National funding sources

Tackling the financing and investment aspect of the Canadian film and television production and distribution industries is a daunting prospect.

While a made-for-producers dream version of Spielberg’s dinosaur comeback flick We’re Back would feature the return of the fabulous tax incentives to investors, in reality, the extinction of sheltering opportunities and the dwindling coffers at the federal and provincial funding agencies have forced production companies to adopt new survival tactics (the going public phenomenon) and adapt to the international market’s presold/ coproduced coalition approach to production.

In addition to news in this issue of changes at Telefilm Canada and the tax-shelter grandfathering clauses, this special report includes a guide to sources of production financing available to the film and television industry, public and private funding, both provincial and national.

In response to the importance of exploring new markets, the national list includes several federal government programs that assist Canadians’ export efforts. And as the commercial viability of a project is increasingly top-of-mind to most potential investment sources, we’ve also included a sampling of the type of support local arts councils offer to those with more esthetically-driven endeavors – see the Ontario examples in the provincial list.

The good news is, there are several new national broadcast production funds gearing up… read on.

ollowing is the 1994 edition of Playback’s annual digest of national funding and investment sources available for Canadian independent film and television program development, production and/or distribution.

Some new funds make their debut this year, and some ongoing federal government programs offering cultural business management and promotion assistance have been added to the list.

note: Certified-Canadian means projects must be certifiably Canadian under the criteria set out by the Canadian Audio-Visual Certification Office or the crtc.

Alliance Equicap

alliance Equicap, a subsidiary of Alliance Communications, raises money for investment in productions which qualify for tax incentives (certified as Canadian).

Producers can choose to use the full range of services Alliance can provide or utilize Equicap as a stand-alone operation. Equicap should be the last component of a producer’s financing plan – on average, a tax-shelter financing scenario amounts to about 8% of the total production budget. Alliance Equicap has an office in Vancouver, in addition to Toronto, and as always is looking for projects.

Contact: Jeff Rayman, president of Alliance Equicap, at (416) 967-1141

Alpha Capital Inc.

it’s business as usual for Quebec-based Alpha Capital, one of those fortunate enough to have offerings of memorandum in circulation before the budget.

This independent brokerage house puts together tax-shelter financing for tv and film producers (the typical 8% to 10% of the production budget) as well as raising venture capital financing for companies.

In business since 1986, Alpha deals with a large pool of established producers in Canada and can help connect producers with Canadian broadcasters.

Contact: Louis Lu at (514) 397-9288

The Canada Council

the Canada Council has several programs offering financial assistance which can be accessed by filmmakers. The major applicable programs for professional filmmakers are Film Production Grants, the Grants to Artists Program and the Explorations Program for first-time filmmakers.

Contact: 1-800-263-5588

Canadian Independent Film and Video Fund

the Canadian Independent Film and Video Fund is aimed at the non-theatrical market and is interested in projects geared to the educational area, business, health and special-interest groups. It has both a regional and linguistic quota system.

The fund, a private-sector, non-profit organization based in Ottawa, normally can be involved in the financing of development to a maximum of $10,000, and production to a maximum of $50,000. Currently running short of money, its fate hinges on which specialty channel applicants are licensed by the crtc. Six specialty service hopefuls signed fund-matching deals with the cifvf.

Contact: Robin Jackson, cifvf executive director, at (613) 729-1900

Canadian Television Series Development Foundation

the Canadian Television Series Development Foundation, established by Maclean Hunter, assists independent production of Canadian tv drama series for private-sector broadcasters.

Since ctsdf is autonomous of Maclean Hunter, set up with a capital endowment of $33 million, it’s business as usual – its operation is unaffected by the sale (pending crtc approval) of Maclean Hunter to Rogers Communications.

Maclean Hunter Television Fund: This fund has approximately $3 million a year to invest in television production. The fund provides equity investment to independent production companies for the production of dramatic television series and pilots. The majority of production financing must be confirmed before applying and projects must have a broadcast licence from a Canadian private broadcaster. Producers must be independent Canadian producers and the production must be at least 51% Canadian.

Cogeco Program Development Fund: A complementary fund to the Maclean Hunter Television Fund (which administers it), the Cogeco fund provides development financing in the form of loans for Canadian dramatic television series, for treatments, first draft scripts or final draft scripts, in English or French. Independent Canadian producers with a Canadian screenwriter and a letter of intent from a Canadian broadcaster are eligible.

