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The role of the federal government in the commercial feature film industry in Canada : an introduction Diebel, Dennis H. 1976

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THE ROLE OF THE FEDERAL GOVERNMENT IN THE COMMERCIAL  FEATURE FILM INDUSTRY IN CANADA AN INTRODUCTION  by  DENNIS H. DIEBEL B.Comm., U n i v e r s i t y o f B r i t i s h Columbia, 1970 LL.B., U n i v e r s i t y o f B r i t i s h Columbia, 1975  A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION  We.accept t h i s t h e s i s as ^conforming t o the required  standard  THE UNIVERSITY OF BRITISH COLUMBIA August, 1976 (o) Dennis H. Diebel  In p r e s e n t i n g  t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f the  requirements f o r an advanced degree a t the U n i v e r s i t y o f B r i t i s h Columbia, I agree t h a t the L i b r a r y s h a l l make i t freely  available, f o r reference  and study.  I further  agree  t h a t p e r m i s s i o n f o r e x t e n s i v e copying o f t h i s t h e s i s f o r s c h o l a r l y . p u r p o s e s may be granted by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s .  I t i s understood  that  copying or p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l s h a l l not be allowed without my w r i t t e n  Department o f Commerce & Business The U n i v e r s i t y o f B r i t i s h Columbia 2075 Wesbrook P l a c e Vancouver, Canada V6T 1W5  Date  permission.  Administration  gain  ABSTRACT The two  f e a t u r e f i l m i n d u s t r y i n Canada i s dominated by  l a r g e f o r e i g n owned t h e a t r e  owned d i s t r i b u t i o n f i r m s , who,  chains  and e i g h t f o r e i g n  by engaging i n a s e r i e s o f  i n t e r r e l a t e d trade p r a c t i c e s , have managed to g a i n e f f e c t i v e c o n t r o l of not only the marketing of f e a t u r e p i c t u r e s i n Canada but the  t h e i r production  l e n g t h motion  as w e l l .  In  1968,  f e d e r a l government's s t a t e d purpose when e s t a b l i s h i n g the  Canadian F i l m Development C o r p o r a t i o n  was  mote a f e a t u r e f i l m i n d u s t r y i n Canada. the government has i n f l u e n c e the  to f o s t e r and Since  pro-  t h a t time,  taken a d d i t i o n a l measures designed to  industry.  T h i s study attempts t o measure the impact o f these i n i t i a t i v e s on they have had  the f i l m i n d u s t r y i n Canada and l i t t l e o r no s i g n i f i c a n t e f f e c t .  f i l m s are f i n a l l y being them r e t u r n a p r o f i t .  concludes t h a t While  produced i n t h i s country, few  o f Canadian f i l m s .  I n d i c a t i o n s are t h a t tax i n c e n t i v e s w i l l not improve  for  this  concluded t h a t the primary purpose  i n v e s t i n g i n f i l m s i s not to reduce taxes but  a p r o f i t , s u b s t a n t i a l tax savings agreements w i t h other n a t i o n s f i n a n c i n g t h e i r productions conclusions  of  Consequently, the p r i v a t e s e c t o r i s  r e l u c t a n t to i n v e s t i n the p r o d u c t i o n  s i t u a t i o n s i n c e i t was  feature  notwithstanding.  to r e t u r n Co-production  a s s i s t Canadian producers i n  but  i t is s t i l l  about the f u l l p o t e n t i a l o f the  too e a r l y t o draw co-production  agreements.  Canada's c o m p e t i t i o n laws have o n l y r e c e n t l y  been extended t o s e r v i c e s such as the f i l m i n d u s t r y , so a g a i n it  is still  t o o e a r l y t o draw any c o n c l u s i o n s .  e x p e r i e n c e , however, the r e s u l t s do n o t appear V o l u n t a r y quota circuits  From p a s t encouraging.  agreements between the two l a r g e t h e a t r e  and the Canadian F i l m Development C o r p o r a t i o n have  r e s u l t e d i n Canadian f i l m s b e i n g shown throughout but o n l y i n an apparent  Canada  attempt to a v o i d l e g i s l a t e d  quotas  and thus, e a r l y i n d i c a t i o n s are t h a t the l e t t e r and n o t the s p i r i t o f the agreements i s b e i n g adhered t o . f o r e i g n ownership l e g i s l a t i o n  Canada's  has had a b s o l u t e l y no a f f e c t  on the e x t e n t t o which the f i l m i n d u s t r y i n Canada i s f o r e i g n controlled.  In s h o r t , from a b u s i n e s s p o i n t o f view, and  i t was concluded  t h a t the f i l m i n d u s t r y must be run as a  b u s i n e s s , the Canadian f i l m i n d u s t r y remains much the same as i t was b e f o r e the government's The of  involvement.  study, t h e r e f o r e , looked a t the f i l m s u b s i d i e s  a number of o t h e r c o u n t r i e s and some o f the Canadian  p o l i c y p r o p o s a l s submitted  t o the S e c r e t a r y o f S t a t e ' s  Department, i n an attempt t o i s o l a t e help develop a film  film  i n c e n t i v e s which would  a Canadian f i l m i n d u s t r y .  I t was concluded  l e v y l i k e t h a t o f the Eady P l a n i n Great  that  Britain,  would n o t only h a l t the flow o f s u b s t a n t i a l sums o f Canadian source  funds  to f o r e i g n c o n t r o l l e d c o r p o r a t i o n s but i t would  a l s o make a v a i l a b l e t o Canadian producers  a source o f funds  iv  which i s p r e s e n t l y b e i n g s u p p l i e d by the Canadian  taxpayer  through the Canadian F i l m Development C o r p o r a t i o n . i t was  A levy,  concluded, would a l s o encourage p r i v a t e s e c t o r i n v e s t -  ment i n the p r o d u c t i o n of Canadian motion F u r t h e r i t was  pictures.  concluded t h a t the supply o f  Canadian  f i l m s a t t h i s time does not warrant a l e g i s l a t e d quota what Canadian I t was  f i l m s need i n s t e a d i s b e t t e r and proper  and promotion.  a l s o . c o n c l u d e d t h a t the. f e d e r a l government should  be encouraged  to n e g o t i a t e and complete  further co-production  agreements s i n c e they i n c r e a s e the p o t e n t i a l sources o f f i n a n c i n g a v a i l a b l e to the Canadian producer as w e l l as make a v a i l a b l e the advantages o f whatever s u b s i d i e s the  co-producing  n a t i o n has imposed, be they quotas, d i s t r i b u t i o n agreements or l e v y p a r t i c i p a t i o n .  F i n a l l y i t was  concluded t h a t the  f e d e r a l government should take steps t o a t t r a c t  foreign  productions t o t h i s country because they not only p r o v i d e a d d i t i o n a l sources o f employment f o r those now the Canadian those new  f i l m i n d u s t r y and,  working i n  at the same time, p r o v i d e  to the i n d u s t r y w i t h a p r a c t i c a l means o f l e a r n i n g  t h e i r t r a d e , but they a l s o have the added advantage o f i n j e c t i n g l a r g e amounts o f c a p i t a l i n t o the Canadian economy g e n e r a l l y .  V  TABLE OF CONTENTS Page ABSTRACT  i i  TABLE OF CONTENTS  V  LIST OF TABLES  ix X  ACKNOWLEDGEMENT  Chapter I.  INTRODUCTION LIMITATIONS A.  1 '.  Sources o f Data and I n f o r m a t i o n  7  PRODUCTION, DISTRIBUTION AND EXHIBITION THE  8  AMERICAN FILM INDUSTRY:  A SHORT HISTORY  9  THE WHITE REPORT II.  11  THE STRUCTURE OF THE MOTION PICTURE INDUSTRY IN CANADA . THE FEATURE FILM INDUSTRY IN CANADA: AN INTRODUCTION THE  4  15 15  CANADIAN FILM INDUSTRY VS.  THE  FILM INDUSTRY IN CANADA  16  A.  Production  18  Independent Producers  19  B.  Distribution  •••  23  C.  Exhibition  26  Famous P l a y e r s  28  vi Chapter  Page Odeon Theatres (Canada) L i m i t e d  III.  ..  .  29  The S m a l l e r Independent Chains  29  The Independents  30  MARKET BEHAVIOUR IN THE MOTION PICTURE INDUSTRY IN CANADA  33  THE MARKETING OF MOTION PICTURES: AN INTRODUCTION  .  34  A.  The Product  34  B.  The Demand f o r Motion P i c t u r e s  34  TRADE PRACTICES IN THE MARKETING OF FEATURE FILMS IN CANADA  36  A.  Block Booking  36  B.  Runs  39  C.  F i l m Rentals  41  D.  Booking P r a c t i c e s  44  SUMMARY OF STRUCTURE AND TRADE PRACTICES IV.  .  45  THE FEDERAL GOVERNMENT AND THE FEATURE FILM INDUSTRY IN CANADA  50  POLICIES INFLUENCING PRODUCTION  51  A.  The Canadian F i l m  Development  Corporation The F e a t u r e F i l m Investment Program  ..  51  ...  53  The Low Budget Program  54  B.  The Canada C o u n c i l  55  C.  Deductions from Income Tax: Feature F i l m Investment Feature F i l m Investment: The 100% Deduction  56 58  v  vii Chapter  Page D.  Co-production Agreements  E.  Canadian F i l m  Investment:  Famous P l a y e r s COMPETITION A.  a n d Odeon  61  The Combines I n v e s t i g a t i o n A c t  FOREIGN  1, 1 9 7 6  65  The F o r e i g n  B.  The Canada B u s i n e s s  Investment Review A c t Corporations  QUOTAS  ON THE F I L M  66  GOVERNMENT  INDUSTRY  71  I M P A C T ON P R O D U C T I O N Canadian F i l m  71  Development  Corporation  71  B.  Taxation  80  C.  Co-production Agreements  83  D. THE  I n v e s t m e n t b y Famous P l a y e r s and Odeon I M P A C T ON D I S T R I B U T I O N AND  EXHIBITION A.  VI.  A c t ..  65  67  THE I M P A C T OF T H E F E D E R A L  A.  61  OWNERSHIP ...  A.  THE  60  POLICY  as o f J u l y  V.  59  ...........  Exhibition  84 85 88  THE I M P A C T ON F O R E I G N O W N E R S H I P  91  SUMMARY  92  F I L M INDUSTRY  INCENTIVES  97  P R I N C I P L E S FOR I N T E R V E N T I O N  98  FOREIGN SUBSIDIES  99  viii Chapter A.  The U n i t e d Kingdom  B.  France  C.  Israel  D.  Sweden  •  •  •  1°  Quotas ......  B.  Promotion  C.  W i t h h o l d i n g Tax  D.  F i l m Marketing Board  E.  Purchase o f an E x i s t i n g Chain . *  ••  IV  Glossary  6  I l l ..  HI 112 H" 1  2  7  3  12 6  f  1  2  9  1  3  4  1  3  4  D i s t r i b u t o r s o f Feature Length F i l m s In Canada  I  The U t i l i z a t i o n o f Tax Deductions i n the F i n a n c i n g o f Canadian Feature F i l m s : An I n d u s t r y Example .. .  145  3  8  The Use o f Leverage i n F e a t u r e F i l m Investment  V  CFDC Agreement w i t h Famous P l a y e r s L t d  VI  CFDC Agreement w i t h Odeon Theatres (Canada) L t d . .. Famous P l a y e r s Report f o r the months o f August-September, 19 75  VII  5  109  Areas o f F u r t h e r Study  APPENDIXES  III  1°  SUMMARY AND CONCLUSIONS  BIBLIOGRAPHY  II  2  106  RECOMMENDATIONS  I  1°  103  A.  A.  e  99  — . . . . . . . .  FILM POLICY PROPOSALS  VII.  9  P a  156 157 1  6  0  1  6  3  ix L I S T OF TABLES* Table II-I II-II  V-l  V-II  V-III  V-IV  V-V  Page SUMMARY OF MOTION P I C T U R E T H E A T R E E X H I B I T I O N I N CANADA, 1 9 7 4  17  NEW F I L M S SHOWN ON C A N A D I A N MOTION P I C T U R E S C R E E N S B Y COUNTRY OF O R I G I N FOR THE Y E A R S 1 9 7 2 , 1 9 7 3 AND 1 9 7 4  22  Y E A R L Y P R O D U C T I O N OF F I L M S PRODUCED W I T H T H E A S S I S T A N C E OF T H E C F D C BETWEEN A P R I L 1, 1 9 6 8 AND MARCH 3 1 , 1 9 7 5 ( F R E N C H AND E N G L I S H ) ..  72  F E A T U R E F I L M P R O D U C T I O N I N CANADA FOR 1 9 7 5 GROUPED A C C O R D I N G TO COST  74  C A N A D I A N BOX O F F I C E G R O S S E S OF THE TOP F E A T U R E F I L M S PRODUCED I N E N G L I S H CANADA A S OF OCTOBER 3 1 , 19 7 5  76  C F D C R E T U R N ON I N V E S T M E N T S (COMPARATIVE TABLE) 1968-69 t o 1972-73 1973-74 t o 1974-75  78  FAMOUS P L A Y E R S P E R F O R M A N C E UNDER T H E AUGUST 1 5 , 19 75 QUOTA AGREEMENT FOR THE P E R I O D AUGUST 1 , 1 9 7 5 TO OCTOBER 3 1 , 1 9 7 5  89  ACKNOWLEDGEMENT  For h e r p e r s i s t e n t encouragement and u n f a i l i n g f a i t h , wife,  I thank my  Peggi Marie D i e b e l .  For t h e i r a s s i s t a n c e suggestions,  i n o r g a n i z i n g m a t e r i a l and f o r many h e l p f u l  I am indebted  t o Dr. Rick P o l l a y and Dr. Stan Oberg.  For t y p i n g the f i n a l d r a f t , much p r a i s e i s deserved by J i l l  Bourne.  CHAPTER I INTRODUCTION  T h i s study i s an attempt t o analyze and e v a l u a t e the  impact o f the f e d e r a l government on the s t r u c t u r e , behav-  i o r and performance o f the f e a t u r e  f i l m industry  i n Canada.  Another purpose i s t o examine the development o f the government's f i l m p o l i c y and i t s e f f e c t as an impetus t o promoting p r i v a t e involvement i n the i n d u s t r y .  In p a r t , i t f o l l o w s the  model o f Mae D. H u e t t i g ' s Economic C o n t r o l  o f the Motion  P i c t u r e Industry and M i c h a e l Conant's A n t i t r u s t i n the Motion Picture Industry. f i l m industry it  L i k e these s t u d i e s ,  i t recognizes that a  i s not l i k e most i n d u s t r i e s .  i s a service industry with constantly  creates  The f a c t  that  changing p r o d u c t  somewhat d i f f e r e n t problems o f a n a l y s i s .  The f a c t  t h a t i t i s a maze o f i n t r i c a t e r e l a t i o n s h i p s compounds the problem. The  nature and h i s t o r y o f the motion p i c t u r e  - 1 -  industry  -  2  -  i n Canada, however, makes much o f t h i s study unique i n form. More than the American f i l m i n d u s t r y , upon which these works are based, the Canadian f i l m i n d u s t r y works w i t h i n a framework o f laws and i n s t i t u t i o n s c r e a t e d by government.  I t has  been regarded not merely as a c o l l e c t i o n of e n t r e p r e n e u r s producing a s e r v i c e f o r consumers but as an i n f a n t i n d u s t r y t h a t needs promoting and p r o t e c t i o n from f o r e i g n c o m p e t i t i o n . P r e v i o u s works on the motion p i c t u r e i n d u s t r y i n Canada are the r e p o r t of Mr. P e t e r White, K.C.,  Commissioner  appointed under the Combines I n v e s t i g a t i o n A c t to i n v e s t i g a t e an a l l e g e d combine i n the motion p i c t u r e i n d u s t r y i n Canada, E l e a n o r B e a t t i e ' s A Handbook o f Canadian F i l m and Garth H. Drabinsky's Motion P i c t u r e s and the A r t s i n Canada.  Of these,  o n l y the White Report can be c o n s i d e r e d a t r u e study o f the f i l m i n d u s t r y i n Canada.  I t , however, was  published  i n 1931.  The B e a t t i e handbook i s an attempt to b r i n g t o g e t h e r and t o make a c c e s s i b l e a l l i n f o r m a t i o n  about f i l m and f i l m making  i n Canada. "The whole book i s , i n f a c t , a k i n d o f d i c t i o n a r y , an open ended l i s t i n g which i n v i t e s additions."" " 1  Motion  P i c t u r e s and the A r t s i n Canada " i s meant to p r e s e n t the economic f a c t s f o r day-to-day d e c i s i o n s and a c t i o n s and t o be used as a s i m p l i f i e d guide t o common l e g a l concepts t h a t 2 influence business decisions" industry.  i n the Canadian f e a t u r e  There has been no study a n a l y z i n g  ture conduct and performance of the i n d u s t r y .  film  the market Thus,  any  struc-  -  3 -  d i s c u s s i o n s o f the government's  impact on the i n d u s t r y have -  l a c k e d an o v e r a l l framework w i t h i n which t o judge the government's a c t i o n o r d e v i s e a u s e f u l f i l m p o l i c y . study attempts to f i l l  t h i s gap.  The p r e s e n t  The second and more important  reason f o r t h i s study i s to r e p o r t c r i t i c a l l y on the impact of the f e d e r a l government's  a c t i o n s over the l a s t t e n y e a r s ,  on the i n d u s t r y ' s s t r u c t u r e , b e h a v i o r and performance. s i g n i f i c a n t of these was F i l m Development  Most  the e s t a b l i s h m e n t o f the Canadian  Corporation.  O r i g i n a l l y a l l o t t e d $10,000,000.00  o f p u b l i c funds "to f o s t e r and promote development o f a 3 f e a t u r e f i l m i n d u s t r y i n Canada",  the C o r p o r a t i o n has  been funded w i t h an a d d i t i o n a l $15,000,000.00.  since  An e f f o r t i s  made h e r e i n to measure the e f f e c t o f the C o r p o r a t i o n on the s t r u c t u r e o f an performance i n the motion p i c t u r e markets w i t h p a r t i c u l a r emphasis e n t r y o f new  firms.  c e n t e r s on changes  on the e f f e c t s o f the C o r p o r a t i o n on the A n a l y s i s on the impact on performance i n the r e l a t i v e output o f new motion  pic-  tures . The remaining s e c t i o n s o f Chapter I d e s c r i b e the three aspects o f a f i l m i n d u s t r y : and e x h i b i t i o n ;  production,  distribution  o u t l i n e the l i m i t a t i o n s o f the p r e s e n t study;  and s e t out a c o n c e p t u a l h i s t o r y o f the American f i l m  industry  w i t h which the Canadian i s c l o s e l y t i e d and a b r i e f summary o f the r e s u l t s o f the White Report.  Chapter II d e s c r i b e s i n  d e t a i l the market s t r u c t u r e o f a Canadian motion p i c t u r e  i n d u s t r y s e t t i n g out the e x t e n t  of f o r e i g n ownership  f o c u s i n g on the h i g h degree of c o n c e n t r a t i o n III centers  and  therein.  on the trade p r a c t i c e s i n the i n d u s t r y  Chapter  included  i n the i n t e r r e l a t e d elements o f run,  c e n t r a l i z e d booking  block booking.  the government p o l i c i e s ,  C h a p t e r I V describes  to date, a f f e c t i n g the i n d u s t r y . p o l i c i e s which can be d e s c r i b e d  These i n c l u d e not o n l y as pure f i l m p o l i c i e s  a l s o a l l i e d government p o l i c i e s having an e f f e c t not on the f i l m i n d u s t r y but on a l l i n d u s t r i e s i n the economy.  j o u r n a l s and v a r i o u s other  but only  Canadian  S t a t i s t i c s Canada,  sources to show the  o f the government's a c t i o n s on the s t r u c t u r e of, and mance i n , the i n d u s t r y . of other  the  Chapter V draws on data from the Annual Reports o f  the Canadian F i l m Development C o r p o r a t i o n , trade  and  nations  impact perfor-  Chapter VI analyzes the f i l m  plus various  f i l m proposals  submitted  subsidies to  the Canadian government as a l t e r n a t i v e s to those a l r e a d y plemented and  Chapter VII concludes w i t h an e v a l u a t i o n  im-  of  the e f f e c t i v e n e s s o f the government's a c t i o n s and o f f e r s a l t e r n a t i v e s , t a k i n g the p o s i t i o n t h a t no amount o f government involvement i n the p r o d u c t i o n  o f motion p i c t u r e s w i l l  the Canadian f i l m i n d u s t r y u n t i l steps  assist  are taken t o i n s u r e  t h a t Canadian f i l m s are p r o p e r l y marketed.  LIMITATIONS I t would be v i r t u a l l y  impossible  w i t h t h i s type o f  5 study  t o analyze  e v e r y a s p e c t o f t h e f i l m i n d u s t r y i n Canada.  Time a n d r e s o u r c e s  d i c t a t e otherwise.  f o l l o w i n g parameters were p l a c e d  Accordingly, the  on t h e scope o f t h e s t u d y .  However e v e n w i t h t h e s e g u i d e l i n e s , i t was o f t e n because o f t h e constant  overlapping  t h a t occurs  t r y , n o t t o make m e n t i o n o f a s p e c t s the  difficult, i n the indus-  o f the industry  outside  scope o f t h e study. The  study  i s designed t o deal only with  English-  speaking  sector o f the commercial feature  Canada.  