As we enter the new year, the British Columbia film and TV industry must feel like it’s under siege, both from without and within. If it weren’t bad enough that producers from other provinces are continuing to call for B.C. to stop enjoying regional status from the Canadian Television Fund (see story, p. 23), now the province itself is making noise about decreasing production tax credits ­- or perhaps getting rid of them altogether.

Now, that latter point sounds absurd. One year ago, the industry won a hard-fought victory when the B.C. government matched the increased tax credits offered in Ontario for both service productions (to 18% from 11%) and domestic productions (to 30% from 20%). The timing was crucial, especially for the service sector, which handled 81% of B.C.’s $1.5 billion in production spending in 2003/04, according to the CFTPA.

Hollywood studios were doing their number crunching for the 2005 summer shooting season, and needed to know the bottom line of shooting in B.C., where they had been bringing large projects – especially on the feature film side – for years. Fewer productions had been coming up in the previous couple of cycles, however, as locales in the U.S. and around the world had gotten wise to Canuck-style tax credits. Well, the evidence so far indicates that the B.C. government did right by upping its shooting incentives, as by all accounts the industry enjoyed a return to form in 2005, hosting features starring Harrison Ford, Jennifer Garner, Robin Williams, Samuel L. Jackson, Nicolas Cage and Kate Hudson.

So, then, you ask, why would the province want to mess with a good thing?

The answer is a new report commissioned by the B.C. government called Film and Television Industry Review, prepared by InterVISTAS Consulting. There is a lot going on in the report’s 124 pages, but what its figures ultimately point to is that B.C. taxpayers spend more money facilitating tax credits than they ultimately get back. According to the numbers, which are based on a five-year average and don’t include the 2005 increases, the incentives cost the public $66 million and attract $192 million in additional production, which generates $20 million in tax revenue for the province. This would indicate that the taxpayer is footing the bill for Hollywood to come and make their movies cheaper in B.C., to the tune of $46 million.

This is what has gotten the report ink in the local papers, and if it were to be taken at face value, then the taxpayer would have every right to question the validity of the tax credits. Problem is, it does not take into account all the financial benefits associated with the production industry. In addition to tax revenue from the labor that production creates, what about the spending on ancillary businesses when a TV series or feature comes to town – such as hotels, restaurants, car rentals and so many more? These productions, and the players involved in them, have plenty of greenbacks they don’t mind leaving behind.

And the report is upfront about this gap in its approach: on page 9 reads the disclaimer -­ and this is what industry stakeholders are jumping on – the study’s analysis ‘does not necessarily represent the full range of costs and benefits associated with the film/TV industry that should be considered when assessing the tax credits.’ This being said, how could the B.C. government possibly move on the report’s findings in good faith? And if the interest of the taxpayer is the priority, shouldn’t an incomplete report be held up as wasteful?

It is also unfortunate that the release of the report was not delayed until figures for 2005 could be incorporated, because, with the recent tax-credit increases, no production cycle in recent memory could better illustrate the volume of business that tax credits attract.

The paper now sits in the hands of B.C. Minister of Economic Development Colin Hansen, who, along with his government colleagues, has maintained that the tax-credit increases were only a temporary measure that would be revisited beyond this March, and that the report would be one factor in their decisions. To mess with the tax credits now would be devastating for the local industry. At the time of this writing, the Canadian dollar is worth US$0.86, and does not represent nearly enough savings to attract Hollywood business on its own.

Rival provinces are aware of this – and of competition in the U.S. and abroad – and continue to fight hard for their piece of the production pie. Late in 2005, Saskatchewan announced up to 55% in production tax credits, and with a new studio in Regina and credits such as Corner Gas and Tideland on its resume, is showing that it means business.

Posing an even bigger threat to B.C. is Ontario, which is finally moving forward with its FilmPort megastudio in Toronto. Ontario has long been a destination for mid-range Hollywood projects, failing to attract the blockbusters only because it lacked a purpose-built soundstage big enough to handle them. FilmPort offers just that, and plans to open its doors in early 2007.

One can only hope that the B.C. government keeps this top of mind before it does the local industry – which has just started humming again – irreparable harm.