Canadian dollar could steer prod'n back north
'Psychological advantage' seen in the drop in valueTORONTO -- Canadian currency is tumbling in value versus the U.S. dollar, and that is a decidedly good thing for firms hoping to lure film and TV projects north of the border, local industry executives say.
"There's a psychological advantage to having our dollar below 80 cents," Paul Bronfman, chairman of the Comweb Group, Canada's largest sound stage and production equipment rental provider, said of the loonie's Friday descent to 79 cents against the greenback.
A strengthened Canadian dollar since 2006 forced many U.S. producers to steer their projects away from Canada -- dubbed Hollywood North during the go-go 1990s -- to southern U.S. states with their own generous tax credits.
Canada's appeal was undercut even further in 2008 when New York tripled its tax credit on below-the-line expenses to 30% and began to offer TV series and movies filmed in New York City a 5% bonus.
That move effectively knocked Hollywood production hubs such as Toronto and Montreal out of the running when it came to luring Los Angeles producers away from rival locales like Michigan, Louisiana and New Mexico.
Only Vancouver managed to keep its sound stages busy with U.S. movie and TV shoots, thanks to its proximity to Los Angeles, while Toronto and Montreal turned to indigenous film and TV shoots for business.
But with recent market turmoil sending the loonie down in value, Canada is back on the radar of Hollywood bean counters, Bronfman said.
"If you do the math, with the (Canadian) dollar below 80 cents, that's a 20% bonus. Combine that with our federal and provincial tax credits, and we're back to a level playing field with New York State," he said.
Hans Fraikin, Quebec's film commissioner, agreed that a sub-80 cent loonie gets Montreal back in the game, particularly as Los Angeles producers already known Canada's talent base and production infrastructure well.
Separately this week, Quebec hiked its tax credit for local film and TV producers as part of a province-wide economic rescue package, and the province has plans to sweeten the provincial tax credit for foreign, mostly U.S., producers as well.
"We're working on that, and hope to announce something before the summer," Fraikin said.
Also playing into Canada's hands is uncertainty over tax credits in certain U.S. states, including Ohio, Michigan and New York, which face bleak budget outlooks amid a growing recession.
Said Bronfman: "There's instability south of the border, and tax credit stability and no surprises in Canada."