I t does n o t c o v e r i n d u s t r i a l , e d u c a t i o n a l , o r  documentary f i l m s .  Nor does i t i n c l u d e s h o r t s :  l e s s t h a n 90 m i n u t e s r u n n i n g industry,  film industry i n  time.  films of  The Q u e b e c F r e n c h  u n l i k e t h e E n g l i s h , " h a s managed t o a c h i e v e  'distribution' The  f o ri t s f i l m s " ,  study  and i s t h e r e f o r e  4  i s further limited  language adequate  excluded.  i n that i t covers  only  35mm f e a t u r e  length motion p i c t u r e s designed f o r t h e a t r i c a l  distribution.  I t d o e s n o t i n c l u d e made f o r T.V. f i l m s o r  subsequent use, second g e n e r a t i o n t u r e such a s :  videotape,  products o f the motion  c a s s e t t e , o r 16mm.  Also  pic-  excluded  f r o m any i n d e p t h a n a l y s i s a r e t h e ' f i l m s o f b o t h t h e C a n a d i a n Broadcasting  Corporation  and t h e N a t i o n a l F i l m Board  n e i t h e r o f t h e s e Crown c o r p o r a t i o n s production  and d i s t r i b u t i o n  to theatre  audiences.  Issues  since  i s concerned w i t h the  o f feature length motion p i c t u r e s  i n v o l v i n g value  judgments such as  censorship,  the E t r o g awards left  5  6 -  and what c o n s t i t u t e s a 'good' o r 'bad' f i l m ' are  f o r f i l m philosophers  and c r i t i c s .  In a s i m i l a r v e i n ,  New Wave o r Underground f i l m s a r e n o t c o n s i d e r e d nor i s t h e d i s t r i b u t i o n o f f i l m s t o u n i v e r s i t i e s and f i l m studied.  Facilities  f o r the p r o d u c t i o n o f f e a t u r e f i l m s such  as s t u d i o s and p r o d u c t i o n and  societies  l a b o r a t o r i e s e x i s t throughout Canada  t h e r e f o r e are taken as g i v e n .  D i s c u s s i o n s about labour  unions and q u a l i f i e d t e c h n i c i a n s a r e s i m i l a r l y  excluded.  Since the v a r i o u s p r o v i n c i a l governments have been r e l u c t a n t to  become i n v o l v e d i n the Canadian f i l m i n d u s t r y , they too  have been  excluded. W i t h i n the parameters o f the study i t s e l f ,  l i m i t a t i o n s had t o be imposed.  With a country  further  as geographi-  c a l l y and c u l t u r a l l y d i v e r s e as Canada and a s u b j e c t matter as complex as the f i l m i n d u s t r y , i t soon became e v i d e n t t h a t o n l y c e r t a i n problems i n t h e areas o f p r o d u c t i o n , and e x h i b i t i o n c o u l d be c o n s i d e r e d . to  distribution  An attempt has been made  d e a l w i t h only the major problems i n each o f these  areas.  While the s e l e c t i o n process was a d m i t t e d l y somewhat s u b j e c t i v e , i t was c a r r i e d o u t only a f t e r e x t e n s i v e and exhaustive i n t o each o f these T h i s study  research  areas. t h e r e f o r e i s an i n t r o d u c t i o n t o and an  overview o f the E n g l i s h - s p e a k i n g  sector  o f the commercial  f e a t u r e f i l m i n d u s t r y i n Canada and the impact o f the f e d e r a l government thereon.  As an i n t r o d u c t i o n , one o f the purposes  -  7 -  i s t o p o i n t o u t f u r t h e r areas o f r e s e a r c h dations.  and make recommen- '  As an overview, i t i s a s k e l e t a l framework t o which  the myriad o f d e t a i l s surrounding the f i l m i n d u s t r y i n Canada q  may be a p p l i e d . A.  Sources o f Data and Information A study o f the f e a t u r e f i l m i n d u s t r y i n Canada i s ,  at best,  a f r u s t r a t i n g undertaking.  w i t h an i n f a n t i n d u s t r y , i t i s s t i l l concrete  conclusions  Because we are d e a l i n g too e a r l y t o draw any  o r make g e n e r a l i z a t i o n s .  But even more  f r u s t r a t i n g i s the f a c t t h a t r e l i a b l e data i s simply n o t r e a d i l y a v a i l a b l e and i s even harder, i f n o t i m p o s s i b l e , w i t h o u t an o f f i c i a l i n q u i r y , t o o b t a i n . i n The Motion P i c t u r e Industry  Howard T. Lewis,  points out that:  "The i n d u s t r y has made no r e a l attempt to give the p u b l i c any thorough-going, unbiased d i s c u s s i o n of i t s o r g a n i z a t i o n , o p e r a t i o n or p r o f i t s and t h a t such i n f o r m a t i o n as has been given has been f r a n k l y b i a s e d and intended p r i m a r i l y t o promote f r i e n d l y public relations."6 While Lewis was speaking o f the American f i l m the s i t u a t i o n i s e q u a l l y a p p l i c a b l e i n Canada.  industry,  Consequently,  t h i s study i s based, and r e l i e s h e a v i l y on secondary data obtained  from sources such as the Annual Reports o f the  Canadian F i l m Development C o r p o r a t i o n , i n the v a r i o u s  r e p o r t s as p u b l i s h e d  i s s u e s o f Cinema Canada, s t a t i s t i c s as p r o v i d e d  by S t a t i s t i c s Canada, and f a c t s gleaned from the country's major newspapers as s u b s t a n t i a t e d whenever p o s s i b l e .  Also  -  8 -  used a r e a r t i c l e s by and i n t e r v i e w s w i t h those i n v o l v e d i n the i n d u s t r y as r e p o r t e d  i n The J o u r n a l o f the Producers  G u i l d o f America, Motion magazine, Cinema Canada, trade n a l s and again,  jour-  Canada's l e a d i n g newspapers.  In a d d i t i o n , attempts have been made whenever p o s s i b l e to substantiate  the above sources through p e r s o n a l  interviews  w i t h those i n v o l v e d i n the i n d u s t r y i n Vancouver. PRODUCTION, DISTRIBUTION AND EXHIBITION The  motion p i c t u r e i n d u s t r y i n Canada, l i k e any f i l m  i n d u s t r y has three p r i n c i p a l branches:  production,  .  distribu-  t i o n and e x h i b i t i o n . The  producer as d e f i n e d by the White Report i s the  person "making a motion p i c t u r e up t o and i n c l u d i n g the 7 negative  print".  T h i s i n v o l v e s assembling a s t u d i o ,  financing,  a c t o r s , d i r e c t o r and t e c h n i c i a n s .  A f t e r making the f i l m , the  producer w i l l  o r number o f p o s i t i v e p r i n t s  l i c e n s e the negative  to a d i s t r i b u t o r , or market i t through his•own i n t e g r a t e d d i s t r i b u t i o n department.  The producer's c o p y r i g h t  f i l m enables him to prevent u n l i c e n s e d p r i n t s and t o c o n t r o l t h e i r The industry.  on the  duplications of h i s  distribution.  d i s t r i b u t o r s are the w h o l e s a l e r s i n the f i l m  They s e l l  the e x h i b i t o r the r i g h t t o use a p o s i t i v e  p r i n t o f a f i l m f o r a f i x e d p e r i o d o f time.  The d i s t r i b u t o r  w i l l perform two s e r v i c e s f o r the producer:  f i r s t , the  - 9 p h y s i c a l d i s t r i b u t i o n to the e x h i b i t o r of copies second, the p r o v i s i o n of finance  of h i s film;  f o r production.  "The d i s t r i b u t o r e n t e r s i n t o a c o n t r a c t w i t h the producer t o perform a l lthe duties f o l l o w i n g the completion o f a f i l m . He b o o k s i t t o e x h i b i t o r s a n d makes o u t the e x h i b i t i o n c o n t r a c t s , arranges trade showns a n d d a t e s o f e x h i b i t i o n , s e e s t o the d i s p a t c h and c o l l e c t i o n o f c o p i e s o f the f i l m and c h e c k s t h a t t h e y a r e i n good c o n d i t i o n , c o n t r o l s a d v e r t i s i n g , watches c o p y r i g h t , and c o l l e c t s t h e c a s h . " 8  An e x h i b i t o r i s a t h e a t r e o w n e r o r o t h e r showing f i l m s commercially  t o the p u b l i c .  person  He i s t h e i n d u s -  t r y ' s r e t a i l e r and i t i s w i t h h i m t h a t t h e p u b l i c d e a l s . may b e a n i n d e p e n d e n t o r p a r t o f a c h a i n . for collecting distributor.  t h e box o f f i c e gross  He  He i's r e s p o n s i b l e  and f o r r e p o r t i n g t o t h e  He r e c e i v e s t h e " c a n s " o f f i l m f r o m t h e d i s t r i b -  u t o r o r t h e c a r r i a g e s e r v i c e h i r e d by t h e d i s t r i b u t o r and i n s u r e s t h a t t h e y a r e d e l i v e r e d b a c k t o same. the  s i z e of the operation,  D e p e n d i n g on  t h e e x h i b i t o r may h a v e a n y number  of people working f o r him i n c l u d i n g a s s i s t a n t s , p r o j e c t i o n i s t , box  office staff,  and  usherettes.  THE AMERICAN F I L M INDUSTRY: Since  A SHORT H I S T O R Y  9  t h e Canadian f i l m i n d u s t r y has been i n e x t r i c a b l y  i n t e r w o v e n w i t h t h e American s i n c e t h e e a r l y 1900's, i t i s necessary i n order  t o understand the f u l l  f l a v o r of the  problems b e s e t t i n g the Canadian i n d u s t r y t o s e t out a b r i e f resume o f t h e A m e r i c a n .  - 10 A t the b e g i n n i n g m o t i o n p i c t u r e was ordinarily  one  s h o t i n one  of the  20th century, the  r e e l o f a b o u t 1,000 day.  Due  standard  feet which  to t h e i r novelty, a l l p i c -  t u r e s p r o d u c e d r e t u r n e d a good p r o f i t r e g a r d l e s s o f quality. who  These f i l m s were n o r m a l l y  ordered  varied  h o w e v e r , was  expensive  exhibitors  and  started  film.  which  T h i s method, film's To  exchanging  allefilms  to rent films  of the purchase p r i c e  Since the e x h i b i t o r s  exhibitors  for prices  because the  e x c h a n g e s w e r e s e t up  at a percentage  of time.  foot  their  to  the f i l m i t s e l f wore o u t .  t h i s problem, the e x h i b i t o r s  among t h e m s e l v e s  period  100  for exhibitors  a p p e a l waned l o n g b e f o r e viate  sold outright  them by m a i l f r o m a c a t a l o g u e  f r o m $10.00 t o $25.00 p e r  was  w e r e now  for a limited  paying  less  p e r p i c t u r e , t h e y w e r e a b l e t o a f f o r d more o f them a n d i n c r e a s e the market f o r f i l m s .  For producers,  d i s t r i b u t i o n m e t h o d m e a n t a few  large  customers,  many f i l m s i n o r d e r t o h a v e a w i d e v a r i e t y  this each  to o f f e r  Then i n  thereby  new taking  exhibitors.  E x c h a n g e s i n t h e same l o c a l i t y b i d a g a i n s t e a c h o t h e r r e s u l t i n g h i g h e r revenue t o  to  with  producers.  1917:  "Paramount (the l e a d i n g d i s t r i b u t o r ) , Famous P l a y e r s - L a s k y ( t h e m a j o r p r o d u c e r ) , and 12 l e s s e r p r o d u c e r s c o m b i n e d u n d e r Adolph Zukor, w i t h the o b j e c t i v e o f o b t a i n i n g t h e power t o d i c t a t e t e r m s t o exhibitors."10 S i n c e Paramount dominated p r o d u c t i o n a t t h i s  time,  - 11 Zukor took advantage  o f h i s c o n t r o l and i n i t i a t e d t h e p r a c t i c e  of "block booking". To p r o t e c t t h e i r p o s i t i o n , the e x h i b i t o r s i n t o c i r c u i t s to o b t a i n p i c t u r e s a t low r e n t a l s .  combined The next  s t e p , o f course, i n the f i g h t f o r c o n t r o l was complete  vertical  integration. Then i n 194 8, the A n t i - T r u s t D i v i s i o n o f the J u s t i c e Department o b t a i n e d a Court Order i n the Paramount d e c i s i o n c o m p e l l i n g the divorcement o r p r o d u c t i o n and d i s t r i b u t i o n from cinema ownership.  This combined w i t h the advent o f  t e l e v i s i o n f i n a l l y broke the power o f the major s t u d i o s and d u r i n g 1 9 6 9 - 1 9 7 1 , t h e s t u d i o s found themselves i n s e r i o u s financial difficulties.  Today, the major f i l m companies have  a l l been taken over by conglomerates. THE WHITE REPORT  11  While there has been an i n q u i r y i n t o the Canadian 12 f e a t u r e f i l m i n d u s t r y p a r a l l e l i n g t h a t o f the Paramount  in-  v e s t i g a t i o n i n the U n i t e d S t a t e s , the r e s u l t s were n o t the same. By an Order i n C o u n c i l dated September 2 3 , Mr. P e t e r White was appointed a Commissioner  1930,  under the Combines  I n v e s t i g a t i o n A c t t o i n q u i r e i n t o an a l l e g e d combine i n the Canadian motion p i c t u r e i n d u s t r y .  A f t e r nine months, most  o f i t spent h e a r i n g e v i d e n c e , the Commissioner  concluded i n  - 12 his  e x t e n s i v e and e x h a u s t i v e  combine d i d , i n f a c t ,  R e p o r t t h a t s u c h an  illegal  e x i s t and c i t e d e i g h t t h e a t r e  a n d 13 d i s t r i b u t o r s a s b e i n g  p a r t i e s t o o r who  chains  "knowingly 13  assisted  i n t h e f u n c t i o n and o p e r a t i o n o f t h e combine". Mr. W h i t e c o n c l u d e d  t h a t because o f t h e agreements  b e t w e e n Famous P l a y e r s a n d t h e d i s t r i b u t o r s : "Famous P l a y e r s h a s b e e n a b l e t o a c q u i r e , p a r t i c u l a r l y i n t h e l a r g e c i t i e s a n d towns i n Canada,...such s u b s t a n t i a l c o n t r o l as t o r e d u c e c o m p e t i t i o n t o a minimum, a n d t o make i t e x t r e m e l y d i f f i c u l t f o r t h e i n d e pendent t o survive."14 Subsequent l e g a l proceedings 15 of Appeal,  i n the Ontario  Court  however, r e s u l t e d i n an a c q u i t t a l f o r t h e a c c u s e d  f r o m w h i c h t h e Crown d i d n o t a p p e a l .  I n the course  of h i s  j u d g m e n t G a r r o w , A. J . , s t a t e d t h a t w h i l e "One d o e s n o t . . . l o o k f o r t h e t e r m s o f t h e c o m b i n e o r c o n s p i r a c y t o be s e t o u t i n b l a c k and w h i t e i n t h e m i n u t e s o f t h e companies i n v o l v e d . . . , i t i s e s s e n t i a l t h a t one i s a b l e t o g a t h e r f r o m a l l t h e e v i d e n c e t h a t t h e combine o r c o n s p i r a c y a l l e g e d d i d i n f a c t e x i s t between...the accused."16 Mr. J u s t i c e G a r r o w c o n c l u d e d 17  t h a t from t h e " m a t e r i a l  b e f o r e me",  h e was n o t a b l e t o g a t h e r  than the existence o f  a combination  b e t w e e n t h e p a r t i e s h a d b e e n made o u t .  - 13 -  FOOTNOTES CHAPTER I  1  (Toronto: 2 i n Canada p. x v i i .  E l e a n o r B e a t t i e , A Handbook o f Canadian F i l m P e t e r M a r t i n A s s o c i a t e s L i m i t e d , 1 9 7 3 ) , p . v. Garth H. Drabinsky, Motion P i c t u r e s and the A r t s (Toronto: McGraw-Hill Ryerson L i m i t e d , 1 9 7 6 ) ,  3 Canadian F i l m Development C o r p o r a t i o n A c t 1 9 6 6 - 6 7 , c. 7 8 , S. 10T 4  . M i c h a e l D. Spencer, "Re: Quotas f o r Canadian F i l m s i n Canadian Motion P i c t u r e T h e a t r e s " , Cinema Canada, Second E d i t i o n , No. 18 (March/April, 1 9 7 5 ) , p. 8. 5 The  award presented a t the annual Canadian F i l m  Awards. 6  quoted from Mae D. H u e t t i g , Economic C o n t r o l o f the Motion P i c t u r e I n d u s t r y ( P h i l a d e l p h i a : University of P e n n s y l v a n i a P r e s s ,. 119441. 9 4 4 ) , r. p . 54. 7 P e t e r W h i t e , R e p o r t o f an I n v e s t i g a t i o n i n t o an A l l e g e d Combine i n t h e M o t i o n P i c t u r e I n d u s t r y i n C a n a d a (Ottawa: K i n g ' s P r i n t e r , 1 9 3 1 ) , p . 9. 8  I v a n B u t l e r , The M a k i n g o f F e a t u r e F i l m s — A ( U n i t e d Kingdom: P e n g u i n Books L t d . , 1973), p . 172.  Guide  9  f r o m W i l l i a m F. H e l l n u t h , J r . , "The M o t i o n P i c t u r e I n d u s t r y " , The S t r u c t u r e o f A m e r i c a n I n d u s t r y , e d . W a l t e r Adams 3 r d e d . , (New Y o r k : The M a c m i l l a n Company, 1 9 6 1 ) , p . 3 9 3 . 10 I b i d . , p . 3 9 7 . ^  White, op. c i t .  12 U n i t e d S t a t e s v. Paramount P i c t u r e s / 13  White, op. c i t . ,  p. 233.  334 U.S. 1 3 1 .  - 14 -  14  . White, op. cit», p. 2 3 2 .  15 Rex v . Famous P l a y e r s 1 6  I b i d . , p. 349. Ibid.  (1932) O.R.  307.  CHAPTER I I THE STRUCTURE OF THE MOTION PICTURE INDUSTRY IN CANADA  T h i s Chapter d e s c r i b e s  the s t r u c t u r e o f the f i l m  i n d u s t r y i n Canada by l o o k i n g a t each o f the t h r e e of the i n d u s t r y :  production,  aspects  d i s t r i b u t i o n and e x h i b i t i o n ,  and more p a r t i c u l a r l y the p a r t i c i p a n t s i n each s e c t o r and the e x t e n t  of t h e i r involvement.  But f i r s t ,  for t h i s d i s c u s s i o n , a b r i e f general  t o s e t the stage  d e s c r i p t i o n o f the ex-  t e n t of the f i l m i n d u s t r y i s s e t out. THE FEATURE FILM INDUSTRY IN CANADA:  AN  INTRODUCTION  There are any number o f d i f f e r e n t ways o f measuring the r o l e o f the f i l m i n d u s t r y i n the Canadian economy, f o u r o f which would have t o i n c l u d e : (2) the number o f e s t a b l i s h m e n t s , and  (1) the volume o f b u s i n e s s , (3) the number o f employees,  (4) the p e r c a p i t a e x p e n d i t u r e on motion p i c t u r e  tainment.  enter-  None o f these methods i s i n and o f i t s e l f d e c i s i v e .  - 15 -  - 16 Furthermore  t o compare the f i l m i n d u s t r y t o o t h e r  i n d u s t r i e s on t h i s b a s i s would o n l y tend t o produce r e s u l t s too g e n e r a l t o be o f any v a l u e .  The f o l l o w i n g data, t h e r e -  f o r e , i s s e t out p r i m a r i l y t o p r o v i d e some b a s i c i n f o r m a t i o n r e g a r d i n g the i n d u s t r y ' s s i z e . As shown i n Table I I - I , there were  approximately  1,4 23 motion p i c t u r e t h e a t r e s i n Canada i n 1974  1  o f which  1,116 were r e g u l a r motion p i c t u r e t h e a t r e s and 307 were o f the v a r i e t y commonly known as the d r i v e - i n . admissions  Receipts  from  ( e x c l u d i n g taxes) amounted t o $172.7 m i l l i o n  while amusement taxes amounted t o approximately  $12.8 m i l l i o n .  The  90.4 m i l l i o n .  number o f p a i d admissions The  was approximately  t o t a l number o f employees i n v o l v e d i n the e x h i -  b i t i o n o f f e a t u r e f i l m s i n Canada as r e p o r t e d by S t a t i s t i c s Canada was 10,29 5 whose t o t a l s a l a r i e s and wages amounted t o $33*9 m i l l i o n , w h i l e the t o t a l number o f persons  employed by  f i l m d i s t r i b u t o r s was 729 whose combined s a l a r i e s and wages t o t a l e d $7 m i l l i o n . The entertainment  1974 p e r c a p i t a expenditure on motion p i c t u r e i n Canada was c a l c u l a t e d a t $8.26 up 12.8% over  the $7.32 r e p o r t e d i n 1973 and almost double  the $4,33 r e p o r t e d  i n 1964. THE CANADIAN  FILM INDUSTRY VS. THE FILM INDUSTRY IN CANADA  D e s p i t e the amount o f a c t i v i t y surrounding f i l m s i n  TABLE I I - I  Summary  o f Motion  Picture Theatre  Item  Theatres  E x h i b i t i o n i n Canada,  all  . .. .  No.  Total, theatres  1974*  Regular theatres  Drive-xn theatres  1,423  1,116  307  Receipts from admissions (excluding taxes)  $'000  172,683  149,720  22,963  Amusement t a x e s  $'000  12,784  11,184  1,600  '000  90,392  79,020  11,372  Number o f p a i d  admissions  •SOURCE:  ..  