New $761 million facility faces uncertainty in '08

MONTREAL — With a surging Canadian dollar and labor unrest in Hollywood, it looks like it’s going to be a topsy-turvy ride this year for those toiling in the production service biz in Canada. No one knows that better than Ken Ferguson.

Ferguson is president of Filmport, the new C$750 million ($761 million) studio facility on the Toronto waterfront set to open this coming spring. The massive studio is designed to transform Canada’s largest city into the country’s hub for Hollywood shooting and fill what everyone in the Toronto scene admitted was the city’s one fatal flaw — it didn’t have a single megastudio.

But even Ferguson admits the timing of the Filmport opening isn’t ideal.

“The worst thing for us would be if the Writers Guild doesn’t settle and SAG goes on strike,” Ferguson says. “That would make it quiet for Toronto. But we’re building for the long term and these strikes can’t go on forever. It’s a nuisance at the beginning but it won’t kill Filmport.”

So far, the Writers Guild of America strike has had the most impact in Vancouver, because that West Coast city is the main place for American TV series production in Canada. Both Toronto and Montreal tend to host more Hollywood features than TV, so those cities have yet to feel the impact of the walkout. But it’s clear the writers’ dispute is starting to delay films that were set to shoot in the first quarter of 2008, and it’s expected that will put a damper on filming in Montreal and Toronto early this year.

But the writers and potential actors strikes are only two of the short-term issues facing the film industry in the Great White North. A more serious problem is the robust Canadian dollar. The much-ballyhooed “runaway production” crisis a few years back was essentially caused by the low Canadian dollar — trading at around 65¢ just five years ago — which had American filmmakers flocking across the border to shoot more cheaply in Canada. But the Canadian loonie, as it is known here, hit parity with the U.S. dollar for the first time in three decades last fall and, more recently, has been trading slightly more than the American buck.

That’s why the provinces of Ontario and Quebec both recently increased their tax credits for foreign filming. In mid-December, Ontario raised its credit from 18% to 25% of labor expenditures for non-Canadian producers shooting in the province, with Quebec following Ontario’s lead a few days later, raising its credit for foreign filming from 20% to 25% of labor expenses. British Columbia is expected to follow suit in the coming weeks.

Hans Fraikin, film commissioner at the Quebec Film and Television Council, says the credits had to increase for the provinces to remain competitive now that so many U.S. states have ever-more-generous tax credits. Fraikin knows it’s going to be a tough period for Canada, but he feels Quebec has one natural competitive advantage — its locations.

“We’re the only province that has all these European looks in our backyard, whether it’s Old Montreal or Quebec City,” Fraikin says. “For the film ‘The Curious Case of Benjamin Button,’ they were able to shoot Moscow, Paris and St. Petersburg within three blocks of Old Montreal and in some blocks of Old Montreal, you’d swear you were in Manhattan.”

Partly thanks to those locations, Quebec had a close-to-record year for American filming in 2007, in spite of the Writers Guild strike, a Canadian actors strike at the start of the year, and a dispute between two rival film-technicians unions in the province. American producers spent just under $300 million in Quebec in 2007, the best tally in four years and just shy of the record for Hollywood shooting in Quebec set in 2003.

Given the labor problems in Hollywood, Fraikin plans to focus more on wooing European producers in the coming months. Europeans haven’t often shot in Canada in the past, but Fraikin figures the timing might be good given the strength of the British pound and the euro relative to the Canadian dollar.

Neither Quebec nor Ontario has been able to snare any major Hollywood shoots yet for 2008, and that’s mainly because so many projects are on hold because of the American screenwriters dust-up. Quebec does have two smaller U.S. films coming, “Factory” and “Orphan,” both Joel Silver productions. In fall 2006, the Societe de Financement du Quebec, the provincial government’s investment arm, made a deal to invest $18 million in a package of films being produced by Silver, with the caveat that six of the 15 Silver films be shot in la belle province. The first of the Silver films, the pic “White Out,” was lensed in Quebec last year.

The Quebec government investment arm also inked a deal with Lionsgate, agreeing to cover up to 35% of the cost of Lionsgate productions shot in the province over the next four years. First under the deal was “The Punisher” sequel, which shot in Montreal in December.

“These types of deals are our best hope,” says Brian Baker, business agent at the Montreal branch of the Directors Guild of Canada. “The proof is that we have nothing else so far for 2008 (except for the Silver productions).”

For Ferguson, the best hope for Toronto comes courtesy of its huge new studio facility. He thinks Filmport will help pull in the pricey Hollywood films that tended to go to Montreal in recent years because it has a major studio in Mel’s Cite du Cinema complex.

“We think Filmport is going to attract a type of business that hasn’t been to Toronto,” Ferguson says.

The biggest film in Toronto this year was “The Incredible Hulk,” and other big Hollywood films might’ve taken a pass on Toronto in 2007, with the producers figuring “Hulk” was occupying all the city’s prime studio space.

Now Toronto is poised to go for the bigger films and TV series. But all three major Canadian production centers still have to wait to see what happens with the various labor struggles down south.

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