Montreal: If the industry in Canada can build an effective consensus on the future of Canadian feature films, there may be hope sooner rather than later for a new series of public policy initiatives aimed at revitalizing the largely underachieving and underfunded sector.

A need for a consensus in the highly divided feature industry in Canada is being made even more clear with the release of a dense, wide-ranging 44-page Telefilm Canada-commissioned Issues Paper prepared by industry consultant Michel Houle.

The Report on the Production and Distribution of Canadian Feature Films examines structural and funding issues related to features, offering a survey of views on the quality of productions, their marketing and the relations between producers and distributors. A final section looks at producer opposition to current Feature Film Distribution Fund policy and suggests possible corrective measures.

The Houle report points to a widely held view in the industry that the feature film sector is a victim of a ‘truncated and incomplete’ public policy framework in marked contrast to the largely legislated framework used to create the country’s successful television sector.

Unlike broadcasting, the report says there is no legislation ensuring Canadian ownership in the production, distribution or exhibition of feature films, no investment requirement for either distributors or exhibitors, and virtually no regulated obligations to features on the part of Canadian broadcasters.

According to Directors Guild of Canada president Allan King, the Houle report points to ‘a remarkable level of agreement.’

‘Of course there are caveats,’ he says. ‘Each sector fears its particular ox will be gored. But I cannot recall a time when the chance of a consensus looked better.’

A list of grievances

The Houle report newly raises many of the central preoccupations in the Canadian feature film industry: the lack of genuinely private investment, especially on the French side, the steady decline in unit budgets for features financed through Telefilm’s Feature Film Fund, more evidence of a direct relationship between production budgets and success at the box office, the non-existence of feature-related licensing conditions for Canadian broadcasters, the diminishing participation in feature financing by both the cbc and Radio-Canada, and ‘weak’ quotas and ‘sagging’ acquisition prices on the part of pay-per-view and video-on-demand licensees.

The problem with the broadcasters is characterized by a comment in the report which says, ‘cbc in particularÉfor all intents and purposes, failed this year in its responsibility to trigger almost the full $15 million in the ctcpf set aside for English-language features.’

Telefilm’s Guy De Repentigny, director of policy, planning and research, says the claim is outdated, or not correct, and ‘the entire $15 million has been spent this year.’

FFDF role is controversial

A letter filed with Houle from 18 unnamed feature film producers keys on the role of the ffdf.

The report says in the past seven years of ffdf’s existence, three distributors – Alliance, cfp and Malofilm – have each received $2 million and more annually for a total of $51.3 million The three operations had close to 60% of ffdf funding in 1995/96 while three other distributors – Astral now joined with Allegro to form Motion International, Norstar and Cineplex – received more than $1 million annually each for a seven-year total of $27.2 million, or an average 25% of Telefilm’s funding. Together the six companies received $77.3 million or close to three-quarters of the ffdf.

The study says there is clear evidence significant distribution capability in Canada is restricted to a closed club, pointing to the total inability of some other 20 Canadian distributors, many of whom are no longer in operation, to join the ranks of the major members of the Canadian Association of Film Distributors and Exporters.

In their submission, the 18 production companies outside the cafde group said ‘a first-come, first-served’ basis for a potential new feature film fund from ctcpf would further unbalance the system because non-integrated producers are obliged to seek a prior commitment from Telefilm-recognized distributors in order to access ctcpf funding.

The producers say they often find themselves in competition with cafde member production affiliates, while Houle’s report adds:

‘These distributors have all the power to take advantage of this funding for their own projects before sending a letter of commitment for the films they acquire from non-related production companies.’

cafde replies that Canada is a small market and concentration in the form of six larger operations is the price of maintaining a strong, competitive distribution sector.

U.S. dominates Canadian feature market

Dan Johnson, president of cafde, says a little perspective is necessary and points to the fact that seven major u.s. distributors (Columbia TriStar, Disney, mgm/ua, Paramount, Twentieth Century Fox, Warner Bros. and Universal Pictures) control 83% of the Canadian theatrical market.

However, the study goes on to point to what appears to be a rapid concentration in the use of ffdf funds for features produced by the integrated Canadian distributor-producers or their affiliates.

It says in the past two years (1995 to 1997), these Canadian ‘majors’ produced 25 qualifying films compared to eight in the previous two-year period – a threefold increase. These 25 films make up 30% of all Canadian feature films acquired through the assistance of the ffdf, compared to only 9% for the period 1993 to 1995.

‘This could partly explain the growing concerns of non-integrated producers and distributors,’ concludes the report.

Other objections to the ffdf include its exceptional omission of cultural policy objectives, in sharp contrast to the Broadcast Fund, the fff, ctcpf, etc.

(Cases in point: more than 80% of all ffdf advances went to English-track movies, the lack of a formal regional mechanism with few distributors of any weight existing outside of Montreal and Toronto, and the lack of a third-party trigger, which effectively means qualified distributors can self-trigger funding for their own acquisition and marketing activities.)

The study says these and other issues suggest an overall overview of ffdf rules are in order.

A chance for solutions

Johnson says ‘the Houle paper is constructive in so far as it identifies a problem in that our movies do not do as well as we would like,’ and that the study can help accelerate a process where ‘the different stakeholders sit down and identify problems and work out solutions.’

Johnson says the urge to point fingers must be resisted.

‘There is a danger that certain comments (in the Houle paper) can be taken in isolation and used to pit one group in the industry against another. That is very dangerous.’

Says King: ‘Houle’s Issue Paper verifies what many have said from day one: most Canadian feature films are cripplingly underbudgeted, undersold and therefore unattended – in theaters, video rentals or on television. They are programmed for failure.’

King says Canadian features require an industrial solution, not adjustments to Telefilm programs, and that distributors need the same support as broadcasters.

‘Fundamentally more must be spent in making Canadian features if the best talent in feature work is to stay in Canada,’ adds King.

Per Johnson, cafde plans to meet, likely this month, with both the apftq and the cftpa to discuss the report and other feature film-related issues.

De Repentigny makes the point that the Houle report is only a ‘discussion paper’ and not a Telefilm or a Canadian Heritage position. Houle is scheduled to conduct more interviews in the weeks ahead and submit a final report.

He adds that the Houle paper is only one element of ‘a more global perspective’ in a package that will include internal Telefilm reviews, documents from Heritage and Industry Canada, and other outside sources such as cultural analyst Paul Audley. De Repentigny says there is no time frame associated with the review.

*1996/97 feature numbers

Montreal: Eight distributors received $14 million from the Feature Film Distribution Fund’s principal fund in 1996/97, according to figures from Telefilm’s annual report which is slated to be released on Oct. 30 along with the agency’s three-year business plan.

The allocations are: Allegro Distribution ($1.3 million), Alliance Releasing ($2.6 million), Astral Films $700,000), Cineplex Odeon Films ($900,000), CFP Distribution ($2.7 million), Film Tonic ($700,000), Malofilm Distribution ($2.3 million) and Norstar ($2.6 million). Three other companies, Cinema Esperanca, Compagnie France Film and TSC Film Distribution, received a total of $369,000 from the Auxiliary Fund.

In 1996/97 production funding terms, eight French-track features with combined budgets of $22.6 million received $6.8 million from Telefilm’s Feature Film Fund, while 16 English-track movies with combined budgets of $66.7 million, a major increase in volume terms, received $12.5 million ($8.1 million in the previous year) from the fff. Fourteen other feature-length productions, five in French and nine in English, also received national funding support either through one or both of the ctcpf feature film envelopes.