Canadian Heritage Committee on April 27th, 2015

[Anne Fitzgerald]

No, I wouldn't think so. There's no regulation about it at all right now.

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

Are you saying there should be?

[Anne Fitzgerald]

I'm saying there should not be, but that's the way—

[Nuria Bronfman]

No. That should remain the same.

[Neil Campbell]

To be clear: no.

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

There should not be, so don't go there.

[Anne Fitzgerald]

Everybody is in agreement on that one, no regulation of windows.

The other thing is there are no quotas. Again, I don't know if that's really something Heritage could do, no quotas. To demand screen time for Canadian content isn't going to solve the problem at all.

[Nuria Bronfman]

The last time around, in 2005, there was a challenge to exhibitors to double the amount of screen time given to Canadian films.

[Anne Fitzgerald]

Frankly, we don't even track that because I can't tell you what qualifies with CAVCO points to be a Canadian film. You talk about Heritage and Canadian culture, War Witch/Rebelle, which got huge awards in the last couple of years, was an amazing movie about African child soldiers. It has nothing to do with Canada, but just happened to be produced in Canada. So it's still Canadian content, but it's just not about Canadian culture.

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

Chair, how much time do I have left?

[The Chair, Conservative, Gord Brown]

You have one minute and 15 seconds.

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

All right. Could you comment, international lawyer to international lawyer, about the copyright law? Changes have been made. How do you feel it's helping or hurting the film industry?

[Anne Fitzgerald]

There are two sides of that. One is there's the piracy law, so thank you for getting that passed. It's made a huge difference. Canada's no longer a hotbed for piracy.

[Nuria Bronfman]

At all.

[Anne Fitzgerald]

For us, we all just got back from an international conference, and it used to be an embarrassment to show up and deal with our being the hotbed of piracy. It's no longer an issue, so thank you for that.

We feel that the copyright laws could have been a lot stronger. With the Motion Picture Association of Canada we came and met with a number of committees and did not get our voices heard as loudly as we would have liked. A lot of that was on notice and remove requirements, that when content is put online illegally and the ISPs are notified about it, they don't have to take it down immediately in Canada. That would have been a big help. It would make a big difference.

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

Are there any other comments about copyright law?

[Vincenzo Guzzo]

Not about copyright, no.

The only comment I'd like to make is that if you want three ideas, the marketing one's been repeated more than once. I think we should also have a better balance of various types and genres of pictures so that Telefilm, when choosing its 10 to 15 pictures a year, should do a better balance.

Lastly, and I think the most important one, is that the priority should be put on celebrating Canadian films by Canadians going to see the pictures, and not juries around the world at various film festivals rewarding our pictures with an award. The priority should be getting Canadians to get out of their homes to go to see the movies. That's the best way to celebrate and to measure the success of Canadian filmmakers.

Those are the priorities that need to change at Telefilm.

[The Chair, Conservative, Gord Brown]

Thank you. That is going to have to be the last word. Thank you very much for your contributions. If you have any further contributions, please get them to us in writing.

On that note, we will briefly suspend. Thank you.

[The Chair, Conservative, Gord Brown]

All right, folks, we're going to call this 42nd meeting of the Standing Committee on Canadian Heritage back to order.

For the next hour we will have, from the International Alliance of Theatrical Stage Employees, John Lewis, who the international vice-president and director of Canadian affairs. From Reel Canada, we have Jack Blum, executive director; and from the Screen Industries Research and Training Centre at Sheridan College, we have John Helliker, the director.

Each of you will have up to eight minutes each.

We will start with Mr. Lewis.

[John Lewis, International Vice-President and Director of Canadian Affairs, International Alliance of Theatrical Stage Employees]

Hi. My name is John Lewis. I am international vice-president and director of Canadian affairs for the IA.

Our members work in all segments of the entertainment industry, including live theatre, motion picture and television production, trade show and exhibition, television broadcasting, and the music industry.

Our members work in positions such as special effects artists, grips, electrics, hair stylists, makeup artists, stagehands, costume designers, cinematographers, sound mixers, editors, carpenters, scenic artists, drivers, ushers, and ticket takers.

We are the largest union in the entertainment industry with 123,000 members, 17,000 of whom are in Canada. We are aIso one of the oldest unions. We were founded in 1893 in the United States, and we became an international union five years later, in 1898, when local unions were established in Montreal and Toronto.

We are pleased that you have chosen to undertake this study, and I am appreciative of the opportunity to appear today. Our position is a simple one: a successful film industry means more well-paying Canadian jobs. The federal government and most provinces have taken an active approach to nurture and grow the industry. That growth has been achieved with a combination of regulatory initiatives and government funding. The economic analysis indicates that this has been a wise investment.