S t a t i s t i c s Canada C a t a l o g u e 63-207: Motion P i c t u r e Theatres and F i l m Distributors ..  -  18 -  Canada, i t cannot be s a i d t h a t we have a t r u l y Canadian f e a ture f i l m industry.  Canada's p r o d u c t i o n  o f motion p i c t u r e s  i s so minimal as t o be i n c o n s e q u e n t i a l , both on Canadian and i n t e r n a t i o n a l screens w h i l e  the f a c i l i t i e s  for distributing  and e x h i b i t i n g f i l m s i n Canada are almost e x c l u s i v e l y i n the hands o f f o r e i g n owners. A.  Production Canadian f e a t u r e f i l m s f o r t h e a t r i c a l  distribution  are made e i t h e r by the N a t i o n a l F i l m Board o r an independent producer  (whether c o r p o r a t e The  by  or i n d i v i d u a l ) .  number o f E n g l i s h - s p e a k i n g  f e a t u r e f i l m s produced  the N.F.B. i n the past decade i s so few t h a t one can  r e a d i l y name the v a r i o u s t i t l e s  i n c l u d i n g "Nobody Waved  Goodbye", "Prologue", "The E r n i e Game", "Waiting "Why Rock the Boat", and "Cry o f the W i l d " . the l a t t e r has had any s o r t o f success, at  f o r Caroline",  Of these,  only  either c r i t i c a l l y or  the box o f f i c e . The  production priorities.  reason f o r the N.F.B.'s l a c k o f i n t e r e s t i n the  o f Canadian f e a t u r e f i l m s i s p r i m a r i l y one o f When Sydney Newman, the Canadian government F i l m  Commissioner and N.F.B. Chairman, was asked about the r o l e o f the N a t i o n a l F i l m Board i n the p r o d u c t i o n  o f Canadian  f e a t u r e f i l m s , he r e p l i e d t h a t the N.F.B. d i d n o t i n t e n d t o make more than two o r t h r e e f e a t u r e s a y e a r .  - 19 "We haven't got the money f o r i t . Our p r i o r i t i e s are a b s o l u t e l y elsewhere. We are more i n t e r e s t e d i n e d u c a t i o n , documentary and i n f o r m a t i o n f i l m s . F e a t u r e s are simply something t h a t c e r t a i n members o f our c r e a t i v e s t a f f can a s p i r e t o and we have got to give them the o p p o r t u n i t y or we would loose a l o t o f good p e o p l e . That's our main i n t e r e s t . " 2  Independent Producers In 1909, the American C o n s u l - G e n e r a l i n Winnipeg, John Edward Jones, wrote an open l e t t e r i n Moving  Picture  World, a New York p u b l i c a t i o n , e x h o r t i n g American f i l m  inter-  e s t s t o take over the Canadian market: "In t h i s new country where a l l forms o f amusement are s c a r c e , moving p i c t u r e s are welcome, and there i s no reason why the manufacturers o f the U n i t e d S t a t e s should not c o n t r o l the b u s i n e s s . " 3  By the e a r l y 1920's, the Americans had taken over the Canadian market i n a l l a s p e c t s o f the i n d u s t r y production.  This i s not p a r t i c u l a r l y s u r p r i s i n g  t h a t the head o f the Canadian government  including  considering  Motion P i c t u r e  Bureau  i n Ottawa, Ray Peck, was o f the o p i n i o n t h a t Canada c o u l d not compete w i t h Hollywood f i l m s and should n o t t r y . On March  3, 1926, Peck wrote a l e t t e r t o a man i n Vancouver who  compained local  ;  that there were too many American f i l m s i n h i s  theatres: "We are attempting a t a l l times , as Canad i a n s , t o induce American c a p i t a l and manufacturing i n t e r e s t s t o come i n t o Canada and e s t a b l i s h branch f a c t o r i e s . I look on the American f i l m i n d u s t r y much  -  20  -  as a b r a n c h f a c t o r y i d e a i n s o f a r as i t a f f e c t s Canada. A m e r i c a n m o t i o n p i c t u r e p r o d u c e r s s h o u l d be e n o u r a g e d t o e s t a b l i s h p r o d u c t i o n b r a n c h e s i n C a n a d a and make films designed e s p e c i a l l y f o r B r i t i s h Empire consumption." 4  E v e n t h e C a n a d i a n p r o d u c e r s o f t h e day was  folly  t o make m o v i e s  i n Canada.  thought i t  Ben N o r r i s h r a n t h e  l a r g e s t C a n a d i a n p r o d u c t i o n company i n C a n a d a a t t h a t t i m e , A s s o c i a t e d S c r e e n News. Nathanson.  A.S.N, was  owned by C.P.R. a n d N.  N o r r i s h t h o u g h t i t made a b o u t as much s e n s e  L.  to  make f e a t u r e f i l m s i n C a n a d a as i t d i d t o grow g r a p e f r u i t i n Ontario.  "He  f e l t Canada d i d n ' t have a l a r g e enough p o p u l a -  t i o n and t h e c l i m a t e was  wrong."  5  With t h i s dubious b e g i n n i n g , there i s l i t t l e  wonder  t h a t the p r o d u c t i o n o f E n g l i s h - s p e a k i n g f e a t u r e f i l m s i n C a n a d a n e v e r d i d and n e v e r h a s g o t t e n o f f t h e g r o u n d . 19 74, S t a t i s t i c s C a n a d a r e p o r t e d t h a t t h e r e w e r e 187  In private  m o t i o n p i c t u r e p r o d u c t i o n f i r m s i n C a n a d a , up f r o m 143 i n 1973. due to  But even  this  increase, Statistics  Canada a d m i t s ,  l a r g e l y t o t h e e f f o r t made by t h a t g o v e r n m e n t a l  was  agency  improve upon i t s c o v e r a g e . ^ E v e n i f we  a c c e p t t h e s e f i g u r e s , t h e y do n o t t a k e  us f a r i n o u r d i s c u s s i o n o f t h e p r o d u c t i o n o f E n g l i s h - s p e a k i n g f e a t u r e f i l m s i n Canada because  they include the operations  of  " p r i v a t e f i r m s and g o v e r n m e n t a g e n c i e s p r i m a r i l y  engaged  in  t h e p r o d u c t i o n and p r i n t i n g o f m o t i o n p i c t u r e f i l m s f o r  - 21 i n d u s t r y , government, e d u c a t i o n  a n d e n t e r t a i n m e n t " 7 as w e l l  , as f i r m s p r i m a r i l y e n g a g e d i n v i d e o S i m i l a r l y of the t o t a l films reported agencies  by p r i v a t e f i r m s  tape  production.  3,940 o r i g i n a l m o t i o n p i c t u r e (3,710) a n d g o v e r n m e n t  (230) i n C a n a d a f o r 1 9 7 4 , 2,250 w e r e t e l e v i s i o n  mercials;  com-  396 w e r e t e l e v i s i o n i n f o r m a t i o n a n d d o c u m e n t a r i e s  and  3 24 w e r e n o n - t h e a t r i c a l i n f o r m a t i o n 8 tions.  and p r o m o t i o n p r o d u c -  I t i s n o t u n t i l we c u t t h r o u g h t h e maze o f f i g u r e s t h a t we r e a l i z e how d i s m a l feature  short films reported  27 t h e a t r i c a l f e a t u r e s  English-speaking  the P r o v i n c e  o f Quebec.  Canada, o n l y  independent producers.  and 7 t h e a t r i c a l  p r o d u c e d by p r i v a t e f i r m s i n C a n a d a i n  17 and 5 r e s p e c t i v e l y w e r e r e p o r t e d  speaking  of  f i l m s i n Canada r e a l l y i s . Of t h e t o t a l  19 74,  the production  by f i r m s b a s e d i n  Thus i n 1974 i n a l l o f E n g l i s h -  10 f e a t u r e  f i l m s were p r o d u c e d by  I n 1972, t h i r t e e n m a j o r f e a t u r e s  produced i n E n g l i s h Canada.  were  I n 1973, s i x .  In 1931, t h e White r e p o r t c o n c l u d e d  that:  "The number o f p i c t u r e s p r o d u c e d i n C a n a d a has b e e n o f s u c h m i n o r i m p o r t a n c e t h a t e x c e p t as s p e c i f i c a l l y m e n t i o n e d , i t may be d i s r e g a r d e d . The q u o t e i s e q u a l l y a p p l i c a b l e t o d a y . s e t s o u t t h e number o f new f e a t u r e  Table  II-II  f i l m s shown on C a n a d i a n  s c r e e n s f o r t h e y e a r s 1 9 7 2 , 1 9 7 3 , a n d 1974 b r e a k i n g  t h e m down  TABLE  New  II-II  F i l m s shown o n C a n a d i a n M o t i o n P i c t u r e S c r e e n s by C o u n t r y o f O r i g i n f o r t h e Y e a r s 1972 , 1973 a n d 1974*  COUNTRY OF  YEAR  ORIGIN 1974  T O T A L  *SOURCE:  1973  1972  356  294  152  137  134  67  61  71  57  83  116  33  35  141  69  811  719  901  Compiled from S t a t i s t i c s Canada C a t a l o g u e 63-207 A n n u a l : Motion P i c t u r e Theatres and F i l m Distribu t o r s f o r t h e Y e a r s 1972, 1973 and 1974  - 23  -  f u r t h e r according to the country of o r i g i n . 98%  o f t h e f i l m s shown on C a n a d i a n s c r e e n s The  produced o f 901  i n the U n i t e d S t a t e s .  Irt 1974,  non-Canadian.  of a t o t a l  are number  f e a t u r e f i l m s r e l e a s e d i n Canada d u r i n g the y e a r , pictures.  r e l e a s i n g motion  The  p r i n c i p a l American  p i c t u r e s i n Canada i n o r d e r o f  share o f the Canadian d i s t r i b u t o r s grosses Warner B r o s . , U n i t e d A r t i s t s , C o l u m b i a , M.G.M., U n i v e r s a l , W a l t D i s n e y , B.  are  bulk of films exhibited i n t h i s country  were A m e r i c a n m o t i o n ducers  Approximately  are:  protheir  Paramount,  20th Century  Fox,  and N a t i o n a l G e n e r a l .  Distribution S t a t i s t i c s Canada has  firms distributed  f i l m s t o 142  r e p o r t e d ^ t h a t i n 1974, 1  offices  included film rental receipts  from  and o t h e r n o n - t h e a t r i c a l u s e s a n d , s h o r t s u b j e c t s a s c a r t o o n s and F o c u s i n g on f e a t u r e l e n g t h motion  T h i s , however,  theatrical,  television,  furthermore, i n c l u d e d such  newsreels.  t o t a l r e n t a l r e c e i p t s from  the r e n t a l  p i c t u r e s f o r t h e a t r i c a l use,  amounted t o $59.9 m i l l i o n and  further, i t i s probably s a f e r  firms distributing  i n Canada Of t h i s  of  these  t o say t h a t over the l a s t t e n y e a r s t h e r e have o n l y been an a v e r a g e 55  82  o r exchanges i n Canada.  T o t a l r e c e i p t s a m o u n t e d t o $87.5 m i l l i o n .  films  355  16 and  on  35mm f e a t u r e l e n g t h  (see A p p e n d i x I I ) . $59.9 m i l l i o n , an a m a z i n g $54.4 m i l l i o n  p a i d t o n i n e major A m e r i c a n d i s t r i b u t i o n companies  was  through  - 24  -  t h e i r C a n a d i a n d i s t r i b u t i o n arms i n c l u d i n g : represented  i n Canada by A s t r o F i l m s L t d ; ;  Distribtuion Ltd.; Corp.  United A r t i s t s  (Canada) L t d . ;  Century  Fox;  Universal Films  Avco Embassy;  Bros.  Paramount P i c t u r e s  (Canada) L t d . ; The  20th  latter  i n C a n a d a by B e l l e v u e F i l m  Ltd.  B a s e d on  these  f i g u r e s , C a n a d a , i n 1974,  dubious d i s t i n c t i o n of becoming the the. w o r l d  Warner  and W a l t D i s n e y .  t h r e e companies b e i n g r e p r e s e n t e d Distributors  Corp.;  Columbia P i c t u r e s ,  f o r American I n 1953,  films.  gained  the  l a r g e s t f o r e i g n market i n  1 1  E r i c J o h n s o n , who  was  l a t e r t o become  P r e s i d e n t Eisenhower's Economic A d v i s o r , t o l d  Congress:  " I t ' s a l i t t l e known f a c t t h a t n i n e o u t o f t e n U n i t e d S t a t e s f i l m s c a n n o t pay t h e i r way i n t h e d o m e s t i c m a r k e t a l o n e . I t i s o n l y because o f revenue from abroad t h a t Hollywood i s able to t u r n out p i c t u r e s o f h i g h a r t i s t r y and t e c h n i c a l excellence."12 B e t w e e n 1963  and  1973,  seven top Hollywood majors  f i l m s a l e s i n C a n a d a by  (excluding Disney) i n c r e a s e d 13  134.5% a c c o r d i n g t o V a r i e t y . moved f r o m b e i n g  the by  . During  t h a t decade, Canada  the s i x t h most i m p o r t a n t  s e c o n d w i t h t o t a l r e n t a l s i n 1973  f o r e i g n market  o f $39.5 m i l l i o n .  C a n a d a became t h e t o p f o r e i g n m a r k e t f o r U.S.  films  "In  to 1974,  with  14  billings  o f $54.4 m i l l i o n . " S t a t i s t i c s p u b l i s h e d by  Makers  the C o u n c i l o f Canadian F i l m  (CCFM) i n d i c a t e t h a t t h e named d i s t r i b u t o r s c o n t r o l  -  between them more t h a n in  Canada. ^  And  1  foreign  and  1974.  as  mately  $5.5  The  of  The numerous  rentals  rentals by  Export  between  1970  t o as  discussion  c o n c e r n i n g 49 and  majority  practices.  and  cinema-goer  as  With  become  real  i s indicated  Zoopraxographer"  by  the  known, them  i n Canada  soon becomes  the  no  and  distributors  constant flow  commercial  f i l m " b u f f s " and such  49  following  become  these d i s t r i b u t o r s  by  a  impossible.  of the independents  to  approxi-  corporations with  independent producers with  societies  companies  and  majors".  different  h a n d l e d by  earned  they are  the independents  Most of the f i l m s  with  distinguishing  distribution  of  are l e f t  o r , as  designation  "the  companies  t h a t was  p r o d u c t and whose p r o d u c t i s o f d u b i o u s  Muybridge,  film  i n Canada  9 8.9%  distribution  distributors  control  philosophies  55  exceptions, generalizations  film  earned  by  m e a n s t h a t we  latter  are referred  different  t h a t revenues  in film  49 Canadian  conversation  three  average  million  Any  for  an  the American  which  theatrical  1 6  independents. from  the t o t a l  belonging to the Motion P i c t u r e  a base y e a r , t h i s  remaining  -  of America have i n c r e a s e d  Using 1974  further,  distributors  Association  80% o f  25  titles  "Siegfried  not as  of  value.  a p p e a l more the  average  "Eadweard  & Kriemhilde's  Revenge". The  second  generalization  that  c a n be  made i s  that  - 26 a few  C a n a d i a n f i l m p r o d u c e r s s u c h as T r e v o r W a l l a c e and  Crawley of Crawley Films are own  products.  The  and  distributors  former being  Ground S t a r C o n s p i r a c y " being  -  and  t h e O s c a r - w i n n i n g "The  "Journey i n t o Fear".  Man  who  d i s t r i b u t i o n arm  Skied  The  made w i t h  down Mr.  i n C a n a d a , New  p r i s e s , also d i s t r i b u t e s f i l m s of other Beyond t h i s ,  their  known f o r " C h r i s t i n a " ,  known f o r t h e money m a k i n g , s e m i - d o c u m e n t a r y  Crawley F i l m s '  is  i n Canada o f  "The latter  "Janice" Everest".  Cinema  independent  Enterproducers.  the o n l y g e n e r a l i z a t i o n t h a t can  r e g a r d s to the  Budge  independent d i s t r i b u t o r s  be  i n Canada  t h a t they a l s o attempt t o o b t a i n the Canadian and/or North  American r i g h t s to f i l m s produced i n other C.  Exhibition Again beginning .  by  .  Statistics  with  countries.  w i t h the g e n e r a l i z e d data  17 Canada,  . there  are  1,116  provided  .  motion p i c t u r e  a s e a t i n g c a p a c i t y o f 643,406 i n C a n a d a and  307 d r i v e - i n  t h e a t r e s w i t h a c a r c a p a c i t y o f 1 4 3 , 7 5 8 , whose t o t a l receipts according  on  annually.  The  the  case w i t h  the  film  t r u e p i c t u r e o f what i s  r e g a r d s t o e x h i b i t i o n i n Canada.  In a f i l m i n d u s t r y , the two,  As was  the d i s t r i b u t i o n s e c t o r of the  i n d u s t r y , these f i g u r e s b e l i e the happening w i t h  sales  t o the C o u n c i l o f Canadian F i l m Makers 18  e x c e e d s $200 m i l l i o n generalized data  theatres  o r , a t most, three i n d i v i d u a l who  theatres  i n d i v i d u a l who i s considered  owns an  one,  independent.  owns o r c o n t r o l s more t h a n t h r e e  theatres  - 27 is  looked  upon a s a c h a i n o r c i r c u i t . I n C a n a d a , t h e r e a r e two m a j o r m o t i o n p i c t u r e  Famous P l a y e r s L t d . a n d Odeon T h e a t r e s both having  There are a l s o  roughly  s u c h a s B. a n d F. T h e a t r e s L i m i t e d a n d  Rocca Cinemas L t d . w i t h regions  (Canada) L i m i t e d ,  t h e a t r e s t h r o u g h o u t Canada.  13 s m a l l e r c h a i n s  chains,  o f Canada.  theatre chains  The l a t t e r ,  that cover  particular  f o r example, being  a small  independent theatre chain i n the Maritimes. Famous P l a y e r s a n d Odeon b e t w e e n them c o n t r o l a p p r o x - . i m a t e l y 531 s c r e e n s  i n Canada.  Famous P l a y e r s r u n n i n g  386  19 t h e a t r e s as c o m p a r e d t o Odeon's 1 4 5 . While t h i s  i s w e l l u n d e r 30% o f t h e t o t a l  i n Canada, t h e s c r e e n s  theatres  c o n t r o l l e d b y Famous P l a y e r s a n d Odeon  a c c o u n t f o r 6 3% o f t h e C a n a d i a n m a r k e t : "Famous P l a y e r s t o o k i n 44% i n 1973 (66.2 m i l l i o n f o r t h e y e a r ended June 30th) and Odeon a c c o u n t e d f o r 19% ( 2 8 . 1 m i l l i o n f o r the y e a r ended O c t o b e r 3 1 s t ) o f t h a t y e a r ' s 150.6 m i l l i o n b o x o f f i c e . " 2 0  I n the key c i t i e s  s u c h as T o r o n t o , M o n t r e a l ,  Vancouver, t h e i r p o s i t i o n i s even s t r o n g e r . 1972,  " f i v e o u t o f seven Ontarians  lived  and  Famous P l a y e r s a n d Odeon t o g e t h e r  the  screens  and  F o r example, i n  i n towns o v e r 35,000  controlled  78.3% o f  21  they  i n those  controlled  profitable centres".  62.3% o f t h e i n d o o r  For a l l of Ontario, 22  screens.  F u r t h e r m o r e , t h e i r p o s i t i o n has been g r a d u a l l y strengthening  over the l a s t  10 t o 15 y e a r s .  A g a i n u s i n g the-  - 28 -  example o f O n t a r i o ,  i n 1963 t h e two c h a i n s  c o n t r o l l e d 44% o f  23 the  screens  control  i n Ontario.  62.3%. Famous  Today, as i n d i c a t e d , they  own o r  Players 24  Famous P l a y e r s be  confused  rated  with  under  January  Canadian Corporation  Famous P l a y e r s  t h e laws o f Canada by L e t t e r s P a t e n t  23, 1920.  in  British  dated  i n Ontario  leased  and two  Columbia.  In A p r i l Corporation  i t s stock  1930, an American  company, Paramount  (now P a r a m o u n t P i c t u r e s C o r p . ,  & Western  Corporation  incorpo-  Upon i t s i n c o r p o r a t i o n , t h e Company  c o n t r o l l e d 11 m o t i o n p i c t u r e t h e a t r e s  of  (nott o  L t d . ) was o r i g i n a l l y  or  Gulf  Ltd.  a subsidiary of  I n d u s t r i e s ) , o f f e r e d t o exchange  forfive  shares  o f Famous P l a y e r s  L i m i t e d , w h i c h o f f e r was  Publix  accepted  four  shares  Canadian by t h e m a j o r i t y  of  shareholders. I n May 1 9 4 1 , N. L . N a t h a n s o n , f o r m e r P r e s i d e n t , f i v e o t h e r members o f t h e B o a r d o f D i r e c t o r s r e s i g n e d .  and  " E f f o r t s w h i c h h a d b e e n made t o r e t u r n c o n t r o l o f t h e Company t o C a n a d a w e r e u n s u c c e s s f u l , i t was s t a t e d , a n d i t was o n t h i s account t h a t changes i n t h e d i r e c t orate took place."25 Over t h e y e a r s , Ltd. the  increased area  Canadian  Corporation  i t s number o f t h e a t r e s , b u t a l s o moved  of broadcasting.  •reorganization,  Famous P l a y e r s  I n 1970, as a r e s u l t  Famous P l a y e r s  of a  into corporate  Canadian Corporation L t d .  c h a n g e d i t s name t o C a n a d i a n C a b l e s y s t e m s Canadian Cablesystems ests i n cable One  Ltd.  