I Never Heard Them Call It “Show Art”: The Business Side of Film Production in Canada

I Never Heard Them Call It "Show Art": The Business Side ofFilm Production in Canada MICHAEL A. LEVINE To describe the growth of the film production industry in Canada over the past decade strictly in terms of the development of creative talent and technological infrastructure begs the obvious question of why a native industry did not develop in earlier years when Canada was providing the world with producers, directors and actors who achieved international repute. The explanation for this sudden growth is a simple one; as in so many other cases in this country, it was primarily the result of government involvement in the marketplace: first, by the creation of the Canadian Film Development Corporation in 1967 and second, by amendments to the regulations of the Income Tax Act, most notably in 1976. These changes occurred contemporaneously with certain important developments within the industry itself, both worldwide and within the Canadian financial community. Tax-shelter financing of film in the United States was virtually outlawed at the very point of its introduction into Canada. The major Hollywood studios, smarting from severe economic losses, continued to decrease the number of their own productions and to expand the number of negative pick-ups (i.e. acquisition of films for distribution after completion by independent producers) in order to spread their risk. The Canadian financial community became aware of the industry and sensitive to the possibilities of tax shelter as an attractive vehicle for wealthy individuals and corporations. At the same time, like so many enterprises born of Canada's unique composition and position, the film industry reflects not only certain worldwide concerns - industrial priorities vying with cultural ideals and policy, private enterprise vying with government involvement or control - but also the conflicts and tensions of our confederation - the French 90 element vying with the English, Toronto vying with Montreal and Vancouver, East vying with West, widespread fears of American domination vying with the ability and willingness to enter into American cultural assumptions. Before briefly reviewing the factors contributing to the recent production explosion of Canadian feature films and expressing my view of certain current problems and trends, it is necessary to note the assumptions upon which these subjective and, I am sure, to most of you, Philistine views are based. The sector of the film industry with which this article deals is essentially the production of English-language, commercial-length, feature (i.e. 75 minutes or longer) films, intended in the first instance for theatrical distribution. It excludes reference to documentaries, television productions, commercials and industrial films. The feature film industry, for strictly economic reasons, requires international distribution for its product to be viable. The capacity of any feature to generate economic return in the Canadian marketplace alone is severely limited. The Canadian-produced film generally acknowledged to have grossed the largest amount is Meatballs, estimated to have earned approximately $4 million at the Canadian theatrical box office, approximately twice what any previous Canadian certified film had earned. According to the normal rule of thumb in the industry, this level of box office gross receipts would net the producerI financier $750,000-$1 million after deducting the costs and fees of the theatre exhibitor and distributor . (The calculation of this number is a Byzantine exercise dependent on a number of factors and best examined in a journal on advanced accounting!) Assuming a Canadian television network sale in the range of $250,000 - $300,000, the top range at present, the maximum revenue generated for the producerIfinancier in Canada would appear to be under $1.5 million. While only an estimate, these statistics suggest a general upper limit to the Canadian marketplace 's capacity to provide a return to the producerI financier on a popular feature film aimed only at domestic consumption. As a result, and notwithstanding the nationalist views of the varRevue d'etudes canadiennes Vol. 16, No. I (Printemps 1981 Spring) ious craft unions and creative personnel, most features now being produced - like Meatballs itself - require significant international appeal to return a profit. There are, of course, always exceptions. Except for Bill Murray, a man unproven theatrically at the time, Meatballs is just such an exception, as is Breaking A way...