With regard to the state of the industry, the screen-based industry in Canada is a large and growing industry. ln a recently released industry report by the CMPA, total production volumes reached $5.86 billion in 2013-14. That translates into an overall increase of 2.1% from the previous year. That $5.86 billion is broken down as follows: Canadian television at $2.29 billion; foreign service production, television, and feature film, $1.8 billion; and Canadian feature film at $376 million. The balance of the total production volume is derived from broadcaster in-house production.

In 2011, the industry supported 262,700 full-time equivalent jobs and generated $20.4 billion in GDP for Canada.

While the industry grows, Canadian feature films, distinct from U.S. studio-produced feature films, lag behind the other sectors of the industry, particularly in English Canada. There are many reasons to explain this. Feature films are relatively expensive to produce. The migration of the Hollywood studios to tentpole feature films with budgets of $200 million and higher make it increasingly difficult, but not impossible, to compete. The availability of financing and access to screens is also problematic for independent feature film producers globally, and not just in Canada.

Our comments today attempt to address particular issues concerning Canadian feature films, but some recommendations would impact other sectors of the industry as well.

On the effectiveness of government funding programs, there are effectively three main federal programs in support of the feature film industry. We have two tax credit programs: one for Canadian content and one for production services, and the Canada Feature Film Fund, which is administered by Telefilm Canada.

Telefilm Canada has the support of the industry and is generally viewed as an efficient and effective agency. We would recommend that the funding cuts to Telefilm and the Canada Feature Film Fund be reinstated.

I would aIso like to raise a cautionary note concerning the Telefilm micro-budget program. The program, which was launched in June 2012, is intended to target emerging Canadian talent, supporting them in the production and promotion of their first feature-length film, with an emphasis on the use of digital platforms for marketing, distribution, and audience engagement.

The script to screen feature film policy lists four objectives to guide the design and implementation of policies and programs that will create winning conditions. One of these is to foster the quality and diversity of Canadian films by restricting support programs and encouraging an increase in average production budgets.

Encouraging an increase in average production budgets makes sense. Enhanced marketing budgets are equally as important. The from script to screen report identified the following recommendations: average production budgets of Canadian feature films should rise to $5 million, and the average marketing budgets should increase to $500,000.

We are therefore concerned by the introduction of Telefilm's micro-budget production program.

In Atlantic Canada, Canadian feature film budgets have decreased significantly, and now run from approximately $600,000 to $1.5 million. Our Nova Scotia film local cannot remember a time that they had a budget over $5 million for a Canadian feature film. These tiny projects get made on the backs of suppliers and crew. The crew end up working for very little money in the hopes of a film credit, and suppliers are asked to provide equipment for no money at all. We have actually had to negotiate “up” to minimum wage. This flies in the face of Telefilm's mandate to build a film industry. By driving down budgets, Telefilm is not supporting the creation of a new industry; they are creating film hobbyists, at the expense of good jobs, and more importantly, safety. Crews are under-supported and undermanned. We appreciate the intent of the program, but it is destabilizing the industry it is setting out to support. We do not think the moneys have to be increased, but simply redistributed. We believe that keeping the same-size pie is fine, but we need to ensure decent budgets are maintained by cutting that pie into fewer pieces.

Regarding tax credits, support for the industry through the tax credit system has been extremely successful, so much so that it has served as a model for similar tax credit programs in other countries and in many U.S. states, which is commendable. Tax credits are offered both federally and provincially. These tax credits are the most important source of financing for Canadian productions. The problem with the federal tax regulations lies in what the government refers to as “net of assistance”, and what the industry refers to as “the grind”. The federal program reduces or grinds the amount of the federal tax credit if the production is also funded by a provincial program. This is counter-productive, as the very purpose of these tax credit programs is to encourage defined spending. To compensate for the grind, a producer will typically reduce the production budget, which translates to fewer jobs, fewer equipment rentals, and fewer dollars going into the industries that benefit from ours, such as restaurants and hotels. We do not see the sense in giving with one hand and taking with the other, so when the provinces invest in our industry, we do not believe that should have an impact on the level of federal support.

Regarding the Alberta grant program, the overwhelming majority of producers who operate in the industry are reputable, creative, and honourable. As in any other industry, there are exceptions. Unlike in other industries, the risky nature of this industry and the use of single-purpose companies have left too many suppliers and workers in a vulnerable position when a production defaults on its financial obligations.

I would like to bring to the committee's attention the very recent changes made to the Alberta grant program. In 2014—

Would you like me to stop?

[The Chair, Conservative, Gord Brown]

Yes, you're past the eight minutes. You'll be able to elaborate on it in the questions, if that's of interest to you.

[John Lewis]

That's fine. Thank you.

[The Chair, Conservative, Gord Brown]

Now we'll move to Mr. Blum.

I understand you have a video. The video is in English. All of you should have a—

[Jack Blum, Executive Director, Reel Canada]

It's subtitled in French.

[The Chair, Conservative, Gord Brown]

It's subtitled in French, but you also should have a copy of the French version.

Does everybody who would like that have it?

All right, you have the floor.