Despite the steady hand behind Telefilm Canada’s 1994/85 Action Plan – which allowed the distribution and production funds to go untouched – there are some changes that have the industry talking. Especially feature filmmakers and distributors.

Telefilm has announced a new formula to determine annual lines of credit for distribution companies dealing in Canadian theatrical feature films. The Distribution Fund of $13 million is broken down into two parts: $12 million is for lines of credit and $1 million is for companies that do not deal in lines of credit.

The problem in the past, according to Telefilm director of production Peter Katadotis, was that ‘the system used to be based on tonnage credit line – on the number of films you had to trigger. The distribution companies would collect minimum guarantees on as many films as possible to keep their margins up, but there was no real incentive to spend money on these films.’

The new formula, which will be implemented over a three-year period, makes distributors accountable for how their Canadian films do at the box office.

Shane Kinnear of Telefilm’s distribution division explains the reasoning behind the new plan: ‘By attaching greater value to the box office, we want distributors to play a bigger role in their films. We will encourage as much input as is appropriate.’

Details are not yet available, but Kinnear says ‘the formula has been determined with the National Association of Canadian Film and Video Distributors and there will be no surprises.’

Paul Jay, an independent filmmaker and cochair of the Canadian Independent Film Caucus, says the plan is long overdue. ‘It’s correct. There needs to be some discipline of performance for distributors. It’s an enormous problem that in our financing there is little incentive for accountability at the box office.’

Sandra Macdonald, president of the Canadian Film and Television Production Association, agrees. ‘There needs to be more marketing input, and one of the sources is the distributors.’

When asked who the adjustment is aimed at – big or small companies – Kinnear says, ‘It’s not aimed at any particular size.’

While the performance incentive is being put into place, distributors remain free of a minimum marketing investment. ‘Basically, the belief is that once the film is made, the marketing costs can then be assessed,’ says Kinnear. ‘Generally there is a requirement for a three-to-five market release and the cost has been a minimum of $100,000 to $150,000 total. Telefilm’s distribution division is interested in getting a realistic projection for what the marketing will cost. As with anything else, we’re not suggesting they have to fix the figure prior to production.’

Ron McLuskey of Toronto-based distributor Libra Films believes the performance of a film has more to do with the film itself than the marketing behind it. ‘I think distributors want these films to work as much as anyone and I’m not sure that spending more money on marketing is the answer. The film has to be appealing. The issue is, is it because the distributors are not marketing the films properly or is it that the films are not marketable?

McLuskey questions how Telefilm will assess performance. ‘When they refer to performance, is this going to mean some sort of jury?’ he asks. He also wonders whether the funding agency ‘is in a position to judge if it’s a good performance or not.’

The question of whether Telefilm has the credentials to make these and other critical assessments of a production has many in the film industry concerned

Jay, speaking as a filmmaker and not as a representative of the caucus, says Telefilm must decide whether it is a banker or a producer. ‘They should come out and claim to be what they are – a government-run studio, or (alternatively) we should create a studio. They have the power and influence of a studio without the accountability. Let’s not have life-long government bureaucrats. Let’s have people who have actually made some successful films making those decisions.’

Responds Katadotis: ‘I don’t think we are trying to play a producer’s role. We’ve had meetings with both producers and distributors and they didn’t think we were too meddlesome. We want to make sure that our rules create more incentives for producers and distributors.’

Pat Ferns of Primedia says he is ‘concerned that Telefilm wants to intervene in a producer’s functions. When you get people in Montreal saying who is going to be the assistant editor on a production, that’s not the role of an agency.

‘Under (Telefilm head Pierre) Desroches it has been a well-administered entity with some good incentives, but the practices are becoming a concern to the production community.’

While Macdonald is not commenting on the studio issue, she says her association has one key area of concern. ‘There is one element in the Action Plan that the cftpa would like to clear up with Telefilm: it has to do with expense incurred between related parties and (Telefilm has) included it in the Action Plan. As before, we will be reiterating that we feel that the choice of who is hired should be a producer’s decision.’

The debate revolves around a practice which allows an employee’s services to be assessed into fair market value, which is then put into the budget. Telefilm may change the cost from fair market value to real cost which will encourage people to use freelancers rather than in-house people.

Despite the concern that Telefilm is close to crossing a crucial line, the Action Plan has been well-received overall.

‘I like the fact that they want unique Canadian stories,’ says Jay. ‘Much of what they’ve done is good, but the whole structure needs to be looked at.’