Montreal: Coproduction with Canada’s two leading European partners, France and the U.K., remains at high levels into 2001, but the industry has to move quickly to deal with big problems with the U.K. and Germany.

Coproduction with Germany is limited to one or two majority projects this year, and a number of German producers with media fund backing are apparently opting for service arrangements in lieu of coproductions. A recent letter from the German minister of finance suggests potential loopholes in restrictive tax legislation for treaty coproduction, but the production industries on both sides intend to push for the complete exemption of coproductions.

An official response from Telefilm Canada to the German authorities is in the works and expected before MIPCOM, says Johanne St-Arnauld, Telefilm’s acting executive director and director of international relations. ‘We have to be proactive on this and stop the waiting because I’m sure it’s going to be a long process,’ she says.

Brits seeks more benefits

As signaled previously, coproduction with the U.K. could also tighten considerably.

The U.K.’s department of culture, media and sports is seeking increased benefits [spending for the British side] by raising the minimum coproduction participation to 40% from 20%, a development which could devastate growing Canada/U.K. economic activity.

The issue was top-of-mind at the two-day Canada-U.K. Coproduction Forum at the Toronto International Film Festival organized by the CFTPA and Telefilm.

The U.K. cultural agency is concerned the tax-based benefit program will dry up entirely if more production funds are not spent in the U.K.

St-Arnauld says the best immediate hope is for producer associations in both countries to find a solution. Producers intend to make their positions known in written submissions to both the Canadian and U.K.

governments.

‘Let’s say if the minimum is 30% starting in a couple of months, it will have a direct impact on projects,’ St-Arnauld says. At TIFF, coproduction forum talks examined the role of project twinning, cofinancing and raising the minimum participation only on the U.K. side, she says.

Spending in Canada tends to be higher because of the unrestricted nature of the sale and leaseback program, and because of a lack of investors and licences for minority Canadian coproductions. Another issue is the higher cost of production in the U.K. ‘But we think we’re going to find a solution. We have to,’ says St-Arnauld.

2001 tally

Between Jan. 1 and Sept. 18 of this year, Telefilm has certified 77 film and TV coproductions, representing financing of $501.5 million. The Canadian share of financing is $288.2 million (57%) and the international share is $213.3 million (43%).

In features, 17 movies with budgets of $138.1 million have been certified, 57% of financing from Canada, including 12 features with the U.K. and four with France.

In TV in 2001, Telefilm has certified 60 projects with cumulative budgets of $363.5 million (58% Canadian), including 17 projects with the U.K. and 26 with France.

In 2000, Canadians coproduced $779.5 million worth of film and TV projects, with $463.9 million (60%) of the financing from Canadian sources and $303.1 million from foreign sources.

Coproduction with Asia continues to be a growth industry, with seven animation projects signed with Chinese partners and five others with producers from Hong Kong, the Philippines and Japan. *

-www.telefilm.gc.ca