Source : Globe & Mail

So, the British Columbia government has caved and will match the tax credits Ontario is offering its film-and-television industry.

With major producers threatening to move east, B.C. Finance Minister Colin Hansen has announced the province will increase from 11 to 18 per cent the tax credit for labour costs that it allows foreign productions, while the domestic credit will rise from 20 to 30 per cent. In Ontario, Finance Minister Greg Sorbara, who had recently come out with his own 18-per-cent and 30-per-cent credits, welcomed the news with talk of a level playing field. ". . . We don't want to get into a bidding war," he said.

Oh no, nobody wants to get into a bidding war, but like a couple of newlyweds looking for their first home in downtown Toronto, the provinces have discovered that if they want to buy, they have to bid. Under intense and very effective pressure from a media-savvy industry, they have ponied up. A thousand workers rallied at Queen's Park; Sorbara talked about the danger of ever-escalating credits, waited a few weeks and put his money on the table. Brightlight Pictures and Lions Gate Entertainment, B.C.'s major production companies, threatened to leave; Hansen said his province would not have a knee-jerk reaction, waited a few weeks and then matched the Ontario grants. Quebec, meanwhile, also raised its foreign-production credit to 20 per cent on the heels of the Ontario increase.

Why does the industry need these raises, especially to lure foreign producers or make productions for the international market? It has suffered from SARS paranoia and cheapo reality-TV shows, but mainly the answer is a piece of bald economics: the rising Canadian dollar. It just isn't that attractive for Americans to film in Canada any more and governments are being asked to legislate the dollar differential back into existence. But with U.S. jurisdictions aggressively luring back what the American film industry likes to call runaway productions with their own incentives, the tax credits increasingly look like a mug's game. Film jobs are going south, like it or not.

Just before Sorbara came out with his credits, Toronto had lost an NBC pilot, NY-70, a show about two New York police detectives in the 1970s. After both the New York state and city governments came out with their own incentives, the show returned to its namesake location amidst much talk about the gall of other cities attempting to stand in for the Big Apple. Meanwhile, Hollywood has been increasingly active on the issue, often citing inflated figures on the dollars lost to Canada, and has powerful support from California Governor Arnold Schwarzenegger, who was rumoured to have taken a pay cut on his last film, Terminator 3: Rise of the Machines, rather than see it shoot in Vancouver. He was certainly among those who lobbied hard for the federal job-creation act that included tax incentives for film producers and that U.S. President George Bush signed into law last fall.

But if Hollywood can always be expected to defend its turf with exaggerated rhetoric, or New Yorkers to get understandably annoyed at seeing other cities offering filmmakers cut-rate versions of their own beloved burg, Canadians might wonder why governments aren't spending their money encouraging Vancouver, Montreal and Toronto to play themselves instead of luring foreign productions.

Make no mistake about it: The tax-credit system that got rolling in the 1990s is all about jobs, not culture. The best evidence of that is the ludicrous provision in Ontario that productions shooting outside of Toronto get an extra 10-per-cent credit. Who cares what kind of films the industry is making, as long as they are spreading those jobs around? Of course, incentives to big employers are de rigueur across this continent -- Ford recently got a $200-million grant from the federal and Ontario governments to build a new plant in Oakville, Ont. -- and in that regard film jobs as just as precious as any other highly paid, highly skilled jobs.

The film industry, however, is a smaller economic player in a more complex context: The larger question for a cultural industry should be how tax credits benefit Canadian film.

The industry argues that Canadian producers need the infrastructure created by foreign productions to do their own projects. That may be true, but giving tax breaks to foreign producers is a pretty indirect method of nurturing the domestic cinema, which just doesn't breathe the same air as the movies-of-the-week and specialty-channel fodder that come to Canada to shoot.

Certainly, there's no evidence that the tax-credit system that Ontario initiated in 1998 has launched some golden age. Canadian auteurs such as Atom Egoyan or Denys Arcand have gone about their business as before, producing a modest little niche for Canada in the international film pantheon, while domestic television has been struggling to produce any decent dramas when it's not copying lame foreign reality-TV formulas.

If provincial governments really want to benefit domestic film and television, they should be making direct grants to their local producers and filmmakers so they can concentrate on domestic projects. And they should be investigating how to improve what remains an abysmal distribution system that allows a deluge of Hollywood pap to overwhelm every screen in a town that might be mistaken for New York, L.A. or Seattle if you just shoot it the right way.

In the meantime, after a painfully slow year, your gaffer, key grip and set carpenter may find their phones are ringing again, for a bit, until the loonie hits another new high.

© The Globe and Mail