The Canadian dollar hit parity with the American dollar Thursday for the first time in 31 years — and that has folks in the film biz here worried that it will scare off American producers.
The value of the Canadian dollar — or loonie as it’s known here — has been rising against the dollar for five years.
Now there is no advantage to shooting in Canada in terms of exchange rate or tax credits, as many U.S. states and countries have similar or even more lucrative tax breaks.
“I think it’s a nightmare,” said Paul Bronfman, who runs the Toronto-based Comweb Group, one of the country’s leading production services and equipment rental companies. Comweb is also an investor in Filmport, the massive film studio being built in Toronto.
“I think it’s going to make it extremely difficult to attract more American work,” he added. “We have a lot of variety of locations but the bottomline is that the economics are getting skinnier and skinnier to shoot in Canada. Right now, we have to find new ways to attract business here.”
Canada is actually doing okay in terms of American shoots this year, but most believe that’s only because the studios are stockpiling pics in case there is labor strife in Hollywood next year.
The common wisdom is that — even without currency problems — few Hollywood movies and TV shows will film in Canada next year because of the labor problems. Either there will be a strike or, even if there isn’t, the studios will be shooting fewer films because they shot extra pics this year.
The downturn will be tough for Canadian production companies that rely on American service jobs to make their money.
“We’ll see a significant decrease in American-financed production,” said Shawn Williamson, a partner in Vancouver-based Brightlight Pictures. “We’ve seen a significant downturn in our service work and I know it’s related to the dollar.”
Fortunately for Brightlight, it also produces Canuck projects as well.
Michael Prupas, president of Montreal-based production company Muse Entertainment, notes that the rising Canadian dollar is even bad news for Muse’s local productions because his sales revenue for those productions comes in U.S. dollars, which now have less buying power in Canada.
Many feel Canada must up its federal and provincial tax credits to be more competitive with the tax credits available in U.S. states.