The movie business tends to leave people starstruck, from would-be actors who dream of fame to politicians who hand over taxpayers’ money to lure the industry to their jurisdictions.
It’s a curious phenomenon. If most industries threaten to leave unless they get public money, governments don’t usually cave in. (Professional sports teams being another exception.)
But in British Columbia, like many jurisdictions, the film and television production industry has had remarkable success in winning tax breaks and incentives.
And, naturally, each successful campaign has set the stage for the next effort.
In 2005, the B.C. government, like Ontario and Quebec, was effectively reimbursing film and television companies 11 per cent of their wage costs for productions in those provinces.
The industry persuaded Ontario to increase the subsidy, Quebec followed and so did B.C. Eight years and a few clever pressure campaigns later, the B.C. subsidy is up to 33 per cent of wage costs.
But Ontario and Quebec have increased their subsidies to 25 per cent of all spending, not just wage costs. The industry now says B.C. has to do the same or lose business.
It’s easy to like the film and TV industry. Clean, glamorous, the faint possibility a few tourists will want to visit after seeing Vancouver used as a backdrop for a car chase. (Though who really sits through the credits to see where a movie was filmed?)
But the subsidy race to the bottom is a mug’s game. The industry was worth about $1.2 billion to the economy in 2011. Last year, the provincial subsidy was $220 million. Some 25,000 people work in the industry, so the subsidy works out to $8,800 per job.
A single parent in Saanich might well wonder why his or her tax dollars are going to support a profitable film company.
There is always a jurisdiction somewhere willing to offer bigger subsidies to try to get into the game. The industry and its lobbyists then try to pressure B.C. and others to match the new offer. Instead of competing on infrastructure or workforce talent, governments compete to buy the business with public money.
This time, the provincial government has said no. That’s the right answer.
At the same time, a problem in the current subsidy regime that wrongly penalizes the capital region should be fixed.
In 2008, when the government increased subsidies, it also introduced an extra six per cent incentive for filming “outside the designated Vancouver area.” That recognized taxpayers across the province were subsidizing the Lower Mainland film industry, and attempted to encourage filming outside Vancouver.
But the regulations made the capital region part of the “designated Vancouver area.” Work here was not eligible for the credit.
That makes no sense. The incentive exists to help cover the extra costs of shooting in the regions. Those costs — ferries, transportation — are the same here as anywhere else. It is obviously unfair that companies are receiving government subsidies to choose Lake Cowichan, which is not in the CRD, over Sooke, which is within CRD boundaries, for film or TV production, .
It’s an easy and inexpensive problem to fix in next month’s budget.
Meanwhile, taxpayers should be happy the government has said no to more gifts for the film companies.
© Copyright 2013