Source : Hollywood Reporter

OTTAWA _ Canadian independent producers attending their annual convention in Ottawa on Thursday heard a persistent message: We're all hurting.

Guy Mayson, the newly installed president and CEO of the Canadian Film and Television Production Assn., told delegates that foreign location shooting in Canada, mostly by U.S. runaway producers, now accounts for the largest share of production activity here.

Domestic TV producers, by contrast, were shrinking in number and being undercut by falling government subsidies, the proliferation of reality TV shows and a collapsed international market for their product.

"A lot of small- to medium-sized companies are on the edge," Alex Raffe, president of Toronto-based producer Savi Media, said.

"Some of the subsidy systems are scandalous in how they are run," Patrick Whitley, president of Dufferin Gate Prods., added.

"So many companies are on the brink. Many don't know whether (they'll be) in business in six months. That's a sad commentary on the industry," Whitley concluded.

But even with regards to foreign location shooting, Canada is hurting as U.S. producers decide to stay at home or go elsewhere internationally in reaction to the rising Canadian dollar compared to the U.S. dollar.

U.S. runaway production was up in Quebec and the Maritime provinces in the past year, but well down in Ontario and marginally down in British Columbia, where 80% of local film and TV production work is done by foreigners.

Tom Rowe, a Vancouver-based producer with Network Entertainment, said there are a number of big-budget U.S. movies currently being shot in Vancouver, including the Halle Berry starrer "Catwoman."

"But they don't help a lot of people in the industry," he added.

In Vancouver, as everywhere else across Canada, the effort to encourage and sustain a homegrown film and TV industry is being undercut on many fronts.

"We lost CAN$200 million in U.S. production last year due to the SARS (health scare)," noted Rhonda Silverstone, Toronto's film commissioner.

This week there was still more bad news for Ontario film and TV producers with word that the provincial finance minister, Greg Sorbara, was looking at eliminating refundable tax credits for domestic and foreign producers shooting their projects in Ontario (HR 1/29).

The CFTPA's Guy Mayson reflected the feeling of many when he said he hoped Hollywood producers would not be scared away from shooting in Ontario by Sorbara 's remarks. "That's my big worry. Hollywood is always looking for cheaper locations," he said.

Silverstone said meetings with Sorbara are scheduled for next week to secure "clarification" on his remarks.

"We have a wait-and-see attitude at the moment," she said.

Independent producers hoping that newly installed Canadian Prime Minister Paul Martin will restore CAN$37 million ($27.8 million) in funding to the Canadian Television Fund received little reassurance from federal heritage minister Helene Chalifour Scherer, who addressed the CFTPA convention.

Scherer said when asked whether Martin would follow through on his recent Liberal Party election campaign commitment to restore the CTF monies: "I hope he will remember what he said," she added.

The difficulty for Canadian producers is that all levels of government _ federal, provincial and municipal _ as in California, are facing rising deficits and are looking to bring down costs and debt loads.

One note of optimism on Thursday was given by Dufferin Gate's Whitley, who said it is unlikely that California will legislate to limit U.S. runaway production to Canada. "(Governor) Arnold (Schwarzenegger) is not a problem," he said.

© Hollywood Reporter