L t d . i s a h o l d i n g company w i t h  t e l e v i s i o n and  t e l e v i s i o n broadcasting  o f i t s s u b s i d i a r i e s i s Famous P l a y e r s  f o r m e d i n e a r l y 1971  to acquire  the  Famous P l a y e r s L t d . o p e r a t e s  p i c t u r e and  drive-in  theatre  Odeon T h e a t r e s  intercompanies  Ltd.,  company's t h e a t r e  r e a l e s t a t e assets under which Cablesystems interest.  Today,  has  a  and  48.8%  the regular motion  business.  (Canada) L i m i t e d  T h i s company i s a w h o l l y - o w n e d s u b s i d i a r y o f  the  26 Rank O r g a n i z a t i o n  Limited,  B r i t a i n on F e b r u a r y 20, Limited.  The  originally  1937,  incorporated i n Great  as Odeon T h e a t r e s  Rank O r g a n i z a t i o n  i s i n v o l v e d i n the  o f f e a t u r e f i l m s f o r t h e t h e a t r e as w e l l as mercials.  I t operates  as d o i n g  i t s own  o f i t s own  i t s own  production  television  com-  f i l m s t u d i o i n B r i t a i n as w e l l  film processing  films outside  Holdings  and  handles the  the U n i t e d Kingdom.  distribution  As w e l l as  owning  o v e r 2 30 c i n e m a s i n t h e U n i t e d K i n g d o m , m a i n l y  under the  "Odeon". and  i n partnerships  some 600 are  "Gaumont", i t c o n t r o l s o r o p e r a t e s  theatres o u t s i d e the United  those  l o c a t e d i n C a n a d a and  (Canada) L i m i t e d . The S m a l l e r As a l l o f the  operated  Of  these,  145  by Odeon T h e a t r e s  Independent Chains  Famous P l a y e r s and first  Kingdom.  names  Odeon own  or c o n t r o l v i r t u a l l y  run t h e a t r e s i n Canada, which a r e , i n t u r n ,  - 30 l o c a t e d i n the key c i t i e s , the s m a l l e r chains are u s u a l l y made up o f t h e a t r e s l o c a t e d i n the s m a l l e r Canadian communities.  F o r example,  the a l r e a d y mentioned Rocca Cinemas L t d .  has t h e a t r e s i n Moncton, N. B., Bridgewater, N. S.,  Halifax,  and i n T r u r o , N. S. "with a t o t a l o f ten screens i n f i v e l o c a t i o n s , Rocca Cinemas i s the l a r g e s t independent i n the 27 Marxtimes." The  Independents  There are approximately 650 independent t h e a t r e o p e r a t o r s i n Canada.  The m a j o r i t y o f t h e s e , by f a r , are  subsequent run t h e a t r e s , u s u a l l y l o c a t e d i n the s m a l l e r communities.  However, there are a number o f independents t h a t  do operate i n the "key" c i t i e s .  Two  such examples  would be the C i t y Nights and Hollywood t h e a t r e s .  i n Vancouver There are  a l s o a number o f independents i n the "key" c i t i e s who  deal  i n f i l m s which are d i r e c t e d towards a p a r t i c u l a r e t h n i c group. Again u s i n g Vancouver as an i l l u s t r a t i o n , features I t a l i a n  f i l m s w h i l e the New  the Olympia Theatre  Harvest t h e a t r e imports  motion p i c t u r e s designed to appeal t o the Chinese community.  - 31 -  FOOTNOTES CHAPTER I I  The y e a r 1974 i s t h e m o s t r e c e n t y e a r f o r w h i c h there i s data a v a i l a b l e ; S t a t i s t i c s Canada C a t a l o g u e 63-207: Motion P i c t u r e Theatres and F i l m D i s t r i b u t o r s . 2  G e o r g e C s a b a R o l l e r , "Sydney Newman", C i n e m a C a n a d a , S e c o n d E d i t i o n , No. 15 ( A u g u s t / S e p t e m b e r , 1974), p. 45. 3  .  K i r w a n C o x , "The M a j o r s a n d t h e M a n d a r i n s : Through t h e Y e a r s " , C i n e m a C a n a d a , T h i r d E d i t i o n , No. 22 ( O c t o b e r 1 9 7 5 ) , p. 1 9 . Ibid.  4  '•'  Ibid.  5  ^ see f o o t n o t e 1 above. 7  Ibid.  8  Ibid.  9  . . White, op. c i t . , p. 12. r  see f o o t n o t e 1 above. C o x , o p . c i t . , p. 2 2 .  1 1  Ibid. 13 _.. , Ibid. 14  ., Ibid.  T U  15 James F o r r e s t e r , " C o u n c i l o f C a n a d i a n F i l m m a k e r s P r e s e n t s P e t i t i o n t o P a r l i a m e n t " , M o t i o n , V o l . 5, No. 3, p . 7. 16 . I b •i d,. T  - 32 -  17  see f o o t n o t e 1 above.  18  . , Ibid.  19 Yearbook  . Barry S i l v e r (ed.), The Canadian F i l m D i g e s t (Toronto: Garth Drabinsky, 1975), p. 55.  1975  20 Kirwan Cox, "Rocca's B i g F i g h t " , Cinema Canada, T h i r d E d i t i o n , No. 25 (February 1976), p. 25. Ibid. 22 I b i d . , p. 23  26.  Ibid.  J  24 "Canadian Cablesystems L i m i t e d " , The F i n a n c i a l Post C o r p o r a t i o n S e r v i c e (Toronto: Maclean-Hunter L i m i t e d , 1973), p. 2. 25 , . , Ibid. T  26 Vol.  see Standard & Poors Standard C o r p o r a t i o n D e s c r i p t i o n s 34, No. 20 ( J u l y , 1973) a t p. 4028. 27 . Cox, op. c i t . , p. 23.  CHAPTER I I I MARKET BEHAVIOUR IN THE MOTION PICTURE INDUSTRY IN CANADA  This Chapter examines the market behaviour o f the e x h i b i t i o n and d i s t r i b u t i o n firms i n the Canadian f i l m i n d u s try.  I t shows how  Famous P l a y e r s and Odeon have been a b l e  to c u r t a i l the p r o d u c t i o n of Canadian f e a t u r e f i l m s by c o n t r o l o f f i r s t run t h e a t r e s .  their  By m o n o p o l i z i n g the f i n a l  marketing o u t l e t f o r f i l m s , they have not only a f f e c t e d the independent and s m a l l t h e a t r e c h a i n s and the independent d i s t r i b u t o r s , they have i n d i r e c t l y a f f e c t e d the supply o f Canadian f e a t u r e f i l m s produced by independent p r o d u c e r s . Throughout,  Canadian can be read f o r independent.  Famous P l a y e r s ' and Odeon's c o n t r o l o f the e x h i b i t i o n arm o f the i n d u s t r y has to be supplemented  by the d i s t r i b u t i o n  arm and, t h e r e f o r e , we  r e l a t i o n s between  d i s t r i b u t o r s and  c o n s i d e r the market  exhibitors.  -  33  -  _ 34 THE  MARKETING OF MOTION PICTURES: Before c o n s i d e r i n g  AN  INTRODUCTION  the trade p r a c t i c e s i n the mar-  k e t i n g of f e a t u r e f i l m s i n Canada, i t w i l l be necessary discuss A.  the i n d u s t r y ' s product and  The  the demand f o r i t g e n e r a l l y .  Product Motion p i c t u r e s are not homogeneous.  constantly  changing and market u n c e r t a i n t y  i n v i r t u a l l y any r e a c t i o n to any  other  They are  i s greater  i n d u s t r y i n the w o r l d .  p a r t i c u l a r f i l m i s unpredictable.  s t o r y , the a c t o r s , and  than  Consumer Marked  product d i f f e r e n t i a t i o n i s the r u l e r a t h e r than the "The  to  exception.  the technique i n each p i c t u r e  have some unique q u a l i t i e s which w i l l a f f e c t the number of admissions s o l d . " Further,  1  i t can be s a i d t h a t v i r t u a l l y every cinema  i s unique.  One  may  have the advantage o f p r o x i m i t y  another may  have more s e a t s , s t i l l  to  patrons,  another b e t t e r p r o j e c t i o n  or sound equipment and y e t another, a more a t t r a c t i v e lobby. B.  The  Demand f o r Motion P i c t u r e s To quote M i c h a e l Conant, "The  demand f o r any do not have  motion  p i c t u r e i s ephemeral;  the g r e a t m a j o r i t y  any  l a s t i n g p u b l i c appeal,  even though many o f them are based on 2  p l a y s or novels t h a t are c l a s s i c s " . element to be c o n s i d e r e d ity.  Not  Thus, the most important  i n marketing p i c t u r e s i s p e r i s h a b i l -  only are movie-goers w i l l i n g to pay  o f l o o k i n g a t f i l m s but  f o r the p r i v i l e g e  they are a l s o accustomed to spending  - 35 more to see  -  a newly r e l e a s e d f i l m than an o l d  one.  "The unique nature of each f i l m , combined w i t h the very s h o r t e a r n i n g l i f e of most, means t h a t success or f a i l u r e i s determined by the end of the major f i r s t run showings, a l l of which take p l a c e i n the f i r s t f o u r to s i x weeks o f e x h i b i t i o n . " 3 Further,  a f e a t u r e f i l m can normally be expected t o  r e t u r n approximately 90%  o f i t s p o t e n t i a l income i n the  first  4 two  years f o l l o w i n g i t s r e l e a s e .  d i f f e r e n c e i n the value  During t h a t p e r i o d ,  of a given  the  f i l m to the e x h i b i t o r  v a r i e s so g r e a t l y i n accordance w i t h i t s newness t h a t r e n t a l for  the same p i c t u r e may  r e l e a s e to $10.00 b e f o r e  range from $150,000.00 on i t s i n i t i a l the p i c t u r e i s f i n a l l y p u l l e d from  distribution. One the U n i t e d way in  o f the c o n c l u s i o n s  S t a t e s was  of successive  o f the Paramount F i n d i n g s  t h a t some form of f i l m a l l o c a t i o n by  showings o r runs i s an economic n e c e s s i t y  the f i l m i n d u s t r y .  For the  1,486  show the same p i c t u r e s i m u l t a n e o u s l y , i n possession time.  in  theatres  i n Canada t o  each would have t o  of a p o s i t i v e p r i n t of the  f i l m a t the same  However, a p r i n t c o s t s , depending on i t s l e n g t h ,  where from $800.00 to $1,200.00. With the exception  be  any-  5  o f a James Bond f i l m which w i l l  6 have 1,500 for  prints,  a f i l m i s 350,  the average number of p r i n t s manufactured w i t h more p r i n t s made a f t e r r e l e a s e i f  the p i c t u r e develops an u n u s u a l l y  l a r g e demand.  "The  number  manufactured i s not g r e a t e r  because a l a r g e p r o p o r t i o n  l a t e r run showings do not earn enough r e n t a l s to pay  of  the  cost  7  of a p r i n t . "  A better explanation  i s t h a t people p r e f e r  choice of f i l m s i n d i f f e r e n t t h e a t r e s  rather  p i c t u r e showing i n a l l cinemas at the  same time.  TRADE PRACTICES IN THE The by  two  f i l m s i n Canada i s a f f e c t e d  groups o f trade p r a c t i c e s :  those governing the  of f i l m s by d i s t r i b u t o r s t o e x h i b i t o r s and  industry our  than the same  MARKETING OF FEATURE FILMS IN CANADA  market f o r f e a t u r e  exhibition.  the  i n Canada c e n t e r around these p r a c t i c e s .  ment i s u s u a l l y companies and  s u f f i c e i s to say,  one  o f the  film To  begin  however, t h a t any  a/disagreement between one  sale  those governing  V i r t u a l l y a l l disagreements w i t h i n  discussion,  disagree-  o f the major  independents, whether producer,  d i s t r i b u t o r or e x h i b i t o r .  Disagreements between Famous  and Odeon or between e i t h e r of these companies and  any  o f the major d i s t r i b u t o r s are s u s p i c i o u s l y conspicuous t h e i r absence.  One  a  Players one by  o f the b i t t e r e s t disagreements between  the independents and majors i n Canada r e s o l v e s  around  the  i s s u e of block booking. A.  Block Booking Block booking has  best been d e f i n e d  of l i c e n s i n g , or o f f e r i n g to l i c e n s e , one of features  upon c o n d i t i o n  as  "the  feature  practice  or group  that' the e x h i b i t o r s h a l l a l s o  license  another f e a t u r e o r group r e l e a s e d by the d i s t r i b u t o r i n a 8 given period". Block booking i s , o f course, a prime example o f a t y i n g agreement and w h i l e a pure form o f i t does n o t e x i s t i n Canada, a form o f i t does.  The problem, however,  determining the e x t e n t t o which i t e x i s t s .  is in  The answer t o  t h i s q u e s t i o n can only be determined by examining the d i s t r i b u t i o n agreements between  the major d i s t r i b u t o r s  and Famous  P l a y e r s o r Odeon.  S i x d i s t r i b u t o r s have s t a t e d t h a t "no such  documents  a t l e a s t t h a t i s i n r e l a t i o n to the d i s -  exist",  t r i b u t i o n of f e a t u r e f i l m s i n one a r e a o f Canada, the M a r i t i m e s . Most agreed w i t h U n i t e d A r t i s t s when i t was quoted as s a y i n g t h a t i t "has no w r i t t e n agreements o r correspondence by which i t allocated in  f i r s t run f i l m s t o p a r t i c u l a r t h e a t r e  the c i t i e s o f H a l i f a x and Dartmouth". ^ 1  owners  Universal,  however,  would appear t o have some documentation e v i d e n c i n g d i s t r i b u t i o n agreements: " U n i v e r s a l i s not prepared t o produce any w r i t t e n agreements o r correspondence r e l a t i n g t o the a l l o c a t i o n o f v a r i o u s f i r s t run f i l m s as requested as to do so c o u l d be h i g h l y p r e j u d i c i a l to U n i v e r s a l ' s business i n t e r e s t s . " H That t y i n g agreements e x i s t between the American distributors a secret.  and the major t h e a t r e chanins, however,  i s not  Most major d i s t r i b u t o r s d e a l w i t h each c h a i n and  supply f i l m s on a percentage b a s i s .  I t has been r e p o r t e d  that  - 38 " U n i v e r s a l deals 75% w i t h Odeon-, 25% w i t h Famous. U n i t e d A r t i s t s d e a l s more w i t h Odeon. Warners and Paramount d e a l almost e x c l u s i v e l y w i t h Famous i n f i r s t run s i t u a t i o n s . " 12 At the U n i v e r s i t y of Manitoba's second annual F i l m Symposium, one member o f the Symposium was  quoted  Canadian as  saying: "In Vancouver...Famous P l a y e r s c o n t r a c t s to p l a y 100% o f the f i l m s marketed by Paramount, Metro Goldwyn Mayer, Warner Bros, and 20th Century Fox. Odeon, he s a i d , has s i m i l a r 100% d e a l s w i t h Rank, U n i t e d A r t i s t s , U n i v e r s a l , and Columbia. Cross overs o c c u r r a r e l y , he claimed, and when they do i t ' s u s u a l l y a t the i n s i s t e n c e o f a d i s t r i b u t o r s e e k i n g a s p e c i a l t y market. For y e a r s , he s a i d , the Vancouver market was amicably d i v i d e d up i n t h i s way."13 With regards t o B e l l e v u e F i l m D i s t r i b u t o r s L t d .  who  d i s t r i b u t e 2 0th Century Fox, Avco Embassy, and Walt Disney in  Canada, Famous P l a y e r s has f i r s t  but does not have f i r s t c a l l  call  on a l l Disney product  on a l l f i l m s handled by B e l l e v u e .  The most r e l i a b l e i n d i c a t o r o f the e x t e n t and of  nature  the t y i n g agreements i s a r e c e n t quote of Famous P l a y e r s  P r e s i d e n t , George Destounis.  In a CBC  i n t e r v i e w f o r the  C u l t u r e s e r i e s t e l e v i s e d March 17, 1976,  he s t a t e d t h a t  l i k e Paramount and Warners and U n i t e d A r t i s t s w i l l p l a y Famous and people l i k e Columbia  "People 100%  and t w o - t h i r d s U n i v e r s a s l 14  and o n e - t h i r d Fox would p l a y Odeon". I r r e g a r d l e s s o f which d i s t r i b u t i o n company i s t i e d  - 39 to which t h e a t r e c h a i n , the  -  f a c t remains t h a t v i r t u a l l y a l l  of the  s c r e e n time o f Famous P l a y e r s and  by  product of one  the  The  Odeon i s taken  up  o r other of the major d i s t r i b u t i o n  e f f e c t o f b l o c k booking i n Canada, t h e r e f o r e , i s t h r e e -  fold.  I t denies the  access to  the  highly  p r o f i t a b l e product of the major d i s t r i b u t o r s ;  it  hampers the  independent e x h i b i t o r  non-major d i s t r i b u t o r s  potentially profitable.films profitable ages the feature B.  exhibition  entry of new  and  and;  i n marketing even t h e i r without access to  distribution facilities,  f i r m s i n t o the  the  i t discour-  p r o d u c t i o n of  Canadian  films.  Runs Compounding the problem c r e a t e d by  b l o c k booking f o r the Odeon's i n s i s t e n c e r e f u s a l on  also  that  the  practice  independent, i s Famous P l a y e r s '  t h a t not o n l y do  f i r s t run  product but as  firms.  they be  and  they have f i r s t r i g h t  showings of the major  of  of  distributor's  e n t i t l e d to second run  showings  well. The  u n d e r l y i n g concept of motion p i c t u r e  i n Canada i s t h a t  distribution  i t i s conducted i n waves or runs.  a f i l m w i l l have a f i r s t run,  a second run  and  any  Normally number of  subsequent runs. F i r s t run  t h e a t r e s are  located  i n the  "key"  Toronto, M o n t r e a l , Vancouver, Winnipeg, C a l g a r y , and All  f i r s t run  t h e a t r e s i n Canada are  cities: Halifax.  owned or c o n t r o l l e d  by  Famous P l a y e r s  and  Odeon.  Normally a p i c t u r e w i l l open i n one  o r two  first  run t h e a t r e s and w i l l then be moved i n t o a neighborhood cinema for  i t s second run.  The  t h e a t r e p l a y i n g the second run i s  normally owned by Famous P l a y e r s o r Odeon.  In  Greater  Vancouver, f i l m s opening at the Odeon t h e a t r e f o r t h e i r run w i l l subsequently be Haida.  first  shown a t e i t h e r the Highlands or  A l l three t h e a t r e s being  c o n t r o l l e d by Odeon Theatres  (Canada) L t d . Usually  a subsequent run r e f e r s t o the f a c t t h a t a  p i c t u r e i s p l a y i n g i n a s m a l l e r community. a l s o r e f e r to the f a c t t h a t the i n one  of the  p r i c e , and  "key"  However, i t can  film i s playing i n a  c i t i e s , u s u a l l y a t a reduced admission  q u i t e o f t e n as p a r t o f a double  bill.  In Canada, the s m a l l independent chains  and  indepen-  dents are r e l e g a t e d to p l a y i n g the subsequent runs. f i l m revenues are  theatre  directly  Since  p r o p o r t i o n a l t o the l i f e o f  the  f i l m , t h e i r p o t e n t i a l p r o f i t i s a l s o predetermined. T h i s p r a c t i c e has  a l s o e f f e c t i v e l y barred  f i r m from e s t a b l i s h i n g a t h e a t r e or t h e a t r e s key 1973  cities.  Rokmay Co.  by Hector Ross and  o f Calgary, P h i l i p May  i n any  any  new  of  the  a company e s t a b l i s h e d i n of A l b e r t a c o n t r o l s a  independent cinema c h a i n w i t h t h e a t r e s p r i m a r i l y i n the areas:  e i g h t i n Saskatchewan, three i n Manitoba, one  .Alberta, and  one  in  Ontario.  in  small rural  - 41 Rokmay Co. Abbotsford, c i t i e s , Mr  a l s o has  theatres i n V i c t o r i a  B r i t i s h Columbia. Ross o f t e n has  P l a y e r s or Odeon do not.  By s t a y i n g i n the  and smaller  a screen a v a i l a b l e when both Famous By f o l l o w i n g t h i s p o l i c y , he  has  been able to e s t a b l i s h a s m a l l c h a i n but has not been able to make any i n any  s e r i o u s t h r e a t to e i t h e r Famous P l a y e r s or Odeon  o f the key  cities.  Since a p a r t i c u l a r t h e a t r e ' s run i s f a i r l y w e l l e s t a b l i s h e d i n the Canadian f i l m i n d u s t r y , b a r g a i n i n g between d i s t r i b u t o r s and  e x h i b i t o r s on i n d i v i d u a l f i l m s c e n t e r s  the r e n t a l to be  paid.  C.  Film  Rentals  Rental bases:  on  fees are u s u a l l y computed on one  (a) the f o u r - w a l l d e a l ;  of four  (b) the s t r a i g h t cash s a l e ;  (c) the cash guarantee i n advance;  and  (d) a s l i d i n g s c a l e  percentage.  two  variations.  