Montreal: Questioning recent directives and growing performance demands, the country’s principal distributors association is distancing itself from Canada Feature Film Fund policies and the fund’s primary goal of reaching 5% national market share for domestic movies by 2005.

In a June 7 letter to Telefilm Canada executive director Richard Stursberg, CAFDE president Richard Paradis writes, ‘We believe, that in the short time period that is left in the five year Feature film fund [2000-2005], there is little hope of reaching the [5%] objective in the English market for a number of basic reasons. The first being that the underlying requirements for marketable films are hard to come by in Canada. We do not currently have the quality and diversified scripts that are required for box office success, neither do we have a sufficient number of producers that are willing to go to risk on projects with commercial potential, nor do we have the on screen talent that attracts paying movie enthusiasts.’

Paradis’ letter follows an in-depth appraisal by all CAFDE member companies of the Telefilm-produced operations document, ‘Achieving the Box Office Objective for English Canada Market.’

With added pressure to perform, the distribs have renewed their call for ‘flexibility in the [Cancon] point system, and increased flexibility in regard to the requirement to have a Canadian lead.’

And while CAFDE says CFFF’s national box-office objective ‘is laudable,’ it claims that because of current realities in the Canadian theatrical market (one to three English-language films gross $1 million or more each year), the stated policy goal ‘fringes on the unrealistic.’

Content disputes

In an industry-wide effort to clarify CFFF objectives, Stursberg pointed out that every dollar invested by Telefilm in English Canada has to generate on average $0.70 at the box office. That calculation, which has prompted Telefilm to introduce ‘hurdle rates’ for features requiring $1 million or more in equity from the agency, is based on the availability of approximately $40 million in funding for English-track films this year.

In his letter, Paradis raises earlier distrib complaints about Telefilm’s eight-on-10 point-only performance rankings and says the new hurdle-rate calculation ‘ignores the fact that there are many Canadian films that have historically generated significant box office without any investment by Telefilm. Most of these films are international coproductions such as Eye of the Beholder, Grey Owl, Grizzly Falls or Canadian content productions such as Art of War and [the] Air Bud and MVP franchises. If films such as these were included in your calculations, Telefilm would probably need to only generate $0.50 of box office per dollar of investment.’

More big-budget movies

The distribs say the national 5% box-office target (which is an aggregate percentage made up of 4% in the English market and 12% in the French-language market) is more likely to be met by producing several larger-budget films (over $15 million) with the potential to generate $5 million in theatres. But since production budgets financed only in Canada tend to be capped at $5 million, CAFDE says more ambitious films would require international financing and a change in content rules to allow producers to cast international marquee talent. ‘In order to increase the budgets on Canadian-only financed projects, either Telefilm’s [investment] ceiling of $2.5 million per film will have to increase or projects will have to generate outside financing through non-Canadian talent.’

U.S. indie model

On a comparative basis, and in terms of setting objectives and measuring success, the distribs say the Canadian feature film industry model is closer to the independent production sector in the U.S. than to Australia, France or the U.K., where indigenous industries have gained theatrical market share in recent years.

CAFDE says much of the recent success in the latter three countries was developed using foreign, mainly American, stars, while the French industry benefits from a direct tax on box-office receipts (on exhibited American films and domestic distributors and broadcasters), and U.K. broadcasters like Channel 4 and BBC are major investors in feature films.

‘An independent film in the U.S. is generally considered a hit if its box office reaches above $3 million, depending on the film’s production cost. Considering the population, an equivalent success in Canada should be 10% of this figure. Yet Telefilm is suggesting CAFDE members will be judged negatively for not reaching a $1-million threshold rather than making the $1-million threshold an indication of success, as it should be,’ writes Paradis.

‘Distributors take significant risk just by being in business due to the minimum level of overhead required to run a film distribution business….What risks are producers taking to ensure box office success?’

Paradis’ letter to Stursberg goes on to say, ‘It’s important that we make sure we all have the same understanding of the very demanding challenges that Canadian feature films face in our own domestic market.’

CAFDE represents 10 Canadian-owned and -controlled distribution and export companies: Alliance Atlantis Distribution, Christal Films, Equinox Films, Film Tonic, Keystone Releasing (Canada), Lions Gate Films, Odeon Films, Remstar Distribution, Seville Pictures and TVA Films.