Contact: In Toronto, Andra Sheffer (416) 596-5878; in Montreal, Claire Dion (514) 843-2554

CIDA’s Film and Video Co-production Program

administered by the film and video services branch of the Canadian International Development Agency, this program encourages productions relating to international development issues and Canada’s role therein. Development funding to a ceiling of $14,000 is available, and the cap on coproduction funding is $150,000, up to a ceiling of 49% per project. Proposals are accepted twice a year, March 31 and Sept. 30.

Contact: The film/video officer (819) 953-6060

Cultural Industries Development Fund

this $33 million five-year fund was established in April 1991 to provide financing and management consulting services in order to strengthen the financial base of Canadian-owned (at least 75%) businesses in the cultural sector. The Cultural Industries Development Fund, administered by the Federal Business Development Bank, provides equity loans ranging from $20,000 to $250,000.

The cidf will pay half – up to $10,000 per year – of the costs of professional management consultation. Companies must have been in business for at least two years to apply.

Contact: 1-800-361-2126 or a local fbdb branch

Department of External Affairs and International Trade

international Cultural Relations runs a program to promote the marketing and export of Canadian film and video products. Based on the availability of funds, the department can cover a portion of international travel expenses, or costs related to promotion.

Financial assistance is available for projects which:

– encourage foreign buyers to participate in industry events in Canada;

– support Canadian film industry professionals, directors, producers and talent in cultural events abroad;

– enhance marketing activities for the Canadian film/tv industry at international trade fairs;

– support the organization of conferences in Canada on the topic of export market development for cultural products;

– develop export market opportunities for Canadian film and tv producers in countries of priority to Canada (such as the November ’93 trade mission to Southeast Asia attended by Niv Fichman of Toronto’s Rhombus Media and Ronald Weinberg and Louis Fournier of Cinar Films, Montreal).

Grant requests should be made three months prior to the event and should include detailed descriptions of the project, relevant documentation and a promotional plan.

Contact: Sheila de la Varende, head of Film & Video, International Cultural Relations Division, at (613) 996-3197

DGC Entertainment Ventures Corporation

the Directors Guild of Canada Entertainment Ventures Corporation operates as a mutual fund and supplies tax-shelter incentives to investors whose money will be injected into a lucrative portfolio consisting of Canadian film and television production and technology holdings. If you wish your company to be considered by the committee as a potential investment vehicle, call to find out what information you should include in a prospectus for review by the investment committee.

Contact: Pamela Brand (416) 972-0098

Export Development Corporation

through various programs, this financial institution helps with financing and insurance packages for Canadian companies exporting product. The Economic Development Corporation has regional offices and the head office is in Ottawa.

Contact: (613) 598-2500.

The Foundation to Underwrite New Drama for Pay Television (FUND)

fund supports feature film script/concept development with an annual budget of $1 million sponsored by The Movie Network. It also makes equity investments in feature film production with funds endowed by Viewer’s Choice Canada. Those funds total $3 million over three years.

Applicants must be Canadian citizens or landed immigrants, or in the case of a corporation, have at least 51% Canadian ownership. Projects with high-octane Canadian content and production talent are given priority.

Those seeking money to develop a theatrical script should give the script development program a call. The next deadline is May 13.

Contact: Kathy Shelep at (416) 956-5431

Global Canadian Program Investment Fund:

the Global Canadian Program Investment Fund, set up in accordance with provisions of Global Television’s 1992 four-year licence renewal, made its first investment in the summer of 1992. The fund was set up to enable Global to increase the proportion of Canadian drama it airs.

gcpif will make available $9.055 million in each of the four years of Global’s licence term. Separate from Global’s $400,000 development fund, gcpif provides loans, equity investment (though not necessarily copyright acquisition) and interim financing to producers whose projects have all other production financing in place. In order to access the fund, Global must decide that the project meets its on-air needs.

Contact: Fund executive director Loren Mawhinney at Global (416) 446-5475.

Gordon Capital Corporation

this Toronto-based company participates in taking companies public. Its money-raising activities (accessing capital markets) are limited to larger film/tv production entities with annual production budgets in excess of $40 million.

Contact: Robert Fraser at (416) 868-5386

Jaffa Road Management

toronto-based Jaffa Road raises money for investment in productions which qualify for tax incentives (certified as Canadian). Tax-shelter financing for tv and film producers typically amounts to 8% to 10% of the production budget, and should be the last component of a producer’s financing plan. Jaffa Road works in association with Montreal-based partner Salvatori and Associates.

