Earlier this year, the Canadian post-production industry, heavily reliant on Hollywood business, was dealt a severe blow by strike threats from the Writers Guild of America, the Screen Actors Guild and the American Federation of Television and Radio Artists. U.S. producers, anxious in the face of looming walkouts, moved up their production schedules, and by summer few cameras were rolling. The effect was serious enough that several shops had to lay off staff.

But with labor disputes eventually resolved, production seemed to be getting back on track. Then, with the economic downturn precipitated by Sept. 11, the film and television industries suffered another devastating hit.

‘Broadcasters are being very [cautious] right now, especially because of revenue lost the week of the 11th,’ says Alex Olegnowicz, CEO of Toronto boutique post house Imarion. ‘Everybody is struggling to get a bit of graphics work. The big houses are doing [the work] we were doing, and we are left with the very low end right now.’

John Gajdecki, president and CEO of Toronto and Vancouver F/X company GVFX, sees the bigger shops as also having greater financial leverage throughout the downswing.

‘It’s easier for a bigger shop to get the bank behind them, and say, ‘Okay, these are tough times,’ ‘ he says. ‘That’s what we did. We went to the bank and said, ‘The next year is going to suck – don’t even be angry when you get our financial statements.’ It’s harder with a smaller shop, because they’re newer – I’ve been there. At the same time, it’s easier for a smaller shop to hunker down and cut costs.’

Imarion, like virtually all companies, has had to do some belt tightening, but Olegnowicz says online editing work remains strong. Current gigs include Food Network Canada’s Opening Soon, Life Network’s Skin Deep, and online and offline for The Surgeons doc series for the Discovery Health Channel. However, the launch of diginets such as Discovery Health has been particularly jeopardized. The chance of their survival has been publicly questioned from the start, but in light of recent events it may prove difficult for cable carriers to ask consumers for more money once the initial free trial period expires.

Fragile psyches

Most projects underway since before Sept. 11 remain so. Gajdecki says there’s a lot in the shop at GVFX, including the SCI FI Channel/Warner Bros. TV film Babylon 5: The Legend of the Rangers and the new Lions Gate Films sci fi series Tracker, although he concedes ‘It could be just coincidence that the projects we have are [keeping us] busy.’

But a slowdown of new production is expected. The F/X side will likely suffer because costly blockbusters seem risky in the current economic climate, and the psyche of moviegoers and TV viewers might be such that action flicks packed with explosions and/or terrorist themes will not be palatable.

‘We’ve had two projects that went away completely because of the subject [matter],’ says Bob Scarabelli, president of Vancouver post and F/X house Rainmaker Digital Pictures. ‘The subjects were planes falling from the sky.’

Also, fear of travel and increased border hassles have affected the number of Hollywood productions shooting in Canada.

‘We lost two confirmed projects,’ says K. Bruce Grant, COO of Toronto full-service post house Magnetic North. ‘One was due to content, and the other issue was the client not wanting their material [travelling] in the air. They’re doing it down in L.A. now.’

Gajdecki believes it is a dire situation, adding, ‘I’m hoping our government gets on side with the whole harmonizing of customs, and whatever it’s going to take to make Americans feel comfortable working in Canada. We’re all victims if they don’t do it properly.’

Grant says work at Magnetic North will be solid for the balance of the year, as it attends to projects shot after the strikes were averted. Some of the seven staff members laid off in July were asked back, yet the COO’s forecast is uncertain, especially with the government’s proposal to amend the tax shelter system.

‘It’s horrible timing,’ he says. ‘When the economy is about to go into a recession, you don’t start taking away tax incentives. I’m hoping they leave things status quo.’

In addition to a continuing stream of video editorial work on series including Fireworks Entertainment’s Relic Hunter, Magnetic North recently serviced Paramount’s K-19: The Widowmaker, a Cold War submarine feature starring Harrison Ford and Liam Neeson, which shot largely in Toronto and Halifax. The shop did the production’s dailies on its Avid Media Station digitizing and output system.

