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Les Leyne: Hollywood hunts for more tax breaks

The B.C. film industry — what’s left of it — has worked itself into a state about B.C. Liberal policies.

The B.C. film industry — what’s left of it — has worked itself into a state about B.C. Liberal policies. Several hundred people blitzed Premier Christy Clark’s Facebook page with vociferous complaints about her government’s lack of interest in their plight.

Their business is all about theatrics, so maybe the people who work in it can be excused for being overly dramatic. But they went a little over the top in portraying themselves as victims of a cold, heartless government.

“I love this province and you are forcing me out.”

“I have gotten used to this sector being ignored and treated with disrespect by your government year after year.”

“Completely ignoring our jobs, community and futures in the film industry.”

“I would like a clear explanation of why you ... tell outright lies about the film/tv/video game industry not needing help.”

Clark’s office didn’t do itself any favours by scrubbing all the complaints from the page, after a few hundred of them had poured in. An official said they didn’t want the page inundated with a single issue by an orchestrated campaign. So they deleted the comments, which created more indignation.

What started the fuss? It wasn’t a budget cut. It wasn’t elimination of a program. It was a revelation in Business in Vancouver, via an Opposition freedom of information request. It disclosed that last year the government considered including the film industry on the list of sectors the jobs plan would focus on, but decided against it.

So the plan emphasizes eight key economic sectors, instead of nine.

Workers in the industry went into high-dudgeon mode immediately and swamped the premier’s page with protests. One thing is clear from the tone — when you’re demanding help from the government, it’s remarkably easy to ignore the help you’re already getting.

For all the constant self-congratulation in B.C. about how beautiful the place is, the industry operates on just one dynamic. It’s tax breaks.

Hollywood has a skill for whip-sawing star-struck governments against one another and forcing them to match subsidies to entice multi million-dollar companies.

So the main measure of support is how many breaks the government gives on taxes. At the expense of the rest of us.

The independent panel that reviewed B.C.’s tax competitiveness took a look at the situation last year.

It found: “Since 2004-5, the value of the tax credits provided to the film and television production industry has more than tripled.”

The film-video tax credit and the production services tax credit cost $70 million in 2005. Last year those two breaks cost $219 million.

It’s not that the tax breaks are drawing in more work. Production value last year was about the same as it was in 2000.

It’s that the government continually increases the value of the breaks in a desperate attempt to keep up with other jurisdictions, mostly Ontario.

It’s clear the reason film and TV was left off the priority list was because the only move a government can make in this racket is to keep surrendering the tax revenue that is the reason for encouraging the business in the first place.

The independent panel said the “race to the bottom” when it comes to matching or bettering tax credits is clearly expensive and counter-productive.

“There is little evidence that the successive increases in these incentives have produced a stable competitive advantage for any of the participating provinces.”

If all provinces agreed to stand pat, film production would stay stable. The panel found little chance of that happening, but said they should try, nonetheless. In the meantime, it recommended no increase in subsidies.

Just So You Know: There’s no questioning the sincerity of the commenters. They are feeling the pinch from the production drop-off. But they’re in a mobile industry that is devoted to chasing tax breaks, and there’s much more bad news ahead. When the harmonized sales tax disappears from B.C. in April, it puts them at even more of a disadvantage, since Ontario is keeping its version.

If the NDP wins the May election, it will be interesting to see if their long-standing sympathy for the film industry’s need for huge tax breaks continues. Particularly when they are needed even more to offset the loss of the HST, which the NDP campaigned against.