It turns out that production in L.A. may not be destined to collapse at the hands of Canadian service producers, as some Americans have been griping since the release of the 1999 Monitor Report. Commissioned by the Screen Actors Guild and the Directors Guild of America, the Monitor Report has been held up as a bible by anti-runaway activists in the effort to keep productions in the U.S.

But a new Canadian-commissioned study, International Film and Television Production in Canada: Setting the record straight about U.S. ‘runaway’ production, claims that figures in the Monitor Report are erroneous. It also stresses that Canadians spend far more money on Hollywood fare than Americans spend shooting in Canada.

The CFTPA, the Directors Guild of Canada, ACTRA Toronto, IATSE 873, the Quebec technicians union SCTVQ and lobby group FilmOntario financed the study. It was prepared by Gary Neil of Neil Craig Associates.

The Neil Craig Report finds that the Monitor Report ‘contains contradictory claims and basic arithmetic errors, double counts figures and uses methodologies that are highly unusual in standard economic analysis.’ It also states ’employment in the U.S. film and television production industry has actually increased by 6.6% since 1998,’ despite American claims of significant job losses from runaway production.

The Monitor Report claims that runaway production had a negative effect on the American industry to the tune of US$10.3 billion in 1998. By comparison, the new Canadian report suggests that number was closer to US$1.7 billion. In addition, the study stresses that in 2003 alone, US$$1.3 billion left Canada for Hollywood through cinema admissions, sales, DVD and videocassette rentals, and broadcast licence fees.

Between 1998 and 2003, the U.S. saw a positive balance of trade of US$1 billion when Canadian spending on U.S. film and television imports is compared to the volume of U.S. productions shooting in Canada, according to the Craig report.

Patrick Whitley, cochair of FilmOntario and president of Toronto’s Dufferin Gate Productions, which produces dramas in Canada for Showtime, including Canadian/U.S.-hybrid Queer as Folk, says that people in front of and behind the camera in L.A. are increasingly deciding against shooting in Canada because of the current lobby against runaway production.

‘I am starting to see a groundswell of support for keeping production in the U.S.,’ says Whitley, explaining why the report was needed. However, considering other factors that are affecting the volume of production in Canada, the study could be coming a little late in the game.

‘I thought it was a very solid report and something I wish we had done a little earlier,’ says Whitley. ‘The reality out there right now is that there are other things causing people to reconsider shooting in Canada – i.e. the dollar.’ The Canadian dollar has been drifting around US$0.80, a mark the Canadian industry has always viewed as having dire consequences for production in Canada.

Swift rejects argument

Despite such concerns, Whitley believes that the amount of money Canadians spend on U.S. entertainment is an important consideration.

‘Look at the billions of dollars worth of American product that we consume in this country,’ says Whitley. ‘I believe we have a right to be part of the manufacturing of that product.’

The Craig report also stresses that Monitor ‘ignores the increasingly global nature of movie production and the growing importance of foreign markets to the U.S. industry,’ and points to 42 U.S. states currently offering some kind of incentive to lure production away from Hollywood.

Brent Swift, who heads up American anti-runaway production lobby group the Film and Television Action Committee, says that dollars funneled back into the U.S. from the Canadian spend on American entertainment are simply not part of the runaway production equation. While at press time Swift had yet to get his hands on the report, his contention remains that Canadian subsidies are a breach of U.S. trade regulations and NAFTA.

Swift goes on to say that incentives within the U.S. are not part of the runaway equation either. ‘[Canadian provinces] can fight each other for movies and [U.S. states] can fight each other for movies. That’s one thing, but it’s different when you’re talking about national governments and crossing borders.’

While he admits that multinational corporate strategies that have seen studios replace five or six films with one big-budget movie full of major stars has impacted job loss in L.A., Swift maintains that the majority of jobs are lost to runaway production. While the rise in the Canadian dollar helps the employment situation, Swift says it is not enough to combat jobs lost to Canadian subsidies such as tax credits.

‘We’re still losing a ton of jobs every year – somewhere in the neighborhood of 14,000 to 20,000,’ he says. ‘And it’s not only to Canada anymore, it’s to every place [Canada has] taught how to do it – South Africa, the European community and Australia.’

Susan Murdoch, VP of Toronto prodco Pebblehut Too, says FTAC’s response to the new study comes as no surprise.

‘I don’t think we ever expected the study was going to sway anyone from FTAC. Their argument is strictly based on employment in the Los Angeles area, and it’s a very narrow focus,’ she says. ‘You have to look at the entire picture. Canada has always been in the position of being in an enormous trade deficit with the United States in terms of entertainment and cultural product and it is a very valid consideration because we’re not only talking about the production side of the industry, but the sales and distribution side as well.’

While Canada represents a small portion of the U.S.’s ultimate audience, so small in fact that American distributors lump Canada into their North American market, Murdoch contends it is an important territory because of its stability.

‘Safe markets are as useful in the grand scheme of things as extremely lucrative markets because you always know they’re there,’ she says.

-www.filmontario.com/news.php