Runaway Production - Competing Subsidies

Competing Subsidies

"Who is representing the interests of taxpayers here?" asked CTF Saskatchewan director David MacLean. "The film industry is playing the Saskatchewan government like a worn-out movie script, drawing them into bidding war with other provinces. It's a race to the bottom where nobody wins except film producers."

When faced with the prospect of a worldwide subsidy war, Ron Haney, executive director of the Directors Guild of Canada is quoted as saying, "Everybody can compete with tax credits now... It's absolutely frightening."

According to a study by the Canadian government, productions are beginning to "run away" from Canada as well. Productions are now going to countries that have introduced competing and/or counter-incentives and/or subsidies. Many productions are starting to return to the United States due to recent legislation to counteract runaway production.

While film and television employment attributed to foreign location spending and actual spending levels by such productions increased in 2008, the state film incentives enacted in U.S. states showed clear increases in the number of productions shooting in the respective enacting U.S. jurisdiction.

Several Canadian companies are also pulling their support for Canadian Television Fund (CTF) because, "(It) was never intended as a permanent source of funding" to subsidize broadcasters and programmers. One Canadian company stated that, "Our understanding was that after the initial five-year period, the fund would be self-sustaining and self-financing from a return on investment in successful productions."

"The Vancouver Sun's Michael McCullough points out that California not only has the world's highest production costs it also has no tax credits. How do they do it? That's the question BC's film industry should be asking, rather than looking to taxpayers to buck up... The tit for tat tax credit game is one with only one loser, the taxpayer. There will always be other jurisdictions that will out-subsidize BC. Louisiana offers a straight 20% subsidy for production costs, is that the next industry demand? It is not the job of the government to keep up with incentives but the industry's role to remain competitive."