Montreal: Guideline changes are underway for the second year of operations for the $100-million Canada Feature Film Fund that could have a significant impact on the coveted performance-based envelopes. Telefilm Canada says it has recommended holding the envelopes at 50% for 2002/03, and raising it to 60% in 2003/04.

A joint Telefilm-CFFF advisory group committee will review the issue at a meeting in February, says Johanne St-Arnauld, Telefilm director, international relations. Both the CFTPA and APFTQ producer associations are also recommending holding the performance component at 50%, although individual advisory group members believe the share should grow if the 5% box-office target – the CFFF’s key policy goal – is to be achieved. In distribution, the performance component in 2001/02 was 85%.

Another major change in the works is a recommendation to give broadcast-affiliate producers access to a maximum of one-third of the CFFF’s performance (production only) envelope. The performance component now includes an expanded list of qualifying production companies, and Telefilm says a producer’s recoupment record will be integrated into the performance calculation in the future.

Other CFFF guideline issues under review include an ‘above the line’ advisory group recommendation to ‘remove the stipulation the lead protagonist [in a coproduction] must be Canadian,’ and a Telefilm offer to kick in additional development money if a distributor picks up 15% of all development costs.

(The final allocation of CFFF performance-based envelopes for 2001/02 is: $20.5 million for English production, $10.2 million for French production and $9.8 million for distribution, for a total of $40.6 million.)

Distribution results

The thorniest CFFF issues are related to distribution.

Distribs continue to be disgruntled with the split in resources and say they are more exposed to risk than producers, especially unfavorable, they say, in light of middling to weak overall box-office returns, largely in the English-language market.

(Preliminary data from alexfilms.com published in the Nov. 26 issue of Playback indicates the top 10 Canadian films earned close to $6 million at the box office between Dec. 1, 2000 and Nov. 11, 2001. The total estimate for the period may be closer to $10 million adding in all other releases, including year-end titles like Les Boys 3, already in the $3-million range, and other successful releases such as Un Crabe dans la tete. The apparent lack of progress becomes more clear when the language split is considered, with French-track, Quebec-only theatrical releases [Nuit De Noces at over $2 million] accounting for at least 75% of the total. The take for the year’s top four English-track films, led by Ginger Snaps at close to $500,000, is in the $1.3-million range.)

And while producers are questioning distributor commissions for more or less automatic presales to pay-TV, there’s concern distribs may drop out entirely if their most secure revenue sources are taken away. On the issue of minimum guarantees for rights acquisitions, Telefilm’s advance is scheduled to drop to 35% in 2002/03 from 50% last year, but distribs don’t like the deal and some in the advisory group have suggested maintaining support at 50%.

Telefilm provides 75% of a film’s marketing budget, 50% in the form of a non-recoupable grant. Distributors have to pick up the remaining 25% of the marketing budget, which is recouped on an equal-dollar basis with Telefilm until the distrib investment is fully recouped.

The issue of foreign investment in Canadian movies is also on the advisory group’s agenda. Telefilm readjusts its recoupment position to encourage private investment, but the measures exclude foreign investors, among others.

Telefilm is expected to release revised CFFF guidelines for 2002/03 shortly.

Annual report

In its recently released annual report for fiscal 2000/01, Telefilm made commitments of $179.4 million, up 11% from the previous year, mainly due to an added $10 million in feature film resources. Of this total, $136 million went to production (351 projects) and development (431 projects), with Telefilm picking up 22% of related budgets – $618 million.

The agency allocated $22 million to distribution ($12.8 million, including $10.9 million to new projects, of which $8.3 million went to minimum guarantees) and promotion, including versioning and international festivals. Another $5 million went to professional development.

Recoupment by the agency in 2000/01 stood at $23 million, well below the $35 million benchmark established several years back. Administrative expenses totaled $16.4 million or 9.1% of all spending.

In the annual report’s highlight section, Telefilm says it allocated 63% of its resources to projects from Montreal and Toronto and 37% to all other regions, with year-over-year percentage growth highest in Alberta, Saskatchewan, New Brunswick and Newfoundland.

In TV, the Telefilm-administered Equity Investment Program committed $95.5 million to 256 productions representing total budgets of $455.1 million. EIP allocation by program category was: 64% to drama, 21% to documentaries (which saw a 40% increase in hours), 13% to children’s and 2% to variety and performing arts shows.

In 2002/03, Telefilm will offer producers more resources for multi-platform strategies with an increase in new media resources, in the range of $6 million to $9 million, and a new Music Entrepreneur Program, with guidelines and funding still to be announced.

In features, Telefilm invested more than $34 million in the production of 64 features in 2000/01, compared to 46 the previous year, including funds from the EIP.

The level of private-sector investment in Canadian films, other than producer deferrals and private assistance funds, as well as the level of foreign participation ($584,000 in international broadcast presales), other than in coproductions, remained exceedingly low in 2000/01.

Other than the re-establishment of ‘an artificial program like the Capital Cost Allowance tax shelter,’ which is not anticipated, Telefilm’s outgoing chairman Francois Macerola says, ‘If we want to have private people [investing] and sponsors it means we will have to challenge them with new possibilities such as [a higher] quality of films and [higher] revenues generated at the box office and other media. I’m not saying sponsorship equals private investment, but in every single country where you find private investment [typically tax-based] in the national film industry, there are incentives for those investors.’

Macerola says foreign private-investment models should be examined by the industry and recommendations made to government.

In festival news, the consolidated Canada stand moves back to its beachside location for the 2002 edition of the Cannes International Film Festival, May 15-26, while Telefilm’s St-Arnauld expects this year’s Berlin International Film Festival, Feb. 6-17, to ‘be very important for Canada.’

-www.telefilm.gc.ca