The 78th Annual Academy Awards provided another strong showcase for the Canadian production industry. It also provided a forceful reminder of what Canada’s role in the global film business can be, and how CAVCO should rethink its definition of ‘Canadian.’

This year’s Oscars had a little bit of everything Canuck. London, ON native Paul Haggis took home statuettes for producing and writing Crash, distributed by Lionsgate Films, partly based in Canada. Brokeback Mountain, shot in Alberta and executive produced by Alberta Film Entertainment, snagged three awards, while Capote star Philip Seymour Hoffman won for best actor. Hoffman gave a shout out to William Vince, one of the film’s producers from Vancouver’s Infinity Features, which shot the project in Winnipeg. Meanwhile, William Hurt and Josh Olson were on hand representing David Cronenberg’s A History of Violence in the supporting actor and adapted screenplay categories, respectively.

Canada’s talent, producers, and service sector all got big-time Oscar props in a year when indie flicks dominated the noms, which makes sense. This is, after all, the scale that Canadian producers can aspire to, and it is also the type of Hollywood project that usually lands north of the 49th, with the exception of the odd mega-blockbuster that goes to Vancouver.

With Capote, Infinity has demonstrated the ability to put together a deal to make a world-class production that benefits the Canadian service biz. And they are right back at it, shooting the thriller Butterfly on a Wheel, starring Pierce Brosnan, in their home province. So: the producers are Canadian and the films shoot in Canada. Canadian? Not according to the CAVCO pointing system. So, no Canadian Film or Video Production Tax Credit and no Genie Award glory. (Many were miffed that A History of Violence – shot in Canada by a local director, but backed by Hollywood – didn’t qualify for the Canadian film awards, despite being lauded for providing an outsider’s perspective on the contemporary American scene.)

Still on the Genies, Water, the most nominated film this year from English-Canadian filmmakers, was shot in Sri Lanka, telling a story set in India in the 1930s that ostensibly has nothing to do with Canada. The version released here was not even in one of Canada’s two official languages, although an English version was shot and appears as a bonus in the DVD version. Yet the production was able to take advantage of CPTC assistance because it makes at least six of its 10 CAVCO points. Writer/director Deepa Mehta, who calls Toronto home, qualifies for four of those points by herself.

Don’t get me wrong. I think Water is a perfect candidate for government funding – it is a beautifully realized work with commercial appeal both here and abroad. But it does illustrate how archaic the points system has become in today’s global film industry.

The talent guilds and unions understandably want to keep the CAVCO system status quo in order to guarantee work for their members. One producer, who would like to qualify for the CPTC while boosting his chances of making a commercial hit, has approached Telefilm Canada with an idea to compensate the local industry if he falls short of his six points. He wants to be able to access Hollywood scripts – and you figure there are at least 10 times as many floating around Tinseltown as there are here – and still keep his CPTC. If he pays, say, $150,000 for a script by a U.S. writer, he would give the same amount to the Writers Guild of Canada, which it can put to use for, say, training. Or perhaps that money can help fund films that reach six points or more.

It is time to embrace a more free-trade approach. This is not a new idea ­- François Macerola made such recommendations in his report on film and TV Cancon three years ago. If public agencies did more to help English-Canadian prodcos make films that could compete with U.S. indies, it would only benefit the local industry. Just ask Infinity, which is doing quite nicely by Capote’s success. Loosening Cancon rules would give Canuck producers more creative options and a greater shot at star power – and in turn, greater success, resulting in more production in Canada – and at a higher level. And it is only natural that Canadian producers would, of their own volition, hire local talent. After all, who is more aware of our talent pool?

We must concede that the English-Canadian film industry has not been a smashing business success. On the other hand, Quebec, with its unique cultural advantage, has shown that it can support locally made films aimed primarily at its own audience. In 2005, two French-language films – C.R.A.Z.Y. and Aurore – topped $5 million at the local box office, following on the heels of other big hits like Séraphin and La Grande séduction. The only 100% English-Canadian film to do this in recent memory is Mambo Italiano.

English Canada, in direct competition with the output from Hollywood, must play the Hollywood game if it wants to win, and the 2006 Oscars have proven that it can. The government should take note.