Headlines, North America

CANADA: Hollywood Budget Boost Revives Fears of Culture Sell-out

Paul Weinberg

TORONTO, Mar 5 2003 (IPS) - The ongoing struggle to preserve Canadian distinctiveness and artistic expression in face of the cultural monolith south of the nation’s border received a new setback with the latest national budget from Finance Minister John Manley, according to many people here.

Manley announced what some critics are describing as an odd combination of fresh tax incentives for foreign and largely U.S. based Hollywood movie producers, while also chopping money for the making of original Canadian television dramas, variety and children shows.

His actions have shaken up the domestic cultural community, which has come to rely for support on his more nationalistic colleague in the federal cabinet, Heritage Minister Sheila Copps.

With the exception of a World Trade Organization (WTO) ruling against Ottawa’s protection of Canadian magazines from becoming vehicles for U.S. advertising, Copps has managed to maintain an array of regulations and subsidies for book publishers and TV and film producers, as well as Canadian content music quotas for radio and foreign ownership restrictions on news media, despite membership in the North American Free Trade Agreement (NAFTA) and U.S. disapproval for any so-called protectionist measures.

But it appears that fears of losing lucrative made-in-Canada Hollywood productions, which employ about 137,000 people here directly or indirectly, motivated Ottawa to increase tax credits for foreign movie-makers working with Canadian labour from 11 to 16 per cent.

The ‘Globe and Mail’ newspaper suggested that the ruling Liberal Party’s desire to win more parliamentary seats in the west coast province of British Columbia, where more than one-half of Canadian-made Hollywood movies are produced, might also have been a factor.

But while ‘Hollywood North’ got a boost from Manley’s budget, Ottawa reduced support for home-grown TV, cutting its portion of the 135-million-U.S.-dollar annual budget of the Canadian Television Fund (CTF) – the sole source of financing for original Canadian TV programming – from 67.8 million dollars to 50.8 million for the next two years.

Private cable-TV companies provide the other chunk of the CTF’s temporary funding.

So far, Copps, perceived to have lost some political clout in recent years, has said very little about that decision, although she has stressed in the House of Commons that funding for the Canadian Broadcasting Corporation (CBC) will not also be reduced this year, as rumoured.

Opposition MP Wendy Lill worries that Ottawa is taking a short-term ”industrial approach” to culture that focuses on creating immediate acting and other movie-set jobs.

”The American industrials are an important piece of the income (for Canadian TV producers), but where the soul is and where the heart is, is in doing original Canadian work,” she told IPS.

At one least member of parliament in the ruling Liberal party with ties to the cultural community is also pushing Copps for more not less. Sarmite Bulte says the CTF should become permanent.

But Bulte downplays Ottawa’s reported reduction, saying that a two-year extension for the CTF also announced in the budget late in February is a major achievement. ”It has been very very hard work on my part. I have worked like a dog to ensure that the fund stays,” she told IPS.

Michael Donovan, the Halifax based chief of Salter Street Films and an Oscar nominee for co-producing the controversial documentary about U.S. gun culture, ‘Bowling for Columbine’, says Manley’s budget took the industry by surprise.

”Obviously, the government is sending us a signal to get out of Canadian business and get into the American business. We were expecting at least the status quo. But to get worse, it essentially says ‘it’s over’. It’s over for Canadian film productions in my opinion,” Donovan told CBC.

Jane Thompson, spokesperson for the Canadian Film and Television Production Association (CFTPA), was more optimistic, saying Ottawa has long been planning a second tax credit for Canadian TV productions. She blames its delay on difficulties working out the details in the finance department but predicts, ”I think we will see something within a year”.

Foreign, largely U.S., movie producers spent about 1.2 billion dollars in fiscal 2002 to do their location shooting in this country, according to the CFTPA.

What attracts U.S. producers is the cheaper Canadian dollar (one U.S. dollar equals 1.5 Canadian dollars). In almost all cases, locations here are disguised as U.S. settings for movies geared for the U.S. and international markets.

The Oscar award nominated ‘Chicago’, for instance, was filmed entirely just north of the Canadian border in Toronto, to the reported chagrin of the mayor of the U.S.’ third largest city.

But the Canadian dollar has been rising due to a resilient economy, causing some foreign film producers to find even cheaper locations, such as Prague, Australia or some U.S. southern states, says an industry source.

The CFTPA estimates that U.S. movie producers actually did about 1.4 million dollars less in business in 2002 than in previous years.

This being the last federal budget for retiring Prime Minister Jean Chretien, it is hard to know what will come next. His expected successor and fiscal conservative Paul Martin has not said where he stands on future support for Canadian TV producers, says Bulte.