Canadian Heritage Committee on April 29th, 2015

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

We take note of that. Thank you.

[The Chair, Conservative, Gord Brown]

Thank you very much.

Thank you, witnesses. If you have any further contributions to our study, please send them in to us. We'll be working on this for a few more weeks.

Thank you.

On that note, we will briefly suspend.

[The Chair, Conservative, Gord Brown]

Good afternoon once again.

We will call meeting number 43 of the Standing Committee on Canadian Heritage back to order. We are continuing our study on the Canadian feature film industry.

With us in the second hour today, we have Robert Lantos, who's with us here in Ottawa from Serendipity Point Films. From Toronto, via video conference, we have Piers Handling, who is the chief executive officer of the Toronto International Film Festival.

We'll start here in Ottawa with Mr. Lantos, for eight minutes.

[Robert Lantos, Owner, Serendipity Point Films]

Thank you, Mr. Chair.

Thank you for having invited me to appear before the committee today.

I am going to speak in English. Even though I began my career in Quebec and I worked for a long time in both parts of Canada, I now work only in English. I am going to let my Quebec colleagues make their comments in French.

To do this in eight minutes is going to be a big challenge for me, but I'll try. I've been doing this for 42 years. I began in 1973, when I was still a student at McGill, with my partner Victor Loewy. He and I started a film distribution company. A few years later, in 1977, with another partner, Stephen Roth, he and I produced our first two feature films, which were called L'Ange et la femme and In Praise of Older Women.

What began as a little company between university students grew into Alliance Communications, of which I was the chairman and chief executive. In 1993 I took the company public on the Toronto Stock Exchange, and in 1998 I sold my controlling interest. For more than 20 years, Alliance was the dominant Canadian film and television distribution and production company. It was also a leading specialty broadcaster until it was resold some years after I sold it and then was split up.

For the last 15 years, I have focused exclusively on producing feature films at my current company, Serendipity Point. Over the course of my career I have produced some 40 films and have financed and distributed many others. I've had the privilege to work with some of the world's greatest stars, such as Dustin Hoffman, Annette Bening, Viggo Mortensen, Michael Caine, Ralph Fiennes, Jeremy Irons, Paul Giamatti, and Rosamund Pike. I've worked with some very distinguished directors, such as David Cronenberg, Denys Arcand, Atom Egoyan, Jean-Claude Lauzon, István Szabó, and Bruce Beresford.

The films we made, such as Barney's Version, Eastern Promises, The Sweet Hereafter, Sunshine, and Being Julia have been nominated for Academy awards. They have won Golden Globes and prizes at the Cannes film festival, in Venice, and in Berlin. Here in Canada, these films have won the screen award for best picture five times, and they have been selected to open the Toronto International Film Festival on 10 occasions. They have been distributed globally and some, though definitely not all, have made a profit.

Black Robe, Being Julia, Sunshine, eXistenZ, Barney's Version, and Eastern Promises all grossed in excess of $20 million worldwide. My production of Johnny Mnemonic surpassed $50 million. Here at home, Black Robe, Johnny Mnemonic, Barney's Version, and Eastern Promises all grossed over $3 million at the box office, and Men With Brooms over $4 million.

That is the good news.

One other piece of good news is that during my watch we have come a long way from when I first started. I'll share with you just one anecdote of how it all was back in 1977 when I produced In Praise of Older Women.

We were having a lot of trouble getting the movie theatres to commit to show the film. It had been selected to open the Toronto film festival and had a tremendous amount of publicity around it, so we thought it would be a good idea to open the film right after the festival, but we had a lot of problems getting a commitment from the then theatre circuits. I went to see the man who was then the head booker for what was then the biggest circuit in the country, a company called Famous Players, which at the time was owned by Paramount.

I said to him that for the film to have any chance in the marketplace it needed to have firm commitments with specific firm dates in some of the best theatres across the country. Otherwise, if it was just going to be floating and hoping to get into a theatre some day, we really had no chance. He said, “Why would I do that”? I said, “Well, it's a great film, so why don't you see it?” Because he hadn't. He said, “I don't need to see it: it's Canadian.”

[Voices]

Oh, oh!

[Robert Lantos]

That is an exact quote.

We've come a long way. That was in 1978. That wouldn't fly today. Canadian films do get access to theatres, and if they have a distributor who is willing to ante up and spend serious marketing money, which is really what it's all about, then the theatre doors are wide open. In many ways, those tough old days are behind us, but we have many more obstacles and challenges facing us today.

