Film companies flee to Canada

VANCOUVER, British Columbia -- One of the sidewalks in downtown Vancouver has been cordoned off again, but no one seems to care.

Pedestrians walk around studio lights that have been set up in the street and the big production truck with the Paramount logo looks like a moving van with its ramp lowered down to the street.

A few curious bystanders stop to get a closer look, but no one seems to be working, so they continue on.

It's a scene played out frequently in Vancouver. The motion picture industry is big business for British Columbia and the public has accepted that the lights, cameras and production trucks mean a healthier economy.

"We've closed bridges into the city and we haven't had a single complaint," he said. "Perhaps because there are so many people who are affected by the industry, they put up with it. Maybe it's because somebody has a cousin or a neighbor or somebody close that has a job because the industry is here."

The film industry touches thousands of British Columbians. Film and television production in the province is expected to reach a record high of $1 billion (Canadian) this year, the Ministry of Small Business, Tourism and Culture said.

In the first half of 1999, 113 productions have committed to filming in the province north of Washington state. The average production spends more than $7 million (Canadian) and creates 113 jobs.

Those numbers have gotten the attention of -- and created controversy for -- organizations across the United States.

In Nevada, the Nevada Film Office, a division of the state Commission on Economic Development, and the nonprofit Entertainment Development Corp. of Las Vegas are developing strategies to duplicate British Columbia's success.

Film commissions across the United States are attempting to rebound from subpar years as their film productions and related revenues have fallen as a result of Canada's success.

Fortunately for Nevada, film production numbers are up here more than 50 percent despite the boom in Canada.

But in California, film industry leaders are developing plans to counter the phenomenon they've dubbed "runaway production."

Earlier this month the Film and Television Action Committee, a grass-roots organization of laborers who make their living making movies and TV shows, gathered at the California state Capitol in support of two bills in a rally they called "High Noon in Sacramento."

The bills, approved by the California Assembly in June, would provide 10 percent tax breaks for film and television production in that state.

Although California's tax breaks may counteract advantages enacted by Canadian government leaders, they won't have much impact on the No. 1 reason film crews flee to Canada in the first place -- a devalued currency.

"There's no question that the exchange rate is what has precipitated this growth," Mitchell said. "We're talking about cheaper labor, hotel rooms, cheaper gas, everything. On a regular basis, vendors here get as much if not more than they can get in California.

Mitchell said Canada became a center for film production about 15 years ago, getting a boost from the television series "MacGyver" and its star, Richard Dean Anderson.

As Anderson's career took off and he began taking roles in feature films, Canada began receiving more attention. Then a popular series on the Fox network catapulted Vancouver to superstar status.

" 'The X Files' really put us on the map," Mitchell said. "It showcased the location."

"The X Files" filmed in Vancouver until last year when the production moved to Southern California. The reason: The series star, David Duchovny, wanted to be closer to his family and persuaded executives to move.

In the late 1970s spending by the motion picture industry in British Columbia averaged about $12 million (C) a year. The British Columbia Film Commission was created in 1978 with a mandate to market the services of the province's production, post-production and ancillary service companies to the international film and television industry.

By 1998 spending in the industry had grown to $808 million (C) and the annual growth rate has averaged about 21 percent.

The 10-member Film Commission staff had a hand in 90 percent of the 250 feature films, television series and made-for-TV movies, pilots and commercials shot in the province in 1998.

The majority of productions filmed in British Columbia are the low-budget made-for-TV movies and series. The reason: They can squeeze more out of their tight budgets because of the exchange rate.

A recent study commissioned by the Screen Actors Guild and the Directors Guild of America, hailed as the first quantitative data on runaway production, said the exchange rate produces a savings of 20 percent for film companies.

The study concluded that a film could be made for 26 percent less with reduced costs and tax breaks -- even though Canadian film crews are typically union members just like their Hollywood counterparts. A $20 million feature film, the study said, could be made in Canada for $14.8 million.

Ian Waddell, small business, tourism and culture minister for the province, said there are 32 feature films; 34 television movies, pilots and specials; 17 television series and 25 documentaries and broadcast singles in the works for British Columbia this year.

Waddell said the growth can be attributed to a tax credit program initiated last year. The program, called Film Incentive B.C., has resulted in the industry becoming three times larger than it was before the program began.

Under the program, British Columbian film companies can receive tax credits of up to 20 percent on eligible labor. Foreign companies can get an 11 percent tax credit.

Today the British Columbia Film Commission operates from a suite overlooking a harbor where cruise ships and sailboats dot the horizon. Actors and producers scurry in and out of the office to pick up the latest film list showing the names of the productions, the cast, the contact names for extras and their phone numbers.

Some of Hollywood's big names are scheduled to be in Vancouver this year: Ben Affleck, Gary Sinise, Jeff Goldblum, Salma Hayek, Nick Nolte, Sharon Stone, Tim Robbins, Rodney Dangerfield, Tom Skerritt, Cicely Tyson and Andrew Dice Clay.

Mitchell is emphatic that British Columbia is no threat to Hollywood and the province's business is a small percentage of the film industry. Sixteen percent of U.S.-developed films are being shot outside of the United States, with most of those being done in Canada, according to the Screen Actors Guild and Directors Guild of America.

"What this does," Mitchell said of the exchange rate and tax incentives, "is level the playing field."

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