Contact: In Toronto, Frank Jacobs at (416) 968-1222; in Montreal, Eris Salvatori at (514) 397-1679

Marleau Lemire

this Montreal-based investment company participates in taking companies public (it was the underwriter for Cinar and Malofilm), as well as structuring tax-shelter financing for the entertainment industry through offices across Canada and internationally (Zurich).

Contact: Montreal (514) 877-3800, Toronto (416) 595-5500, Vancouver (604) 668-7900

The Movie Network

as well as sponsoring fund, The Movie Network financially participates in and supports Canadian films through prelicensing fees and equity investment, in addition to acquisition of licence fees. tmn, launched by parent company Astral Communications in 1983, has spent over $110 million on Canadian programming in the past 10 years.

Contact: Alison Clayton, tmn vice-president of programming, or Jamie Wynne, manager, original productions, tmn at (416) 956-2010

National Film Board

PAFPS Program: The National Film Board’s Program to Assist Filmmakers in the Private Sector helps developing filmmakers complete their first films as independents. It offers access to lab services in Montreal and renders whatever production assistance is available at the other regional centers, ranging from a desk and a phone to production facilities. This program assists in printing, processing and sound transfers, and limited post-production assistance (editing space, opticals, titles and release print).

NFB Independent Co-production Program: The nfb manages this program for coproduction with independent producers. The English Program Branch has $2,640,000 available through icp, which is divided up into $440,000 allotments for each of the nfb’s six production centers across the country. The French Program Branch has $1,720,000 available for Quebec productions, with $172,000 earmarked for the Moncton and Toronto studios.

Eligible projects must be certifiably Canadian and initiated from the private sector. The board cannot own more than 49% equity in a production, or less than 20%. As part of its equity, the nfb requires non-theatrical distribution rights to a production. In addition to cash, the nfb can provide some internal lab services.

Projects which the board would consider coproducing must be non-racist, non-sexist and non-violent. Published guidelines on the icp are available through nfb regional offices.

English Program contacts:

Montreal: (514) 283-9455

Ontario: (416) 973-6856

Vancouver: (604) 666-3838

North West: (403) 495-3013

Prairie: (204) 983-3160

Atlantic (902) 426-6000

French Program contacts:

Montreal (514) 496-1171

Toronto (416) 973-2226

Moncton (506) 851-6105

OWL Communications

owl Communications (aka the OWL Centre for Children’s Film and Television) provides development funding for joint ventures with young producers to produce quality children’s, youth or family projects through two funds: the YTV OWL Project Development Fund (for youth programs suitable for airing on ytv), and the new Family Channel/OWL Program Development Fund (for family programs suitable for airing on Family Channel).

Contact: Wayne Arron at (416) 863-1661

Paragon Financial Investments

paragon Financial Investments, a subsidiary of Paragon Entertainment, puts together tax-shelter financing for producers with Canadian-certified projects. pfi works with producers from the inception of their search for financing. Producers can anticipate an investment that would cover 8% to 10% of the production budget, depending on the size of the production.

Contact: Michael Speyer, pfi vice-president, at (416) 977-2929

The Production Fund

slated to start up Jan. 1, 1995, the hoped-for $300 million (raised through cable companies’ levies to subscribers) over five years will be predominantly (80%) allocated to drama and children’s programming. The aim is to help producers through increased licence fees and help broadcasters with the cost of airing Cancon in primetime.

The fund’s board of directors will be comprised of three reps each from the Canadian Association of Broadcasters, the Canadian Cable Television Association, and the Canadian Film and Television Production Association/Association des producteurs de films et de television du Quebec, and one rep apiece from the cbc, the Association for Tele-education of Canada and specialty services.

(For more information on conditions of the fund, see Playback, Feb. 28, 1994. p. 2, ‘Ground rules set for $300M fund’.)

Program for Export Market Development

the Program for Export Market Development is a federal (repayable) program that supports export marketing and might help with marketing-related costs. For eligibility guidelines, the pemd handbook can be obtained through the Info-Export information services of the Department of External Affairs and International Trade, which also has market studies and over 1,200 titles available free of charge to qualified Canadian exporters.

Contact: 1-800-267-8376

Radio-Quebec/ TVOntario

the new program development fund ($500,000 over three years) from educational broadcasters Radio-Quebec and tvontario, operational as of this May, encompasses the wide range of programming the networks air. Guidelines are currently being finalized, and contacts are the respective heads of programming at the nets.

Radio-Quebec: (514) 521-2424; tvontario (416) 484-2600

Rogers Telefund

rogers Telefund is a $13 million revolving fund available for interim financing to Canadian producers with fully financed tv projects which have a Canadian broadcaster attached. There is no minimum or maximum on the amount that can be loaned. Telefund loans have no administration fee and boast favorable interest rates.

