Vancouver: It’s getting more expensive to attend National Lampoon’s Family Reunion. With the Canadian loonie flying high, the cost of currency exchange for the U.S. production gearing up in Vancouver is starting to mount for West Coast service producer James Shavick.

‘It’s a problem,’ says Shavick of the improving Canadian dollar. ‘Preproduction has started and the costs are containable. But you have to have a jaundiced eye toward the budget and make changes. Kodak isn’t about to lower its prices and the actors aren’t working for less. That means we have to beat up our suppliers.’

Most U.S. networks and studios have hedged against this kind of economic change. By buying forward or buying Canadian currency at a pre-established rate, producers can minimize the impact of currency fluctuations. The negative impact of the dollar, should it continue to rise, will be longer term.

‘We’ll have to adapt,’ says Shavick. ‘Everyone is being careful and everyone is aware.’

Canada is not necessarily at a disadvantage, however, because the currency story is also big for its production competition. Most currencies are rising relative to the U.S. dollar, and markets including Australia are seeing a comparable rise in value.

On May 20, the Australian dollar was up more than 16% against the U.S. dollar compared to the beginning of the year, while the New Zealand dollar and the Euro were each up 10%.

The Canadian dollar, by comparison, is up more than 15%, but the impact, other than a little discomfort so far, hasn’t pulled any business away.

‘We haven’t seen any reaction at this point,’ says Susan Croome, B.C. film commissioner. ‘We are still getting a lot of scripts. Scouting continues. The indicators are positive. We have to remember that there was a film industry here when the dollar was par.’

Proximity to L.A., trained local crews, established infrastructure, provincial and federal tax incentives, locations and, in B.C.’s case, a favorable time zone, continue to make Canada an attractive shooting location and help offset the currency exchange costs, says Croome.

‘Production is a short business cycle,’ says Croome, ‘and the industry is nimble enough to get through these fluctuations.’

Veteran Toronto producer Marilyn Stonehouse says, however, that the higher loonie will most impact the U.S. independent producer who doesn’t have the financial resources to hedge against it.

‘Independent producers are already having a tough go of it,’ says Stonehouse, referring to the challenge of selling to the U.S. networks when lower-cost reality television shows have a more compelling business case and foreign markets dry up. ‘They are trying to take advantage of everything. [Independent producers] are shopping all the provinces looking for the best pricing. A higher dollar makes it that much harder [to get a show into production].’

Stonehouse, through Pebblehut Too, is wrapping up production on the first season of Sue Thomas F.B. Eye and the third season of Doc, which constitute 22 hours each.

And both of the Canadian-content series, financed in part by U.S. cable and foreign sales draws, have been adversely affected by the rising dollar, with Stonehouse estimating a loss of $500,000 in currency exchange costs over both series in the current season.

At press time, neither lower-budget series was renewed, and Stonehouse says a higher dollar could negatively impact the series’ financial viability. Since the beginning of May, it costs more than $13,000 more to convert the average US$800,000 budget to Canadian dollars.

‘There is a point at which they won’t be able to go forward,’ says Stonehouse. ‘There is no upside from a production point of view.’

But the improved dollar is good if you want to shift into equipment-needy post-production. The silver-lining story of the rising loonie is the positive impact it has on companies that are expanding their technology or recapitalizing equipment.

For example, Vancouver’s Finale Editworks is going through a well-timed $500,000 upgrade to HD.

‘We would have expanded anyway,’ says president Don Thompson, ‘but we may have postponed it. The rising dollar, however, makes the jump more affordable. Everyday saves us money. We’ve been able to stretch our budgets that much further.’

Finale has bought an Avid DS HD Nitrus edit suite and an accelerated HD editing system. The added purchasing power of the dollar has allowed the company to accessorize, adding other HD gear including digital dailies and expanded DVD authoring and replication.