1 & 2).

Workers' livelihoods is a serious issue and a good economic policy will ensure that stable, well-paid, unionized work is available to all. But aside from the fact that the argument underwriting increased tax credits for film production tacitly assumes a worker in B.C. deserves a job more than a colleague in Ontario, or that the film industry deserves more public money than, say, the lumber industry or social services, the numbers prove that tax credits (just raised in 2010!) are only a short-term fix and institute a industry-wide culture of disruption, precarity and pandering as labour remains vulnerable to the whims of a never ending bidding war.

As a cultural policy, the idea is terrible. Can someone tell me when the NDP became the party of tax credit and subsidy? When was the last time emerging poets, playwrights or authors were offered $100-million in tax credits? While some economic incentive does benefit independent filmmakers, the proposed policy clearly favours multi-million dollar regurgitation of the incessant dreck leaking northwards from Beverly Hills. Why not invest that money in, to name one example, a public broadcasting television channel or website with a focus on social engagement and artistic inventiveness rather than cheap thrills? Such a plan would create a stable, sustainable industry focussed on employing British Columbians and encouraging their artistic impulses.

As long as we're worried about losing the next Stephanie Meyer epic to whichever state opts to offer a 40% tax credit to Daddy Warbucks, we will continue to develop the cultural heritage we deserve.""

[steven lloyd]

Why not invest that money in, to name one example, a public broadcasting television channel or website with a focus on social engagement and artistic inventiveness ...

... because ...

[HP]

I think there's another perspective on the matter.

Keeping in mind that Saskatchewan's film industry would be far smaller than BC, Saskatchewan just did away with their film tax credit system. While I've never been one to tout the chamber of commerce as being an impartial, the sask chamber conducted a study and discovered that since the tax credit system was introduced in 1998, the provincial government had credited about $100 million. That fact basically lined up with the story the government was telling. The other part that the government couldn't/didn't/wouldn't tell was that over the same period about $650 million in revenue and 850 full time jobs were supported by the tax credit system.

The net position for Sask was that it was costing the government about $1.3 million per year to support all of that activity (that number comes from a summary of the report and I've interpreted it to be the difference between the cost of the tax credit and the taxes collected from the ensuing industry spend).

The article you're quoting is woefully shortsighted and probably misleading. Film tax credits are also applied to advertising development etc - not just blockbuster movies and longrunning series. The reality is that the film industry is highly mobile and will go wherever the climate is most competitive. An entire industry is built upon film development including things like set development, equipment rental, production facilities, etc. Without a tax incentive system, BC is at a disadvantage purely because of the number of jurisdictions with very competitive tax credit structure.

The only question that has never been answered for me is, "how much business will still happen without a film tax credit structure?". The way I see it, without a tax credit system BC has little to offer film producers that can't be found in other jurisdictions with a more favourable system other than, possibly, convenience.


For additional reading:
http://www.cbc.ca/news/canada/saskatche ... -1210.html
http://www.leaderpost.com/business/JOHN ... story.html

[Captain Awesome]

While tax climate certainly has some effect on the industry, the main reason why film industry was so strong back in the day is because of the favorable exchange rates. Production companies were saving a fortune by filming in Canada (doesn't matter if it was Vancouver or Toronto), but once it became actually more expensive to film here, it quickly died down. Some tax credits here and there won't bring it back to its former glory - there's plenty of tax credit battle going down south.

[twobits]

While tax climate certainly has some effect on the industry, the main reason why film industry was so strong back in the day is because of the favorable exchange rates. Production companies were saving a fortune by filming in Canada (doesn't matter if it was Vancouver or Toronto), but once it became actually more expensive to film here, it quickly died down. Some tax credits here and there won't bring it back to its former glory - there's plenty of tax credit battle going down south.

That is the bottom line truth...the exchange rate. I remeber well the film industry actively and openly lobbying Hollywood with the lure of favourable exchange rates that reduced production costs by 20%. It was the main point of their sales pitch.
Am somewhat surprised they are not blaming the oil industry and Dutch desease

[NAB]

B.C. film subsidies already generous

Times Colonist
January 24, 2013

Re: “Lack of tax breaks costs city film jobs, producer says,” Jan. 22.