‘Where normally we would be transferring the film to Digital Betacam, this time we were digitizing the video directly to digital media, and that basically saved the production time and money,’ Grant explains.

Vancouver-based F/X house Lost Boys Studios has taken advantage of this year’s slower times to finish production on an in-house animation project called Frank.

‘It was kind of nice to bring [Frank] to the forefront for a while, because we had extra time to schedule people,’ says Lost Boys producer Roula Lainas. ‘Keith Graves, the writer, has got other works, and we’ve got [executive producer] John Williams in Los Angeles, and together they’re trying to develop these. Frank is a showpiece for them.’

Lost Boys is also one of several shops in town working on the Miramax/Disney time-travel mini A Wrinkle in Time, for which GVFX’s Gajdecki is effects producer. ‘I think it’s the biggest F/X contract that’s ever stayed in Canada – about $4 million,’ Gajdecki says. ‘It’s about 400 shots, and the shots are big and hard. It’s an enormous amount of work.’

Lost Boys has regularly contributed to locally shooting series such as MGM’s Stargate SG-1, but there are no guarantees, and Lainas acknowledges that with budgets shrinking, bigger one-stop shops that have telecine and dubbing facilities can have the advantage in winning episodic work.

‘If [your show] has a few visual effects, and [a shop] is already doing everything else for you, it can give you a great deal on those effects,’ she says.

Rainmaker’s Scarabelli says that although the strike threats hit his company even harder than anticipated, the shop is now nearly as busy as ever with a slew of TV series (including Cold Squad, Dark Angel, Jeremiah, Stargate SG-1 and Mysterious Ways). He adds, however, that feature business is down and MOW work non-existent. Rainmaker’s services range from lab work to F/X on the sci-fi-themed programs.

Although Scarabelli says he has to be more cautious than ever in terms of capital expenditures, keeping up with new gear is often necessary for a company to retain its edge.

‘We said, ‘What can we do differently from our competition?’ ‘ he recounts. ‘So we have added new services, such as DVD dailies. We have also recently installed MediaNet, which allows us to send footage via fibre back and forth with various customers in Los Angeles.’

Pete Denomme, president and executive producer of Toronto animation/F/X house Calibre Digital Pictures, says it is not particularly slow for his company given the time of year, but that could very well change.

‘There’s less to quote on,’ he says. ‘Right now I’d be quoting on a whole lot of things to be filling the funnel for January-March, and [the fact that I’m not] is a bit disconcerting. Instead of getting two or three other people quoting on the few things [out there], you’re getting six others, so it’s really a producer’s paradise right now.’

Denomme says Calibre is actively doing spec work to bring in jobs. It is, however, in better shape than some others because for the past three years it has operated with a core staff, bringing in freelancers as the jobs dictate, whereas shops with a traditionally large staff have been forced to let some employees go.

Calibre has also sought to diversify its business, such as in its expansion into animated children’s series production with the Alliance Atlantis Communications/BBC copro Ace Lightning and the Carnival of Doom, which mixes live action and CG.

Partnering with other shops has also proven beneficial, as with its collaboration on the AAC mini Haven with GVFX, which yielded the companies a recent Emmy nomination.

‘I think one of the ways to get big feature projects here is to be able to work cohesively with the other divisions,’ Denomme says.

Gajdecki concurs: ‘It’s suicide for individual companies to take on enormous projects. It’s bad not just for the fact that everybody at your company works killer hours, but also because it doesn’t spread the work around. And [collaboration] gives the producers in L.A. more confidence the work can be done locally.’

Denomme acknowledges that post shops will have to knuckle down, but expects cooler heads will prevail.

‘It’s like the older stockbrokers compared to the younger ones,’ he says. ‘The older ones say, ‘You’ve got to ride it out,’ while the younger ones are going ‘Oh my God – I just lost my Porsche!’ You have to have more foresight than that.’

-www.imarion.com

-www.gvfx.com

-www.rainmaker.com

-www.magpost.com

-www.lostboys-studios.com

-www.calibredigital.com