A whopping 37% increase in service production in British Columbia led to a small gain of 4% in overall production volume across Canada for the fiscal year ended March 31, 2008, according to a sneak preview of the upcoming CFTPA annual report. Combined domestic and service production increased to $5.2 billion, from $5 billion the previous fiscal.

The total $5.2-billion production volume is divided into three sectors: foreign location and service production was worth $1.77 billion; production by independent Canadian producers was worth $2.3 billion; and in-house broadcaster productions (such as news, sports and current affairs) generated $1.16 billion in activity.

‘Production volume is solid, but it certainly isn’t growing,’ says CFTPA president and CEO Guy Mayson. ‘Over the last few years, production activity has plateaued in the $5-billion-plus range. I think we need a new strategy to take the content industry – which is potentially a huge growth sector – to the next level. The real economic potential is making a bigger impression on the international market.’

According to Profile 2009, the CFTPA’s annual survey of production activity, the only sector that saw a marked boost in ’07/08 was the service industry, with a 23% increase to $1.77 billion (from $1.4 billion the previous year). However, that national increase can be attributed to a boom in B.C., where volume soared 37% to $1.1 billion in ’07/08 (from $861 million in ’06/07).

B.C. continues to have some advantages over the rest of Canada, including many large studio spaces, a geographical advantage that includes a shared time zone with Los Angeles, U.S. producers’ familiarity with B.C. crews, and an increasingly competitive provincial tax credit (which increased from 18% to 25% for service shoots during this period).

‘Ontario and Quebec have faced competition south of the border from states like New York, Illinois and Michigan, which have all introduced significant tax credits,’ says Peter Leitch, chair of the Motion Picture Production Association of B.C. and president of North Shore/Mammoth Studios. ‘We don’t have that same level of direct competition in B.C. [because] the states south of us – like Washington, Oregon and Montana – haven’t developed their film industry to the same level.’

Nonetheless, the sharp increase in location shoots is surprising, given that during ’07/08 the Writers Guild of America staged a strike (November 2007 to February 2008) and the Canadian dollar continued to strengthen against the greenback. On top of that, the loonie was on par with the U.S. dollar for the first time in almost 31 years in September 2007.

Additional mitigating factors contributing to the rise in offshore work in the west also include U.S. studios rushing through an increased amount of production prior to the WGA strike deadline, and some B.C. studios guaranteeing a locked exchange rate to eliminate the fluctuating dollar factor in budget planning.

‘Some American producers who shot in other places may have decided to come back to Canada last year,’ says Mayson. ‘Clearly we remained competitive.’

Meanwhile, the $2.3-billion Canadian indie production sector is further subdivided into two categories: television, worth $2 billion in ’07/08, and feature film, worth $273 million for the fiscal. Television and feature film production volumes each decreased by 7% in fiscal ’07/08.

‘Features are certainly not a growth area, although theatrical production isn’t doing as badly as it has in previous years,’ says Mayson, noting that in ’04/05, for example, feature production totaled just $179 million.

Another annual decrease is notable in kids programming and documentaries, which fell by 34% and 12%, respectively, in ’07/08. Mayson downplays the drops, pointing out that in ’06/07, both genres faced unprecedented volume gains, with kids programming soaring 40% to $387 million and docs rising 23% to $492 million, due to increased appetite from specialty channels.

In this past fiscal, however, both genres returned to historic levels, although the CFTPA has chosen to only reveal those details when Profile is released at its Prime Time in Ottawa convention on Feb. 19.

Looking ahead, Mayson says it is too early to forecast how the industry will fare in 2009. While a lower Canadian dollar should result in more foreign shoots, there is some uncertainty as to how the global economic crisis will impact both service and domestic production.

‘That is the big question mark,’ says Mayson. ‘Anecdotally, I am hearing that production levels are reasonable so far. But there is a lot of concern over the financing system. Producers rely on banks to underwrite the financing of their projects, and if that becomes problematic in any way, it could have serious implications. There is also a worry over the state of the international market and whether broadcasters will be buying.’

Ironically, hopes for increased production volume are being pinned on international activities, but the global market is questionable for TV programming and in decline for feature film acquisitions.

And at press time, the real wild card in the mix was a looming strike stateside by the Screen Actors Guild – which remains mired in infighting – that in turn is delaying negotiations and potential service production commitments.