Vancouver: British Columbia Film has less money than ever before to invest in the West Coast film industry, following the B.C. government’s Feb. 17 provincial budget for fiscal 2005, beginning April 1.

The funding society’s annual core funding of $2.28 million will be maintained in the next fiscal year, but requests to renew the Feature Film Fund were denied.

The Feature Film Fund, a legacy of the previous NDP provincial government, had separately invested $4 million in 18 features over three years and represented the only production financing left at B.C. Film, which abandoned television production funding in 2002/03.

‘We are now engaged in a comprehensive service and program review,’ says Rob Egan, president and CEO. ‘We have to determine what our role in supporting the industry will be. No existing programs are sacrosanct. We’re cognizant of the continuing decline in production and are looking at expenditures of resources in that context.’

Despite the lack of funding, Egan says B.C. Film might continue some form of production financing. Currently, B.C. Film is focused mainly on marketing support, development and training as key programs.

The budget also held bad news for the service production industry: no Provincial Sales Tax relief. Some intensive professional lobbying did not convince Finance Minister Gary Collins to classify film and television producers as manufacturers, thereby making them PST-exempt for exported product such as foreign-owned film and television. Other Canadian provinces waive the PST, where applicable, and consequently give about a 2% break on budgets.

‘We’re disappointed that the government does not see film and television production as manufacturing,’ says Pete Mitchell, chair of the Motion Picture Production Industry Association of B.C. ‘However, we understand they are squeezed cost-wise. We look forward to working with them again next year.’

The added cost of the PST has been a challenge for years, says Mitchell, and its removal would have leveled the playing field with other film locations. And in a year in which B.C. is facing a substantial downturn in production volumes because of the rising dollar and international competition, the continued PST expense is ‘not giving us a step up’ with cost-sensitive U.S. production budgeters, he adds.

Meanwhile, according to B.C. Film’s annual report for fiscal 2002/03 (published at the same time as the budget was announced), B.C. domestic tax credits totaled $22.5 million on qualifying production valued at $256 million. That represents a year-over-year improvement of almost 90% over 2002’s $11.8 million (on qualifying production valued at $140.4 million), but is still down more than 27% from the recent high in 2000/01 of $31 million (on production of $377.3 million).

‘Since its inception, [Film Incentive B.C.] has proven to be key to the continued growth of B.C.-owned and -controlled film and television production,’ says the report, published in February. In 2002/03, FIBC supported 107 domestic productions.

Total Production Services Tax Credits for visiting productions dropped 7% in fiscal 2002/03, recording tax credits of $43.6 million (on qualifying production of $945.3 million) compared to $47 million (on $1 billion) a year earlier. In the reporting period, 89 productions qualified for the PSTC.

According to B.C. Film, domestic production overall declined to $163.6 million in 2002/03, a 61% drop from the industry high of $419.4 million in 2000/01. New in 2003 were enhanced provincial tax credits to assist with digital animation and visual effects and regional production.

-www.bcfilm.bc.ca

-www.bcbudget.gov.bc.ca