Vancouver: In what many consider a surprise, b.c.’s film industry came away relatively unscathed in the provincial budget March 30 – a budget that cut other provincial industries to pay for substantial increases in health and education spending.

The 1999/2000 b.c. budget – assailed by critics for its spend-and-borrow strategies – will carry an $890-million deficit and contribute to the province’s $35-billion debt.

‘The government made a choice to invest in the new economy like high tech, film, small business and tourism,’ says Ian Waddell, b.c’s minister for small business, tourism and culture who oversees the film industry. ‘The old industries [such as forestry and mining] are screaming like hell.’

Through this budget, British Columbia Film’s operating grant will be maintained at $3.26 million, which has been the allotment from government for the previous two years. In addition, b.c.’s film financial reserves – created over the years through surpluses and returns on investment – will remain intact and will augment the basic grant, claims the minister.

‘We are committed to B.C. Film,’ says Waddell. ‘We believe in creating a sustainable [production] industry for b.c.’

Waddell has also pledged to return to b.c.’s Treasury Board to find additional funding to address the demand for domestic production financing. For the domestic industry, news that B.C. Film will continue will come as a huge relief.

‘It’s certainly good for the industry,’ says accountant Lui Petrollini, a partner at Vancouver’s Ellis Foster. ‘But a big concern continues to be the excess demand for funding.’

Says Sheila Galati of the b.c. branch of the cftpa: ‘Given the state of the economy in b.c., the ministers are to be commended for keeping the grant intact. It could have been much worse. And if Waddell goes back to the Treasury Board for more money, that’s huge because B.C. Film has long been on the block.’

Prior to this budget, the local production industry was put on alert that the embattled ndp government – suffering extremely low public esteem following a gaming scandal, a crisis in its new fast-ferry industry and damning review of its previous budgets – was about to cut some or all of B.C. Film.

The b.c. branch of the cftpa undertook an extensive lobby to ensure that the agency which triggers domestic production and supports project and skills development would sidestep the axe.

‘It’s a big `Phew!’ admits Rob Egan, ceo of B.C. Film. ‘We’re very encouraged that with all the funding pressures, [government has] maintained B.C. Film’s funding. It’s a real credit to the lobbying efforts of the domestic industry and a real indication of the maturation of the industry in general.’

Still, B.C. Film’s activities will be somewhat curtailed. Overall, B.C. Film will have fewer dollars to spend this year compared to last year’s $5.5-million outlay. According to Egan, the decrease in overall dollars will mean fewer productions receive financing, but it will still allow B.C. Film to triple its investment in skills development and increase funding for project development.

‘[Maintaining the budget] will allow us to target strategically production financing to higher quality projects with good prospects of recoupment,’ says Egan.

Recently, B.C. Film reported that requests for funding in 1999/2000 totaled 80 separate applications and $9.7 million, or more than three times the funding available.

Also untouched, following the budget, are the provincial tax credits for foreign and domestic production, which have been credited with pushing up production spending tallies in b.c. by 28% in 1998 to $808 million.

While the foreign production tax credit totals are not available, Film Incentive b.c. has generated $12.8 million in tax credits for b.c. producers in its first 11 months of operation ended Feb. 28.

And in an odd development, the budget for the marketing-oriented B.C. Film Commission was cut by $20,000 to $887,000.

Local media reports indicated a month ago that such a cut was coming for the commission, but Waddell maintains that it wasn’t something he was actually planning. ‘I would have liked to have given them an increase, but they announced a decrease,’ he explains. ‘So I gave them a decrease.’

The B.C. Film Commission, which may have to face layoffs of some of its 10 employees, is currently on track to process 5,100 separate production requests, which is three times the rate from 1997.