Film producers in B.C. already receive a 33 per cent “incentive” on labour costs, but they feel hard done to because B.C. refused to match the 25 per cent incentives on production spending available in Ontario and Quebec.

Victoria apparently doesn’t qualify for an additional six per cent that’s available elsewhere in B.C. and Los Angeles-based producer Cory Large threatens to relocate if he doesn’t get it. Lamenting B.C.’s paltry incentive plan, Large says: “I can shoot a $10-million picture and get $5 million back in Michigan, Louisiana or even Hong Kong.”

Over the past year, there’s been a steady stream of announcements of increasing taxes and fees levied on citizens and businesses to pay for things such as infrastructure upgrading and ferry-fee increases, not to mention the coming levy for sewage.

Film makers and film crews enjoy the benefits and services paid for by those taxes. Large is from Los Angeles, a city whose infrastructure is crumbling because people and businesses there don’t like to pay taxes. I doubt that film crews would find the same level of services that they take for granted here in Detroit or Louisiana — and good luck with cheap food and accommodation in Hong Kong.

The subsidies that the film industry gets already are generous. If it isn’t good enough, let them go elsewhere.

John R. Paterson

Saanich


http://www.timescolonist.com/opinion/le ... us-1.54999

[Gone_Fishin]

It was predicted by many that extinguishing the HST would result in job loss in the industry. And lo and behold, the HST is done and the jobs and investment have packed up and headed for Ontario, which still has the HST. Ironically, Adrian Dix rallied to extinguiish the HST, yet he's now accusing the BC government of not offering a competitive tax climate for the industry. Dix helps to get rid of the favourable tax climate, then cries about the lack of a favourable tax climate. There ought to be a law against that guy...

[abbyrugby]

It was predicted by many that extinguishing the HST would result in job loss in the industry. And lo and behold, the HST is done and the jobs and investment have packed up and headed for Ontario, which still has the HST. Ironically, Adrian Dix rallied to extinguiish the HST, yet he's now accusing the BC government of not offering a competitive tax climate for the industry. Dix helps to get rid of the favourable tax climate, then cries about the lack of a favourable tax climate. There ought to be a law against that guy...

Last time I checked, the HST is still in effect (until April 1st) ................blaming this on the NDP, nice attempt to spin, do you work for Christy Clark's PR team?

The Film industry is greedy and mobile, plain and simple. Not NDPs fault, not the LIbs, not the Conservative nor the Greens.

[Gone_Fishin]

Last time I checked, the HST is still in effect (until April 1st) ................blaming this on the NDP, nice attempt to spin, do you work for Christy Clark's PR team?

The Film industry is greedy and mobile, plain and simple. Not NDPs fault, not the LIbs, not the Conservative nor the Greens.

If you think investors put many millions of dollars and years of planning into a jurisdiction that will punitively start taxing them on April 1st, you're sadly mistaken. No one will start anything in that industry with 2 months to go before it becomes too expensive to operate here.

Business timelines are far longer than the next month or two. Soon after the referendum, the film industry started to change venue plans and move house eastward. Understanding business strategy should be mandatory for students. It appears some on this board need considerable education to make better informed decisions in their lives.

[abbyrugby]

Yeah, you're 100% right, the film industry wanted out on August 26th, 2011. Or maybe they've been asking for tax credits for over a decade. That's how they work, threaten to leave until they get can stay rent free.

Still the fact that you blamed the NDP for this is just showing your ignorance, Mr. "Higher Education."

[Drip_Torch]

Try to imagine my surprise when I emerged from my bunker on my first post Mayan apocalypse survey and found not only you, but the BC film industry still here.

(Thank you Kevin from "Locals supporting Locals" and the "Hotties" for picking things up where the Mayans left off.)

Peter Leitch from the Northshore film studios is out explaining how the industry needs further tax credits in order to survive. For those of you that watch trends this is welcome news as it means there is only 6 more weeks to winter and we'll be into some good weather again.

Last year, Mr. Leitch didn't come out till May and I'm sure I don't need to remind you what June and early July looked like.

