Canada's Global Reach

From an American perspective, the big Canadian story of the last decade has been, of course, the flight of American productions headed there to take advantage of favorable tax incentives. But there are some other very interesting things happening there, too, as the Canadian film industry tries to expand its reach in terms of both content and financial influence. I spoke with Toronto native and NYU Grad-Film Alum Ian Harnarine about Doubles with Slight Pepper, the feature film he is developing within the Canadian system. Doubles With Slight Pepper is a feature expansion of Ian’s short film by the same name, which won Best Short Film at the Toronto Film Festival in 2011 and also won the 2012 Genie Award for Best Short Film from the Academy of Canadian Cinema and TV (Canadian Oscars). For the feature, Ian has teamed up with Producer Christina Piovesan (Amreeka, The Whistleblower). They are seeking funding from Telefilm Canada (TeleFilm is the more commercial, feature-film-oriented of the two Canadian national film agencies; the National Film Board has been a leader in funding animated films and also focuses on documentaries).

Telefilm historically organized its Production Program funds into distinct groups, one for French language films and one for English language films, as well as separating funds into lower- and higher- budget level categories. In a recent effort to streamline the process, Telefilm consolidated these into one major production program. (Micro-budget films will still fall into a separate category). While English-speaking Canadian films are generally overshadowed by American movies, Francophone Canada maintains a relatively high degree of prestige and audience support, with critical and financial success on the world stage. Telefilm’s current mission statement describes an increased focus on promoting Canadian content in both English and French, as well as aboriginal languages.

Telefilm-financed movies with Canadian producers but shot primarily outside of Canada have found great success of late -- notably Incendies (Jordan) and War Witch (Congo), both Oscar Nominees. About 20% of Doubles with Slight Pepper will be shot in Trinidad and Tobago, where Ian Harnarine’s parents are from.  (The short version was shot entirely on the island of Trinidad, and received a post-production grant from the Trinidad and Tobago Film Company, the national film agency).

While Canada has Co-Production treaties with over fifty countries, Trinidad and Tobago is not one of them. Still, the cross-cultural subject matter of Ian’s film – a young man’s dilemma over whether to reconnect with his terminally ill, estranged father – could bring an interesting dynamic to the English-language Canadian landscape if it finds funding at some level within the Canadian system.

Canada’s film industry presents government funding at federal, provincial, and state levels. Telefilm can offer up to 49% of eligible Canadian production costs as either an equity investment or a recoupable advance. If Telefilm comes on board for Doubles with Slight Pepper, Ian and his team plan to seek the rest from Ontario provincial funds and from private investment.

I’ve met with a number of first-time filmmakers from outside the U.S. who have chosen to make their films inexpensively and quickly in the U.S. rather than deal with the (sometimes slow) bureaucracies of their home countries’ film industries. With traction and momentum that Ian has going in Canada, and what will hopefully prove to be a smooth process with Telefilm Canada, shooting the feature of Doubles in his native Toronto could be a great homecoming.

Durban FilmMart 1: Pitfalls of Co-Production

I just returned from the Durban FilmMart Co-Production market, which featured a diverse slate of doc and narrative projects that are fostering collaboration between African countries and entities outside the continent. This is the first in a series of blogs about projects and issues related to co-productions in the South African industry. Durban FilmMart 1: Pitfalls of Co-Production

Michael Auret, Producer at South Africa’s Spier Films, delivered an excellent master class that catalogued in detail his last ten films done as co-productions. According to Auret, Co-Production (especially with European partners) is a very viable means of financing South African Films – nearly the only viable way at certain budget levels. South Africa’s Department of Trade and Industry offers a healthy tax incentive for qualifying national films or co-productions - a rebate of 35% for the first R6-million (about $662 000) spent, and 25% for the remainder of production expenditure in country. (Non-South-African films have a much higher budget threshold -- about 1.3 million -- to qualify for incentives).

Auret spoke to the Durban Talent Campus participants and shared his lessons, which are equally applicable to Co-Productions anywhere in the world. These lessons come from Auret’s experiences, especially cases in which he lost money because of problems described below.

Here are my takeaways from Auret’s presentation:

1. You must deliver your incentive. This is a no-brainer, but partners teaming up with you expect you to be able to successfully meet the requirements to get the agreed-upon tax rebate from your country. As the number of partners rise, the complications and distractions increase. Start with step one – make sure your production meets all incentive requirements and properly does all necessary reporting. If you fail to do that once, you likely won’t make another movie.

2. Be clear about deliverables. Industries in some countries tend to have more onerous requirements than others (according to Auret, films delivered in the U.S. and UK will require a mountain of legal paperwork relative to European films).

If you are the local production company for an international partner and you are handling the post deliverables, are you also responsible for delivering all the legal work for the international partner? Who is responsible for all releases, and do those releases meet the requirements of the partners in all countries? Who pays for versions of the film in different subtitle languages, etc.? Deliverables can be very expensive, and depending on the structure of a co-production agreement, often payment won’t come from a co-producer until you have met all deliverables.

3. Make sure everyone is on the conference call. If there are four countries involved, then the financial partners and producers/lawyers from all four countries need to be on the call. You don’t want a simple misunderstanding about the structure of an agreement to delay the deal or the film getting done.

4. Work with Co-Production partners that you like – or at least can share the red carpet with. Co-production is an intimate partnership, and whatever your level of involvement, you may be married to these people for several years.

ASKING THE RIGHT QUESTIONS ABOUT TAX INCENTIVES

Tax incentives – do they work? The answer to that question depends not only on whom you ask, but also on how you define success.

For producers, tax incentives ‘work’ when they help get a film financed and made -- in a location that works creatively and logistically for the film.

For craft professionals, an incentive system that ‘works’ means just that – it helps them get work (and hopefully ‘good’ work in terms of both pay and creative satisfaction).

For a local or national economy, tax incentives can be deemed successful if they bring in more revenue than they pay out to attract that revenue – which can be highly contentious and surprisingly difficult to measure.

(Here is a good description – from outside the industry -- of how politically contentious that processes can be in the U.S.).

There are also the ancillary businesses that can accrue to an economy from the presence of the film industry. (New Zealand’s big budget gamble on tying the tourism industry into the Hobbit franchise is a high profile example, but regional film boards the world over deal with this on a smaller scale.)

For a community or society, tax incentives can serve the aim of fostering local talent and local creative voices. In countries with the means, this can be the most important desired result of an incentives system.

But not surprisingly, these goals aren’t always in alignment.

It’s likely that in most cases the attraction of big budget Hollywood/international productions support the technical betterment of local craft professionals.

But when it comes to supporting local creative voices, do such productions create a trickle-down effect? Or simply homogenize the art form and raise the cost of filmmaking to a level that crowds out independent producers working on projects with locally specific content?

I am particularly interested in the ways that this dynamic is playing out in emerging economies and emerging film industries. Next week I’ll be traveling to the Durban FilmMart in South Africa. South Africa is fertile terrain for these questions because it has an active national funder, an incentives structure at least partly geared towards attracting big money studio films, and a sometimes uncomfortable co-existence between government-funded local talent initiatives, big-budget international films, and local films made and distributed on shoestring budgets.