Hollywood North expected to survive terror by John McKay

by John McKay

Unlike some other sectors of the Canadian economy, the $4 billion film and television industry is expected to withstand the destructive ripple effects of the Sept. 11 terrorist tragedy and may, in fact, even benefit.

Amid reports that Hollywood studios and actors are planning to stick closer to home in the months ahead, Canada is still considered family and Canadian cities as shooting locales are still viewed as cost-efficient and safe, say industry officials and watchers.

"This is a macabre statement, but I think the terrorism thing helps us," says Ian Morrison, spokesman for Friends of Canadian Broadcasting. "We're competing with other parts of the world for Hollywood's business and we will benefit from being thought of as the backyard, or the brother."

Stephen Waddell, national executive director for the Alliance of Canadian Cinema, Television and Radio Artists agrees.

"We do have a stable environment. We have a much more stable society – unfortunate for the U.S.," he says, adding, however, that a cheap dollar and government tax credits remain the primary reasons why they will continue to shoot here.

Gail Berman, president of entertainment at Fox TV also continues to see the cost benefits of shooting television in Canada as overwhelming.

"I don't think Canada is any less attractive," Berman says. "(The crisis) will mean additional travel time is all."

One American network executive was even more blunt in comments to the Los Angeles Times earlier this week.

"If they want to work, actors won't have any choice. They will fly to Vancouver."

Filming a U.S. movie or TV show in Canada shaves an average of five to 10 per cent off a production's budget. And with the problems experienced south of the border – failing dot-com companies, the recent settlement with Hollywood writers' and actors' unions and a slowdown in advertising – it's felt there will be an even greater demand to cut budgetary corners.

Meanwhile, there are other issues that continue to threaten the prosperity of Hollywood North, but in the wake of recent events even they have taken on a backburner tone:

Grumpy and jealous U.S. unions: The Screen Actors Guild remains upset at what it says are unfair tax incentives to lure so-called runaway productions to Canada. They want the U.S. Commerce Department to take their case to either NAFTA or the World Trade Organization. But at the same time they're asking lawmakers in Washington and Sacramento for the same benefits. One such bill has already been tabled in Congress.

"Frankly I think the Washington government has more important and pressing issues," says Elizabeth McDonald, president of the Canadian Film and Television Production Association. She adds that while the entertainment industry is important to Americans, so too is future access to Canadian water and energy supplies. Besides, she says, S.A.G. is immersed in its own elections right now and the heated rhetoric isn't always informed.

Waddell says that by seeking countervailing duties, the U.S. union leaders are being self-contradictory and protectionist.

"Certainly shortsighted and not consistent with what our relationship has been in the past."

Ottawa's plan to close a film tax credit loophole: Finance Minister Paul Martin recently tabled changes to the income tax act that would place limits on tax-shelter benefits for Canadians investing in U.S. productions here. Alliance Atlantis says its shareholders stand to lose $6 million but there are doubts the impact on Hollywood North would be that great.

"If they cleaned up more of these industrial subsidies and applied them for cultural purposes, we'd be better off," says Morrison. "We're not paying taxes to keep Alliance Atlantis shareholders happy."

ACTRA's approaching strike deadline: The Canadian union has never struck but negotiations begin in mid-October on a contract to replace the one that expires in January. Earlier this year, U.S. producers rushed to completion a lot of material to offset the American writers and actors strikes that didn't happen last summer, and they slowed work down here in recent months to avoid a Canadian work stoppage. Then the terrorist events added an even greater chill, at least in the short term.

But ACTRA has moved to head off labour concerns by assuring filmmakers that anything begun by Dec. 21 could be completed even if it went past the end-of-January strike deadline.

"The ACTRA issue, I think, is a non-issue," believes Manny Danelon, secretary-treasurer of the Directors Guild of Canada. "Now we've got to convince them that it's safe to come to Canada. How do we make them feel comfortable?"

McDonald says it's a very muddled atmosphere right now but she retains a confidence in the entrepreneurial spirit of the Canadian film and TV industry. And besides, she says, there are larger issues at play now.

"Everyone in North America is re-assessing life," she says. "I think we should be a little bit depressed about how our world turned around on Sept. 11. When I get down to it fundamentally, what I worry about the most is what my children are going to have as a world."

© Canadian Press