On Dec. 1, Ontario’s film and television community will descend on Queen’s Park for a rally intended to push Ontario Premier Dalton McGuinty and Finance Minister Greg Sorbara to follow through with a much-needed tax-credit increase, something the Liberal government promised during its election campaign more than a year ago.

Even with unions such as the Directors Guild of Canada, ACTRA, NABET and IATSE, as well as major players including Paul Bronfman’s Comweb companies behind them, the production community’s voices may go unheeded.

‘We will be using whatever resources we can provide to ensure that this rally is successful,’ wrote Bronfman in response to the announcement of the rally. ‘It is imperative that people realize our industry is in a free fall, and unless something is done quickly, the repercussions will be disastrous.’

The organization of the rally follows comments made by Sorbara when opposition members including MPPs Marilyn Churley, Rosario Marchese and Michael Prue confronted him with the issue of a tax-credit increase during question period in the legislature on Nov. 4. Sorbara responded by saying, ‘Ontario will not participate in the unhealthy bidding war with upping and upping tax credits.’

He went on to say that his government does plan to help the production industry by generating skilled labor and talent pools, something many feel Ontario’s industry already possesses.

Keeping Ontario’s tax credit competitive with higher incentives in other provinces and new state incentives south of the border ‘is the only game in town right now and if we don’t play we lose,’ says NDP MPP Churley. ‘The bottom line is if [Sorbara] doesn’t deal with these tax credits, it doesn’t matter what else is done.’

In her riding of Toronto-Danforth, home to three of the country’s largest studios, Churley says the issue of tax credits translates into thousands of jobs. From her perspective, the film and television industry, like the automotive industry, which the government seems willing to throw cash at, is one that generates money for the government.

‘[Tax credits] are not a handout, [they’re] a help-up,’ she says. ‘Everybody wins at the end of the day; jobs are saved, there’s more equity in the film industry and more money coming back to the government.’

This is the same message that CFTPA president and CEO Guy Mayson plans to hammer home to the government in the coming weeks.

‘It’s almost a false economy to be looking at [a tax-credit increase] as an expenditure in terms of deferred revenues,’ says Mayson. ‘What [the government is] risking by not doing anything is declining activity and a complete reversal of the progress that’s been made’ in Ontario’s film industry.

The tax-credit issue has become an urgent matter for Mayson, who says the film industry in Ontario has entered a period of decline.

‘We’ve seen the production volumes basically declining in Ontario. They had flattened out and now we’re seeing a period of decline both on the domestic and service sides,’ says Mayson.

Stats from the lobby group FilmOntario point to a 36% decline in foreign production coming to the province, to the tune of $200 million, in 2003 below 2002, with domestic production volumes following suit. Because of the SARS crisis in 2003, these numbers may be slightly skewed, but given Canada’s rising dollar combined with stateside tax incentives introduced to quell runaway production, the production community in Ontario is concerned the industry is about to take a nosedive, a fate which a tax-credit increase could help avoid.

The Liberal government’s pledge to increase the Ontario Film and Television Tax Credit from 20% to 33% applies to domestic production only and does not even touch the provincial service production credit, which Mayson also says he’d like to see increase from its current 11%.

While Sorbara’s office would not say they have completely given up on the idea of a tax-credit increase, it will likely not be coming anytime soon.

‘We’re not saying we’re not doing it,’ says communications assistant Guy Lepage, speaking on behalf of Ontario’s Ministry of Culture. ‘The pledge we made last year during the campaign is [part of] a four-year plan,’ says Lepage, stressing that the government is just over one year into its mandate. He adds that the Ontario Liberals already ‘went to the wall’ for the film and television industry in the government’s first budget by making enhancements to the Ontario Film and Television Tax Credit, allowing producers to claim development costs and budgets, including federal contributions.

As for the promised tax-credit increase, ‘No decision has been made on that yet,’ says Lepage. ‘We’re working hard with Minister Sorbara to make that happen.’

While issues pertaining to the film and television industry may formally fall to Ontario Minister of Culture Madeleine Meilleur, it’s clear that the question of a tax-credit increase will be approved or denied by the Ministry of Finance.

Speaking on behalf of Sorbara’s office, spokesperson Sean Hamilton says, ‘The premier was clear from the beginning of the mandate that we would have to slow down our pace of change and that we wouldn’t be able to deliver on some of our commitments right away… But I don’t want to speculate on when or if tax credits are going to come.’

Brad Pelman, executive VP sales and distribution for Lions Gate Films, says his company spent $150 million on production in Canada over the last year and a half, but adds that Lions Gate productions are increasingly being lured to American shooting locations by a combination of the rising dollar and new tax incentives in states such as Louisiana, New Mexico and Illinois.

Lions Gate spent $26 million in Toronto shooting the dramatic series 1-800-Missing, starring Vivica Fox, for Lifetime and CHUM, and Pelman says his choice would always be to shoot in Canada, so long as the incentives are competitive with the current market.

In December 2003, Lions Gate tried to mount its TV remake of Frankenstein for USA Network and Hallmark in Hamilton, ON at the short-lived Hamilton Film Studios. It was a US$12-million service shoot that ended up going to Louisiana because of Ontario’s tax credits. Less than six months after Frankenstein went south, HFS closed up shop.

‘Louisiana was wooing us with cash, and we’re a publicly traded company so we had to make the right decision for our shareholders; it’s a business decision,’ says Pelman. ‘At the end of the day, the Ontario tax credit was such that moving to Louisiana was US$1 million to the good for us.’

And it’s not just Ontario that has to worry about reverse runaway production in light of new incentives emerging in the U.S.

Because Lions Gate has offices on both sides of the border, ‘it has the ability to reverse runaway, and it will, if it is the best business decision,’ says Pelman. Lions Gate will shoot Wildfire, an MOW for ABC Family, in New Mexico, a project initially intended to shoot in Saskatchewan.

‘We’re our own worst enemy,’ says Pelman of various competing interest groups within the film and television industry, including industry unions, guilds and associations, which he says are all sending different and mixed messages to federal and provincial governments, diluting the overall message that Canada’s lucrative film and television industry is in serious jeopardy.

‘As an industry, maybe we should be fixing ourselves by getting self-interest off the table and sitting down together to come up with five or six consensus points that clearly provide a solution to the government that they can actually implement,’ says Pelman.