Canadian participation in international coproductions has plummeted by as much as 50% over the past few years, according to statistics recently released by Telefilm Canada. The surprisingly poor numbers are thought to be more accurate than previous tallies and paint a grim picture of Canada’s production partnerships in the U.K. and Europe.
‘The news is not good at this point,’ says Danny Chalifour, director of international operations and development at Telefilm. ‘This is worse than we expected.’
Canada coproduced 40% fewer projects in 2004 than in 2000, down to just 60 titles, according to Chalifour. Production budgets for that same period dropped 59% to $367 million.
TV has been hit the hardest. The number of TV projects has dropped 40% since 2000, to just 45 shows in 2004, while budgets came crashing down by 73%, to $173 million. Spending on feature films dropped some 23%.
The federal agency has previously kept track of coproductions based on when producers file their final paperwork, sometimes months after principal photography or even post has wrapped. This makes the year-to-year numbers hard to follow, says Chalifour. The new stats are based solely on when the projects actually shot.
Under the old method, total copros appeared to be up 13% in 2004, not down by 40%. TV shows were up by 27%, not down by 40% again.
The feds first presented the figures at last month’s CFTPA conference in Ottawa. Telefilm says it will continue to use both methods, but will focus on the more accurate numbers.
Chalifour blames the drop on changes to the U.K.’s sale-and-leaseback program, and on the increasingly tightly knit production community of the European Union. In 2003, the Brits raised restrictions on their once-popular financing system – upping the minimum Canadian spend to 40% from 20% – while the E.U. has been making life easier for its own filmmakers with a variety of funding opportunities, its single currency and a general clearing away of red tape. Equity funding in the U.K. also dried up after a 2004 crackdown on tax shelters.
The U.K. and France, as usual, are still Canada’s most active copro partners, although their numbers are slipping. The budgets of French-language copros dropped 77% from 2001 to 2004, while the number of shoots fell 55%. U.K.-partnered features have dropped by more than half since the sale-and-leaseback changes, to just 12 films worth $192 million in ’04.
Veteran international coproducer Sandy Mackay-Smith says he’d noticed a drop in U.K. film projects, but notes that the numbers are still ‘pretty damn shocking.’
‘I think maybe you’re seeing two or three [coproductions] a year where there used to be 10 or 15,’ he says. ‘It’s brought things to a grinding halt.’
He says the lack of U.K. money is pushing producers into less familiar territory – striking three- and four-way deals with Germany, South Africa, Spain and other countries where the film industries are less stable and the rates less favorable.
‘But that only works on a larger movie because it’s expensive to bring in other coproducers,’ he says. ‘Most of our independent films don’t get over $10 million and you don’t want a tri-prod on an $8-million film… So Canada just gets left out of this Europe thing.’
But if Canadians can’t get into Europe, Europe is at least coming to Canada. Joe Iacono of the accounting firm Weisbord, Del Gaudio & Iacono says recent tax changes in Ontario, B.C. and other provinces are drawing more business from across the Atlantic.
‘It’s stimulating interest in Canada, it definitely is,’ he says, pointing to the feature Silent Hill, now shooting in Toronto, as an example. The horror pic came here from France looking for a minority partner, but switched gears to take advantage of Ontario’s new tax breaks. It is now a majority Canadian copro.
‘We were able to demonstrate to them that we could get them significant tax credits, around 55% on every dollar of Ontario labor expenditures… because of the increase in Ontario,’ he says.
Chalifour says filmmakers should also look beyond Europe. Canada has coproduction treaties with 49 countries – including Japan, Russia, Cuba, Senegal, et al – some of which have gone all but unused, having been signed for mainly diplomatic reasons.
‘There needs to be more R&D,’ he says, ‘to see which countries can be good partners, culturally and financially… Can we do something with South Africa? Something with Asian countries, Latin America, India?’
South Africa signed a copro treaty with Canada in 1997, and has recently attracted major Canadian shoots such as the CBC’s Human Cargo and its new Jozi-H and the new CHUM series Charlie Jade. Ottawa is in talks on a copro treaty with India and is currently renegotiating its deal with the U.K.
Mackay-Smith agrees that South Africa is a good choice, despite some hurdles, but believes the climate in the U.K. is set to improve, pointing to signs that more equity funding may become available there by the fall.