Tax rebate changes rile producers

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Canadian producers are up in arms over a move by the Canada Revenue Agency to shrink their tax rebate checks. Producers who have had their tax credit applications randomly audited by tax officials in recent months have complained that they are now allowed a maximum 10% cap on claims for producer fees, with a further 10% write-off for corporate overhead. This has alarmed producers who have long recorded 15 to 20% write-offs for labor costs against corporate overhead while filing returns in search of tax credit rebates.
The effect of the changed policy is to leave many producers out-of-pocket as they anticipate smaller tax rebates in the mail over the coming months. The biggest production shortfall is understood to be around CA$400,000, but the 10% cap will greatly impact smaller producers who made a high claim, as they depend more on the straight cash flow and domestic and foreign sales, and need the tax credits to stay afloat.
The major issue here is not that Canada Revenue changed the rules, but that they did it without letting anyone know that they had changed. Since many films are created over a three to five-year cycle, banks, other investors and financiers have already approved these production budgets based on old rates. The industry and the CRA are currently in negotiations to resolve this issue.

Sinking Loonie Cheers Service Sector

Those were the good old days when the Canadian “loonie” was sitting at CA$.63 American. The year was 2002-2003 and big American films were coming to Canada to shoot: The Aviator in Montreal, Catwoman in Vancouver, Chicago in Toronto. Then the Canadian dollar started its climb to wards parity; as it passed CA$.80, CA$.85 and CA$.90, the Canadian service sector started to weaken and lose work.

But now, amid the market turmoil, the Canadian dollar has shrunk back to CA$.85 while many American states have reduced their credits for filming as part of cost-cutting measurers—and Canada is poised to inherit the shoots.

Work in Vancouver has definitely picked up. Toronto is hearing that as long as our dollar stays below CA$.88, work will come their way. Quebec is the one spot that has not yet seen a rise, but that is said to be due to the prolonged Screen Actors Guild negotiations in the U.S., which are holding the industry hostage and delaying new film production.

Industry Applauds James Moore
The recent Canadian election introduced a new face in the Heritage portfolio. The appointment of media-savvy, bilingual MP James Moore was met with cheers from a starving cultural community hoping for someone who would back and defend important cultural issues.

Industry insiders feel Moore knows the importance of the film industry in his home province of British Columbia. He follows José Verner and Bev Oda in the post. Both former ministers were viewed as ineffectual and powerless by the community. With a Conservative government in power and with a recession looming on the horizon, the industry is looking for a champion, someone to get cultural funding increased with a roster of new ideas for the future.



Paschendaale Passes $4 Million
Oliver Stone and W. took a back seat to writer-director Paul Gross’ Paschendaale in Canada on its opening weekend, and Gross’ film has been making history ever since. The CA$20 million World War I drama opened on 202 screens with a per-screen average of $4,500. Distributor Alliance put in extra marketing dollars, bringing the spend up to CA$2 million. In its sixth week, the cumulative gross of CA$4.3 million was the fourth-largest box office for a Canadian film in Canadian history. To date, it is the highest-grossing English Canadian film of 2008.

Cronenberg Circles Matarese
David Cronenberg is in talks to direct his first big-budget action film, the Robert Ludlum adaptation The Matarese Circle, for MGM. The picture has Denzel Washington attached. The 1979 conspiracy yarn centers on rival spies confronted with a criminal organization that has infiltrated the government.

The veteran director recently won new acclaim for his well-crafted thriller Eastern Promises, which dominated this year’s DGA Awards in Canada, winning all five of the juried categories in which it was nominated—best feature, director, picture editing, sound editing and production design.

Cinematheque Donates Seats
Leonard Schein, president of Festival Cinemas, donated some seats to Vancouver’s Pacific Cinematheque last spring. As those seats were more comfortable then those already at the Cinematheque and they had cupholders to boot, the Cinematheque offered their old seats for free…and four B.C. independents in Balmoral, Burnaby, the Gulf Islands and Prince Rupert quickly snapped them up.

Mehta Prepares Komogata Maru
Deepa Mehta’s Komogata Maru, now in pre-production, is the true story of a ship that sailed from India to Vancouver in 1914 with 374 passengers on board seeking a new life in Canada. According to Mehta, the project is her chance to share a significant moment in Canadian history and illustrate the bravery of the Sikh community who sacrificed to help create a more tolerant community within Canada. The CA$35 million dollar epic is being produced by David Hamilton.

E-mail Canadian news items to Adina Lebo at mptac.ca@ca.inter.net
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