One year ago, it was largely doom and gloom. Not that it’s sunshine and rainbows today for the Canadian film and television industries, but optimists might say that 2003 was a bottoming out and 2004 showed enough glimmers of hope to keep on keeping on. Yet many in the biz still feel that their corporate viability relies too much on external forces. If good fortune and more of a helping hand don’t come soon, what positive signs came over the past 12 months will not be enough to sustain them.

For those on the service production side, bad news came on several fronts in 2004. While tumbleweeds rolled across Toronto soundstages in 2003, largely due to SARS fears, Vancouver and Montreal hosted some of Hollywood’s biggest blockbusters, and these films – including I, Robot, The Chronicles of Riddick, The Day After Tomorrow and The Aviator – figured prominently at the 2004 box office.

But in 2004, Canadian studios from coast to coast felt the pinch, as the loonie, threatening to hit US$0.80 in late 2003, did just that, in fact skirting US$0.85 at its peak. (It sits at US$0.82 at the time of this writing.) Observers have long said that US$0.80 was the point at which Hollywood producers would question the economic benefit of shooting in Canada, and the silence in the studios would indicate that might be the case.

Compounding the situation is the fact that American states have jumped into the ring. On the heels of anti-‘runaway’ rhetoric from the likes of California Governor Arnold Schwarzenegger, U.S. presidential candidate Senator John Kerry and actor Ben Affleck, many states have begun offering their own Canadian-style tax credits for producers, from Louisiana to New Mexico to Pennsylvania. The situation has grown dire in Canada’s production centers, and think groups, lobby organizations and forums have launched in the three major cities to find ways to save Canada’s service sector, which seemed all but indestructible in 2000, when foreign location shooting peaked at $1.5 billion.

For those banking on domestic drama, 2004 began looking very bleak indeed. The number of homegrown shows was at an all-time low, Gemini-winning offerings such as The Eleventh Hour were not drawing monster eyeballs, reality programs ruled, and, worst of all, the federal government had cut its annual contribution to the Canadian Television Fund – many programs’ financing trigger – by $25 million to $75 million. There was, in fact, even less in 2004’s pot, after the CTF had borrowed $12.5 million against the fed’s kitty to answer an industry-wide S.O.S. in 2003, enabling the likes of The Eleventh Hour to make it back on air.

Things got grimmer in February when two of the stalwarts of Canuck drama, cop shows Cold Squad on CTV and Blue Murder on Global, both got the axe on the heels of Ottawa’s diminishing cash commitment.

Then, a reversal of fortune – albeit a temporary one – arrived on March 23. Finance Minister Ralph Goodale, who had replaced John Manley in that post after Prime Minister Paul Martin took over the reins from the retiring Jean Chrétien, announced that the feds would be restoring their previous commitment to the CTF to $100 million per year for 2004/05.

Lobbying efforts by stakeholders including ACTRA, CBC, CFTPA, APFTQ and the Canadian Association of Broadcasters had paid off, and producers could breathe a collective sigh of relief. But after the initial wave of enthusiasm subsided came the realization that this was only a short-term fix, and that producers were no better off than they had been a couple of years prior, when times already seemed tight.

On behalf of the private nets, Glenn O’Farrell, president and CEO of the CAB, took the CTF news positively. ‘This is a much better environment and context for television across the country,’ he said, adding that the two-year stay of execution would give the industry an opportunity to build a long-term plan.

That time is half up, and the most high-profile solution that has been offered came at the recent CAB conference, where CRTC chair Charles Dalfen unveiled a scheme to bolster drama. The incentive would allow a caster to run up to eight extra minutes of advertising per hour for each hour of original Canuck drama aired. Additional bonuses would be granted for increased audience share and spending.

While casters received the news with muted excitement, those on the production side, who want to see a revision of the CRTC’s controversial 1999 Television Policy, which loosened caster requirements to air Canadian drama, were not satisfied.

‘I think recent history has told us that when you leave it up to the broadcaster, they don’t necessarily put their money where their mouth is,’ said Eleventh Hour star and ACTRA lobbyist Sonja Smits.

Cynicism from the production sector was fueled in large part by the CRTC’s Statistical and Financial Summaries 1999-2003 report, released in February, which revealed that, while domestic drama production has declined, private broadcaster profits doubled from 2002 to 2003, jumping to $189.8 million from $95.6 million.

Hope came for both domestic and service producers in Ontario, at least, when, on Dec. 21, the provincial government pledged to up both its foreign and domestic tax credits to 18% (from 11%) and 30% (from 20%), respectively.

Of the private casters, CTV was the clear winner in 2004 with both its domestic and U.S. programming. While the second season of CTV’s Canadian Idol continued to draw record viewerships of over two million, the half-hour comedy Corner Gas, about quirky locals converging at a local Saskatchewan gas station, became an underdog Canuck TV story for the ages, attracting up to 1.6 million viewers per episode.

In addition to these homegrown smashes, CTV’s acquisition acumen proved that drama is, in fact, far from dead. The quirky bedroom shenanigans of Desperate Housewives and the Survivor-as-drama of Lost have helped the net dominate the ratings. These successes assured Susanne Boyce, CTV’s president of programming, honors as Playback’s Person of the Year.

For its part, the news out of Global Television was nowhere near as cheery. Although the net was clearly getting beaten in the ratings, despite phenom reality series Survivor and The Apprentice, the industry was shocked by the news in October that three of the net’s top TV execs – Jack Tomik, president CanWest Media Sales; Loren Mawhinney, VP of Canadian production; and Doug Hoover, SVP programming and promotions – had been let go.

Parent company CanWest Global simultaneously announced the launch of Toronto-based CanWest MediaWorks, made up of the firm’s Canadian business units, which is being headed up by Rick Camilleri, former COO of CanWest operations. Meanwhile, the company lured U.S. TV execs Kathleen Dore and Joseph Mangione northward to try to right the ship, serving as president television and radio and president, sales and marketing, CanWest MediaWorks, respectively.

Meanwhile, it was a bittersweet year for the CBC. The pubcaster launched the new drama series This Is Wonderland and the epic mini-series Human Cargo, both critical faves, but its much-hyped hockey-themed reality show Making the Cut drew sometimes middling audiences. There were also high expectations for The Greatest Canadian, episodes of which had wildly varying ratings but which became prime water-cooler fodder.

The bad news for CBC is that the NHL season had yet to get underway at the time of this writing, with team owners and players still unable to come to terms on a new labor agreement. The Ceeb has retained a fair number of eyeballs with its replacement Movie Night in Canada, in which it airs – controversially – Hollywood blockbuster fare, but nonetheless the Ceeb could be out a reported $55 million to $60 million in ad revenues if the season is completely forfeited.

The timing couldn’t be worse – the pubcaster experienced a $10-million budget cut in November, and new Minister of Canadian Heritage Liza Frulla announced that it might have to take another cut in 2005 of up to $46 million. These announcements came on the heels of the pubcaster already letting go of upwards of 50 employees.

A major changing of the guard at CBC this year saw Richard Stursberg, former Telefilm Canada executive director, take over the role of executive VP, English television from the retiring Harold Redekopp. Meanwhile, Wayne Clarkson, former executive director of the Canadian Film Centre, was named the new Telefilm head, and so the task of upping domestic feature films’ piece of the local box office to 5%, a task that is not as unlikely as it once seemed (see story, p. 26), falls to him.