The biggest challenge is really a global showdown between independent films and the Hollywood studios. It isn't that one has declared war on the other; it's just that the studios today have an average budget per film of about $130 million. That significantly exceeds the total annual expenditure of Telefilm Canada and all Canadian films. That is per film and does not include the marketing budget. They have a typical marketing budget for a big Hollywood so-called tent-pole franchise movie, such as the one that opened this weekend, the new installment of X-Men.

The typical marketing budget is about $150 million. That is for a global launch, and this is a fairly recent idea. This idea of of releasing films globally in every country in the world and every theatre on the same day, and backing it with enormous juggernaut marketing budgets, really only developed over the course of the last dozen years. I won't get deeply into a sermon about the digital age here, but that's what the cause of it is, for better or worse. The digital age brought piracy along with it, so the Hollywood studios' approach to beating the pirates is to release their films on the same day in every city in the world, in order to get ahead of the pirates.

Also, in the digital age, the Internet makes that possible, because you can advertise globally, which is something you couldn't have done 15 years ago. If you were to turn back the clock a dozen or 15 years, Hollywood studio movies would be released in America, and by the time they got to places like Japan or Scandinavia, it could be a year later. Today it happens on the same day.

What does that mean to independent films, not just Canadian films? European films and Australian films face the same hurdle. Ours is a little greater because of our geographic proximity to this giant. The hurdle is that you have two, three, and sometimes four of these juggernauts being released every single weekend of the year, with the number of screens they occupy when they open in 10,000 or sometimes 12,000 theatres on the same day, and the cacophony of noise that's made by these massive advertising campaigns is such that the smaller independent voices have a harder and harder time being heard.

I was here a few minutes ago and heard the discussion about getting eyeballs to see Canadian films, about films not being seen or heard from. That is the major challenge here. As I say, it's not specifically a Canadian challenge. It's the challenge of independent film versus the six studios, and it's the challenge of making films that are essentially made for grownups, films that have stories to tell that may be of interest to people who may be over 25, versus the business of the Hollywood studios. They each make their one exception per year, but for the most part their business is to make repeatable franchise movies aimed at the under-25 audience, which rushes to the movies on the opening Friday night. That's the challenge we face. That's the biggest challenge.

Here in Canada, we have a few other issues, such as, for example, the massive talent drain we have, which is incomparable to anywhere else. Most of our stars, our directors, our writers, and some of our producers, when they have the opportunity to go to Los Angeles and work with much bigger budgets, avail themselves of that opportunity. They don't quite share my penchant for masochism, and I don't blame them.

Some of Hollywood's biggest names are Canadian. Directors such as James Cameron, Paul Haggis and, more recently, Jean-Marc Vallée and Denis Villeneuve are also making Hollywood movies. Movie stars like Ryan Gosling, Jim Carrey, and Keanu Reeves are all from here, but they live in L.A. and they work in L.A.

In the face of all these obstacles, here's the question I have for this committee when we get around to switching sides and you speak: what's the importance and value of feature films? Why should they be supported? Why should they be supported at all and why should they be more supported by government? There are several answers to this question.

First, feature films are like cultural flagships. When a Canadian film is in competition at the Cannes film festival or is nominated for an Academy award or a Golden Globe, it's like a Canadian athlete competing at the Olympic Games or world championships. When they get prizes, it's like winning the gold medal. It's an honour to our country. It makes the world take notice of us and our stories. It allows us to take our place in the global cultural mosaic.

Feature films do that better than any other medium today because they have attracted that much more attention. Even though we are in the golden age of television and it is a very effective mass medium, still the greatest attention goes to the biggest award show of all, the Academy awards.

[The Chair, Conservative, Gord Brown]

Mr. Lantos, I'm going to cut you off there. You've gone well past, but you will get an opportunity to expand on all of this during the questions.

We're now going to go to Toronto and Mr. Handling, who is from the Toronto International Film Festival.

We're going to give you 10 minutes, Mr. Handling.

[Piers Handling, Chief Executive Officer, Toronto International Film Festival Inc.]

Thank you, Mr. Chair and members of the committee.

Thank you very much for inviting me to feed into your examination of Canada's feature film industry. Today I'll be giving you a very quick overview of TIFF and our role in supporting the sector, the new direction our organization is taking for the future, and some specific recommendations around our film industry.

