Canadian Heritage Committee on Feb. 23rd, 2015

[Johanne Mennie, Director, Canadian Audio-Visual Certification Office - CAVCO, Department of Canadian Heritage]

I'll take that question.

Yes, you're absolutely right.

What we see in the province of British Columbia are mostly what are labelled “service productions.” What that means is that production companies in British Columbia offer their services to companies, mostly Hollywood productions, that use Canada as a locale to shoot their films, or for certain specialties like special effects or animation productions. They actually assist or are part of the production of a foreign producer. British Columbia, being closer to California and Los Angeles, tends to be the market for the Americans to shoot their productions here.

[Jean-François Bernier]

It's easier to fly John Travolta from Hollywood to Vancouver. He can go back and sleep in his own bed that same evening. Whereas if you bring him to Halifax or St. John's, Newfoundland.... So a lot of the business in B.C. is for foreign productions. Other big centres in Canada for that are Toronto and Montreal.

The other part of your question was whether there are national policies that are helping B.C. I would answer that national policies are national policies. In this business, they don't have a particular focus on B.C. or Saskatchewan or.... With the tax credit program, if you hire people in B.C., you release T4s, and you get a tax credit on that.

We don't necessarily have a focus with a national policy on helping the B.C. or Ontario or Quebec industry. We help all the industries, which we consider, from a national perspective, a Canadian film industry.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Thank you, Mr. Bernier.

Ms. Mennie, you mentioned post-production, a major stage in the film industry. Yesterday, a Canadian mixer by the name of Craig Mann won an Oscar for Whiplash. Dean Deblois' animated film was also nominated.

Are there incentives for post-production? I am thinking of Rodeo FX, for instance, the company that did 90% of the special effects for Birdman, which won a number of awards yesterday.

This is a major part of the industry. Are there specific programs for post-production or is the exchange rate the only benefit?

[Johanne Mennie]

All post-production costs are eligible for tax credits. They are included in the total production cost. So the same tax credit calculations apply if the production is eligible.

[Jean-François Bernier]

Some expenses are eligible under the Telefilm Canada fund, the Canada Feature Film Fund.

The mandate of the Department of Canadian Heritage is, first and foremost, cultural. Clearly, there is an economic aspect, but on a daily basis, our objective is not really to have John Travolta come to Vancouver. If that happens, great, because that is how the city can maintain its infrastructure and make sure technicians are busy. The technicians work with current tools, not tools from 20 years ago. Our policies are for Canadian productions.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

You are quite right. This has more to do with the industry.

[The Chair, Conservative, Gord Brown]

Okay, we'll move on to Mr. Yurdiga, for five minutes.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair, and thanks to the witnesses for being here today. Your presentations were very interesting.

We have a big multicultural society. In my community of Wood Buffalo, in northern Alberta, we have over 100 countries represented.

It says here that out of 93 Canadian films in 2012 and 2013, there were 59 in English and 34 in French. Are there any films coming out in other languages, especially targeting any group outside of those English and French groups?

[Johanne Mennie]

Yes, we do certified productions that are produced in languages other than French and English. I would say on average that's about 2% of the productions that we certify on an annual basis. Based on 1,100 productions that we certify, about 2% are in languages other than French and English.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

Are you seeing a bigger demand for films produced in other languages?

[Johanne Mennie]

It's pretty stable.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

Okay, thank you.

I was just looking here at the economic impact. Now we're in the digital age; we're reaching out to more people. We're more mobile; we're on our cellphones or iPads, whatever we have. What is the total economic impact now that we're attracting a bigger group of people? Before if you wanted to watch something, you had to be at home and you were limited to what you could see, but now you can watch a movie anywhere. Is that changing our bottom line for the film industry, having a bigger market?

[Scott White]

I'm not sure. On annex A, we have 10 years' worth of production volume in the film and television sector. You can see that it's generally trending up, but I think it's too early to tell the impacts of what you're talking about.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

Yes, the financial impact. Obviously, revenues are very important to any industry.

[Scott White]

Right. I'll say one thing, which is that we do see something that is happening across other cultural industries, where in the physical world, the kind of money involved is different than in the digital world. There hasn't been a full adjustment to that yet. The biggest example in the film world would be DVDs. There was a lot more money involved in the sale of those and a lot more profits to be made from various players, whereas the digital files, digital distribution of films, is a much lower cost business, so you have to make it up in volume, right?

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

Yes.

In terms of jobs, obviously, we're having more and more films produced. Is the number of people going into the film industry increasing as far as people working in the industry?

[Scott White]

We haven't seen that yet, no.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

So it's been stable.

[Johanne Mennie]

If we look at the number of productions over time coming in for certification, you see a pretty flat line. There's no drastic increase year over year; it's pretty stable. You can think about that in terms of capacity, so individuals coming out of film schools or whatnot, and also in terms of capacity to absorb what comes out into the marketplace.

[Jean-François Bernier]

If I may, it's true that it's fairly flat, but the productions that Johanne sees are more traditional film and television productions. We're not certifying video games. We're not certifying a lot of online material that is taking place out there, and that's good. This is Canadian content that is taking place and finding its way.

If you want to visit something that is quite telling of what's happening outside the framework, I invite you to visit epicmealtime.com. Epicmealtime.com is Montreal-based guys. They give extreme recipes, like a huge hamburger, and they keep counting the number of calories, and if it's below 250,000 it ain't enough, so more bacon, more bacon. It's taking place and it has visitors. Every week two million people watch that. It's another form of content.

Now, should we be proud of epicmealtime.com? I don't know; it's for debate, but two million people find it funny and interesting to watch. We don't finance that, but I'm sure there are creators working on this, like just the guy shooting this. Maybe the day after he's working with Xavier Dolan or at the NFB. People work on those audiovisual productions.

[The Chair, Conservative, Gord Brown]

Okay, thank you. We're going to move on.

Mr. Nantel, you have five minutes.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Thank you very much, Mr. Chair.

My questions will be quick since the clock is ticking.

Thank you for being here. Your testimony is very enlightening for us.

The two graphs on page 20 have caught my attention. If I understand correctly, the first graph shows that films presented in French in Canada are taking roughly 10% of the box office revenues. In the second graph with the multiple platforms, films in French have 6.9%.

Is that not indicative of what I was saying in terms of people having so many choices that they sort of forget about the Canadian content in French?

[Jean-François Bernier]

We have not analyzed people's motivation. The other conclusion we could draw from your analysis is that, once people see a movie in theatres, they don't watch it again when it's on TV or on other media.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Of course, we must compare apples to apples. It is not the same spectrum, the same number of years, the same year. There can be a huge difference from one year to the next. At any rate, thank you for your answer.

Let me ask you something else. The eOne corporation has a monopoly or a near monopoly. Mr. Roy is the president and he is a wonderful man who cares about Canadian film. However, isn't it troubling that Canada has only one huge distributor?

[Jean-François Bernier]

Let me answer this question, which I think also has a catch.

In the 1980s, there were no Canadian distributors other than René Malo perhaps. Canadian films were not out in theatres or shown on TV. It is as if, 25 years later, we are the victims of our own success. A distribution industry has developed. How many distributors do we need in a country like Canada? Should we have five, 10, 150?

If you had done this study a year ago, there would have been two huge distributors. Today, there is one that's even bigger. We are looking at the situation to see whether it is causing problems for the Canadian feature film industry. That is something you could ask the few producers who will appear here.

The way we see it, Canadian films find a distributor. The eOne corporation does business in 40 countries. Does it help with Canadian film distribution abroad? We could probably say so.