West coast facing ‘brain drain’?

B.C.’s domestic industry has taken a dramatic hit over the past year, although a flurry of scripted development and new factual production is fueling optimism that a turnaround is underway.

Indigenous production in B.C. nose-dived by 40% in 2009 to $217 million, continuing a downward spiral from a high of $407 million in 2007.

‘It has been a tough year for B.C. producers,’ says Brian Hamilton, VP and executive producer at Vancouver’s Omni Film Productions.

A number of factors are being blamed for the downturn in Cancon production in the province: the recession, more lucrative tax incentives in Ontario and Quebec, and broadcasters, impacted by reduced advertising revenue, licensing fewer shows.

The province increased the production services tax credit for foreign shoots to 33% in February, but didn’t sweeten the 35% base domestic labor rebate, which can’t compete with the wider-ranging Ontario and Quebec 25% incentives.

‘I was in L.A. a couple weeks ago and was told by someone who ran the numbers on a large budget drama series shooting in Ontario vs. BC that based on labor rates and the tax credit, there was a $200,000 differential in Ontario’s favor,’ says Hamilton.

Liz Shorten, managing VP, operations and member services at the CFTPA-BC, says in general there is about a 10% budget advantage to shooting in Ontario as compared to B.C. This has caused concern in the Vancouver industry that there isn’t much incentive to land Canadian series in the province.

‘If you are a broadcaster and looking at Ontario vs. B.C. right now to shoot a series, there is going to be a heck of a lot of pressure to make the show in Ontario where you can get more on screen,’ she says.

However, Hamilton points out that there are also many creative factors that come into play when making decisions on where to shoot.

‘As a B.C. based producer we are exploiting all our other advantages as best we can and while the tax credit differential is a challenge, it isn’t the only factor and B.C. has other things we can offer,’ says Hamilton.

‘We want to shoot in B.C. and make it work here and there is a willingness to produce in BC by the networks,’ adds Force Four Entertainment’s John Ritchie.

But the lack of Cancon drama production in B.C. in comparison to Ontario worries Trish Dolman at Vancouver’s Screen Siren Pictures. She is concerned it’s causing the beginnings of a ‘brain drain’ East.

‘I know writers, DOPs, directors and composers who are moving to Ontario this summer because they are getting work there,’ she says. ‘If we lose our talent pool then we lose another competitive advantage and it is a downward spiral from there.’

Writer Chuck Lazer, who’s also the Writers Guild of Canada’s National Councillor from the Pacific Region, points out that the B.C. domestic tax credit puts local writers at a disadvantage in comparison to other provinces like Ontario.

Under the rules of B.C.’s indigenous incentive, scripts written before production begins are not eligible for the labour credit — but broadcasters will want a number of scripts written before shooting begins. Most other provinces, including Ontario, allow for script-writing before production to qualify for their rebate. As a result, Lazer says there is a financial incentive for a B.C. drama producer to go into a copro with another province, like Ontario, and have the scripts written in that jurisdiction, with B.C. taking the post work.

‘So it’s financially advantageous for the creative to leave B.C.,’ says Lazer.

The WGC has met with the provincial government to lobby for a change to this rule, but as yet no changes have been made.

‘I see the next generation of B.C. writers leaving this province to work,’ adds Lazer.

Screen Siren’s Dolman says her company lost two American projects that moved to Ontario when the province announced its 25% credit last summer.

‘I think this provincial government made a tactical error,’ Dolman adds. ‘You have to decide if you are going to be in the tax credit game or not and if you are, it means being competitive and staying on top of it.’

Screen Siren recently partnered with Toronto’s The Film Farm on the coming-of-age movie Daydream Nation, starring Kat Dennings, Rece Thompson, Josh Lucas and Andie McDowell.

Dolman points out that another advantage Ontario producers have over their counterparts in B.C., is access to equity investment financing from the OMDC.

‘The OMDC’s equity investment isn’t a huge amount of money but it can be crucial in closing financing,’ she says.

BC Film offers only development funding — which Dolman says is hugely valuable — but the agency could also make a big difference in triggering production as an equity investor.

‘BC Film could do a lot with a small amount of [equity investment] money,’ she says.

Shorten points out that another cause for concern is that over the past couple years broadcasters like Canwest, Corus and CBC have disbanded Vancouver development offices, centralizing their commissioning staff in Toronto.

‘This is the second largest English language domestic production community in Canada so one would think it would warrant that kind of infrastructure,’ says Shorten. ‘Beyond the practical realities of the $1,500 cup of coffee because producers have to go to Toronto to keep up relationships, I think this also has an impact on how we are viewed as a production community.’