Under  an independent,  takes  the f i r s t ,  The  f o u r - w a l l d e a l has  the d i s t r i b u t o r , normally  over a second o r subsequent run t h e a t r e and operates  it.  He  h i r e s the management, and pays the employees and a c t s as a r e g u l a r e x h i b i t o r would a c t .  Under the second arrangement,  the d i s t r i b u t o r , again an independent, pays a weekly sum  to  the t h e a t r e owner to cover h i s overhead p l u s an agreed upon profit. head  The  t h e a t r e owner, i n t u r n , pays the t h e a t r e ' s  ( i n c l u d i n g wages).  ,what f i l m s w i l l pay  The  d i s t r i b u t o r , however,  and f o r how  long.  over-  decides  -  Normally utor  under the  is saturating  an  42  first  area with  -  arrangement,  his  the  distrib-  particular film.  The  aforementioned National  Film  Board production  of  Wild"  York  area,  cinemas  opened  taneously  i n the  but  only  New  a f t e r the  playing  37  d i s t r i b u t o r had  "Cry  spent  of  the  simul-  one-quarter  15 of  a million The  producer factor of  dollars m  problem w i t h  involved.  Increased and  Furthermore,  i f the  co-operative  sharing  the  film of  method  of  f o r the  course,  costs  are  independent  i s the  incurred  high  risk  f o r the  number  a d v e r t i s i n g expense i s s u b s t a n t i a l .  i s not losses  successful, between the  there  is  no  distributor  and  exhibitor. By  scale  f a r the  percentage.  receives over  this  and/or d i s t r i b u t o r ,  prints required  the  advertising i t .  an  time.  share of  m o s t common a r r a n g e m e n t i s t h e Under t h i s  arrangement,  increasing  percentage  of  The  the  the  higher  gross,  the  sliding  the d i s t r i b u t o r  box  higher  office  receipts  the d i s t r i b u t o r ' s  the r e c e i p t s . " I f an e x h i b i t i o n c o n t r a c t has a percentage i n i t r e a d i n g ' 2 5 — 5 0 ' , t h i s means t h a t the d i s t r i b u t o r r e c e i v e s a minimum o f 25% o f t h e box o f f i c e r e c e i p t s and t h a t the p e r c e n t a g e e s c a l a t e s u n t i l a c e i l i n g o f 50% i s r e a c h e d . The distribut o r and e x h i b i t o r work o u t d o l l a r amounts f o r each percentage. For instance, 25% may e q u a l $ 1 0 , 0 0 0 . 0 0 , 2 6 % may equal $ 1 1 , 0 0 0 . 0 0 , 2 7 % may e q u a l $12,000.00 and so on."16 The  theory  i s that  the  lowest percentage  is  equal  to  the theatre's  receipts figure,  the exhibitor  third  keeps a l l o f t h e r e c e i p t s  method o f r e n t a l  o r s t r a i g h t cash  exhibitor  pays  sale.  of  In return,  exhibitor the film's  computation  a l l box o f f i c e r e c e i p t s  expenses.  assumes a g r e a t e r success  Paying  proportion  and t h e r e f o r e basis.  Since  pays  h i g h e r on a percentage b a s i s ,  to  bear on t h e independent e x h i b i t o r s  being  Vancouver to a  Three years  offered  a flat  because  a year The  guarantee  old film,  fourth  type  i n advance.  b y Famous P l a y e r s  total  basis  rental return  pressure  change  theatre  The  grosses  i n relented  Hollywood,  slipping  because the f i l m s behind,  b u t 14, 16, and t h e n of exhibition contract type o f contract  and Odeon and o n l y  flat  i n the product  t h e owner had f i n a l l y  saw i t s t o t a l  This  uncertainties  n o t t o book on a  i t were f a l l i n g f a r t h e r and f a r t h e r  just  signed  a lower  by t h e Hollywood  year on t h e s t r a i g h t cash s a l e  not  rental,  of the  fee to a percentage basis.  subsequent run theatre,  offered  a flat  the majors bring  ago a n o t i c e a b l e  t o the public  took place  go from  flat  but  the distributor's  is  basis.  i s the  Under t h i s arrangement, t h e  he r e c e i v e s  t h a n on a p e r c e n t a g e  fee  and the d i s -  t o t h e d i s t r i b u t o r , a f i x e d sum f o r t h e e n g a g e -  must pay a l l a d v e r t i s i n g the  the lowest  does n o t g e t a n y t h i n g . The  ment.  expense and i f t h e box o f f i c e  f o r a p a r t i c u l a r week do n o t e x c e e d  tributor  fee  operating  43 -  into  each  being  "That i s , 18 m o n t h s " .  i s the cash  i s usually  only  when t h e r e h a s  been a v a s t  amount o f advance  Under  this  arrangement,  antee  the d i s t r i b u t o r  e x a m p l e b e i n g "The fail  a t the box  exhibitor Great  a specified  utor w i l l  The  or  This proved  most r e c e n t  t o be  the theatre  picture  refund the  the case w i t h  reason being, of course, that  want t o use  guar-  However, s h o u l d the  the d i s t r i b u t o r w i l l  h i s advance.  picture.  advance  amount.  Great Gatsby".  The  f o r the  the e x h i b i t o r w i l l  office,  Gatsby".  publicity  again, usually  the  "The  distrib-  i n the  near  future. D.  Booking  Practices  Booking to  lease  power,  o f one  second  Canada's two  B.  being, are  C.  in a particular  cities  and V i c t o r i a b e i n g booked  The  and  the head  available,  into  cities  first  t h e n Famous P l a y e r s  and  the  located of  these  the  offices.  available.  and  rest  The New  them i n  key  features  i f extra prints  Odeon use  in  Greater  from Toronto w i t h  out of the Vancouver  the key  from  office  Columbia,  o f c o u r s e , t h e number o f p r i n t s  booked  Booking  booking of a l l f i r s t  In B r i t i s h  are booked  theatre.  Odeon t h e a t r e s  i s done from  i n Toronto.  (contractually)  power r e s u l t i n g  o r more t h e a t r e s .  r u n Famous P l a y e r s  companies  of arranging  i s the bargaining  larger  Vancouver of  f o r showing  i n turn,  control and  a film  i s the p r a c t i c e  are  their  18 theatres  located Couple  Famous P l a y e r s  i n smaller  communities.  the c e n t r a l i z e d and  Odeon w i t h  booking practice  their  of  both  b o o k i n g power and  they  - 45 can v i r t u a l l y  -  d e c i d e t h e f a t e o f any f i l m .  i s p e r f e c t l y analogous  The  situation  to that i n England wherein the Palache  C o m m i t t e e c o n c l u d e d , a f t e r s t u d y i n g t h e p o w e r w e i l d e d by m e n — t h e c i r c u i t b o o k e r s , George P i n c h e s o f Rand and B a r t o n o f ABC  two  Bob  that:  " I f t h e s e two p e r s o n s s h o u l d d e c i d e n o t t o book a f i l m , o f i f on b o o k i n g i t , t h e y choose t o a l l o t t o i t the l e a s t remunerat i v e p l a y i n g d a t e s and l o c a t i o n s i n t h e i r c i r c u i t , the p i c t u r e i s almost c e r t a i n to be a f a i l u r e and t h e p r o d u c e r may i n c o n s e q u e n c e be r u i n e d . " 1 ^ On F r i d a y , A p r i l f i l m maker G i l l e s Vancouver. poor  I t was  19, 1974,  " L e s M a l e s " by  Canadian  C a r l e o p e n e d a t Odeon's D u n b a r t h e a t r e i n p u l l e d the f o l l o w i n g Thursday  "because  of  attendance". "The m a d d e n i n g t h i n g i s t h a t t h e d e c i s i o n t o t a k e i t o f f t h e D u n b a r s c r e e n was made on Monday, o n l y t h r e e d a y s a f t e r t h e r u n b e g a n . And i t was made i n T o r o n t o , a l l o f w h i c h means t h a t no m a t t e r how many p e o p l e w e n t t h i s week, t h e C a n a d i a n m o v i e s t i l l comes o f f a f t e r two n i g h t s s h o w i n g s . "  SUMMARY OF  STRUCTURE AND  2 0  TRADE PRACTICES  S i n c e a f i l m i n d u s t r y has  three p r i n c i p a l  branches,  p r o d u c t i o n , d i s t r i b u t i o n and e x h i b i t i o n , i t c a n n o t h o n e s t l y be s a i d t h a t a C a n a d i a n  feature f i l m industry exists.  y e a r l y p r o d u c t i o n of Canadian  feature f i l m s i s not  The  sufficent  t o s u p p o r t an i n d u s t r y a n d o n l y 5% o f t h e f i l m s shown  on  motion p i c t u r e screens i n t h i s country are Canadian.  By f a r  the  majority  sector, these  are American  r o u g h l y 55  account  rentals  and  exhibition Players  films  office  g r o s s and  owned.  What r e m a i n s  sectors  of the  industry  Furthermore,  industry are  and  i n Canada.  positions.  distributors  large,  screens while  i s compounded by  reluctant  first  are  "Canadian"  de  facto  control  sector, and  or  "inde-  from  i n their the fact  and  theatres.  of the  the  lesser independent  exhibitors  exhibitors'  run showings  Without  exhibition  access to  outlets,  first  are denied,  t h a t Famous P l a y e r s  to second  film  independents  thereby  The  con-'  enabled  t o the p r o f i t a b l e  the independent  the d i s t r i b u t o r s .  t o p l a c e funds  foreign  distribution  block booking procedures,  demand t h e r i g h t s  distribtuion  Famous  between  r u n t h e a t r e s has  run playings  Through  product f o r showing  profitable  the  have been d e n i e d access  products of  and  In the exhibition  new  new  by  o f C a n a d a ' s r o u g h l y $200  a g a i n b o t h companies  Odeon t o g a i n  theatre  Odeon a l s o  The  the b a r g a i n i n g power d e r i v e d  run  problem  owned o r c o n t r o l l e d .  industry.  assigned t o subsequent  profit  of film  ( C a n a d a ) L t d . who  i s known as  s o many o f t h e  Famous P l a y e r s  Seven  theatrical  of the e x h i b i t i o n  segment o f the  trolling  i n Canada.  of the t o t a l  f o r a p p r o x i m a t e l y 65%  box  distribution  i n Canada i s dominated  Odeon T h e a t r e s  million  In the  films  are American  feature  L t d . and  pendent"  handle  f o r more t h a n 80%  of  -  produced.  firms  a l lseven  them a c c o u n t  46  and  of a l l the  investors  i n the production of Canadian  are  feature  films. for  Even i f a d i s t r i b u t i o n  a Canadian  profit  i s easily  location Players  feature  with  one  manipulated  47  -  agreement c o u l d of  the majors,  schedule of  potential date  and  Famous  Odeon.  As  this  situation  has  continued f o r decades,  unreasonable  to expect ordinary market conditions  the  The  majors.  guaranteed  i t s  according to the play  i t i s assigned i n the booking or  be  o n l y o t h e r r e c o u r s e i s government  to  i t is untrench  intervention.  -  48 -  FOOTNOTES CHAPTER I I I  1  Industry p . 1.  M i c h a e l Conant, A n t i t r u s t i n the Motion P i c t u r e (Berkeley: U n i v e r s i t y o f C a l i f o r n i a P r e s s , 1960),  2 Ibid.,  p. 2 .  Ibid.,  p . 3.  3  from the Annual Report o f t h e Canadian D e v e l o p m e n t C o r p o r a t i o n 1 9 7 3 - 1 9 7 4 a t p . 5.  Film  4  5  Drabinsky, op. c i t . ,  p. 160.  The  D e c e m b e r 6, 1 9 7 4 , p . 5 A , c o l . 2.  c  7  Sun (Vancouver),  . Conant, op. c i t . , Ibid.,  8  p. 59.  p. 77.  q Kirwan Cox, "Rocca's B i g F i g h t " , Cinema T h i r d E d i t i o n , No. 25 ( F e b r u a r y 1 9 7 6 ) , p . 2 5 . 10 11  Canada,  _.. , Ibid. T  . Ibid.  12 Stephen C h e s l e y , The B u s i n e s s o f F i l m Cinema Canada Magazine F o u n d a t i o n , 1975), p. 14.  (Toronto:  13 c o 1.  The  4. 14  Cox,  Province  op. c i t . ,  (Vancouver),  February  12, 1974, p. 23,  p. 25.  C a n a d a , Commons, H o u s e , C o m m i t t e e o n B r o a d c a s t i n g , Films and A s s i s t a n c e t o the A r t s , N a t i o n a l F i l m Board, Hearing, 2 9 t h P a r l i a . , 2nd S e s s i o n , A p r i l 2 3 , 1974 ( O t t a w a : Queen's P r i n t e r , 1974), p. 21.  - 49 -  16  P a u l A. B a u m g a r t e n a n d D o n a l d C. F a r b e r , P r o d u c i n g , F i n a n c i n g and D i s t r i b u t i n g F i l m (New Y o r k : Drama Book S p e c i a l i s t s / P u b l i s h e r s , 1 9 7 3 ) , p. 188. 17 f r o m a n i n t e r v i e w w i t h M. B r i a n R o g e r s , M a n a g e r o f Famous P l a y e r s L t d . L o u g h e e d M a l l C i n e m a s J u l y , 1 9 7 5 . 1  8  Ibid.  19 The  from Terence K e l l y , A C o m p e t i t i v e Cinema I n s t i t u t e o f E c o n o m i c A f f a i r s , 1 9 6 6 ) , p . 72^ 2  0  (London:  The Sun ( V a n c o u v e r ) , A p r i l 2 5 , 1 9 7 4 , p . 4 1 , c o l . 1.  CHAPTER I V THE F E D E R A L GOVERNMENT AND T H E F E A T U R E F I L M I N D U S T R Y I N CANADA  This policies  i s devoted  to a description ofthe  o f t h e f e d e r a l government designed t o a f f e c t t h e  structure industry  Chapter  o f , and i n f l u e n c e i n Canada.  behaviour i n , the feature  Some o f t h e s e p o l i c i e s h a v e b e e n  ized  as l e g i s l a t i o n ,  with  participants i n the industry.  others take the form o f  to have a d i r e c t impact on t h e f i l m fore to  be d e s c r i b e d  influence  thereby not have  as " f i l m "  a l lindustries  affect the film a film  industry  policies.  industry  at  actions  this  present  time.  designed  and can there-  Others  i n the Canadian  formal-  "agreements"  Some h a v e b e e n  are intended  economy a n d  incidentally.  Canada  does  p o l i c y as such.  No a t t e m p t i s m a d e t o m e a s u r e these  film  on t h e s t r u c t u r e This w i l l  aim i s merely  t h e impact o f any o f  o r performance  be t h e p u r p o s e  o f the industry  o f C h a p t e r V.  t o present the policies,  The  most o f which  are  aimed d i r e c t l y  at the production  By  f a r t h e most ambitious  of  t h e Canadian F i l m Development To  facilitate  ment's p o l i c i e s policies  o f these  and;  establishment  an o r d e r l y p r e s e n t a t i o n , t h e govern-  have been o r g a n i z e d  under f o u r main  competition  headings:  policy;  foreign  quotas.  POLICIES INFLUENCING The  has been the  Corporation.  influencing production;  ownership  sector of the industry.  PRODUCTION  following are direct  a t t e m p t s w h i c h have  made b y t h e f e d e r a l g o v e r n m e n t t o p r o m o t e  been  the production  of  Canadian motion p i c t u r e s . A.  The C a n a d i a n F i l m D e v e l o p m e n t  Corporation  A Crown c o r p o r a t i o n c r e a t e d Film  Development C o r p o r a t i o n  A c t  1  i n 1967 by t h e C a n a d i a n  "to foster  and promote t h e 2  development o f the feature  film  CFDC r e p o r t s  through  Originally ration  allotted  furtherance  feature  i s empowered t o :  film  productions  o f p u b l i c funds, with  film  Canadian feature  the  of State. the Corpo-  an a d d i t i o n a l  $15  million.  and promote  i n d u s t r y i n Canada, t h e  (a) i n v e s t i n i n d i v i d u a l C a n a d i a n  i n r e t u r n f o ra share  any such p r o d u c t i o n s ;  individual  the Secretary  o f i t so b j e c t i v e t o f o s t e r  development o f the feature  Corporation  from  $10 m i l l i o n  has s i n c e been p r o v i d e d In  the  t o Parliament  i n d u s t r y i n Canada",  (b) make film  loans  i n the proceeds  t o producers o f  productions  and charge  interest  thereon;  52 -  ( c ) make a w a r d s f o r o u t s t a n d i n g  in  the production  to  film  makers  of Canadian  and f i l m  assist  them i n i m p r o v i n g  assist  the producers  bution  o f such  feature  technicians their  films;  (d) make  grants  r e s i d e n t i n Canada t o  crafts;  o f Canadian  accomplishments  a n d (e) a d v i s e  feature  and  films i n the d i s t r i -  f i l m s and i n t h e a d m i n i s t r a t i v e  functions of  3 feature  film A  "Canadian  production" respect  production. feature  i s a feature  film"  film  o r "Canadian  or feature  film  feature  production  film i n  o f which the Corporation has determined: "(a) that the completed f i l m w i l l , i n the judgment o f t h e C o r p o r a t i o n have a s i g n i f i c a n t Canadian c r e a t i v e , a r t i s t i c and t e c h n i c a l c o n t e n t , and t h a t a r r a n g e m e n t s h a v e b e e n made t o insure that the copyright i n the c o m p l e t e d f i l m w i l l be b e n e f i c i a l l y owned by an i n d i v i d u a l r e s i d e n t i n Canada, by a c o r p o r a t i o n incorporated under t h e laws o f Canada o r a P r o v i n c e o r by any c o m b i n a t i o n o f such p e r s o n s ; or 1  (b)  To authorized the  promote  production  abroad;  t h e d e v e l o p m e n t o f t h e i n d u s t r y , t h e CFDC i s  to provide  major motion  for  t h a t p r o v i s i o n h a s b e e n made f o r t h e production o f t h e f i l m under a c o production agreement entered i n t o between Canada and any o t h e r country."4  of:  investment  feature  films designed  picture theatres  and f e a t u r e  and loan  new t a l e n t s .  to assist i n  f o rrelease i n  and on t e l e v i s i o n  f i l m s on low budgets  the purpose o f developing  funds  i n Canada and  produced p r i m a r i l y  -  The  Feature Film  As program,  a  -  Investment  precedent  Program  to  CFDC f u n d i n g u n d e r  this  guaranteed d i s t r i b u t i o n i n Canada i s r e q u i r e d .  distributor duction  condition  53  will  costs  a d v a n c e as guarantee mutually  of  be the  s o o n as an  expected film;  the  or  either  i s delivered  p r i n t s and  the  (i) invest  in  the  pro-  ( i i ) guarantee payment of  picture  amount f o r  agreed with  to  The  to  advertising  CFDC, t h e  him;  an  or ( i i i )  which w i l l  producer,  and  the  be  other  6 investors. Under t h i s program, more t h a n and of  50%  of  the  seldom exceeds  of  ticularly  release on  the  or  participate the  in  writer, of  the  a  share  than  to  films  50%  CFDC a c t u a l l y of  the  goes  director, film).  the  in  the  to  When t h e  a  and  also  rarely  completed  the  film  availability  contracted  for par-  market. invests  in a  film, i t  in proportion  other  50%  ( t o be  others  of  the  to  loan,  in  will share  profits  the  request security  rate  interest  the  production  i t does not  i t does of  i t s  shared with  involved  CFDC m a k e s a  The  the  is  television potential,  producer  p r o f i t s but  film itself.  negotiation.  the  actors  films  profits The  of  D e p e n d i n g on  with  original financing.  traditionally  production  international  When t h e  CFDC's c o n t r i b u t i o n  $200,000.00.  funds, p r i o r i t y i s given  television  of  costs  the  take  other  i s subject  to  The In of  Low B u d g e t  fund to  fund  o f $600,000.00 p e r y e a r  o f low budget f e a t u r e f i l m s .  i s to provide  produce  skills  low  their  first  feature  the establishment  to facilitate the The p u r p o s e o f t h i s  length film  i n the industry.  length experience,  budget  7  opportunities f o rdeveloping  and t a l e n t s  feature  Program  1972, t h e C o r p o r a t i o n announced  a special  production  54 -  however,  the  F i l m makers w i t h are s t i l l  exceed  60% o f t h i s  form o f cash  eligible.  t o $20,000.00.  amount.  of their  qualify  under t h i s  ducer  must be C a n a d i a n c i t i z e n s  least  three year's  to  as w e l l  residence  that the producer  reach  way, f i l m s  40% w i l l  take  or educational films are  program,  only  once.  a l l t h e crew, c r e a t i v e  o r landed  will  guarantee work  director  immigrants  and prowith at  this  i s required, i t i s  together with  once t h e f i l m  through  their  i n Canada.  