While the loonie’s rapid rise has caused instability across the Canadian film and TV industry, limiting U.S. location shoots and post-production contracts, a bright spot has emerged on the cloudy horizon, with price breaks starting to appear in post and production gear.

This year alone the Canadian dollar has appreciated around 24% against the greenback, reaching a record US$1.08 on Nov. 6. But for the past couple months, costs of post and production gear have been all over the map, with some manufacturers and resellers lowering prices to reflect the strength of the loonie, while others are continuing to charge 20% to 30% more than American list prices.

Suppliers are being forced to react to the reality of the break-neck speed of the loonie’s rise, because Canadian post houses and producers are starting to purchase directly from the U.S.

For example, the Canadian branch of leading editing gear supplier Avid recently announced its prices are on par with Avid U.S., effective Nov. 1.

‘We try to keep a level playing field on both sides of the boarder,’ says Paul Friedman, national manager at Avid Canada. ‘Anyone can go online and look at U.S. prices, so you don’t want to encourage a gray market. No one wins in this situation. The manufacturer doesn’t win and the end user doesn’t win. They have no one to call if they don’t get what they paid for, and they don’t have the service and support or a long-term relationship to leverage.’

Panasonic Canada has also cut prices by about 10% on key broadcast products.

‘The prices won’t go down to par, and it is not across-the-board cuts on all products,’ says Jim Mason, director of professional imaging and display solutions at Panasonic. ‘Our prices have to reflect that the cost of doing business in Canada is higher than in the U.S. The American market is 10 to 15 times larger than ours, so they have bigger buying power.’

Panasonic Canada’s price reductions are primarily on what Mason calls ‘Internet sensitive’ products that companies may be tempted to buy online directly from the U.S.

Cross-border shopping is becoming an increasing concern for equipment suppliers.

‘Clients are going online, and if they can find a U.S. price list, they are saying we want a better deal [from the Canadian reseller],’ says Sean Cowan, manager of post-production and new media products at Toronto’s Precision Camera. ‘So then resellers have to go back to their supplier and say ‘If we don’t reduce the price they are going to buy direct from the U.S.”

Alex Olegnowicz, president of Toronto post shop Imarion, says some resellers are still charging 20% to 30% higher than in the U.S., so companies have no choice but to buy in the U.S. for some products. Even with shipping and duty, there are cost savings.

‘There is no uniformity,’ he says of the widely varying prices. ‘We need our dealers to survive, as they offer us support and service. But if they aren’t reacting to market conditions, they are killing themselves.’

The reason pricing is all over the map, according to Precision’s Cowan, is that some of the manufacturers from which he purchases have locked in their prices for the quarter, so it takes several months before an adjustment can be made to reflect the rising Canadian currency.

‘It takes a while for the savings to trickle down to us,’ he says. ‘The companies we buy from may have stock that is three months old, or have set their prices for the quarter. We expect to start seeing savings in the next while.’

Glenn Burgess, president of Calgary broadcast-product reseller Matrix Video Communications, adds that many companies buy currency contracts with the bank that lock in an exchange rate on their American purchases, to protect them from rapid fluctuation.

‘We are locked in for about a month with the bank on our U.S. purchases, but larger companies often buy currency contracts that lock them into a rate for longer periods,’ he explains. ‘So we can make price changes faster than the big guys.’

It is also apparently cheaper to buy film stock directly from the U.S., as the published prices for Kodak Canada’s stock is 25% to 30% higher in this country.

‘I think there is a gray market developing where companies buy film in the U.S. and bring it back to Canada,’ says a source who asked not to be named. ‘There is significant savings in doing this.’

A Kodak Canada spokesperson refused to comment on its pricing, except to say its pricing varies depending on the contract with the end user and volume purchased.

Fujifilm, meanwhile, says that Canadian customers shouldn’t expect stock prices to be on par with those in the U.S.

‘At Fuji, we buy stock [from Japan] and bring it into Canada, so there’s the cost of catch-up and the fact that business costs more in Canada,’ says Alan Fraser, senior sales and marketing manager, Fujifilm Canada.

Adjusting prices quickly is costly and can be damaging, according to Canuck manufacturer reps and resellers, particularly when the dollar is climbing so rapidly in such a short period of time.

‘There is a cost involved in re-pricing thousands of line items and changing our computer systems,’ says Avid’s Friedman, noting that the company typically sets prices once a year, in January. But for 2007, the company has already had to lower prices twice in a six-month period.

It can also hurt Avid resellers when the supplier makes sudden price changes, and they are forced to sell at a reduced cost inventory they purchased earlier at a higher price, Friedman points out.

Resellers add that it simply isn’t realistic to expect Canadian and U.S. prices to match up.

Brian Milne, director at Toronto software reseller Ilumina, says there are numerous extra costs when he purchases and ships equipment from the U.S. into Canada, including duty clearance, shipping, handling and bank service charges.

‘People don’t understand that a Canadian company pays around 5% extra in currency conversion and transaction fees,’ says Milne. ‘So we have to keep that in our margins.’

-With files from Suzan Ayscough