seeks

to stay

around

The Ontario Film Investment Program is up for renewal in April 1995 and looking for a permanent commitment from the Ontario Ministry of Culture, Tourism and Recreation. Priorities laid out in ofip’s renewal submission are for the cash rebate program to gain permanent status and a demand-based funding allocation.

The five-year-old program, administered by the Ontario Film Development Corporation, provides cash rebates to eligible investors for Ontario-based film and tv productions with high Canadian content.

ofip was originally created to offset both the 1988 implementation of a Quebec tax incentive and the federal reduction of the Capital Cost Allowance from 100% to 30%.

The ofip document underlines the program’s staggering success: 2,000 person years of employment are created annually by way of the program, and the provincial treasury gets an injection of $1.23 in tax money for every ofip dollar spent ($30.4 million in ofip rebates has returned $37.3 million to government via tax revenues).

The submission also indicates that from 1992 to 1994, $30.4 million was paid in rebates to ofip-supported productions valued at $253 million, thereby suggesting each ofip dollar on average supported $8.30 of domestic production in that period.

With a $14 million annual allocation, ofip runs on a two-year cycle. Producers’ opposition to the temporary status of the program (which they say complicates and delays investment planning) was addressed by the Advisory Committee on a Cultural Industries Sectoral Strategy report, released in August, which recommended that ofip become a permanent government initiative.

While no one is saying whether ofip will be given an indelible stamp of approval, Culture Tourism and Recreation policy analyst David Field says ‘the (ofip) evaluation provided a strong argument for supporting the program.’

William Mustos, head of ofip until Nov. 25, is confident his departure will not affect the renewal process, and says ofdc ceo Alex Raffe has made the ofip evaluation one of her corporate priorities this year.

If funding continues on the present flat-rate basis, ofip argues it would mean a drop of about 12% in available moneys, with depletion of start-up and roll-over funds factored into the picture. Based on a projected provincial production tally of $400 million in 1994, ofip expects demand for funds to increase by $11 million in 1995.

Justification

Justification for an increase in funding comes from many sources, says the evaluation, including the fact that the program’s total annual allocation of $14 million was in demand in the first six months of fiscal 1994/95. ofip argues that an increase of $11 million would mean a net gain of $91.3 million in total production, with $13.5 million in revenues going to the Ontario government and the creation of over 1,400 jobs.

Better solution

Demand-based funding would be a better solution, says the report, considering the increased demand on Ontario production from the new Canadian specialty channels (that go on air Jan. 1, 1995), new technologies and delivery systems, telcos as they enter the delivery business, and deregulation of markets in the Pacific Rim.

Eligibility for ofip should change from Ontario-owned to Canadian-owned companies, and interprovincial coproductions should be granted access to funds, says the report. But such changes, if implemented, would increase demand on ofip funds by about $4 million.

Foreign investment accounts for about one-third of all ofip-supported productions, and about 85% of that is non-equity. Recent treaty coproductions supported by ofip include Deepa Mehta’s Camilla, Nelvana’s tv series Rupert and Paragon Entertainment’s The Mighty Jungle. A survey of ofip clients indicates that if American coventures were made eligible for ofip, the result would be a boost of about $53 million in production in Ontario in 1995.

Also recommended is the elimination of corporate caps, which now sit at $2.75 million. Removal of the caps would boost Ontario production by $49 million, the report claims.

Opening up the arena to include educational, lifestyle and reality tv, among other genres is also advised by the document’s authors, saying it could add up to $15 million to Ontario’s 1995 production slate.

In 1993/94, close to one-third of all rebates were used toward development or financing of another production, and survey results indicate that 78% of total Ontario expenditures of ofip-supported projects would not have occurred without the program.

Until the future of ofip is determined, ofdc legal council Corrie Coe will act as interim executive co-ordinator of ofip until March 31.

It is hoped Swarbrick will announce his decision by January 1995. Field says he and his colleagues are ‘aware of the pressures.’ PC