The film industry is lobbying the federal government to amend the vital tax-shelter incentive which went down the drain in last month’s budget. For the most part, industry representatives appear to feel the baby went out with the bath water, but some are more critical of the move.

Says Tom Berry of Montreal-based Allegro Films: ‘I think we can take the (Finance) Minister (Paul Martin) at his word when he says there was no intention to disrupt the industry. I think that it was accidental. They’re prepared to work quickly with us to minimize the disruption to the industry.’

Robin Spry of Telescene in Montreal has a different take: ‘I don’t think the federal government should abandon the film and television industries, which is what this (situation) implies.’

Diane Lafleur, special assistant in policy for the Ministry of Revenue, says: ‘I think a line has to be drawn here between a loophole being addressed and an incentive being taken away.’

Earlier this month, Sandra Macdonald, president of the Canadian Film and Television Production Association, and Suzanne d’Amour, president of the Association des producteurs de films et de television du Quebec, along with two members of the tax committee (Berry and Jeff Raymond), met with Martin.

‘That meeting went very well and the minister told us there was no intention to disrupt the industry, there was only an intention to correct abuses,’ says Berry. ‘He suggested that, if we had ideas as associations to improve the implementation of the government policies, we should propose them to his people in the Department of Finance.’

The next step was to meet with the Finance people. The gathering of industry representatives was identical for this second session, except for the replacement of Raymond with Steve Ord of Toronto-based Atlantis Communications.

‘Prior to the meeting, the associations had done their best to canvass their members and we were very well received at Finance,’ says Berry. ‘They agreed that one way or another we should have more precise guidelines concerning grandfathering, and that the goal is for Finance to set these guidelines prior to Easter weekend.’

When asked about the progress of the lobbying, Lafleur responded: ‘I wouldn’t even call it lobbying. What’s going on is a defining of the grandfathering.’ How far can grandfathering be stretched? Lafleur says: ‘In the past it has been quite strict.’

Spry believes ‘the grandfathering has got to cover all aspects of the project and, even on projects that are grandfathered, there is a de-grandfathered clause, which can mean that about 3% to 4% of the revenue is not covered. When you’re talking about $25 million projects, that’s enough to bring a production house down. For projects, all aspects of the regulation should be grandfathered.’ Spry also suggests implementation of ‘a federal version of the Quebec tax-credit system.’

If the shelter is not amended, estimates of what it could cost the industry have run as high as a billion dollars. Berry assesses that as too high. ‘What you can certainly say is that many hundreds of millions of dollars of production are at risk of being disrupted,’ says Berry. ‘You have to put this in perspective and the first thing about disruption is that we are largely a broadcast industry and there is no delay option. The production (slated) for that hour of program is simply lost.’

Berry assesses the independent production industry as ‘well in excess of $1.2 billion of economic activity per year. It is an employment-intensive industry and the response we have received (from the government) is partly in recognition of the economic impact of what our industry creates.’