Canadian Heritage Committee on Feb. 25th, 2015

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

I've certainly seen that demonstrated in my advocacy for the sector. Thank you.

Go ahead, Terence.

[Terence Young, Conservative, Oakville, ON]

Thank you.

How much time do I have, Chair?

[The Chair, Conservative, Gord Brown]

You have three minutes.

[Terence Young, Conservative, Oakville, ON]

Then I'm practising triage on my questions.

Mr. Bronfman, you made reference to what happened in Regina, Saskatchewan, to the industry there. What happened? How did that harm the industry?

[Paul Bronfman]

Well, what happened was that I think there was a philosophical decision made by the Wall government that tax credits were not something they could live with. They dropped them, and within 60 days the industry was dead.

[Terence Young, Conservative, Oakville, ON]

Thank you.

You used the term “bridge financing”. What kind of return on investment do bridge financers expect when they invest in a feature film?

[Paul Bronfman]

As much as they can get away with.

[Terence Young, Conservative, Oakville, ON]

How much can they usually get away with?

[Paul Bronfman]

It depends on how desperate the film producer is. I know this because my son is a feature film producer, a Canadian feature film producer.

[Terence Young, Conservative, Oakville, ON]

So you don't feel comfortable providing—

[Paul Bronfman]

Oftentimes, because the Canadian producers are—I wouldn't call it desperate for money—very short of money, they pay fees that are way above market.

[David Hardy]

They're high-risk loans.

[Paul Bronfman]

Yes.

[Terence Young, Conservative, Oakville, ON]

So you have a high-risk loan. What do they want? Twenty-five per cent?

[Paul Bronfman]

I would say that it could range anywhere from 5% to 20%.

[Terence Young, Conservative, Oakville, ON]

Okay.

[Paul Bronfman]

Twenty per cent is really punitive, but it's certainly prime plus a few points.

Shawn would know better than I would.

[Terence Young, Conservative, Oakville, ON]

Shawn, do you have an answer, please?

[Shawn Williamson]

I think we're talking about bridging the tax credits, so because these are effectively Canadian government...we're banking Canadian government paper, so the spread on that is quite low. When you get into the actual financing of a feature film and you talk about gap, bridge, and super-gap financing, this is all very expensive money, but it's high-risk money, and often we expect to pay a fair return on that.

I think Peter was referring to the actual loans that we set up on every production to bank the tax credits that come out of both the provincial and the federal governments. The suggestion was that there may be a way for government to front that money and allow us to save the banking on that. The numbers on that are typically at prime or prime plus 1%.

[Terence Young, Conservative, Oakville, ON]

Thank you.

Mr. Williamson, what is hardest to find: scripts, performers, directors, or money?

[Shawn Williamson]

Oh, there are lots of scripts, but “good” in front of any those is hard to find.

I would say that money is easy to find if you have a great script and a great director. At the end of the day, the foundation for what we do is to tell stories, and that's all we're talking about. For that, you need good actors, good directors, and good storytellers.

[A voice]

Good scripts.

[Shawn Williamson]

The money will follow.

[Terence Young, Conservative, Oakville, ON]

I was under the impression that there are a lot of good actors in Canada. Is that not true?

[Shawn Williamson]

There are many, many good actors in Canada. The talent pool, both technically and from a creative perspective, is very deep. The concern we often have is finding internationally known names within Canada. That can be challenging.