During his run for governor, Arnold Schwarzenegger told the voters of California he would ‘terminate’ a great many things: high car taxes, the state’s crippling deficit, the influence of special-interest groups, ‘politics as usual,’ and, not least of all, his embattled opponent Gray Davis.

He also made noise about runaway productions and has said he wants to keep Hollywood movies from so frequently skipping town for Australia, eastern Europe or Canada.

Schwarzenegger made good on one of those promises when a 48% share of the recall vote handed him the reigns of America’s most populous state on Oct. 7, pinkslipping Davis partway through his second term. The question now, for Canucks, is will Arnie do away with runaway shoots – and countless jobs – with the same relative ease? Perhaps by adding a tax credit to the books?

The short answer? Anything’s possible, but probably not. Canadian unions and other stakeholders are cautiously optimistic that the Golden State’s governor-elect will be too busy with bigger economic and political problems to make much trouble for Canada.

‘Worried? No. We’re a little concerned, but he’s got a lot of things he’s got to take care of first,’ says Rick Perotto, business representative at Toronto’s IATSE Local 667.

For starters, the state deficit, depending who you ask, is somewhere between $15 billion and $40 billion for this fiscal year. Schwarzenegger has to come up with a workable budget before he can even begin to work through his campaign promises, and he told voters his first priority will be fixing California’s ailing education system. He also pledged to reverse a recent car tax increase. Doing so stands to widen the budget gap by another $4 billion, say critics.

But doing much of anything will be difficult for the Republican rookie, who faces a mostly Democratic state senate and legislature – 25 of California’s 40 senators are Dems, as are 48 of its 80 assemblymen, its attorney-general, comptroller, treasurer and the lieutenant governor.

The former Mr. Universe ‘has got no power’ says Crawford Hawkins, managing director of the B.C. office of the Directors Guild of Canada.

Los Angeles still does a very healthy $40 billion per year in production, which will make arguing for a tax credit difficult, adds Peter Leitch, head of Vancouver’s Lions Gate Studios, and it’s unlikely that studio heads will keep their shoots in Hollywood without a strong economic incentive.

It has been suggested that Arnie could use his showbiz connections, and presumably good relationships with Hollywood decision makers, to succeed where other anti-runaway campaigners have failed, and failed repeatedly. At more than one campaign stop, Schwarzenegger made it known that he pulled strings to keep the Terminator 3 shoot out of Vancouver, and some fear he could now do the same on an industry-wide scale.

Colin Robertson, Canada’s consul general in L.A., and a vigorous promoter of the Canuck movie industry, disagrees. ‘There’s one rule in this business. It’s the bottom line. Canada is the preferred location because it’s good business,’ he says.

Observers are more worried about the rising loonie, which has pushed down production across the country since last year as it rose 12% to the $0.76 mark. ‘If it hits 80 cents, then that’s problematic,’ says Robertson.

Currencies are also on the rise among Canada’s main runaway competitors – Australia, South Africa and eastern Europe – but an overly strong loonie could still do serious damage to the service industry, undermining the strong ‘convenience factor’ that keeps many Hollywood shoots from going overseas.

One labor rep suggested that if the dollar goes past $0.80, Canadian unions might cap their pay rates at below-$0.80 levels to remain competitive, perhaps even organizing an industry-wide pay cap.

‘Our dollar will probably remain even with the competition,’ says Leitch. ‘The U.S. economy will probably rebound, but in the short term the Canadian dollar could still go up. We have to work harder to become more cost effective.’

Experienced crews have always been one of Canada’s main selling points, but Hawkins disagrees and says the movie crews here have to work harder to meet the demands of high-budget Hollywood shoots.

‘We’re TV-trained, not movie trained. It’s a whole different dynamic,’ he says. ‘Someone who worked on a $2-million MOW is totally incapable of handling the hierarchy of a $150-million feature film.’ Many lack the ‘soft’ or people skills to deal with the unique pressures of a Hollywood pic, while others don’t have the hard skills to handle stunts, effects or the volume of cast and crew.

Interprovincial competition and union jurisdictional disputes – mainly between the DGC, IATSE and the Teamsters – are also gumming up the works.

‘All our problems come from inside Canada, not outside,’ says Hawkins.