B.C. unions mulling wage cuts for biz

20% currency exchange increase deters U.S. prod'n

VANCOUVER — Fearing a huge drop in film and TV production, mainly in service work from Hollywood, British Columbia’s film unions say they are reviewing contracts and are considering substantial wage cuts.

The province has become less attractive to U.S. productions because of the 20% increase in the Canadian dollar against the greenback over the past year, and an onerous 7.5% provincial sales tax that is not charged in Ontario and Quebec.

“It’s better to get 90% of something than 100% of nothing,” said Tom Adair, executive director of the powerful BC Council of Film Unions. “It’s not good news for the people in the industry here. But it’s part of the way we have to do business to be competitive and to keep talented people from drifting off.”

Peter Leitch, general manager of Lions Gate Studios in North Vancouver voiced the possibility of a 25% drop in production revenue in 2004. Production revenues in 2003 are expected to match the 2002 total of C$994 million ($764 million).

B.C. film commish Susan Croome told Daily Variety that Leitch’s concern about a 25% drop is reasonable, as the industry is off to a slow start this year, especially in TV drama series work. “That’s a strong area for us. But things can improve quickly,” said Croome, adding that the industry is prepared to do whatever is necessary to be competitive. “Business cycles are very short in this industry.”

The industry is pressing the government to exempt productions from the 7.5% provincial sales tax, which can add 2% to the cost of a production. The sales tax on one film shot here last year was $385,000, according to Leitch. “We’re trying to prove to the finance minister that it will be a positive thing to eliminate the sales tax for film and television production. The additional productions that we’ll attract here will leave more money in the economy.”

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