produced under  an audience  not  allow deferments o f  as the w r i t e r ,  no d i s t r i b u t i o n  obtain distribution  this  will  o r by companies o f  can p a r t i c i p a t e  and performers  expected  time  The CFDC d o e s  staff  While  The o t h e r  No d o c u m e n t a r i e s  and a d i r e c t o r To  A  i n v e s t e d by t h e p r i v a t e s e c t o r o r o f c o n t r i -  equipment and s e r v i c e s .  eligible  previous  f e a t u r e i s d e f i n e d a s o n e w h i c h h a s a maximum  butions by i n d i v i d u a l s  up  makers  and t o i n c r e a s e  b u d g e t o f $125,000.00 and t h e CFDC's i n v e s t m e n t normally  film  t h e CFDC  has been completed. program should  the various  co-operatives  In  at least and other  -  low  cost distribution This  operations  proposal  differs  and be  aspect.  i n a first  position  distribution.  the film B.  after  The C a n a d a The  Under  film  this  contributing their  services t o the production  into by  and i n d i v i d u a l s  i n Canada.  from the feature  ment p r o g r a m i n one i m p o r t a n t companies  55 -  invest-  program,  time,  equipment  o f the low budget f i l m  will  f o r recoupment once t h e p i c t u r e  The CFDC r e c e i v e s these  individuals  goes  25% o f any monies  have been  earned  reimbursed.  Council  Canada  C o u n c i l was c r e a t e d  ment i n 1957 t o "promote  the arts,  by an A c t o f P a r l i a -  the humanities  and t h e  8 social  sciences",  a broad  and c a r r i e s  program o f f e l l o w s h i p s and grants.  policies  While  t h e Canada  the production  I t sets  direct  grants  training  and s c r i p t  immigrants  films,  f o rfilms  writing  have produced a t l e a s t  t o Parliament  i t s own  through  C o u n c i l does n o t d i r e c t l y  of feature  Program,  landed  through  a n d m a k e s i t s own d e c i s i o n s w i t h i n t h e t e r m s o f t h e  Canada C o u n c i l A c t and r e p o r t s Secretary of State.  in  o u t i t s work mainly  f o rat least  assist  under i t sF i l m and Video  as w e l l as g r a n t s  are available.  one f i l m  the  f o r research,  Applicants  must  and be C a n a d i a n c i t i z e n s 12 m o n t h s b e f o r e  the date  or of  9 application. The maximum a m o u n t a v a i l a b l e f o r a s i n g l e •production  i s $25,000.00, t o c o v e r  total  or partial  film production  -  costs. may  Applicants  for  federal film  Video Program  C.  Class  Regulations that  1966,  Class  television film  12  100%  such  as  Income Tax:  i n Council  18 w a s  permitting  income  film".  1  c o m m e r c i a l message: and  and  Canadian  Investment  B o f t h e Income  9,  Tax "property  1966—431 published the words  "other  the phrase  March  than  picture  added  Regulations  23,  a  "A m o t i o n  c o m m e r c i a l m e s s a g e " was  1  March  tax write-off f o r  B t o t h e Income Tax  w r i t e - o f f was  eligible  1  amended t o add  of Schedule  by  1960—225 published  i n C o u n c i l P.C.  18 w a s  used  Feature Film  P.C.  a 60%  picture  Order  from  t h e CFDC, a r e n o t  i s seldom  added t o Schedule  . a  exceeding  f o r t h e same p r o j e c t , t h e F i l m  that i s a television  Class  not  picture producers.  from  Order  i s a motion By  for a total  o f t h e Canada C o u n c i l  Deductions  1960,  grants  length motion  By  funds  more  applicants receiving assistance  agencies,  Canada C o u n c i l  feature  o f $15,000.00 o r  1 0  However, s i n c e other  -  receiving grants  re-apply f o r supplementary  $25,000.00.  56  to  wherein  2  permitted.  however, the w r i t e - o f f remained  For regular at  feature  films,  60%. 13  At  the r i s k  is  t h e i n v e s t o r who  an  asset  a  rate  which  o f 60%  .depreciation,  of over s i m p l i f y i n g , buys  c a n be  a share i n a motion  depreciated  p e r annum on or capital  t h e way  this  picture film  f o r income t a x purposes  a declining balance basis.  cost  works  a l l o w a n c e as  has at  This  i t is called,  can  -  be  o f f s e t against  In most cases, tial  loss  equal  to  t h e n be  end  pay  no  from  salary,  the  capital  the  tax  for  i n the  cost  return loss  from other  d e p e n d i n g on  the  "The  taxpayer's  income a l t o g e t h e r  film  i s sold,  taxable  This  the  income o f  previously  claimed  proceeds the  investor  for  tax  amount i s known  i t can  effectively  gained  i n p r i o r years.  can  has  i f i t i s simply  allowance an  and  1 4  sale.  cost  can  sources,  income,  purchase of tax  cash this  film.  substan-  and,  capital  the  the  allowance  a d v a n t a g e he  the  e f f e c t of  i n t o the  taxable  recaptured  eligible  year."  depreciation  i s recovered  investors  most of  the  that  income  taxable  taken  are  of  p r o f e s s i o n a l income.  i t i s possible,  f o r the  amount o f  against  sale  recaptured  since  tax  share  result in a  The  i n t e r e s t i n the  extent  the  year.  eliminate  the  result i n a rather  When t h e  purposes  to  will  i n v e s t m e n t and  p o s i t i o n , to income  the  first  a deduction  result i s that  overall  to  as  this  from  many f i l m s w i l l  i n the  used  including  not  -  income earned  however,  since 60%  the  57  income  be  spread  In  the  i s an  added  eliminate However,  amount w h i c h  averaging  over  as  annuity  a period  of  is  contract,  "up  to  15 15  years  to  7%  or  per  income".  for  annum c a n  .film  of  be  meantime,  e a r n e d on  the  "a  balance  return of  the  of  6%  deferred  1 6  This use  life".  tax  a d v a n t a g e may  leverage. ^  i s paid  1  f o r by  Normally,  be the  a modest cash  further  e n h a n c e d by  investor's  the  interest in  downpayment w i t h  the  the  remaining  balance  being  payable  film.  I f the  of  the  investor i s limited  an  investor purchasing  put  up  a cash  film  only  does not  58  -  out  of  revenues earned  r e t u r n any  revenues,  t o h i s downpayment.  a one-half  payment o f  $ 5 0 0 , 0 0 0 . 0 0 p r i c e as  -  million  $120,000.00 and  a c o s t b a s e on  dollar thereby  which  from the  For  the  liability example,  film  might  claim  the  to calculate his  depreciation. Feature On Faulkner, the  F i l m Investment:  August  5,  introduced  capital  1975,  the  The  100%  Secretary  Deduction  of  State, J.  a new  Income Tax  Regulation  cost allowance  percentage  on  which  motion p i c t u r e  Hugh amended films  18 from to  60%  to  100%.  This  initiative  "increase p r i v a t e sector support  was of  expressly  designed  the  Canadian  feature  t o be  eligible  for  19 film  industry".  increased a of  capital  "certified the  However, i n o r d e r cost  feature  allowance,  film",  as  an  the  a p p l i a n t must i n v e s t i n  defined  under Subsection  Income Tax R e g u l a t i o n s . That i s to say, a f i l m : "(a) o f a t l e a s t 75 m i n u t e s r u n n i n g time i n respect of which a l l photography or a r t work s p e c i f i c a l l y r e q u i r e d f o r t h e p r o d u c t i o n t h e r e o f and a l l f i l m e d i t i n g t h e r e f o r was commenced a f t e r November 18, 1974; and (b)  produced under a formal Canadian cop r o d u c t i o n agreement w i t h a f o r e i g n country; or  (c)  a f i l m i n which: (i) the producer i s a Canadian; (ii) t w o - t h i r d s o r more o f the personnel performing key  1104(2)(h)  - 59  (iii)  (iv) (v)  Films because  they  eligible Class D.  -  creative functions are Canadians; a minimum o f 75% o f t h e r e muneration paid t o personnel other than those included above i s p a i d t o Canadians; a t l e a s t 75% o f t h e t e c h n i c a l services are performed i n Canada; and the Canadian copyright i s b e n e f i c i a l l y owned by Canadians f o r not less than four years f o l l o w i n g completion of the film."20  that are not e l i g i b l e  do n o t meet t h e c r i t e r i a  f o r t h e 60% c a p t i a l  18 i n S c h e d u l e Co-production  f o r t h e new  allowance  s e t o u t above a r e  cost allowance  B o f t h e Income Tax  provided  s t i l l  f o r under  Regulations.  Agreements  "In order t o promote c u l t u r a l r e l a t i o n s , the production o f f i l m s w i t h high a r t i s t i c and t e c h n i c a l v a l u e and t h e e n c o u r a g e m e n t of f i l m making c o - o p e r a t i o n between c o u n t r i e s , c o - p r o d u c t i o n agreements have been entered i n t o between t h e governments of various f i l m producing countries."21 A co-production two  ( o r more)  the  film  or  quotas  countries.  has d u a l  I f a co-production  nationality  and thereby  I t a l s o guarantees  and thereby While  varies  f i n a n c e d by p a r t n e r s i n treaty  avoids  exists,  import  and r e c e i v e s any p r o t e c t i v e b e n e f i t s g r a n t e d  home i n d u s t r y . bution  i s a film  helps  the film  foreign  according  t o the terms o f t h e agreement,  to either  distri-  t o insure the f i l m ' s ' f i n a n c i a l  the c o n t r i b u t i o n of the producer  duties  o f each  success. country  the production  company o f  each  such personnel  country as  will  60  -  advance  i s necessary  to  such monies  satisfy  the  and  provide  agreement.  "Each p r o d u c t i o n company w i l l r e s e r v e i t s n a t i o n a l t e r r i t o r y f o r the e x p l o i t a t i o n o f t h e f i l m and w i l l s h a r e t h e n e t p r o f i t s from the r e s t of the r o l e i n p r o p o r t i o n t o the amount o f c a p i t a l a d v a n c e d o r c r e d i t made a v a i l a b l e t o t h e p r o d u c t i o n . " 2 2 Canada has with  three  dates:  E.  came i n t o e f f e c t on  June  Canadian F i l m  7,  1974;  Canadian release  feature on  the  the  new  deduct  film,  also  Secretary  Theatres  12,  the  Tuesday, August  Faulkner  Italy,  100%  program of  at  l e a s t $1.7  production  of  Canadian  1974  following and;  of  their  the  State  5,  As  part  that  Famous P l a y e r s  million feature  to  which  issued of  after extensive  voluntarily  Odeon  investment i n  of  1975.  and  Regulation  Secretary  State,  (Canada) L t d . had  4,  the  Famous P l a y e r s  Income Tax  announced of  July  agreements  1975.  Investment:  announce  allowed investors to  with  which  Kingdom, September  To  Mr.  into co-production  countries  France,  United  entered  Ltd.  agreed  a i d the  to  this  a  "I have a l s o approached the chains to increase t h e i r investment i n Canadian films. They have c o n s e n t e d t o i n v e s t a t l e a s t $1.7 m i l l i o n i n C a n a d i a n f i l m s o v e r a one y e a r p e r i o d . Famous P l a y e r s w i l l p r o v i d e $1.2 m i l l i o n a n d O d e o n $500,000.00."23  news  release,  negotiations and an  Odeon investment  exhibition  films:  a  and  -  61  -  COMPETITION POLICY Canada's c o m p e t i t i o n p o l i c y i s p r e s e n t l y  embodied  24 m  the  Combines I n v e s t i g a t i o n A c t ,  an A c t  to provide f o r  "the  25 i n v e s t i g a t i o n o f c o m b i n e s , m o n o p o l i e s , t r u s t s and m e r g e r s " . The p u r p o s e o f t h e C o m b i n e s I n v e s t i g a t i o n A c t i s t o : " A s s i s t i n maintaining e f f e c t i v e competit i o n as a p r i m e s t i m u l u s t o t h e a c h i e v e m e n t o f maximum p r o d u c t i o n , d i s t r i b u t i o n and employment i n the mixed s y s t e m o f p u b l i c and p r i v a t e e n t e r p r i s e . To t h i s e n d , the l e g i s l a t i o n seeks to e l i m i n a t e c e r t a i n p r a c t i c e s and r e s t r a i n t o f t r a d e , and t o overcome t h e bad e f f e c t s o f concentration, t h a t tend t o p r e v e n t the economic r e s o u r c e s o f Canada from b e i n g used most e f f e c t i v e l y to the advantage of a l l . " 2 6 On  O c t o b e r 17,  underwent e x t e n s i v e C-2,  an A c t  and  t o amend t h e  t h i r d r e a d i n g i n the  1975,  the  Combines I n v e s t i g a t i o n  e x t r e m e l y i m p o r t a n t c h a n g e s when Combines I n v e s t i g a t i o n  House o f Commons.  Bill  passed  T h e s e amendments,  l a s t o f w h i c h w e r e p r o c l a i m e d i n f o r c e J u l y 1, h a v e a p r o f o u n d e f f e c t on  Act  Act  1976,  the  could  the motion p i c t u r e i n d u s t r y  in  Canada. A.  The  Combines I n v e s t i g a t i o n A c t The  gation  A c t , as  Act  (against  all  services  as  o f J u l y 1,  f i r s t s i g n i f i c a n t change i n the amended, i s t o e x t e n d t h e c o m b i n e s , m e r g e r s and and  trade i n a r t i c l e s or  Combines I n v e s t i -  prohibitions of  monopolies) t o apply  service industries.  they were, f o r the most p a r t ,  1976  P r i o r to the  to  amendments,  r e s t r i c t e d to production  commodities.  the  and  - 62 Section an  article  any  2 of the Act defines  and s e r v i c e ;  description  while  whether  " p r o d u c t " as  "service"  industrial,  means  trade,  including  "a s e r v i c e  professional  of  or  27 otherwise." In rental  1963, an i n v e s t i g a t i o n  of Motion  Picture  Film  into  the d i s t r i b u t i o n and  was s t a r t e d  under  t h e Combines  28 Investigation independent  Act.  The i n q u i r y  theatre  o p e r a t o r s who h a d b e e n u n a b l e  good  first  run films  that  since  Famous P l a y e r s  films,  "second  of  a r t films  is  and Odeon h a d c o n t r o l  run showings  a n d l e s s e r known f o r e i g n  to  obtain  The c o m p l a i n a n t s  have been r e l e g a t e d  o r subsequent  This the  f o rexhibition.  the independents  of  a r o s e o u t o f c o m p l a i n t s by  over  alleged  a l l such  to the exhibition  or to the e x h i b i t i o n 29 films".  investigation d i d not warrant proceedings i n  o p i n i o n o f t h e A t t o r n e y - G e n e r a l o f Canada because: "The e x h i b i t i o n o f m o t i o n p i c t u r e f i l m i s a s e r v i c e and beyond t h e scope o f t h e Combines I n v e s t i g a t i o n A c t which allows combines t o e x i s t i n ' s e r v i c e industries'."3° The s e c o n d m a j o r c h a n g e a s f a r a s t h e f i l m industry concerned "32.  i s contained i n Section (1)  32(1) which  now  provides:  E v e r y o n e who c o n s p i r e s , combines, agrees o r arranges w i t h another person (a)  t o l i m i t unduly the f a c i l i t i e s for transporting, producing, manufacturing, supplying, s t o r i n g o r d e a l i n g i n any product,  -  63 -  (b)  t o prevent, l i m i t or lessen, unduly the manufacture o r production o f a product, o r t o enhance unreasonably t h e price thereof,  (c)  t o prevent, o r lessen, unduly, competition i n the production, manufacture, purchase, barter, sale, storage, rental, transportation o r supply o f a product, or i n the p r i c e o f i n s u r a n c e upon p e r s o n s o r property, or  (d)  t o otherwise r e s t r a i n or i n jure competition unduly,  i s g u i l t y o f an i n d i c t a b l e o f f e n c e and i s l i a b l e t o i m p r i s o n m e n t f o r f i v e y e a r s o r a f i n e o f one m i l l i o n d o l l a r s , o r both."31 Under  t h e o l dAct,  the penalty  provided  f o r"impris-  32 onment f o rtwo y e a r s " .  B u t , more i m p o r t a n t l y ,  32(1.1) has been added which p r o v i d e s that  a conspiracy  (1),  i t will  that i n establishing  o r an agreement i s i n v i o l a t i o n  n o t be n e c e s s a r y  t o prove  into  or virtually,  competition  Subsection  t o " e l i m i n a t e , com33  t h e market"  i f carried  effect. Over t h e y e a r s ,  Court  m  of  that the conspiracy,  agreement o r arrangement would be l i k e l y  pletely  Subsection  o f Canada i n L  some C o u r t s ,  v . Howard S m i t h  most n o t a b l y Paper M i l l s  S.C.R. 4 0 3 , ( 1 9 5 7 ) ,  8 D.L.R.  opinion  an agreement becomes  that before  completely  or virtually  t h e Supreme Ltd.  (1957)  (2nd) 449 h a v e b e e n o f t h e "undue", i t must  eliminate a l l competition.  Cartwright, J . ,  -  with  whom L o c k ,  cases,  J . concurred,  concluded  that  an  64  -  a f t e r reviewing  the  relevant  agreement becomes u n l a w f u l  only:  "When t h e l e s s e n i n g a g r e e d u p o n r e a c h e s the p o i n t a t which the p a r t i c i p a n t s i n the a g r e e m e n t become f r e e t o c a r r y on... v i r t u a l l y u n a f f e c t e d by t h e i n f l u e n c e o f competition."34 While has  been added  not  be  other to  Courts  insure  have d i s a g r e e d ,  that  such  Subsection  32(1.1)  a demanding i n t e r p r e t a t i o n  followed. Section  3 3 of  the  new  Act  remains e x a c t l y  as  i t  was,  namely: " E v e r y p e r s o n who i s a p a r t y o r p r i v y t o or knowingly a s s i s t s i n , or i n the format i o n of, a merger or monopoly i s g u i l t y o f an i n d i c t a b l e o f f e n c e and i s l i a b l e t o i m p r i s o n m e n t f o r two y e a r s . " 3 5 Sections  32  Under S e c t i o n  7(1),  of  18  of  or  i s a b o u t t o be  who  are  Director old  f o r an  matters Two  of  selling"  fall  within Part  s i x Canadian  opinion  t h a t an  the  offence  under Part  has  the  by  been added the  over to  V may  the the  deal  31.2(1)(a)  provides  t h a t where a person  over  This  age Act  provisions  have d i r e c t a p p l i c a t i o n i n the  the  film  the  and  the  amends  the  Canadian  21. sets  out  Practices and  age  committed  to  t o be of  Act.  been  apply  R e s t r i c t i v e Trade  r e f u s a l to  of  has  s i x i n d i v i d u a l s having  i n Canada and  IV.1  V  residents  i n q u i r y i n t o such matter.  reviewable these,  33  committed  resident Part  any  the  requirement of  citizens,  and  the  Commission. "tied  industry.  is substantially  Section  -  65 -  a f f e c t e d i n h i s business o r i s p r e c l u d e d business  from c a r r y i n g on i n  due t o h i s i n a b i l i t y t o o b t a i n adequate s u p p l i e s o f  a product  anywhere i n a market on u s u a l trade terms, the Com-  m i s s i o n may order the s u p p l i e r t o accept t h a t person  as a  customer. Section 31.4(1)  i n t r o d u c e s i n t o the A c t f o r the f i r s t  time the term " t i e d s e l l i n g " and d e f i n e s i t t o mean, alia,  any p r a c t i c e whereby a s u p p l i e r o f a product,  dition  o f s u p p l y i n g the product  b l o c k booking. any  as a con-  t o a customer, r e q u i r e s t h a t  customer t o a c q u i r e some other product T h i s , o f course,  inter  from the s u p p l i e r .  d e s c r i b e s the f i l m i n d u s t r y ' s p r a c t i c e o f Again  the Commission i s empowered t o p r o h i b i t  such s u p p l i e r s from c o n t i n u i n g t o engage i n t i e d  selling  arrangements. FOREIGN OWNERSHIP In the l a s t three y e a r s , the f e d e r a l government has enacted  two p i e c e s o f l e g i s l a t i o n  designed  t o d e a l w i t h the  problem o f f o r e i g n ownership such as e x i s t s i n the d i s t r i b u t i o n and e x h i b i t i o n arms o f the f i l m i n d u s t r y i n Canada. 