U.S. Tax Credit Chill Sends Hollywood To Canada

Vancouver and Toronto gain as Hollywood producers seek tax credit certainty.

OTTAWA – The Canadian dollar may have touched a three-year high against the American greenback, but so too has Hollywood foreign location shooting north of the border.

Ontario’s film and TV sector racked up $964.3 million in overall production activity in 2010, up from a year-earlier $946.4 million and $671.2 million spent locally in 2008 when Hollywood studios pulled back amid the 2008-09 market meltdown. British Columbia continues to attract the bulk of foreign location shooting and service work nationwide, with Hollywood production in and around Vancouver last year clocking in at $485 million, up sharply from $248 million in 2009. 

Current Vancouver credits include the Tom Cruise-starrer Mission Impossible IV, and The Grey on the movie front, and TV series like Chaos, Endgame, and Fringe, which shifted from New York City to Vancouver. In second place was Ontario, where total foreign production in 2010 came to $318.2 million, up from a year-earlier $272 million in production activity.

The bonus for Hollywood North was foreign production rebounded last year, even as the loonie and American greenback moved to parity. “We sustained foreign production, and even had a modest increase, when the dollar was at near par,” said Donna Zuchlinski, manager of film at the Ontario Media Development Corp., which markets Ontario to Los Angeles producers as a production destination.

U.S. network series to shoot in Toronto last year included DreamWorks/Turner Network Television’s Falling Skies, NBC Universal Television’s Warehouse 13, now shooting its third season currently locally, and 20th Century Fox/A&E Network’s Breakout Kings. On the movie front, recent Toronto credits include Summit Entertainment’s Red and Morgan Creek Productions’ Dream House.

The Canadians market themselves as a stable and sustainable backlot for Los Angeles, in contrast to the tax credit chill south of the border. Paul Bronfman, chairman and CEO of the Comweb Group, the production equipment supplier, said Michigan on Thursday proposing an end to its 42 percent film tax credit, to be replaced by a $25 million economic development fund, signaled neighbouring Ontario was likely to get even busier in 2011. “We don’t wish any ill on our American friends. But this will help Toronto,” Bronfman, who is also chairman of Pinewood Toronto Studios, said.

When Michigan first introduced its film tax credit, Comweb moved some of its production gear into the state to service projects like Clint Eastwood’s Gran Torino movie shoot. But Bronfman said he has pulled his equipment back to Ontario “now that Toronto is back in the groove.”