Is Hollywood North Going South?
Recently all the talk in the industry, which directly and indirectly employs some 30,000 British Columbians, has been about the U.S. writers' strike and how it's impacting B.C. television production.
But that's just a short term event masking more serious problems that could sink an industry that's become as much a part of the popular B.C. identity as our infamous BC Bud.
Everyone now privately wringing their hands about the future of the industry should have seen this coming. The signals have been emerging for some time.
At the root of the film industry's problems is the fact that movie-making is being commoditized. Today, the moguls who make movies are not the movie makers of the past -- creatives wanting to make “great films”. They're closer to bankers, or MBA driven corporate leaders who produce product that’s become just another low-priced entertainment commodity.
American movie producers came here because we were a low-cost production centre. Sure we can tout our growing expertise which makes foreign production easier here. But really, it's all about cost. To movie producers we were the equivalent of those programmers from India who will do a software job for a third of the cost in North America.
Much of that low-cost advantage came from our low dollar in comparison to the U.S. Greenback. When a U.S. dollar buys $1.40 worth of Canadian services, you can always make the numbers work. Throw in a few hidden perks that are equivalent in a way to subsidies and it gets even better. That's why through the 90s and up until last year the industry was thriving.
But that was then. This is now. With the Loonie at par, that 40-per-cent bump in productivity has disappeared, even as local costs (i.e housing and wages) went up. A serious blow to their bottom line.
Also, other jurisdictions are wooing these people. Ontario and Quebec have boosted their tax credit regimes; several U.S. States have credits in place to encourage filmmaking; even European and Asian governments are getting in the game. Can you blame a producer faced with ballooning costs and lower prices for his product for seeking out the lowest cost area in which to operate?
I'd like to say here that B.C. is starting to reap what it has sown, but we haven't really sown anything. All we've done is what B.C. has always done – harvested a natural resource. Just like with forestry and other commodity-type industries, we've taken a natural advantage and played it into an industry. And now that natural advantage is disappearing and so is the industry.
Oh, by the way, speaking of the link between resources and film, there's another connection that threatens. The same bulldog law firm that launched (and won) the softwood lumber suit against Canadian forestry firms for producing low-cost subsidized lumber has been engaged by the Hollywood unions and their allies to fight the flight of American production to Canada.
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