The Ontario Media Development Corporation is keeping the lid on a damning report that portrays Ontario’s production infrastructure as cracking and that is highly critical of both the Ontario government and its agency’s handling of the problem.

The report, penned by consultant and industry veteran Pauline Couture and delivered to the OMDC in November, is titled ‘Rebuilding Capacity and Competitiveness: An Action Plan to Increase Production in Ontario.’

According to data collected for the report from the CFTPA’s Ontario Producers Panel, member producers exported $710-million worth of production activity, or 19,000 jobs, to other provinces between 2000 and 2002, representing almost 57% of all indigenous (non-service) production in the province.

‘There is legitimate cause for concern: for the first time in many years, there is a feeling that the prized infrastructure of this economically significant industry is eroding in Ontario,’ the report reads. ‘Many Ontario producers have been forced to leave the province and to shoot in other provinces in order to obtain necessary financing. In fact, many have shifted all of their development, or R&D activity, to other provinces.’

Couture was not available to comment on the report.

The report, released to the CBC earlier this year through the Freedom of Information Act, but not widely reported, estimates a loss of economic activity in Ontario of nearly $1.8 billion over those three years.

According to OMDC CEO Michel Frappier, there was nothing sinister in keeping the report under wraps. It was just never meant for public consumption.

‘Originally, it was an internal document,’ he says. ‘Really it was to feed both ourselves and the Ministry [of Culture], to strengthen our recommendations [to Finance] as we go forward.’

Still, the report lays a good deal of what ails the province’s production sector at the agency’s feet. Criticisms include charges that the OMDC is too focused on promoting service work to the detriment of indigenous production and that it lacks expert support to help producers navigate ‘the bureaucracy of the tax credit.’

The agency is also criticized for a lack of aggressiveness in pushing an Ontario agenda when it comes to CRTC hearings, policy processes and other federal issues: ‘Other provincial agencies such as BC Film and Manitoba Film & Sound appear regularly at CRTC hearings and at industry gatherings to promote their provincial industries. In particular, the OMDC should urge the Ontario government to lean on the CRTC to increase primetime drama commitments for private broadcasters, and to lobby for a more stable environment and scheduling stability for Canadian shows.’

Frappier says the report was commissioned in the wake of four consecutive years of declines in domestic production activity in the province. OMDC numbers indicate that the ratios between foreign and Canadian-certified production in Ontario have been steadily decreasing for years. In fact, growth in Ontario since 1996 has been largely due to service productions, which have gone from 35% of total activity to 60% in 2002.

Not surprisingly, the report identifies the 20% Ontario Film and Television Tax Credit – ‘the lowest level of tax credit in the country’ – as the number-one culprit. The lack of development funding and equity investment at the provincial level is also a significant contributor, the report says.

The study goes to great lengths to sketch a reality where the federal and provincial focus on supporting regions outside Toronto, including those initiated through the CTF, CRTC and various provincial and federal tax credits, have conspired to weaken the Ontario sector.

All the while, each institution works under the assumption that Toronto – home to most of Canada’s largest media and production companies – is the strongest and most vibrant center in the country. But together, these regional-based initiatives are chipping away at Ontario’s ‘natural advantage.’

Such programs are meant to help support smaller producers and suppliers, but the strategy ignores the fact that Toronto is home to the largest collection of such so-called mom-and-pop operations, that, by virtue of their location, are viewed through the same lens as an Alliance Atlantis or a Fireworks, the report says.

Among the factors cited, the report points a finger at the CRTC, both for its 1999 Television Policy, which includes ‘regional non-news programming’ in its definition of Priority Programming, as well as the regulator’s approval of numerous regionally based production funds available only to producers outside Ontario.

While the CTF recently did away with its regional bonus, newly introduced broadcaster envelopes continue to have regional incentives for networks airing shows produced outside of Montreal or Toronto.

‘I think there is a very good description of where Ontario sits,’ says producer Alexandra Raffe, chair of the CFTPA’s Ontario Producers Panel, who has read the report. ‘I think it was particularly well done because it factors in a little bit of the historical reality and also makes very explicit that Ontario can’t wave a magic wand by itself, and that so much of the domestic side, particularly, is reliant on the federal level.’

The result is a steady exodus in production to greener pastures in other provinces, the report claims.

Barna-Alper Productions is cited to have taken $180 million of activity out of Ontario in the last seven years. In the last two years, Shaftesbury Films has gone out of province to make four MOWs, a six-part anthology and one series totaling $22.3 million that ‘should all, otherwise, have been made in Ontario,’ according to the Couture report.

Likewise, Tapestry Productions took $17 million of production out of Ontario in the 12 months leading up to the report’s publication.

The only thing keeping some of these producers in Ontario at all is the fact that taking advantage of the more favorable business environment in other provinces requires handing 51% of copyright, plus half their producer fees and overheads to a production company in another province.

‘Forty-nine percent of the money that was distributed in the CTF was to Ontario-based companies, but I’m betting that most of the shows aren’t going to shoot in Ontario. Manitoba has its frequent-shooting bonus. There’s just a huge incentive to go outside of the province and a disincentive to stay here,’ says Tapestry principal Mary Young Leckie.

Frappier is only too aware of the challenges facing Ontario producers. He says the OMDC is using the Couture report where it can to inform various ministers or for internal reference. ‘We don’t agree with everything in the report. It would be very difficult to work on every one of those recommendations. Some we’re working on, some we’ll continue to research and some are not within our jurisdiction.’

The OMDC, due to have its mandate reviewed in 2005, is focused on new communications efforts, Frappier says, because there is some confusion as to just what the OMDC does. He remains hopeful that when its new mandate comes around next year, there will be a return to development funding and equity investment. The agency is using the Couture document to help make its case.

Much of the anecdotal evidence in the report failed to sway the province to upgrade the tax credit last month when the Liberal government tabled its 2004 budget. Minor adjustments included allowing the credit to apply to labor expenses incurred up to two years before principal photography begins and permitting investors outside a production company to claim a stake in a production.

‘We’re continuing to work hard on trying to develop new incentives,’ Frappier says. ‘Our job is to be relentless and go back with the Ministry [of Culture] to Finance and say, ‘Here’s some more information we found. You guys should take a look at updating the tax credit.’ We made presentations pre-budget on improving the tax credit… both enhancements and changes were recommended.

‘As you know, we just got tiny little changes.’

-www.omdc.on.ca