36  A.  The F o r e i g n Investment Review A c t The F o r e i g n Investment Review A c t r e c e i v e d  Royal  Ascent  on December 1 2 , 1 9 7 3 and came i n t o f o r c e on A p r i l 9,  1974.  In p a s s i n g t h i s Act, Parliament was r e c o g n i z i n g the  e x t e n t to which Canadian i n d u s t r y was under f o r e i g n c o n t r o l  -  and  the e f f e c t  foreign  to maintain e f f e c t i v e  66  -  c o n t r o l has control  on  of their  the a b i l i t y economic  of  Canadians  environment.  " P a r l i a m e n t ' s aim, t h e n , i n a d o p t i n g t h i s l e g i s l a t i o n was t o r e q u i r e t h e g o v e r n m e n t t o review f o r e i g n investment i n Canada.and t o p r e v e n t s u c h i n v e s t m e n t when i t f a i l s to o f f e r s i g n i f i c a n t b e n e f i t t o Canada."37 The is  purpose  to control  may  be  the A c t as s e t out  the e x t e n t t o which  a c q u i r e d by  businesses  of  may  be  persons  i n Section  "Canadian  business  other than Canadians,  established  i n Canada by  and  persons  2(1) enterprises new  other  than  3 8 Canadians". B.  The  Canada B u s i n e s s C o r p o r a t i o n s A c t On  and  i s now  March  Royal  Ascent  t h e C a n a d a B u s i n e s s C o r p o r a t i o n s A c t , S.C.  1974-  75-76, C h a p t e r  24,  33.  1975,  The  Bill  C-29  received  A c t became e f f e c t i v e  on  December  15,  1975. U n d e r t h e new have a m a j o r i t y tors  (Section  as  an  in  Canada o r  who year  of resident  100(3)).  individual  has  Act, a l l corporations are required  "a  who  Canadian  resident  t h e t i m e when he  citizenship".  holding  ducted  at board meetings are r e s i d e n t  their  citizen  ordinarily  of  resident  immigrant one  to apply f o r  109(3) f u r t h e r  provides  b u s i n e s s may  unless a majority  direc-  Canadian  i n Canada f o r more t h a n  c o m p a n i e s , no  Canadians.  board  except a landed  became e l i g i b l e  Section  for certain  on  2 defines a resident  landed immigrant,  except  present  Section  i s a Canadian  been o r d i n a r i l y  after  Canadians  to  of  the  be  that con-  directors  QUOTAS As  an i n c e n t i v e d e s i g n e d t o i n c r e a s e  support o f the Canadian  feature  film  private  industry,  the  sector  Secretary  39 of  State 40  Odeon  reached . which  Canadian chains  an a g r e e m e n t w i t h Famous .  guaranteed  feature  films.  had v o l u n t a r i l y  Canadian  feature  films  screen time i n t h e i r  "They w i l l  submit  and  theatres f o r  Mr. F a u l k n e r announced t h a t agreed will  "to a quota  be g u a r a n t e e d  weeks o f s c r e e n t i m e p e r t h e a t r e 41 and Odeon o u t l e t s i n Canada". The CFDC was  Players  system  by  not less  t h e two which  than  p e r y e a r i n Famous  four  Players  assigned t o monitor the situation.  quarterly reports  p u b l i c s o t h a t we w i l l ..42 met."  k n o w how  t o me w h i c h w i l l  effectively  the quota  b e made i s being  • 4 .  Mr.  F a u l k n e r was g r a t i f i e d  Odeon had s e i z e d  the i n i t i a t i v e 43  this  increased  quota  plan".  " t h a t Famous  and responded  Players  positively  and to  -  68 -  FOOTNOTES CHAPTER I V  Canadian F i l m Development Corporation C. 7 8 , S. 1 0 . 1  2  Ibid.  3  Ibid.  4  Ibid.,  S. 1 1 .  C.C.H. C a n a d i a n G o v e r n m e n t a t p a r a g r a p h 45,057. 5  Reports  6  Ibid.  7  Ibid.  A c t 1966-67,  Programs and S e r v i c e s  8 Council  f r o m p a g e 14 o f a b r o c h u r e p u b l i s h e d on J u l y 1975. Ibid.  9  10  ., Ibid.  1  Income  1  1  by t h e Canada  2  -r-i  '  T a x A c t S.C. 1 9 7 0 - 7 1 - 7 2 ,  c . 63 a s a m e n d e d .  J  Ibid. 13 see 1  1973,  . also Appendix I I I .  "Getting  4  i n t o the Movies",  p . 5. 15 , I b •i , d. T  p . r 6.  Ibid. 17 ,  . see also Appendix IV  Tax B r a c k e t August 10,  18  Secretary  1975  o f S t a t e News R e l e a s e  dated August  5,  dated August  5,  Ibid. 20  Income Tax A c t , op.  . c i t .  21 Drabmsky,  o p . c i t . , p. 134.  22 Ibid. 23 Secretary  1975 24  Combines  o f S t a t e News R e l e a s e . Investigation  A c t R.S., c . 314 a s amended  25 Ibid. 26 Canada, Consumer and C o r p o r a t e A f f a i r s , P r o p o s a l s f o r a New C o m p e t i t i o n P o l i c y f o r C a n a d a : F i r s t Stage, I n f o r m a t i o n C a n a d a C a t . No. RG52-4/1973 ( O t t a w a : Queen's P r i n t e r ) , p . 1. 27 Combines  . . Investigation  A c t R.S., c . 314 a s amended  28 Cox, 29 30  "Rocca's B i g F i g h t " ,  op. c i t . , p. 22.  . Ibid. T  . . , Ibid.,  p . 23 .  31 Combines I n v e s t i g a t i o n Ibid.,  3 2  33  Section 32(1).  R- v . H o w a r d S m i t h  403. 34  T  . • , Ibid.  A c t R.S., c . 314 a s amended,  Paper  Mills  Ltd.  (1957)  S.C.R.  J  J  Combines  Investigation  A c t R.S.,  c.  314  as  amended.  36 Foreign  I n v e s t m e n t R e v i e w A c t S.C.  1973-74  c.  46.  37 from page 2 o f a b r o c h u r e p u b l i s h e d by I n v e s t m e n t Review Agency, O t t a w a , A p r i l 1974.  the  Foreign  38 Foreign  I n v e s t m e n t R e v i e w A c t S.C.  1973-74  c.  46.  39 see  Appendix V  see  Appendix VI  f o r a copy o f t h i s  Agreement.  40 f o r a copy o f t h i s  Agreement.  41 Secretary 42  .,. Ibid. Ibid.  of State  News R e l e a s e  d a t e d A u g u s t 5,  1975  CHAPTER THE  V  I M P A C T OF THE F E D E R A L GOVERNMENT ON THE F I L M  This  Chapter measures  INDUSTRY  the impact of the federal  government on t h e f i l m i n d u s t r y and, more p a r t i c u l a r l y , the  s t r u c t u r e and performance  change has been  i n the production  b e e n made i n t h e d i s t r i b u t i o n The  overall  effect,  second purpose actions  of this  i s to analyze  A.  well. The  the government's this  i sso.  a t t h e end o f the Chapter.  PRODUCTION  t h e v a r i o u s measures  has been  taken by t h e f e d e r a l of feature films,  govern-  t h e most  t h e c r e a t i o n o f t h e CFDC.  Canadian F i l m Development By  having  s e c t o r s as  I V a n d e x p l a i n why  ment t o i n f l u e n c e t h e p r o d u c t i o n significant  noteworthy  s e c t o r , some i n r o a d s  and e x h i b i t i o n  Chapter  A s h o r t summary i s p r o v i d e d  Of  The m o s t  however, has n o t been s i g n i f i c a n t .  as s e t o u t i n Chapter  THE I M P A C T ON  therein.  on  Corporation  the end o f the Corporation's  -  71 -  1974-75 f i s c a l  year,  -  it  72 -  had a s s i s t e d i n the production  total  budgets o f these  which  $17,144,656.00 was i n v e s t e d b y t h e C F D C . Table  produced with 1968  through  entry. films only in  V-I presents  amounted t o  was j u s t sporadic there  the period  attempts  Prior  f o rthe years  o f Canadian  feature  t o 1968, there  t o produce Canadian  were v e r y  of films  1968 t o 1970 as one  period, the production  g e t t i n g u n d e r way.  The  1  the yearly production  1975, combining this  films.  $44,336,482.00 o f  the assistance of the Corporation,  During  fact,  films  o f 168 f e a t u r e  feature  few f i l m makers even  were  f i l m s and,  "capable  of  2 producing,  directing  and w r i t i n g  features".  TABLE V - l Yearly Production o f Films Produced w i t h t h e A s s i s t a n c e o f t h e CFDC b e t w e e n A p r i l 1, 1 9 6 8 a n d M a r c h 3 1 , 1 9 7 5 (French and E n g l i s h ) *  Year 19 6 8 1970 1971 1972 1973 1974  English 70 71 72 73 74 75  7 14 7 18 10 12  French  Total  11 13 12 13 9 14  18 27 19 31 19 26 140**  *SOURCE: ** NOTE  C o m p i l e d f r o m t h e CFDC A n n u a l 1972-73; 1973-74; 1974-75.  Reports:  The d i s c r e p a n c y r e s u l t s f r o m a c h a n g e i n the Corporation's r e p o r t i n g methods. (The f i g u r e s - f o r t h e p e r i o d 1 9 6 8 - 7 1 a r e estimated.)  -  According films  and  to the Corporation's  have p r o v i d e d  producers  "70 8 a s s i g n m e n t s  and production  employment  73 -  managers,  s t a t i s t i c s , t h e 168  f o rCanadian  directors,  8,611 r o l e s f o r a c t o r s  f o r 2,45 8 t e c h n i c i a n s i n t h e C a n a d i a n  film  3 industry."  Moreover,  $5,3000,000.00 $2,700,000.00.  and equipment and r e n t a l  quality  average of  1 9 7 2 , a t t e m p t s h a v e a l s o b e e n made  of the product.  cost of a feature  the Corporation  pares with The  of less  remaining  was  In with  dustry's  however,  produced  feature  main  Category  B:  film  $300,000.00 There  5  with  cost of the Corporation's  6  budget  of the film  These  $200,000.00:  f i g u r e s compare  f o r 1975.  C a t e g o r y A:  the  to the i n -  Table V - I I breaks  down  consumption  into  up t o $ 3 0 0 , 0 0 0 . 0 0 ;  t o $600,000.00; were  produced  i n the English-speaking  output f o r theatrical  categories:  $600,000.00.  the  •'  com-  f o r 1974.  produced  The a v e r a g e  and t h e l o w e s t , 7  production  the  the assistance  films  i n 1974 w i t h  the highest  $59 4 , 1 7 9 . 0 0 .  t o improve  $310,000.00, w h i c h  include five  $477,000.00.  19 7 5 ,  total  total  three  over  produced with  the assistance of the Corporation  a v e r a g e was  some  notwithstanding,  f o r 1973 and $374,000.00  s e c t o r was $1,200,00.00  the  film  t h a n $100,000.00.  14 f i l m s  assistance  Inflation  i n 1972 was a r o u n d  $335,000.00  1974 f i g u r e s ,  budgets  companies,  than  4  Since the  l a b o r a t o r i e s have e a r n e d more  and Category  14 f e a t u r e s p r o d u c e d  C:  i n Category  A  TABLE V - I I  Feature  F i l m P r o d u c t i o n i n Canada f o r 1975* Grouped a c c o r d i n g t o Cost  CATEGORY  NUMBER OF F I L M S PRODUCED WITH CFDC ASSISTANCE  TOTAL  AVERAGE  COST  WITHOUT CFDC ASSISTANCE  A:  Up t o $300,000.0.0  9  5  14  $  123,000.00  B:  $300,000.00  8  2  10  $  402,000.00  C:  Over $600,000.00  2  2  4  - $600,000.00  *SOURCE:  Compiled  from  data  obtained  $1,150,000.00  from Cinema Canada V o l . 26.  -  at  an average  made a t a n a v e r a g e  Category  C,  the average  least  trend  values  box o f f i c e .  B,  cost of the four features  the philosophy  t o make a f i l m w i t h  which w i l l  attract  When a f i l m h a s  that  and i n  produced  the star  this  k i n d of appeal  It  i s v i r t u a l l y impossible  to recoup  expensive  erage,  film  a f i l m must  box o f f i c e  solely  before  i t shows  As o f O c t o b e r Kravitz"  United be  times  31, 1975,  Complete box o f f i c e  to make.  "Black box o f f i c e $700,000.00  an i n d u s t r y avcost  at  gross  of  Duddy  o f $1,800,000.00.  nearly  $2.5 m i l l i o n  recoupment i s  i n the  expected  "Kravitz"  cost  1 0  Christmas"  by O c t o b e r to make.  " i t can  i n even the  i t sp r o d u c t i o n  i n t h e n e i g h b o r h o o d o f $4.5 m i l l i o n .  $910,000.00  to  States.  "The A p p r e n t i c e s h i p  31, 1975, i t had g r o s s e d  States.  As  and  a profit.  had a Canadian box o f f i c e  A s o f May  investment 9  i n Canada."  r e t u r n 2.5  names g  t h e mass a u d i e n c e "  and even i n t h e U n i t e d  to  were  " i t takes  s o l d i n f o r e i g n markets  the  there  each  be  least  0  c o s t o f $402,000.00  reflects  $1,000,000.00  production the  In Category  $1,150,000.00. This  at  -  c o s t o f $123,000.00.  10 f i l m s  was  75  had r e t u r n e d  31, 1975  $1,200,000.00  and had o r i g i n a l l y  at the  cost  1 1  '  "Black Kravitz" ds  Christmas"  and  "The A p p r e n t i c e s h i p  a r e Canada's t o p g r o s s i n g  feature  a t a b u l a t i o n o f the Canadian box o f f i c e  of  Duddy  films.  Table  V-III  grosses  of the top  - 76 -  TABLE V - I I I Canadian Box O f f i c e Grosses of the Top Feature F i l m s Produced i n E n g l i s h Canada as o f October 31, 1975* Film  (Title)  "  Box O f f i c e Gross  **The A p p r e n t i c e s h i p o f Duddy K r a v i t z  $1,800,000. 00  **Black Christmas  $1,200,000. 00  **Paperback Hero  $740,000. 00  **The Pyx  $625,000. 00  **Face O f f  $600,000. 00  **The Neptune F a c t o r  $450,000. 00  The Rowdy Man  $364,000. 00  **Wedding i n White  $325,000. 00  **Going Down the Road  $250,000. 00  *SOURCE:  Motion P i c t u r e s and the A r t s i n Canada by Garth H. Drabinsky  **Denotes f i l m s i n which the CFDC has p a r t i c i p a t e d .  -  feature  films  October  31,  produced  77  -  i n English-speaking  as o f  1975.  It  i s noteworthy  progressive  that since  rise  i n the investment  language market.  I n 1972-73, o n l y  English  Canada  films  whereas  the French  1972  there  returns 8% w a s  films  has been  a  from the E n g l i s h recovered  from  brought i n the  remain-  12 ing  92%.  During  to  48% and  or  $25,290.00  i n 1974-75  Christmas" Kravitz"  (distributed i n 1973)  feature  year  and  three  "The N e p t u n e  t o 29% "Black  o f Duddy  Factor"  to the growth o f the  revenues  1 4  the Corporation  had  recovered  t h a t i t has Again,  In that year,  I n 1973-74:  rose  films,  Apprenticeship  since i t sinception.  balance  compared  But only  $17,144,656.00 15  i s significant.  The  3  Corporation".  31, 1975,  $339,745.00.  $864,011.00.  1  "The  contributed  of the total  films  1972-73  recovered  films.  i n 1974),  the i n d u s t r y and t h e  $2,707,458.00  to  t o 71% o r $613,720.00,  from French  As o f M a r c h  in  the E n g l i s h market returns  (released i n 1975),  (released "in  1973-74,  the  the  invested  fiscal  Corporation  $786,028.00;  i n 1974-75:  has r e s u l t e d from investments  prior  t h e y e a r 1972. "Since i t sbeginning, the C o r p o r a t i o n has invested a t o t a l of $17,144,656.00...this amount i n c l u d e s $14,437,198.00 from P a r l i a m e n t a r y a p p r o p r i a t i o n s , $2,707,459.00, or 18.75% r e t u r n from i t s investments."16 As  investments  Table  V-IV i n d i c a t e s ,  increased  t h e amounts  considerably during  returned  the l a s t  two  from years.  -  78  TABLE  CFDC  RETURN  ON  -  V-IV  INVESTMENTS*  (Comparative Table) 1968-69 t o 1972-73 1973-74 t o 1974-75 T o t a l amount i n v e s t e d i n the i n d u s t r y (by t h e Corporation) T O T A L 1968-69 t o 1972-73 F i r s t 5 years A V E R A G E per year T O T 19731974Last  A L 74 t o 75 2 years  A V E R A G E per year  Amounts p r o vided through Parliamentary appropriation  Investment returns (amounts re-invested)  $10,464,490  $9,407,070  $1,057,420 (11.24%)  $  2,092,898  $1,881,414  $  $  6,680,166  $5 , 0 3 0 , 1 2 7  $1,650,039 (32.80%)  $  3,340,083  $2,515,064  $  *SOURCE:  Annual Report o f the Canadian F i l m Development C o r p o r a t i o n : 1974-75  211,494  825,020  -  The  average rose  f r o m 11.24%  Corporation's  operation  In  period,  the l a t t e r  representing 1968 of  returns  $211,494.00.  f o r the f i r s t  t o 32.80%  investment  were  film  industry  tion  by p r i v a t e  been  disappointing.  m e n t was  increased  were  proportion 7%,  to  1975.  $1,605,038.00 whereas  or a yearly  h o w e v e r , was  from average  " t o promote  the private sector.  investors  the f i s c a l  by  1973  i n Canada" w h i c h would have  i n Canadian films,  year  approximately  investors'  returns  of the  purpose i n e s t a b l i s h i n g the Canadian  i n v e s t m e n t by  In  years  f o r the period  $1,057,420.00  Development Corporation,  encouraging  five  1 7  Parliament's  feature  -  a y e a r l y average o f $825,020.00,  t o 1973,  Film  79  The  including the f i l m due  include  participa-  however,  1971-72, p r i v a t e s e c t o r  1 8 % , a n d i n 19 7 2 - 7 3  mainly  to  "other  industry  the  has  invest-  Canadian itself  t o t h e f a c t t h a t Canadian banks 18  invested private of the  i n feature money o n l y  films during accounted  f o r 15%.  t h e f i l m s i n 1973-74 amounted Corporation  Percentage  invested  The  the f i l m  e x h i b i t o r s ) was  B u t i n 1973-74, combined budgets  t o $7,095,801.00  $2,644,000.00  o f i n v e s t m e n t by  distributors,  the year".  of which  o r 30% o f t h e  total.  industry (laboratories,  32%, w h i l e  foreign  producers  20 invested  16%. In  1974-75, t h e p i c t u r e becomes even b l e a k e r .  c o m b i n e d b u d g e t s o f t h e 12  feature  f i l m s i n the  The  English-speaking  -  sector  amounted  invested  to  accounted  12%  of  this  for  sum  33%  raised outside  of  tax  Canada's  of  the  total. only  the  . Part  Corporation  The  film  from  .  problem  in this  l a w s on  feature  film  indus-  $410,000.00  industry  the  regard  or  private  .  .  i s the  influence  investment.  Taxation Private  sector  i t s peak d u r i n g  period, their  there  b e e n no  had  Revenue  as  investors  their  period  investment against their  ically  the  investment i n the 1971  o v e r a l l tax  the  disallowed  June  other  burden.  this  a bona f i d e tax 19 7 4 ,  portion  this  the  point  in  of  time, National  permitted  Department  leveraged  this  thereby  Department of  p r a c t i c e w o u l d be  the  5,  leveraged  the  i t ,w r i t i n g o f f  was  During  To  until  industry  1973.  income and  position that  i n v e s t m e n t was On  the  pronouncement from  to whether took  their  film  through  i n v e s t o r s were w r i t i n g o f f  lessening  the  the  this,  $1,180,000.00 w h i l e  was  sources.  at  Of  of  21  B.  -  $3,324,960.00.  $1,086,103.00 o r  try  80  and specif-  portion  of  deduction.  in Interpretation Bulletin  IT-164,  Department took a stand: "The Department takes the p o s i t i o n t h a t the c a p i t a l c o s t of the f i l m to the i n v e s t o r f o r t h e p u r p o s e o f p a r a g r a p h 2 0 ( 1 ) (a) i s o n l y t h a t c o s t w h i c h has been l a i d out o r i n f a c t p u t a t r i s k by t h e i n v e s t o r , e i t h e r through investment of cash or borrowed funds u n c o n d i t i o n a l l y repayable whatever the fortunes of the f i l m i n q u e s t i o n may be."22 This  a n n o u n c e m e n t was  followed  by  the  Tax  Review  Board's  decision  (1975) 1972, The  29  in Currie  D.T.C. 5 7 .  purchased  This  applying  terms  of  which  the  the  right  to  claimed  Any  1979. a  a deduction  of  of  producing  On decision  appeal  was  deduction. bona  fide  with  respect  to  successfully  to  the  and  an  245  Tax  the  investment  of  that the  that  the  purpose  the  B,  therefore, year.  that  the  purpose  transaction  the  was  Minister's  entitled  claiming The  connected with  videotapes,  and  earning  income  out  t r a n s a c t i o n was  serious  businessman would have contemplated  this  basis  not  t a x p a y e r was that  Schedule  Act.  allowance.  