Montreal: Canada’s coproduction policy has hit an iceberg in Europe. Government officials in Germany, sparked by strong complaints from German industry, have asked Heritage Minister Sheila Copps for a prompt explanation of new Canadian Television Fund caps on coproduction investment in television.

In a letter to Copps (see Playback, Jan. 11), Wolfram Tichy, president, TiMe Medien Vertriebs GmBh, says the new ctf guidelines ‘clearly violate the spirit’ of the recently revised and expanded treaty with Germany. He says German authorities should not ratify the treaty and that TiMe Medien has effectively suspended all its official Canada/Germany coproductions, projects representing total budgets of $65 million.

An official with Telefilm Canada says she understands Copps’ office is preparing a response.

Tichy has raised the issue with the German Economic Ministry, setting off a round of damage-control meetings at the Canadian Embassy in Berlin.

Ina Hoelzmann, commercial officer, new media with the Canadian Embassy in Berlin, says, ‘We’ve discussed this issue a couple of times and we were advised by Ottawa that Ottawa and Telefilm in Montreal will take action. The issue is very important. . . and we know that the German side is requiring an official statement from us.’

Caps replace quota

Both eip equity and lfp licence fee top-up envelopes have been capped at $5 million for ’99/2000. Neither program was capped last year but there was a 65% Canadian content requirement in effect for the lfp portion. The quota was recently dropped.

The funding cap represents a step back, at least from the German perspective.

Tichy and others believed the quota issue had been resolved at meetings in Halifax last fall, only to discover as the quota was being withdrawn, new ctf caps were being drawn up.

In ’97/98, ctcpf provided close to $8 million in tv coproduction funding. Telefilm’s eip funding for tv was $2.7 million, which means the lfp envelope was in the order of $5.3 million. Although lfp was unable to report this year’s investment, it’s estimated to be considerably over $ 9 million as the investment remained uncapped and coproduction grew dramatically.

‘Our forecast for this fiscal (’99/2000) is that the eip won’t reach the $5-million cap based on projections from the operations division. We feel comfortable the eip won’t be oversubscribed,’ says Deborah Drisdell, Telefilm’s director, international affairs. The eip investment in coproduced tv programs for ’98/99 is projected at $1.9 million.

Essentially, for the upcoming ’99/2000 exercise, ctf’s board has cut lfp spending on coproduction, opting for a little more 10/10 domestic programming.

‘This is not great news,’ says Galafilm producer Arnie Gelbart. ‘We did get this extra [ctf] money and it’s torn by a lot of [sectorial demand], but somebody has to be aware there’s a coproduction element in all of this.’

Gelbart says even if the lfp reduction for ’99/2000 is as high as $3 million or $4 million, it may not be a sufficient reason to suspend $65 million in industrial production. Granted, there’s an element of provocation using caps to take over where quotas left off, but ‘the reaction may be a little over the top,’ he says.

The more important point is that coproduction is a big business built largely on credibility, accounting for $497 million in productions last year. Virtually all the big pubcos in Canada have engineered their growth through coproduction.

In the period from July ’97 to December ’98, Canada and Germany coproduced six films and tv programs with combined budgets of $82.3 million. The Canadian side included Nelvana, Cine-Groupe, a Lions Gate subsidiary, Cinar Corp. and Salter Street.