It is an irony, albeit a cold one for West Coast stakeholders, that B.C. was the first of the big three industry centers to mobilize a province-wide industry lobby group, with the formal creation of the Motion Picture Production Industry Association of British Columbia, and yet is the last to see its 11% service production tax credit boosted to a competitive level.

Since late December, Ontario and Quebec have raised their production service tax credits to 18% and 20%, respectively.

The MPPIA-BC has been operating since April 2002. By comparison, FilmOntario, which acts largely in the same capacity, advising the provincial government and lobbying on behalf of the production community – including producers, talent, studios, post houses and crews – came into existence in June 2003. In Quebec, the Forum métropolitain de l’industrie cinématographique met for only the first time on Nov. 29 and announced the creation of an as-yet-unnamed corporation aimed at promoting Quebec as a production center. Just four weeks later, the Quebec government boosted its service tax credit from 11%.

The irony is colder still when one considers that no jurisdiction in Canada relies more heavily on the largesse of foreign production than B.C. In 2002/03, B.C. saw $1.04 billion in production spending, of which foreign location shoots accounted for $830 million, representing 80% of the total.

By comparison, service shoots in Quebec and Ontario represented 25% and 29% of total production, respectively.

And the clock is ticking. Already, Brightlight Pictures, one of the busiest service producers in Vancouver, has said it could shift US$100-million in feature production out of B.C. and into Ontario. While some see it as posturing aimed at forcing the province’s hand, Brightlight says the move could save its productions hundreds of thousands of dollars.

Mood in B.C. somber

According to Playback’s West Coast correspondent Ian Edwards, the mood in B.C. is very somber and there is some extremely strong doom-and-gloom rhetoric about the industry being on the brink of collapse.

The B.C. Liberal government has said that the industry’s tax-credit concerns will be addressed in the provincial budget Feb. 15, but many fear that a good chunk of the year’s revenue will be heading east by then, as producers are already crunching numbers in anticipation of the summer shooting season. It’s a critical month.

The B.C. industry has already struggled through what appears to have been a devastating year that saw the Canadian dollar skirt US$0.85. Figures from MPPIA-BC estimate that production in the province fell by 25% in 2004, killing about 2,000 jobs.

Since coming to power in 2001, the B.C. Liberals have not been the most film-friendly of regimes, slashing funding to B.C. Film by 63% in 2002. The result was that B.C. Film stopped participating in TV productions. The agency’s Feature Film Fund was also cut last year. Meanwhile, B.C. is the only province in Canada that refuses to make foreign film and TV producers exempt from the provincial sales tax, which generally adds 2% to budgets.

Mind you, government action has not been all negative. In 2003, the province introduced a 15% digital animation or visual effects tax credit for both foreign and domestic producers, which helped boost B.C.’s animation industry, with 40-plus animation companies such as Studio B Productions, Bardel Animation and Atomic Cartoons benefiting greatly. The government also added a 6% bonus to service producers shooting outside Vancouver, helping boost work in Victoria and the Lower Mainland.

But the recent surge in the Canadian dollar, declining drama volumes and increased competition from international locations have continued to put pressure on the sector.

For its part, the industry has been fighting hard to help maintain whatever piece of the pie it can. Industry stakeholders including Lions Gate Studios and IATSE Local 891 in Vancouver have dropped rates, and several unions are discussing pegging fees below US$0.80.

If the industry can make such sacrifices to keep the industry afloat and if the B.C. government’s Liberal counterparts in Quebec and Ontario don’t need to wait for a new budget to announce enhanced tax credits, then B.C. can do its part, too. It should do so with haste.