Montreal: Looking for higher production values and better returns at the box office, Telefilm Canada will increase its investment cap in selective component feature films to $3.5 million in 2003/04. The federal funding agency’s investment cap has remained unchanged over several years at $2.5 million.

Telefilm’s financial participation may go even higher for productions with ‘exceptional levels of Canadian content or exceptional commitment from the trigger distributor,’ exceeding 49% of the budget up to a maximum of 64% in the form of a producer’s equity advance, for both selective and performance component projects.

The new caps are among the highlight modifications to the 2003/04 Canada Feature Film Fund guidelines, released Dec. 12.

Another major change is a sharp reduction in the number of companies with performance envelopes, particularly on the English side.

Qualifying films will be sourced from the top-ranked 15%, instead of the top 20%, and the qualifying period is reduced from four and a half years to three years.

Consequently, in 2003/04, only five companies, instead of the current 20, will receive English-language production envelopes, representing about 20% of all English-language funding; seven companies, instead of nine, will receive French-language production envelopes (54%); and three companies, instead of eight, will receive distribution envelopes. For marketing, about 54% will be sourced from the performance component.

The ’03/04 performance-based allocation list was not available at press time.

The reward ratio (box-office to envelope amount) has been capped within the English-language envelopes at last year’s level of $1.21 and increased within the French-language envelopes to $0.50. A minimum floor of $500,000 has been established for distribution envelopes. Telefilm says it has also clarified the origin of its box-office numbers (net of taxes).

In a letter prefacing the new guidelines, Telefilm executive director Richard Stursberg writes, ‘The good news is that the Canadian box office is growing compared to last year and stands at 2.2% compared to less than 1.4%. The objective is to continue to grow, especially in the English-language market, until we reach our 5% goal.’

In the CFFF’s selective component, the new guidelines reaffirm Telefilm’s earlier ‘hurdle-rate’ decision, namely that English-language projects requesting $1 million or more in production financing have to demonstrate the ability to generate at least $1 million at the box office.

The subsidy for distributors’ minimum guarantees will be completely phased out in ’03/04; however, Telefilm says ‘limited grandfathering is available to those distributors who have performance envelopes.’

The 2003/04 CFFF guidelines and related submission deadlines are posted on the Telefilm website.

-www.telefilm.gc.ca