According to data compiled by the Ontario Film Development Corporation (and based on figures that reflect money spent by productions utilizing ofdc-administered services), Ontario’s film and television production activity set a new record in 1999, contributing a total of $934 million to the provincial economy.

Fueled by an upsurge in domestic television production and foreign production activity in the province, the impressive production figure is up $190.8 million from last year’s record-breaking total of $743.2 million, for an increase of 25.7%.

Domestic production now accounts for 53% of production spending in the province and foreign production accounts for 47%. In 1997, however, domestic production accounted for 65% and foreign for 35%.

For the second year in a row, the growth rate of foreign production exceeded that of domestic production. In 1999, domestic production grew 24%, reversing the 4.4% decline in ’98. The foreign sector grew by 27.6% in ’99, compared to 57.2% in ’98.

Domestic production in ’99 increased to $491.3 million from $396.2 million in ’98.

While total domestic television production grew to $454.6 million in ’99 from $338 million in ’98, a 35% increase, the number of domestic feature films slipped to 17 projects, which left $36.7 million in Ontario, from 21 projects the previous year, which left $58.7 million in the province.

Domestic television series production generated $367.7 million, or 75%, of total domestic film and television production for the year.

As to why the province is seeing such a burgeoning domestic tv production industry, ofdc ceo Adam Knelman Ostry says the Canadian Television Fund is a primary factor. The fund injects $200 million a year, on a national scale, to the Canadian tv industry.

He also points to the exponential growth in the number of specialty channels. ‘They need more content. It’s a demand-side measure that’s been there progressively over the last decade.’

As for the decline in domestic feature film production in Ontario, Ostry points to a combination of factors.

Firstly, there’s a relative lack of script development and preproduction support in the province, especially compared to Quebec, Manitoba and b.c., which makes it extra difficult for small to mid-sized independent producers to get the ball rolling.

The second issue relates to the ‘grind down’ on the Ontario Film and Television Tax Credit, implemented in 1998.

While the tax credits, both provincial (20%) and federal (25%), apply to labor costs, which typically represent about 50% of a budget, the calculators deduct any equity or investment funds provided by Telefilm and private sources, thereby reducing the total budget, before applying the credit.

Often with some of the smaller companies, Ostry says, total budgets are reduced 60%, significantly diminishing the impact of the 45% combined tax credit.

Furthermore, foreign production can be privy to an 11% provincial and an 11% federal tax credit that are directly applied to total budgets. No deductions. And while the tax credits apply to tv as well, the feature film community is more sharply affected as it does not have the benefits of licence fees.

A third reason for the drop in domestic feature film is a comparative lack of marketing capacity. ‘There’s relatively little in the way of support for marketing and distribution in Canada,’ says Ostry. ‘When you compare our capacity to compete with other countries, discounting the u.s., but looking at places like Britain, France, Australia…the average budget for an independent feature film is $8 million to $10 million, whereas our budgets are between $2 million and $4 million. Plus, marketing budgets for those films can be up to 50% of a production budget. We’re nowhere near there.’

Going forward, Ostry suspects that if the government were to respond favorably to the feature film advisory committee, ‘It would definitely help, as it did when they created the tv fund. What’s unfortunate, however, is that the crtc can’t regulate feature films.’

Nonetheless, the new tax-credit regime in Ontario is worth somewhere between $70 million to $80 million, a huge net improvement from the ofdc’s defunct granting program worth about $27 million.

As for any questions surrounding the issue of runaway production accounting for the province’s inflated foreign production numbers, Ostry says, ‘The entire u.s. production in Canada, let alone Ontario, only represents about 2% to 3% of the u.s. industry. Also, u.s. production activity in Canada constitutes, by and large, principal photography, so it only represents 25% to 50% of any given production budget.’

An unprecedented five foreign tv series chose Ontario as a location in 1999, up from only one in each of the two previous years. And while the bulk of production activity took place in Toronto, other cities, such as Uxbridge, Hamilton, Ottawa and Peterborough, also saw some action in ’99.

All together, the province hosted the production of 116 domestic projects: 17 feature films, 50 mows/miniseries/specials/pilots/docudramas, 44 tv series and five animation.

On the foreign side, there was a total of 200 productions, including 21 feature films, 58 mows/miniseries/specials/pilots/docudramas and five tv series.