Heritage Minister Sheila Copps has apparently struck out in a bid to have support for $50 million of federal money allocated for a feature film fund written into the upcoming budget.

Sources close to Copps say she planned to ask Finance Minister Paul Martin to ‘put a line in the budget’ acknowledging the importance of the feature film industry in Canada and inspiring confidence that the money will be forthcoming. No such ‘line’ will appear.

Commenting on the policy initiative overall, Copps told Playback in an interview at the cftpa policy conference in Ottawa Feb. 3 that there would be no movement on feature film policy until late spring.

Copps was wary of commenting on specific recommendations made in a report by the advisory committee to the Feature Film Policy Review, but she did indicate support for amending the federal foreign services tax credit to put those funds toward indigenous films.

Copps also said that reallocating $5 million from the National Film Board’s annual budget and $25 million from the cbc could help give both public institutions ‘a new lease on life.’

When asked about suggestions that cbc might not be able to afford a reallocation of $25 million of its annual budget, Copps stated: ‘Ask the cbc how much they paid for the rights to broadcast the Olympics.’

‘Support Copps’

Meanwhile, industry reaction to the advisory committee’s report is mostly positive. All seem to support more money for Canadian features, but the elimination of the foreign services tax credit, along with a few other key recommendations, is facing opposition on a number of fronts.

‘Not for a decade has a minister had the courage to champion the extraordinary potential of Canadian films. Let us give her the united support she deserves,’ said Directors Guild of Canada president Allan King in a speech to the Empire Club in Toronto the day of the report’s release.

‘It is time for us to summon the nerve to author our own destiny,’ said King in a speech that lauded the committee’s proposals to untie Canadian distribution rights from u.s. ones, amend federal tax credits to direct them solely at Canadian films, and create a new $150-million feature film fund from existing funds and new government money.

However, King did admit that the dgc’s Ontario and b.c. district councils had serious concerns about scrapping the foreign services tax credit.

‘It’s unclear what the effect [of freezing foreign producers out of the tax credit] will be,’ says King.

Speaking on behalf of his 1,200-member group, dgc Ontario District Council chairman Alan Goluboff says, ‘We support any initiative that helps develop indigenous production to strengthen Canadian culture and the telling of our own stories. However, while we approve of the idea of an enhanced feature film fund, we do not believe that this fund should be created at the expense of u.s. production in Canada.’

Goluboff says that in 1998, 65% of dgc productions in Ontario were u.s. and another 15% coventures with u.s. producers.

‘We do not want to do anything to jeopardize this relationship, and are alarmed at the implications relating to the foreign tax credits,’ says Goluboff. ‘It is because of this that we do not support their removal.’

The cftpa and the Canadian Association of Film Distributors and Exporters are both definitely onside with the report.

‘Canadian film producers can only benefit from better access to funding, Canadian screens and even Canadian primetime television with stories made here and about Canada,’ says Elizabeth McDonald, cftpa president and ceo.

Richard Paradis, president of cafde, which represents the interests of Canadian distribution companies, says his membership supports all of the committee’s recommendations, including a 3.5% levy on the gross distribution receipts of all films distributed in Canada.

Paradis says his members have no problem paying the levy as long as the funding available for the marketing and promotion of Canadian films increases.

In December, when the first trial balloons from the report were floated, the Heritage Ministry said it would not support such a dedicated tax and Paul Martin’s Finance Ministry is also understood to not support such measures.

‘From our point of view, it was a proposal put in with others,’ says Paradis. ‘The government could also choose to put in on its own behalf $50-million worth of money. So it gives a choice to the government of either trying to impose the levy on distribution or to come up with the money. The committee can’t be blamed with not coming up with proposals.

‘What the recommendations now require is a political response.’

Not surprisingly, cafde members also support the committee’s recommendation to unbundle North American distribution rights to prevent the tied buying of Canadian and American territories. While governments have looked at this issue in the past and subsequently backed off, Paradis is confident that the current government’s commitment to the feature film issue will give the recommendation to amend the Competition Act a chance.

cafde recommends the creation of an industry/government task force to deal with the complicated issue. It has also commissioned a study to determine the value of non-proprietary rights and to gauge the impact such a move would make. The association hopes to table the report to Heritage in the near future.

But Doug Frith, president of the Canadian Motion Picture Distributors Association, which represents the interests of the major Hollywood studios in Canada, says the committee’s findings reflect its membership, which he calls heavily weighted with Canadian producers and distributors.

Frith says the committee’s recommendation to untie distribution rights is not asking to eliminate tied buying but rather tied selling – a trade practice he says is common throughout the world.

Frith also opposes the elimination of the foreign services tax credit – legislation that his lobbying helped create. The former Liberal member of Parliament says he is ‘vigilant and reasonably confident’ that the 11% credit won’t be rescinded.

The proposed 3.5% distribution levy is also strongly opposed by Frith and his membership. The American studios account for roughly 85% of the theatrical box-office receipts in Canada, but Frith points out that Canadian distributors control roughly 50% of the home video market. The committee suggests that $50 million could be gained from such a tax. Frith says funds should come from Canadian companies’ consolidated revenues.

CAB criticism

Similarly, the Canadian Association of Broadcasters also criticized the report, saying its findings reflected the fact that no cab members were on the committee. ‘Without broadcaster input, the report is incomplete and unbalanced,’ says Michael McCabe, cab president and ceo.

TMN Networks president Lisa de Wilde was on the committee but the Astral-owned tmn is not a cab member.

The report suggests the crtc create incentives for Canadian broadcasters to license and broadcast more feature films in primetime, but nowhere does it suggest they be mandated to do so by condition of licence – as some reports have suggested.

Another broadcaster somewhat squeamish about the report is the cbc. The committee recommends that $25 million of the national public broadcaster’s yearly budget be allocated for features.

‘It’s important to remember that these are recommendations,’ says cbc’s Phyllis Platt, head of arts and entertainment. ‘We’ve always been very supportive of the idea of trying to provide more exposure for feature films in Canada. We know more Canadians watch feature films on the cbc than they do in the theaters, on pay and on home video combined. We have a significant role and we’d love to expand it. The question is money.’

Platt says that in the last two fiscal years cbc and src combined spent $7 million each year on feature films. To jump up to $25 million is ‘significant,’ she says.

‘This [$25 million] is a lot of money for a corporation that’s been downsized as much as we have and holds as large a mandate as we hold.’

Platt indicates that the cbc may in the near future have more primetime slots available for features, and will also be examining the issue of being allowed to own significant stakes in feature productions.

Similarly, taking even $5 million from the National Film Board’s $55-million-a-year budget is far from a done deal.

Reallocating even $5 million of nfb resources to feature films represents ‘a major change and should not be undertaken quickly or lightly,’ says Sandra Macdonald, nfb chairperson and government film commissioner.

Macdonald says the nfb will ‘wait and see’ what response the government makes to the committee’s recommendation that $5 million of the nfb’s annual budget be put towards a feature film fund.

In the Empire Club address, King spoke of the essential cultural necessity for strong Canadian feature films – an idea that has been somewhat overshadowed lately with talk of the logistics of a feature film fund.

‘Feature films are at the heart of a healthy audiovisual culture,’ said King, ‘. . . they are its most creative and rewarding expression.. . . It is in feature films that new worlds of feelings are explored. This is where exciting new discoveries are made. At their best, feature films rise beyond entertainment. . . .Making feature films attracts our brightest and best. Without a vibrant feature film industry, we will always and inevitably export our best talent.’