Telefilm

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Montreal: Through significant hikes to its high-guarantee envelopes, Telefilm Canada has increased its production spending by $6 million over last year.

In its 1994/95 Action Plan, released April 6, Telefilm announced its Special Production Fund envelope will double to $9 million from last year’s $4.75 million.

Faced with a budget freeze and inflationary erosion, plus new cuts of $6 million in each of the next two years, executive director Pierre DesRoches says Telefilm plans to increase revenues to meet the shortfall.

Overall budget

The agency’s overall budget for 1994/95 is a projected $150.8 million, up more than $1 million from 1993/94. The breakdown includes a parliamentary appropriation of $122.3 million, anticipated revenues of $20 million and an $8.5 million carryover from 1993/94.

The gamble in hiking revenues, says DesRoches, is that the federal treasury will grab the returns, but based on his long experience in public service, and in budget cutting, he says he’s ‘ready to take the risk.’

At least 65% of Telefilm investment from the Special Production Fund is guaranteed.

Funds steady

The Broadcast Fund and Feature Film Fund remain at 1993/94 levels, $65 million and $24.5 million respectively. The Revenue Sharing envelope increases $500,000 to $6 million, while the Distribution Fund remains at $13 million.

Most of the cuts occur in Regular Fund expenditures, including marketing and festivals, and in administration allocations, down almost $700,000 this year. The Versioning Fund has also been reduced, from $6 million to $5.8 million.

1994/95 Action Plan policy change highlights include:

– A decision that a production company which owns more than 10% of a broadcast holding will be ineligible on a project destined to the affiliated broadcaster. Robert Armstrong, Telefilm director policy, planning and research, says the policy is a safeguard against ‘self-dealing’ and its specific application will depend on the outcome of the crtc’s specialty channel licencing decisions.

– The introduction of a new distribution expense allowance which permits producers to retain a 10% commission of gross broadcast sales after the initial broadcast cycle. This is in addition to the deduction of 5% of net production revenues, already allowed.

– A new ruling which allows a producer to receive a commission of up to 10% of the value of a sponsorship, including all expenses, based on several conditions including that the sponsorship is an integral part of the financial structure, and is non-recoupable.

– Subject to various conditions, Telefilm says it will consider interest payments made by producers on interim financing loans as eligible expenses; in other words, the funding agency will pay the interest charges.

– Telefilm has announced a review of its treatment of tax-shelter investments.

According to Armstrong, the review is prompted by the small portion of these funds which actually find their way into production, and because the analysis is time-consuming and complicated for Telefilm staff.

Telefilm says its $25 million Loan Guarantee Program should be on line by early 1995. It says estimates of the value of inactive sales contracts – potential collateral security on bank loans – is between $70 million and $117 million.

Theatrical release

Commenting on the rapidly evolving outlook for Canadian feature films, Peter Katadotis, Telefilm director of production, says there’s wide agreement across the country that special efforts must be undertaken to develop and produce films specifically targeted for theatrical release.

‘In the past, (Canadian) films have been too production driven, and not enough emphasis has been placed on marketing and distribution. Mostly what we’ve been doing is tv films,’ says Katadotis.

He says the success of foreign and u.s. independent films like My Left Foot and The Piano is provoking a keener awareness of the theatrical market among Canadian writers and filmmakers.

And because Canadian filmmakers cannot generally compete with American studio movies, Katadotis says Canadian films should be founded on a ‘terrific idea,’ if they are to be worthy of a full theatrical launch.

As for young and first-time directors, Katadotis says they should consider projects appropriately budgeted at $1 million or less.

‘Open’

‘We are also open to higher budget proposals but we expect these to be more commercial packages.’ he says. ‘Why shouldn’t there be a presale in the u.s. and then come and see us?’

He says Telefilm will encourage producers to keep working with their best directors, because ‘jumping around’ undermines craft continuity.

Producers shouldn’t expect a retreat on Telefilm’s growing insistence on market testing, he adds.

In the past year, at least four Canadian films were sent back to the editing suite after a test experience.

Katadotis says he would like to see 20 or more English-language features produced annually in Canada, but the level of production is likely to hold at 11.

Support growth

At the April 6 press conference, DesRoches said the agency will continue to support industrial growth, but a clear ‘cultural mandate’ better justifies Telefilm’s existence. He said it also acts as a safeguard against growing program internationalization and homogenization.

Despite real gains over the years, DesRoches said the Canadian industry needs much higher levels of production.

‘Production is not high enough, especially in feature films,’ he said. ‘We cannot create an impact with only two per cent of (total Canadian) screen time.’