The lack of available studio space in Ontario could slow the future growth of the provincial industry, warns a new report from FilmOntario.

Toronto studios turned away an estimated $130 million in production activity over the past year, a total that could have created more than 1,000 jobs. The report also called this estimate a conservative one, saying that the responses it received suggest the projects that went elsewhere had, at the top end, budgets totalling approximately $260 million.

The study, which examined the current situation for Toronto studio owners, argues that, despite the fact Ontario posted its best-ever year in 2016, the growth of the province’s film and TV sector is struggling to keep pace with that of other jurisdictions, including Vancouver and Georgia, both of which reported 35% year-over-year production spending increases in their most recent counts, compared with Ontario’s 11%.

While there will always be incentive-based international competition for screen projects, Canada itself is getting more competitive between jurisdictions. The past couple of years have mainly seen Vancouver and Toronto vie for business (and a few years earlier, Montreal too), but a potential rebound in Montreal thanks to the new MTL GRANDÉ space, a new element to Alberta’s competitiveness with its Calgary Film Centre, a rising Manitoba industry and an expansion of B.C. studio inventory to accommodate its own struggles with overbooking have made domestic competition a little more fierce these days.

According to FilmOntario, all of the study’s respondents said they have been operating at capacity for a year or more and have turned away business, with many saying they are already booked up well into 2018. FilmOntario cited another report, conducted by Hemson Consulting for the City of Toronto, that vacancy rates in the city were less than 5%. In total, respondents to FilmOntario’s survey said they had turned away 44 projects, which ranged from feature films with budgets from $10 to $80 million to series with budgets ranging from $3 to $5 million per episode. The report noted that some of those projects were able to find other production facilities within Toronto or elsewhere in Ontario, though those were in the minority. Respondents also noted that it was easier to accommodate TV series, as opposed to high-budget features, which meant a higher percentage of films looked elsewhere. In most cases, these projects went either to Vancouver or the U.S., said the study.

This has implications for overall domestic industry too: “In addition to the lost business, having low vacancy rates in provincial studios can also have a detrimental impact on a very important part of the province’s screen-based ecosystem – the domestic productions that are squeezed out of the premium studio spaces due to their usually smaller budget sizes,” read the study.

All the studio owners surveyed said they hope to expand in the future. In total, by 2022, respondents said they hope to expand by approximately 600,000 square feet. Among the most recent expansion announcements was the news that Cinespace is adding two new 20,000 square foot studios to its Kipling Avenue location. The new space is scheduled to operational by the middle of 2018.

While expansion is top of mind, studio owners said a number of challenges are impeding their desired level of growth. The primary issue cited was a lack of suitable land in the downtown Toronto area, while studio owners said they felt producers may be unwilling to travel extra distances in the case of studios located outside of the downtown area. Respondents said some of the land they have identified is located in Toronto’s Port Lands, while other areas were not disclosed due to confidentiality reasons. Last May Toronto mayor John Tory said the city was in the process of identifying city-owned assets that could be used for potential expansion.

Access to capital was another challenge cited by studio owners. The study suggested a number of solutions, including: one-time-only grants of up to $20 million for studio building (where studio owners invest an equal amount as government); government loan programs; and loan guarantees (where studio owners can arrange more favourable rates on loans from private lenders due to the fact they have a government guarantee).

In addition, studio owners said that safety regulations have been enforced less rigorously in the case of make-shift studio spaces being operated out of warehouses or other short-term-use facilities. “Studio owners feel this puts them at a competitive disadvantage yet, should anything happen in one of those inadequate spaces, it will be the entire sector that suffers reputational damage, even those who were following existing safety regulations,” said the report.

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