Backers of efforts to fight runaway production are about to launch an initiative asking that the World Trade Organization rule that Canadian production subsidies are illegal.
The move by the 3-year-old Film & Television Action Committee — expected by early October — represents the latest strategy in efforts to put the brakes on productions fleeing to less-expensive locations outside the United States. In January, the org withdrew its controversial push for penalties against producers who use Canadian subsidies; it has not refiled that petition with the feds.
FTAC’s latest gambit will be to file a NAFTA Section 301(a) petition asking the U.S. Trade Representative to initiate negotiations with Canada to remove its subsidies, backed by the threat of intervention of the WTO if it does not comply.
“Because Canada’s subsidies to film production violate our treaties, we believe the most immediate and effective solution to the problem of runaway production is to simply enforce our existing trade agreements and to utilize our existing trade laws,” FTAC said. “Once filed, the Section 301 could curtail runaway production in literally a matter of months,” FTAC said.
Canadian officials have long insisted that their subsidies are legal.
FTAC — a coalition of below-the-line showbiz workers — disclosed the strategy in a letter to supporters after key runaway production legislation evaporated due to California’s $24 billion budget gap with the defeat of Assembly Bill 2747, which could have provided as much as $650 million in tax credits to producers between 2004 and 2010.
Proposed federal legislation — which would provide a 25% wage-based tax credit to productions with budgets under $10 million — was introduced a year ago but has not yet moved forward. Backers, who include FTAC, showbiz unions and many other orgs, hope one of the bills can be attached to tax legislation before Congress adjourns in the next few weeks.
A spokesman for Rep. David Dreier, R-Calif., who authored House Resolution 3131, admitted that the bill’s prospects for passage are murky at this point. “With all the attention on Iraq, we’re not sure if it will move by the end of the session but if that happens, the Congressman will re-introduce it next session,” said press secretary Jo Powers.
Dawn Keezer, prexy of the Film US org of domestic film commissioners, contends that support for the federal legislation remains strong with 27 co-sponsors in the Senate and 76 in the House. She noted that the Sept. 11 terror attacks took away attention from the issue.
“The question of a tax credit was not high on people’s agendas in Congress for a long time,” said Keezer, director of the Pittsburgh film commission. “We’ve got a lot of support from all sectors and I’m confident it will go through but I don’t know when.”