Thank you, Chair. Thank you, committee members.
My name, as you've heard, is Richard Hardacre. I'm a Canadian actor; I'm a professionally trained working actor. I'm also the elected president of ACTRA, the union representing the interests of performers in film, television, sound recordings, radio, and new media. I'm very pleased to bring you the concerns of more than 21,000 members of ACTRA who live and work in every comer of the country; English-speaking artists, all of us, whose performances entertain, educate, and inform Canadians and global audiences through the most powerful media that presently exist.
That's our boilerplate.
What I have to say here today is serious business, because for us, creative art in Canada is serious business. According to StatsCan, in 2002 the culture industries contributed $40 billion to Canada's gross domestic product. More people work in culture than work in agriculture, forestry, mining, and oil and gas combined. In the most recent year for which we have industry stats, the film and television production sector was a $4.8 billion business employing more than 125,000 people.
I hope you have copies of our September written submission. I'll briefly touch on the main points, and then we'll talk about the impact of the high dollar on the film and television industry, Mr. Chair. The clerk informed me that you want to hear specifically about that.
ACTRA made several proposals in our submission, which you have. First, we asked the finance committee to recommend adequate, stable, long-term funding for the Canadian Television Fund, for Telefilm, and for CBC. This is critical to being able to bring Canadian stories to our televisions and cinemas. It's important to us to establish a home-grown industry.
Our second recommendation is to reintroduce income averaging for professional artists. As many reports have observed, professional artists have income that can fluctuate enormously from year to year, and the present tax regime is unfair to creative artists. Just as artists must spread their income over years to survive, we're asking that the tax liability also be spread over years. Canada has previously had income averaging. Many countries still have it and specifically include artists. Quebec introduced a system in its 2004 budget to help artists in that province spread the tax load over several years.
Now I'll provide the committee with some insights from the film and television industry about the soaring dollar. The current surge of the dollar is indeed a serious threat to this sector of film, television, new media, and commercial production.
To understand the impact you need to know that we have two types of production in this country. We have Canadian producers making programs and movies primarily for Canadian audiences. Nationally, less than half our work at the moment is Canadian content. More than half of it is on service productions: making programs, movies, and television commercials, mainly from the U.S. locating in Canada.
This is the type of production that is the reason this country gets dubbed “Hollywood north”. It's primarily this U.S.-based service production moving to Canada for location—this “service production”, as we call it—that's affected by the high dollar.
A 2004 industry report pointed out seven factors that affect Canada's competitiveness as a filming location. Of these, the most important is the value of the Canadian dollar relative to the U.S. greenback. The ratio is simple: the more we lower the dollar, the more work there is; the higher the dollar, the less work there is in service production.
Remember that producers plan their productions well in advance. It can easily take more than a year of planning ahead for big budget films. The superpower strength of our dollar was not anticipated when locations for today's productions were being scouted.
This brings us to 2007 and currently 2008. At the moment, production levels throughout North America have been affected by the run-up to and now the complete strike of scriptwriters in the United States. I'm sure you've heard that the Writers Guild of America is in the third week of its strike. ACTRA supports them, because creators everywhere deserve a fair share of the returns from digital media.
U.S. producers and productions have been anticipating labour unrest for some time. This means that the studios were pushing very hard to complete projects before the writers' strike. Production in 2007 has been artificially inflated, so to date we've been insulated from the rise of the dollar. As the writers' strike continues to affect us, two big productions in B.C. have shuttered already, and more are coming. Canadian actors and crews work on these shows, and the strike has already put as many as 1,000 out of work in British Columbia alone.
So that brings us to the dollar. The full impact of the overheated dollar, the Canadian dollar, will not be felt until the middle or the end of 2008. We know the studios intend to let projects already on the books go ahead. But due to the dollar, they're not planning on many new productions. This will be felt especially in British Columbia, which is in the same time zone as Los Angeles, one of the reasons for its popularity.
But we have suggestions on what you can do to help--three things. Some of them are already in the written brief submitted to this committee. This is what we need to do. We need to build the Canadian industry, build an industry that's not dependent on foreign production moving to Canada. The way to do that is to increase the tax credits and broaden the base of the tax credit system. We've had tax credits in Canada for many years. We know they generate substantial economic activity, and more taxes are created than those that are forgiven.
We have suggested two formulas to increase the tax credit formula. One is for film and television video, the tax credit for domestic productions. Increasing the base is what's really important, so it's not just simply on a small labour component, Mr. Chair.