In this special report, Playback steps back to look at both the Montreal World Film Festival and the issues surrounding production in Quebec. Included are interviews with producers, distributors, funding agency managers and service providers on a range of topics including the benefits and trends of production in Quebec, the simmering conflict between domestic and location interests, developments in deal-making, acquisitions and coproductions with European partners, and the lay of the land at WFF. Stories by Leo Rice-Barker.

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Coproduction activity in Canada in ’98 is holding at the record levels set in ’97 when total coproduction budgets were very close to $500 million (65 projects), double the figure in ’96, says Johanne St-Arnaud, senior analyst, coproduction, Telefilm Canada.

Between January and July, the agency certified 44 film and tv projects with cumulative budgets of just over $264 million. The Canadian share is $168 million or 64% (see chart).

‘We have a lot of majority projects from Canada this year, probably because of the tax credits and all the incentives in Canada,’ says St-Arnaud. ‘In fact, it’s a problem with the u.k. They need to have majority projects, too, but they can’t finance it.’

While France forever remains Canada’s preferred coproduction partner, St-Arnaud says the number of projects with the u.k. continue to increase. ‘Last year we did 15 projects with the u.k. and this year [after seven months] we already have 12,’ she says.

And while features dominated with the u.k. last year, this year the growth is in tv. ‘We have four features and eight television projects [with the u.k.] so far this year,’ she says

The latest tax-shelter type of wrinkle expected to help boost u.k. majority coproductions may be a complex financing scheme known as the ‘sale and lease-back option.’

And with mipcom on the horizon, coproductions aren’t likely to fall off for the balance of the year, says St-Arnaud. ‘Our big months are summer and fall.’

As for France, St-Arnaud says 22 projects have been certified to date in ’98, 50% of them animation.