TIFF is a not-for-profit charitable organization that transforms the way people see the world through film. You know us best for our flagship event, the annual Toronto International Film Festival. It is one of the two most important film festivals in the world, and it's the largest public film festival anywhere. The festival is also a must-attend event for the international film industry, which comes here to do an enormous amount of business. The festival is global, but it is also the key launch pad for most new Canadian films.

We are now an organization that runs a building showing films on five screens every day of the year for audiences of all ages. We're one of the very few film festivals in the world that actually owns our own infrastructure, a building that acts as a flagship and allows us to interact with our audiences every day of the year. We also bring films to over 152 communities in every province of Canada, and we've been doing this for over 20 years. This unique film circuit, a model that other countries have studied, includes film clubs, community-run film festivals, schools, art galleries, and even libraries.

For the sesquicentennial, we have a very large dream: to identify 150 essential moving-image masterworks from our history, to digitize them, and to make them free to all Canadians in 2017.

Now I have just a few numbers: we have an annual economic impact of $189 million, and 1.4 million people attend all our activities every year.

Today I'd like to address two areas that I think are key to the success of Canada's film industry: acting globally and talent development.

These days, if you're not a global player, you risk irrelevance. The creative economy is moving at such speed and undergoing so many changes that you must develop international relationships and markets if you want to flourish and indeed survive.

TIFF's strategic direction is to be global: to be the global leader in film culture and set new directions for our audiences and the industry. Starting this year, we will bring Canadian films and filmmakers to key markets around the world. Our initial focus will be on London, New York, Los Angeles, and Beijing. Our initiatives will promote Canadian cinema and provide opportunities for Canadian talent: a higher profile, more co-productions, access to new funding partnerships, and larger audiences.

We recommend that the federal government take a leading role in growing the export potential of Canadian film. A funding program to develop international markets, one that allows Canadian filmmakers, artists, and arts organizations to promote Canadian cultural industries abroad, would have significant impact. Every other major film industry is now extremely aware of the international marketplace. We must be more aggressive in this area. For Canadian films to succeed, the industry must tap into international audiences, financing, and partnerships.

To be a global player in the entertainment sector requires desirable and competitive content. This comes from creative artists, the people who capture the imagination of audiences. Talent development is an essential part of this process. This is the R and D component of our industry. Our talent needs to be trained, developed, mentored, and given opportunities to work and play in this new global environment. It is not enough to excel nationally. We need to continue to provide as many opportunities as possible for future generations to hone their skills.

The Toronto film festival is the leading global launch pad for Canadian films. We provide Canadian talent the opportunity to rub shoulders with over 5,000 industry professionals from around the world. We have a number of programs, both at the festival and throughout the year, that are designed to develop and mentor the finest young new talent we have in Canada: filmmakers, writers, producers, and actors. Our talent development programs offer increased profile, access to networks, and training, all of which contribute to building careers that can function in a competitive international environment.

We urge the federal government to invest in talent development programs, not just our own but also the fine work done by other film training institutions across the country. This is an essential investment in the future. As technology assumes increasing importance in our world, the one thing technology cannot replicate is human creativity. We must invest in the creativity of future generations of Canadians. Their creativity will build our economy.

I would be remiss if I did not mention the importance of your federal agencies in supporting the sector, particularly Telefilm Canada, which is the essential agency in our feature film sector. Telefilm has been TIFF's long-time partner, and together we will continue to drive a global agenda and support and promote Canada's talented filmmakers, both within Canada and abroad.

In summary, Canadian films need to be championed on the global stage, and Canadian filmmakers need the proper training, professional development, and opportunities to compete internationally.

Thank you very much.

[The Chair, Conservative, Gord Brown]

Thank you very much.

We'll now go to questions, starting with Mr. Young.

You have seven minutes.

[Terence Young, Conservative, Oakville, ON]

Thank you, Chair.

Thank you, gentlemen, both of you, for your time today. We very much appreciate it.

Mr. Lantos, before I ask a question, do you want to take a few minutes to finish what you were thinking about in your opening statement?

[Robert Lantos]

That's very kind of you. My apologies for being verbose.

I was going to suggest that there are good reasons for supporting feature films beyond the cultural ones, which I think we have discussed and we all know about. If you do a cost-benefit analysis, approximately 70% of the budget of every film is spent on labour, which in turn is taxed at source. The films themselves often find the greater part of their revenues outside Canada, thus generating export revenues. They are a tremendous source of environmentally friendly and well-paid jobs. Finally, Canadian films in Canada provide Canadians with a Canadian option, as opposed to only being exposed to American movies, which, were it not for Canadian films, would definitely be the case.

