As city puts money on the table, other jurisdictions hit rewind
While Ottawa was shivering through a deep freeze in late January, Invest Ottawa’s Blair Patacairk was in sunny Hollywood meeting with executives from film heavyweights such as Warner Bros. and Walt Disney.
inMotion's Patrick McGowan. (Photo by Lois Siegel)
Invest Ottawa has made the film and television industry a chief plank of its strategy for increasing the number of jobs in the city. The municipally funded organization has worked with the city to put $1.5 million in taxpayer money on the table to fund a sound stage aimed at bringing more productions to the city.
“Aside from just the studio, it’s the willingness of the community to band together to get this done and to help make production successful,” said Mr. Patacairk in a phone interview from California. “Because the last thing you want to do is bring in productions and they don’t do well.”
But the city’s investment comes at a time when other jurisdictions across the country are rethinking the use of public funds to support the industry.
The Province of Saskatchewan decided to eliminate an $8-million annual tax credit for the industry, with the production companies of shows such as the TV series Corner Gas leaving soon after.
British Columbia Premier Christy Clark told her province’s film industry the government had no plans to expand on the $285 million in tax credits it provides, even as studios in Vancouver say they continue to lose money, with productions moving eastward to take advantage of subsidies in Ontario.
The Province of Ontario offers, among other incentives, a 25 per cent refundable credit on production expenditures in the province and a 20 per cent credit for eligible labour involving green screen work.
The primary issue is that film and TV producers are highly mobile. They can move with relative ease to whichever province, state, city or country promises the best deal on subsidies and tax breaks.
That means those in the industry will be all too willing to hit the road and film elsewhere if the City of Ottawa doesn’t match the tax breaks and subsidies from other jurisdictions, some observers said.
“It’s never one-off,” said Mark Milke, a Calgary-based researcher with the fiscally conservative think-tank The Fraser Institute. “They will be back (looking for more) when there’s an overrun in costs, they will be back to up the film tax credit at the provincial level – this stuff never stops.”
He said that as a result, investing in film doesn’t work as a long-term economic strategy.
Some in the local industry disagree and say film and TV can be an important part of the city’s future economic development.
“Studios are required to make feature films,” said Patrick McGowan, the president of local production firm inMotion. “And if Ottawa wants to diversify its economy in the face of a government downturn, then it’s going to have to look at the cultural industries as a very strong part of that strategy.”
He welcomes the $1.5 million for the studio, but thinks the city should be spending closer to $20 million on the film industry.
Ottawa city staff reached the conclusion about the financial need for the studio by talking to those who work in the industry and other municipalities, according to a statement sent to OBJ that was attributed to economic development director Saad Bashir. The $1.5 million is a “one-time capital investment,” the city wrote.
The statement also said the city conducted a cost-benefit analysis. However, the municipality refused to make public its business case for the studio, on the grounds that it contains commercially confidential information.
SIDEBAR: Jurisdictional comparison
The Stampede City is currently debating the construction of a sound stage and film studio for local producers, including the company responsible for CBC TV’s Heartland.
City council agreed to spend $10 million to help build the project a little more than a year ago. However, the city has been unsure about how it will make up the gap between the amount it’s willing to spend and the total cost, which it pegs at $32 million.
The provincial government was still examining whether to fund the project as of mid-November.
The city has committed $5 million to a fund for movie and TV projects in 2012. Edmonton film commissioner Brad Stromberg told a local paper in December that he has plans for other initiatives in the future.
Sudbury filmmakers can take advantage of a tax credit targeted at Northern Ontario. The province offers a $1-million incentive program, said Michel Lavoie of the Ministry of Northern Development and Mines.
He said about half of that is a loan. The other half is money that doesn’t need to be returned to the government as long as the production satisfies established requirements, such as hiring a certain number of employees from the region.
The city offers several incentives as well, wrote municipal spokesperson Shannon Dowling in an e-mail. These include assisting film productions to use municipal buildings and helping to arrange policing.