A Tangled Web

‘Convergence’ is taking on a whole new meaning, these days, in the Canadian production industry. The c-word had become a cliche, right up there with the now-fuddy duddy ‘information highway’ and the still copasetic ‘e-solutions’; nevertheless, the term was useful to describe the melding of discrete distribution channels into one, sporting the attributes of all. Telephone and video, Internet and cable. Old hat stuff.

But out from under the brim lately slinks a new kind of convergence. This is more of a pack mentality swarm-fest, where access to a microphone, a website or a byline sometimes produces suggestions which go far beyond coverage of alleged credit tampering in the production industry. Some media pundits are suggesting that a few producers who have made significant incomes in the industry are ripping off taxpayers via fraudulent tax credit applications and calculations of net profit, convinced the funding agencies will not catch on, or won’t call them on it. The implication is that the Canadian public should be scandalized by how easy it is for producers to give in to the seductive temptation to defraud the system, and how easily the system’s checks and balances can be bypassed.

Some observations about numbers might be helpful. In television, producers receive about 7% against below-the-line production schedule cost and post-production schedule cost – not against the cost of hiring expensive stars. They also can get a percentage of the development money on projects, which typically is not exorbitant.

Also, the structure of refundable production tax credits is a good deal for governments because taxes tend to be higher, frequently much higher, on salaries and services than the credits handed out; to say nothing of spinoff economic spending.

That’s not to say there’s nothing amiss in the state of Denmark. A third-party investigation – regardless of what political agendas prompted it – is worthwhile. It will be useful if it brings to light flaws, laxness or favoritism within agencies, their Cancon standards, and their diligence in assuring that Canadian creative contributions are more than name deep.

And there’s no stepping around the detritus on the path to the truth. Tales continue to be told out-of-school by current, and more often former, production company employees, service companies and anyone else who suspects dishonesty in prodcos’ business practices. That’s not going to change and it doesn’t prove anything one way or the other, either.

But to imply that the industry is only parasitic is prejudicial and confuses the issues: the government sets up the support system because otherwise, little production would go forward – especially of the high-end ctf-financed variety. It’s certainly true that most of the volume growth has been in projects with a key American broadcast presale, which can come with an American screenplay attached; but then a Canadian director needs to be hired. On the issue of promoting Canadian screenwriters, much more may need to be done.

Meantime, the leaders in this industry need to stand up and be counted. Any problems that emerge from the police investigation of Cinar, or any image problems created by this tempest, must be countered by practical, statistical information on the realities of production in Canada and the verifiable role producers play.