The Toronto International Film Festival marks the starting point of what will be a major acid test for Telefilm Canada’s mandate of boosting domestic features to 5% of the total Canadian box office by 2006.

Last fall, Telefilm’s executive director Richard Stursberg toured the country to spell out exactly how he expected Canadian films to attain higher audiences. The idea in its simplest form was to invest only in marketable films and demand stronger P&A commitments and higher minimum guarantees from distributors.

Most western industrialized markets, including Australia, the U.K. and France, make films that claim anywhere from 8% to 40% of their domestic audiences, he pointed out. Surely 5% is attainable here.

Last year, total box office in Canada was $835 million, according to research by Toronto-based Lightning Group, a strategic marketing consultancy practice that monitors the theatrical exhibition business. That means Canadian-produced films would need to generate about $42 million to reach the 5% threshold.

Now we get to see how well the experiment is working. Significant movement at this stage, one assumes, is critical.

Many producers see TIFF, which begins Sept. 4, as a premier marketing tool for their films and, so, hold off releases in English Canada until the festival. Once the festival is done, Canadian audiences can expect a small flurry of locally produced cinema.

Quebec audiences have already been enjoying a number of French-Canadian films, and the box-office results have been nothing short of fantastic. Four releases – Charles Biname’s Seraphin, Denys Arcand’s Les Invasions barbares, Emile Gaudreault’s Mambo Italiano and Jean-Francois Pouliot’s La Grande seduction – have earned more than $24 million since Seraphin’s late November release.

Several of these are bound for English Canada and could add millions more to the total take when they arrive. This means that Quebec features are providing the kind of momentum necessary, accounting for about half the total earnings

But Quebec films have long been far more successful at finding audiences, and extending that success to English-language films has never been a given.

The festival marks premieres of several films where Telefilm’s new emphasis will be put to the test. These include Deepa Mehta’s The Republic of Love, Scott Smith’s Falling Angels, Guy Maddin’s The Saddest Music in the World and Sudz Sutherland’s Love, Sex and Eating the Bones, which Stursberg pointed to last year as one of the more bankable features funded by Telefilm.

Later this year we will also see the premieres of the Robert Lantos-produced The Statement, starring Michael Caine and directed by Norman Jewison, Alliance Atlantis’ Foolproof, CHUM-backed Decoys and The Great Goose Caper, starring Chevy Chase.

Both Foolproof and Decoys have reported P&A commitments in excess of $2 million and $1 million, respectively. And you can bet there won’t be much hand wringing by Lantos and company over the P&A spend on The Statement.

Will they all break the coveted $1-million mark domestically? Probably not. But there’s still lots more to come, including Hollywood North, Twist, A Problem With Fear, Nothing and Gaz Bar Blues. Somewhere there lies a sleeper.

Could it be that $42 million is not so far away? Stay tuned.