Not too long ago, I remember Peter Leitch, http://ca.linkedin.com/pub/peter-leitch/a/272/b35 the executive from that BC success story Lions Gate films, standing next to the Brightlights pictures demanding a tax credit or they were going to pull out of BC altogether and when the Government put those credits in place, BC enjoyed a small boom in economic activity when Lions Gate Studios sold out to Bosa and moved their operation down to St Monica Blvd in California.

Remember what great news the HST was for BC film production? http://www.youtube.com/watch?v=H4Hll5YjQTI

What a happy feel good story... a 7% competitive advantage that secured a 200 million dollar feature film "Superman" and that story continued to feel great till they started filming - in New York and Australia. http://www.imdb.com/title/tt0348150/locations

I guess what most people don't understand is film production is a creative endeavour and those that are fortunate enough to be granted artistic licence are accustomed to the regulations that accompany that licence - and the 10% bump to the licensing agent just goes without saying.

True creativity follows patterns and stays within the lines. So is it any surprise to see all of our creative people in the film industry following the established pattern of asking for more tax credits? Sure there may be some argument in how to deal with this situation amongst the clerks and bureaucrats, but the truly creative people are colouring in between the lines like they have every other year for the last 11 years.

The industry association MPPIA, Save BC Film, a chorus of film producers, film technicians and local heroes have been on radio, TV, the interweb etc... and the story has been as clear as mud. BC offers a 33% tax incentive, Ontario offers a 25% tax incentive and the difference is 10% in favour of Ontario... okay, not good with math so I'll buy that.

Example: a producer with a 10 million dollar budget for labour to spend over 10 days, 5 in Vancouver and 5 in Kelowna, plug that all into the BC film calculator and you get a combined tax credit in excess of 5 million dollars... so in terms of the 33% everyone is talking about, I agree with Christy this seems a little generous, but again... not good with math.

(The difference is the basic BC is 33% the regional 6%, distant 6% and federal 17%... and then there is DAVE another 17.5 on your digital animation and visual effects work)

This Government has done a lot to increase the economic outputs of the industry. Bill Bennett was on CBC stating that they had increased the tax credit from 11% to 33% in the last 8 years... hmm, that seems a little humble, guess he's overlooking the other 12% available to those producers that boldly step outside of the center of the universe and the new 17.5% credit for animation and digital effects... don't understand it, really... they usually like to tell you all they've done.


The industry, for the last 8 years, has enjoyed continued growth in the face of it's undeniable decline by incorporating different sectors that really have nothing to do with film or television, like land speculation, education, video gaming and animation.

So here we are... the BC liberal lobby group http://www.youtube.com/watch?v=L4GJmuztr1s that took over the film industry and got everything they ever asked for out of Government, soft regulatory enforcement, corrupt labour relations and a steady diet of tax credits is once again pointing to the bottom line and saying it needs another increase in the tax credits. We can restore our position as the third most desired location if and only if we increase the tax credits... because after all is said and done it's the bottom line and only the bottom line that matters. Turns out BC film production budgets are formatted in such a way that the tax credits are the bottom line. Which is why we'll never be able to compete with LA or New York and why the X files packed up and went to Hollywood. They format budgets differently.

They say that business doesn't happen amongst strangers - it happens amongst friends and I say the BC film industry is what happens when friends do business with friends with other peoples money.

Do they need an increase in Tax Credits - hell yeah, because at the end of the day in order to maintain our incredible numbers in the BC film industry... we'll need a little bit of an actual film industry.

[kibbs]

There is no better investment then film and media. I'm surprised httm was not mentioned.
http://www.youtube.com/watch?v=_TXNEE6SaoI
films like this showcase bc

[Spocky]

I dunno. Bridge Studios in Vancouver is undergoing a huge expansion so there has to be some business somewhere in the BC film industry!

[Drip_Torch]

With reference to my post above... six weeks later and look at the sunshine.

Some trends are simply undeniable.

[solidfiction]

lets look at it my way.The only reason the film industry is or was in Vancouver is because of goofy provincial tax credits
Its not like we have a superior actors in BC.Quit the opposite in fact