However, Canadian films are the orphans of a very well-designed system of cultural support for the Canadian media. What I mean by that is this. In television production and in digital production today, there are quotas. Every broadcaster in Canada, whether it's a network or specialty or pay television, has always had and continues to have Canadian content obligations.

There has never been such a thing for feature films. There has never been any quota of any sort, nor am I advocating one today, but the foundation upon which the very prolific Canadian television production industry was built—and I was very much a part of it for a very long time—is based on a series of regulations overseen by the CRTC that are designed to create a marketplace, a domestic marketplace, for Canada to have homegrown productions. There is no such thing for feature films. Even in broadcasting there have never been specific regulations requiring any broadcaster to designate airtime and specific dollars to theatrically released feature films. There are in other countries. Certainly in France there's a great deal of that, but not here, and there never has been.

In the absence of these kinds of regulations and legislated support systems, Canadian films have been on their own. In English Canada, they have a particularly great mountain to climb. The advantage Quebec has is that it has its own language. English Canada shares a language with our neighbour to the south.

I have some concrete suggestions in lieu of regulations and quotas. One of them is that the tax credit that's currently equally available to feature films and to television productions be increased for feature films, so that if a television production is eligible for x percentage of its spend in tax credits, feature films should be eligible for double x, and by feature films I mean specifically films designed for and released in movie theatres.

I will also urge the government to entertain the notion of increasing the budget of Telefilm Canada, which, as I mentioned earlier, is less than the budget of one Hollywood movie. Doubling that budget perhaps would equal close to the budgets of two Hollywood movies. I think it would be a very wise and cost-efficient investment, both commercially and culturally.

Finally, I would also suggest that the money spent on the marketing of Canadian films, especially when spent in Canada marketing Canadian films, be eligible for the same tax credits as the production of Canadian films, because the marketing dollars are just as important as the production dollars in order to actually accomplish the mission and get films to people and people to films.

Those are my specific suggestions. Thank you for giving me the extra time.

[Terence Young, Conservative, Oakville, ON]

Thank you very much.

How much time do I have for questions, Chair?

[The Chair, Conservative, Gord Brown]

You have about two and a half minutes.

[Terence Young, Conservative, Oakville, ON]

Thank you.

Mr. Lantos, what is the most important variable in need of any kind of boost the government can give to grow the film industry in Canada? Is it the two things you just mentioned?

[Robert Lantos]

I won't repeat them, but it is exactly what I suggested. In my opinion, they are the increasing of tax credits specifically for feature films, the inclusion of marketing money in those tax credits, and increasing the budget of Telefilm Canada.

[Terence Young, Conservative, Oakville, ON]

Thank you.

What about developing actors and writers and trying to keep them here? Do you have any other suggestions on how to keep the talent here? You talked about the brain drain or the talent drain as a big issue.

[Robert Lantos]

This might sound cynical, but it comes down to dollars.

[Terence Young, Conservative, Oakville, ON]

No, it doesn't sound cynical. I just wondered if you have any other creative ideas. I have a nephew at the Vancouver Film School right now. I haven't asked him, and I don't know.... He's graduating this week, but he's going to go where the opportunities are, right?

[Robert Lantos]

That's right.

[Terence Young, Conservative, Oakville, ON]

That's what it is. For the artists and the writers, everybody goes where the opportunities are, so we have to create more opportunities here, and those suggestions are the ones that you have. Do you have any others?

[Robert Lantos]

Investment is the only way to create opportunity. I don't mean just public dollars. There's a great deal of private dollars have been invested in Canadian film. I certainly have done so over the course of my career, and that needs to continue. It's a partnership. But at this point, the public purse needs to step more than it has.

[Terence Young, Conservative, Oakville, ON]

What about expanding investment or somehow encouraging it on the private side?

[Robert Lantos]

Well, The encouragement on the private side has to do with contemplated return on investment. For feature films, the most logical way to invest in a feature film is to buy shares in a company that produces and distributes them, because in regard to investing in a single film, although it is done, the stakes are high and the risks are high. The truth is—and this is not specific to Canadian films—most films lose money. Only a few break even or make a profit.

[Terence Young, Conservative, Oakville, ON]

Ontario's 2015 budget was announced 10 days ago and reduced the following credits: the Ontario production services tax credit was reduced from 25% to 21%, as was the Ontario computer animation and special effects tax credit.

[The Chair, Conservative, Gord Brown]

Mr. Young, I'm going to have to cut you off.