Contact: executive director Robin Mirsky at (416) 864-2325

Royal Bank of Canada

the Royal Bank’s Toronto-based film finance group provides interim financing for film and tv productions (with borrowing requirements in excess of $1 million).

Minimum requirements for project consideration are: a fully financed production budget or bankable licensees, a shooting budget and deferrable cost analysis, cash-flow projections, a completion guarantee and insurance.

Contact: Robert Morrice at (416) 974-5188

The Shaw Children’s Programming Initiative

canada’s third largest multi-system cable tv operator, Shaw Communications, will invest up to $2 million a year for the next five years to support quality children’s programming licensed by private and specialty channels in partnership with independent Canadian producers.

Although the official launch of the new fund will be at the Banff Television Festival this June, executive administrator Gerri Cook (formerly Saskfilm executive director) plans to be operational by April, with guidelines available.

The $10 million fund is available as top-up equity loans for the last 10% to 15% of a total budget, and initially will be for tv projects geared to the under-13 set. Drama, documentaries, animation, multimedia, variety and special projects are all eligible.

Contact: Gerri Cook, executive administrator, at (403) 468-1230

Telefilm Canada

Canadian Broadcast Program Development Fund ($65 million)

this 10-year-old fund was established to help the independent production community develop and produce tv programming. The fund may finance up to one-third of a program – up to 49% in certain instances – through equity financing, secured loans or non-interest-bearing advances.

Telefilm requires projects be certifiably Canadian and satisfy specific broadcast licence fee requirements. Projects should be innovative in their subject matter, have superior production values and strong Canadian elements. The equity contribution ceiling on hour-long series is $4 million, and $2.4 million for half-hour series.

Feature Film Fund ($24.5 million)

under this fund, created in 1986 to stimulate investment in independently produced Canadian features for theatrical release, Telefilm may finance up to 40% of a production budget, to a ceiling of $1.5 million. For certain regional, or distinctly Canadian projects, Telefilm’s participation may increase to 49%, and further advance up to 15% of production costs.

Telefilm looks for Canadian certification, a strong creative package, the involvement and commitment of a Canadian feature film distributor, a marketing strategy and a business package that has a realistic budget.

In certain instances, such as financially challenged new directors, Telefilm will finance up to 49% of production costs on low-budget films with a distributor – providing other requirements are satisfied – on a few projects per year.

Scriptwriting Assistance Program

a maximum of $10,000 is available to assist experienced screenwriters develop a detailed theatrical film treatment.

Concept Development for TV Series

for initial development financing (up to $10,000), experienced producers are exempt from broadcaster commitment requirements.

Cross-Over Writers Program

the program gives experienced writers working in literary fields other than scriptwriting an opportunity to work on a feature film script. Playwrights and writers from the West and Atlantic provinces are eligible to apply for first draft development funds of $10,000.

Special Production Fund ($9 million)

contributing to the corporate development of Canadian production companies, this fund expands Telefilm’s range of involvement in film/tv projects. No less than 65% of Telefilm’s involvement must be guaranteed by the production company and a third party.

Interim Financing Fund ($8 million)

a revolving loan fund, Telefilm uses the interim fund like a commercial banking operation. Applications should be for amounts between $50,000 and $1 million.

Feature Film Distribution Fund ($13 million)

this fund is used to market or to acquire rights to Canadian films or to market Canadian rights to foreign films. Applicants to the Feature Film Distribution Fund must have been in business as a feature film distributor for at least two years and have distributed 12 or more films, of which at least two were Canadian.

Versioning Assistance Fund

($5.8 million)

canadian independent distributors and foreign sales companies (and in some cases Canadian producers) may be advanced up to 100% of the dubbing or subtitling cost of Canadian or foreign productions into English or French, a portion of which Telefilm expects to recoup.

Loan Guarantee Program

telefilm will guarantee up to $1 million of an individual borrower’s financial obligation for a maximum term of 18 months. Total outstanding loan guarantees will not exceed $25 million at any time. Telefilm expects the loan guarantee program to be effective early in 1995.

For more information please refer to the Action Plan for the Administration of Telefilm Canada’s Funds 1994/95.

Head office: Montreal (514) 283-6363/Fax (514) 283-8212

Toronto: (416) 973-6436/Fax (416) 973-8606

Halifax: (902) 426-8425/Fax (902) 426-4445

Vancouver: (604) 666-1566/Fax (604) 666-7754