the  by  taxation  t r a n s a c t i o n was of  paid  f o r the  the  by  a l l prints  12,  1972  the  the  taxpayer,  the  t a x p a y e r was  cost  i n 1972  of  world  Class  paid  same d a y ,  t o be  Review Board,  the  f o r the  capital  that  the  the  f o r the  income and  the  of  and  t o be  distributor  d e d u c t i o n on as  Board held  purchase  on  in  $10,000.00  taxpayer under  the  being  100%  Section  upheld, The  of  acquired  sham p r o h i b i t e d by  the  throughout  $10,000.00  not  a  to  for  b a l a n c e was  to give  asset,  rate  v i d e o t a p e was or  the  Revenue  t a x p a y e r who,  r e m a i n i n g b l a n c e was  Minister disallowed  gaining  a  agreement signed  The  at  National  a motion picture  a m o u n t due  distribute  videotape.  depreciable  The  the  taxpayer purported  N o v e m b e r 30, was  of  involved  $2,500.00 and  a distribution  exclusive of  half  M i n i s t e r of  case  a videotape  d o w n p a y m e n t was  by  v.  a  not  i n any  possibility so  a  of  argued business his  remote t h a t  such  the  deduction  Minister  not  to  an  no  investment  unless  i t was  ficially  t o use  reduce h i s The  Currie  been  e f f e c t o f the Department's  i n part,  investment i n the industry. contributed  I n 1973-74,  i t s l i p p e d even At  private  IT-164  and  the Board's  to curtail private I n 1972-73,  pronounce-  first  sector  this  private  further to  blush,  dropped  decision  sector investors  some 20% o f t h e t o t a l b u d g e t s p r o d u c e d b y  CFDC t h a t y e a r . 75,  arti-  income.  combined  has  -  i t as a t a x s h e l t e r t o u n d u l y o r  ment i n I n t e r p r e t a t i o n B u l l e t i n in  82  t o 15%  and  the i n  1974-  12%.  t h i s would  seem t o i n d i c a t e  investment i n Canadian  feature  that  films i s  relative  only  The  l i b e r a l t h e w r i t e - o f f , t h e more p r i v a t e i n v e s t m e n t  more  there  will  however,  t o t h e amount o f t h e t a x d e d u c t i o n  be.  Another consideration  i s that  investing  the r e a l  i n movies  that with  isolated  not  returning  a profit.  foreign  Regulations,  productions,  allowance, while Canadian the  added  continues  reason f o r the p r i v a t e  exceptions, Under  a l lf i l m s ,  t h e new  f i l m s are e n t i t l e d tax benefit  .of a s u c c e s s f u l  weighed,  sector revenue  Canadian films are  Class  are e n t i t l e d  under  to flow  t h a t m u s t be  i s t o make money f r o m t h e f i l m  and  Income Tax  permitted:  simply  18 o f S c h e d u l e B o f  whether  Canadian  t o t h e 60%  Income Tax  or  capital  cost  Regulations,  t o a 100% w r i t e - o f f .  Yet  of i n v e s t i n g i n Canadian f i l m s ,  to foreign productions  investment are considered  the  (where  the  despite money  chances  much b e t t e r )  such  as  "Conduct Unbecoming",  "Clansmen", "That in  and  "Won  Ton  i s more t h a n has  the  recent f a l l Another  reason  film  "certified  1104(2)(h) burden  of  the  will The as  tial Any  any  factor  market  that  allowance  with  foreign  i n Canadian  the  involved  picture  a film  immediately  consequently  area of  t o be  Canadian  restricts  new  knowing  appeal.  i t s poten-  i t s potential  of the  a  investment  with international  requiring  a  Subsection  investors  100%  profit.  capital  co-production agreements  Agreements  i t is s t i l l  too e a r l y  t o draw any  r e g a r d i n g c o - p r o d u c t i o n agreements,  indications  are  development of  that  they w i l l  a commercial  other incentive  Kingdom and  pro-  that  d e f i n e d under  i n motion  i n films by  as  requirement  conclusions  The  23  features  of foreign  Sophisticated  i s being taken  Co-production  any  Hollywood".  countries.  While  than  File",  R e g u l a t i o n s i s too onerous  film.  i s i n the  Saved  attraction  i s because  t o Canada and  advantage  Dog  Odessa  2 4  to international,  cost  C.  who  The  f o r the  tax regulations  opposed  Ton:  feature film"  o n l y p l a c e funds new  "The  Income Tax  t o p l a c e on  the high r i s k  " S t o r y o f 0",  surge."  i t i s argued,  a  -  been i n v e s t e d  ductions, be  83  to  not  early  c o n t r i b u t e more t o  feature film  industry  the i n Canada  date.  Co-production Agreement between the C a n a d a was  definitive  i n force  until  United  September 12,  1975.  Yet  by  only  December  agreed  to  4,  19 7 5 ,  84  -  Quadrant Films  f i n a n c e the  first  film  of  Toronto  under  this  had  not  agreement, 25  "Find  the  Lady", It  to  they  agreeement w i t h  the  Taking  country  Greenberg  of  Canada, has  "Echos of  a Summer", "The  "has  up  to  with  announced  1974,  Alive  has  Well  and  shot  spreading  the  the  Under the "The  and  I n v e s t m e n t by Under the  risk,  the  in Paris" and  a near m i l l i o n ,  Brel  official  of  is co-  became i n v o l v e d  four country 27  (Canada-  co-production. Famous P l a y e r s and  Odeon  the  agreement reached  State's office  and  the  5,  Lives  co-productions.  terms o f  announced August  agreement  who  "Jacques  i n 1975  Point"  ranging  Heroux Bros,  under the  a  companies  "Breaking  Girl  is a  Harold  official  Little  $1,000,000.00  agreement w i t h France  of  of  Neptune F a c t o r "  shot  official  producer  other p r o j e c t s w i t h budgets  Living  France-Germany-Italy)  Secretary  other  an  turning  a d d i t i o n a l market of  a company owned by  "Born f o r H e l l " ,  D.  signed  a l s o been h e a v i l y i n v o l v e d i n  Cinevideo  and  the  the  are  co-produced w i t h American  G r e e n b e r g has 2 6 Lane".  production in  the  France,  Montreal,  shooting.  Canada has  of which  f o r 1976".  Cinevideo,  In  and  five  $3,000,000.00  down t h e  not  advantage of  country  started  that Canadian producers  whether or  co-producing  and  already  is significant  co-productions  citizen.  had  1975,  two  Famous P l a y e r s  between  major e x h i b i t i o n in a  letter  to  the chains  the  -  CFDC d a t e d during  February  24, 1976 was  the program p e r i o d  invested  -  able  to confirm  f i l m s t h e sum  i t had, 1975,  o f $8 8 5 , 0 0 0 . 0 0 .  h o w e v e r , h a d made i t a p r a c t i c e p r i o r  agreement t o i n v e s t i n Canadian f i l m s a l b e i t November 1974,  George  Ltd.,  that  reported  that  from August 1 t o October 31,  i n Canadian feature  Famous P l a y e r s ,  85  Destounis,  President  t o the  nominally.  o f Famous  t h e company h a d i n v e s t e d  In  Players  "$2,000,000.00  28 in  something l i k e Prior  not  invested  have n o t . the  t o the announcement,  commence u n t i l  to  t h e CFDC h a s I M P A C T ON  the  December  DISTRIBUTION  January  1,  Odeon  report  AND  indus-  i m p o r t a n t e f f e c t o f t h e amendments t o their  taking  e f f e c t on  has been an a p p l i c a t i o n f o r an i n q u i r y  e x h i b i t i o n system i n Canada. Canadian c i t i z e n s  the Combines  Consumer  by  due  EXHIBITION  and  with  with  19 75 a n d a n y  market p r a c t i c e s o f the f o r e i g n c o n t r o l l e d  nine  agreement not  the  by  s t i l l  i n v e s t m e n t p r o g r a m was  Investigation Act since  1, 1 9 7 6  They  immediate and, f o r the Canadian f i l m  most p o t e n t i a l l y Combines  their  L t d . had  n o t y e t b e e n made p u b l i c .  The m o s t try,  film.  u n d e r t h e terms o f Odeon's  of State,  to  THE  Odeon T h e a t r e s  i n a s i n g l e Canadian feature  However  Secretary  36 C a n a d i a n f e a t u r e s " .  pursuant  The  distribution  a p p l i c a t i o n was  to Section  into  filed  7 of the Act,  I n v e s t i g a t i o n Branch o f the Department o f  and C o r p o r a t e A f f a i r s  i n O t t a w a on F e b r u a r y  4,  1976.  -  The  applicants  Pierre  Berton,  ducer,  K i r w a n Cox,  are  Quebec f i l m film  86  -  author  ("Hollywood's  director, Michel  of  Sandra  director, Alan  Peter  Gathercole, Pearson,  actor/writer,  film  film  Practices and  r e f u s a l to  cation  as  stated  that  employed the  40's  an  offence  of  the  abuse o f that  Canadian to  the  such  present",  Investigation  3 0  stated  Odeon, U n i t e d  20th Century Fox, In  C a n a d i a n m a r k e t had distribution ,films  at  an  market  and  that  the  e x h i b i t i o n of  The  appli-  applicants been  from  "at  that  and  ( d ) , and  Artists,  they  least  constitute Section  33,  10  distribution  and  application, including: Paramount P i c t u r e s ,  Warner Bros.,  extent  restricted  i n the  have  and  that  a p p l i c a t i o n , the  concluded  Canadian  agreements;  cited  practices  A v c o Embassy, and  their  and  director,  Act.  Columbia P i c t u r e s , A s t r a l Films,  they had  are  c o m p a n i e s w e r e named i n t h e  Famous P l a y e r s ,  film  exclusive  film  32(1)(c)  Sandra Gathercole exhibition  Chairperson,  market c o n t r o l .  feature  under Section  Combines  selling;  independents  believe  i n the  early  tied  with  examples of they  Budge C r a w l e y ,  pro-  Pinsent.  of  deal  King,  film  editor,  Canadian F i l m Makers  producer/  Gordon  Brault,  critic/"Saturday Night"  Robert F u l f o r d , Council  Canada"),  Walt  Universal  Disney.  applicants  stated  of  control of  foreign  that  legitimate competition f i l m s and  immense d i s a d v a n t a g e  in their  Films,  had own  placed  the  in  the  Canadian  country,  and  that  this  s i t u a t i o n was c o n t r a r y  well  as t h e i n t e r e s t s o f t h e Canadian  utor  and e x h i b i t o r . The  difficulty,  under Section many t i m e itself of  to the public film  however, i s t h a t  producer,  steps  i s uncertain.  Investigation  the application  on the road  Under S e c t i o n  and Research  to a prosecution  8 o f the Act,  i s under  an i n q u i r y  now t h a t  he i s i n r e c e i p t  pursuant  to Section  7.  inquiry  a  preliminary  the  inquiry,  manner but,  a s i t u a t i o n contrary  h e may p r e p a r e  the  inquiry  that  be c o n d u c t e d i n a t any stage o f obtained  32 o r 3 3 o f t h e  a statement o f the evidence obtained i n  Commission. evidence  to the Restrictive  The C o m m i s s i o n t h e n h e a r s on b e h a l f  o f any persons  allegations  h a v e b e e n made a n d a f t e r  opportunity  t o be heard,  Commission reports  duty t o  o f an a p p l i c a t i o n ,  the evidence  t o Sections  w h i c h must be s u b m i t t e d  receives  will  i ft h e d i r e c t o r  i s o f the opinion  Act  and  This  against  a l l parties  days o f r e c e i p t  states would In  by t h e M i n i s t e r  i t s  to the Minister  i n i t s report be b e t t e r  this  public,  case, either  unless  why i t b e l i e v e s  served  by w i t h h o l d i n g  the Minister  decides  i n whole o r i n part.  whom  have h a d an  t h e Commission prepares  a r e then submitted  Trade  argument  C o n s u m e r a n d C o r p o r a t e A f f a i r s a n d m u s t b e made p u b l i c 30  which  the Director  a statutory  initiate  Practices  distrib-  7 o f t h e A c t a s amended i s b u t t h e f i r s t o f  consuming  discloses  i n t e r e s t , as  report. of within  t h e Commission  the public  interest  publication  i fthe report  (S. 19(4)). will  b e made  -  88 -  When a n i n q u i r y h a s b e c o m e a s u b j e c t the  o f a r e p o r t by  Commission: "The M i n i s t e r n o r m a l l y r e f e r s i t t o t h e Attorney-General, with a request that i t be r e v i e w e d t o d e t e r m i n e w h a t C o u r t p r o ceedings, i f any, a r e w a r r a n t e d by t h e evidence. The M i n i s t e r a l s o c o n s i d e r s whether any o t h e r remedies ought t o be instituted." 3 1  The  d e c i s i o n a s t o how f a r t o p u r s u e  quirty,  however,  w h o may  "discontinue  opinion  the matter being  inquiry" A.  an i n i t i a l  in-  i s largely at the discretion of the director an i n q u i r y a t any stage  i f he i s o f the  i n q u i r e d i n t o does n o t j u s t i f y  further  (S. 14(1)).  Exhibition The  Corporation under  initial  by the Canadian F i l m  o n Famous P l a y e r s  the quota  couraging  report  performance  system announced August  results.  Tabled  Development  f o ri t s f i r s t  quarter  5, 197 5 o f f e r s e n -  i n t h e H o u s e o f Commons o n M a r c h  32 1976,  i t shows  that  Players  provided  184 w e e k s a n d f o u r  for  19 C a n a d i a n  totals  from August  feature  by P r o v i n c e  films.  t h a t Famous P l a y e r s  Equally being as  as e n c o u r a g i n g  shown t h r o u g h o u t  i n the larger  time  A complete breakdown o f t h e V-V.  encouraging  has selected  i s the fact that the country,  cities.  1 9 7 5 , Famous  days o f s c r e e n i n g  i s s e t out i n Table  What i s p a r t i c u l a r l y films  t o October,  i s t h e number o f  to fulfil  i t s quota.  the films are also  i n small  towns, as w e l l  3,  -  89  -  TABLE  V-V  FAMOUS P L A Y E R S PERFORMANCE UNDER THE AUGUST 1 5 , 1975 QUOTA AGREEMENT FOR THE P E R I O D AUGUST 1 , 1 9 7 5 TO O C T O B E R 3 1 , 1 9 7 5 *  Total  by  Province  No.  Theatres  No. o f  Films  No.  Weeks  No.  Days  6  4  10  33  Alberta  2  2  1  4  Saskatchewan  8  4  7  9  Manitoba  3  2  3  Ontario  39  8  77  Quebec  18  9  63  7  5  6  8  6  4  6  9  4  2  British  Nova New  Columbia  Scotia Brunswick  Newfoundland  GRAND  TOTAL  93  17  21  173  81 (11 & 4  NUMBER OF  FILMS  *SOURCE:  1q  Canadian F i l m Development Corporation R e p o r t on Famous P l a y e r s P l a y e r P e r f o r m a n c e f o r the p e r i o d from August t o October 1975 t a b l e d i n t h e H o u s e o f Commons M a r c h 3 , 1976.  weeks days)  - 90 The r e a l i t y Players to  of the situation,  and Odeon have b o t h  avoid  having  one l e g i s l a t e d  quota  i s the constitutional  under  the B r i t i s h  t h a t any b i l l s  agreed  North  to this  i s that  voluntary  them.  Any  responsibility  of the  Players  would provide  for a  and Odeon s c r e e n s  Famous  quota  legislated Provinces  America A c t and i ti s h i g h l y  so introduced  s h o w i n g o n Famous  upon  however,  likely  compulsory  for a certain 33  number o f weeks o f a l l C a n a d i a n  feature  films,  to  p u t i tm i l d l y , have been b o t h  is  Another discouraging feature of the voluntary quota t h e e a r l y i n d i c a t i o n t h a t Famous P l a y e r s i s a d h e r i n g t o  the  letter  its  own  t o meet o t h e r 34  short  This life  as  than  really  the bare  i s 3ust  o f the Canadian  In July quota  and f i n a n c i a l  o f t h e agreement and i s t a k i n g no i n i t i a t i v e  therein. the  critical  some o f w h i c h  history repeating feature  1 9 7 3, M r . F a u l k n e r  agreement w i t h  requirements  Famous P l a y e r s  film  2.  on  as s e t o u t  itself  m  industry.  h a d made a p r i o r a n d Odeon w h i c h  follows: "1.  flops...  C a n a d i a n 35mm f e a t u r e f i l m s p r o d u c e d o r dubbed i n E n g l i s h a r e g u a r a n t e e d two weeks' t h e a t r e t i m e i n M o n t r e a l , • T o r o n t o and Vancouver. The r e s p o n s i b i l i t y f o r . t h i s i s d i v i d e d b y Famous P l a y e r s (2/3 p r o p o r t i o n ) a n d Odeon (1/3 p r o p o r t i o n ) . I f the releases are successful, the films are assured a f u r t h e r d i s t r i b u t i o n i n 18 t o 20 c i t i e s across Canada s e r v e d b y t h e two c h a i n s . And a good audience response i n those w i l l get the f i l m screened widely across Canada."35  voluntary provided  - 91 -  The r e s u l t s o f t h i s agreement were such t h a t seven Canadian f e a t u r e f i l m s were p r o v i d e d 1 1 9 weeks almost e x c l u s i v e l y i n M o n t r a l , Toronto, and Vancouver and seldom o u t s i d e these l a r g e urban c e n t r e s . Under the terms o f the August 5, 1 9 7 5 announcement, the v o l u n t a r y quota c o n d i t i o n s were not b i n d i n g on Odeon Theatres  (Canada) L t d . u n t i l December 1, 1 9 7 5 and, as y e t ,  no r e p o r t by the CFDC on Odeon's performance has been made public.  ;  THE IMPACT ON FOREIGN OWNERSHIP The F o r e i g n Investment Review A c t and the Canadian Business C o r p o r a t i o n s A c t  have had a b s o l u t e l y no impact a t  a l l on the f o r e i g n ownership i s s u e i n the f e a t u r e f i l m  indus-  t r y i n Canada. The f a t a l flaw i n the F o r e i g n Investment Review A c t as f a r as the f i l m i n d u s t r y i s concerned i s t h a t i t does not apply t o Canadian companies  which a r e p r e s e n t l y f o r e i g n owned  or c o n t r o l l e d , even i f the e x t e n t o f such ownership extends to 1 0 0 % c o n t r o l o f the Canadian company.  I t only a p p l i e s to  the takeover of e x i s i t i n g Canadian b u s i n e s s e s and the e s t a b l i s h m e n t of new  ones by f o r e i g n e r s .  Under the Canada Business C o r p o r a t i o n s A c t , the r e s i d e n c y requirement o f d i r e c t o r s does not apply t o an e x i s t i n g company, u n t i l i t a p p l i e s f o r a " C e r t i f i c a t e o f Continuance".  -  Under five is,  t h e A c t , a company must years  before  from  92 -  apply  f o ra C e r t i f i c a t e w i t h i n  t h e date o f the A c t coming i n t o f o r c e ,  December  15, 1980.  The majors  s t i l l  have  that four  years. SUMMARY While  s i g n i f i c a n t inroads  number o f C a n a d i a n efforts as  feature  f i l m s produced  a r e b e i n g made t o i n c r e a s e  i s e v i d e n c e d by t h e r e t u r n s  "Black the  Christmas",  federal  feature  film  a n d "The N e p t u n e F a c t o r " ,  fact  remains, most  a healthy  investors,  return  receipts.  possibility  only  despite a  instead  to invest  to invest  of a successful  and a s t r i c t  only  a profit to the Canadian sector  i n Canadian  i n foreign  investment  i s  of the feature  features  where  considered  notwithstanding.  of the leveraged  portion  definition of a certified  t o aggravate  films, i s  on i t s investment, y e tt h e  substantial tax saving  serve  three  As a r e s u l t , t h e p r i v a t e  Non-deductibility vestment  Canada,  does n o t have  e s p e c i a l l y i f we c o n s i d e r  preferring  greater—a  as " K r a v i t z " ,  C a n a d i a n f i l m s do n o t r e t u r n  C a n a d i a n economy i s r e l u c t a n t  the  s t i l l  CFDC, due l a r g e l y t o t h e a b o v e  to boast  films,  the q u a l i t y o f the product  industry.  able  box o f f i c e  each year and  on f i l m s , such  government's e f f o r t s ,  The  their  h a v e b e e n made i n t h e  the situation.  o f an i n -  Canadian  The s i g n i n g  film  of further  -  co-production  agreements  but i t i s s t i l l The theatre of  must  serve to alleviate  to  $2  and  $3 m i l l i o n  films  Canadian  (average cost  been  long  f o r each  the  foreign  to the average  of the  screens each  300  odd  owned cost  American  y e a r and w i t h  which  o f a p p r o x i m a t e l y $500,000.00)  the d i s t r i b u t i o n / e x h i b i t i o n  launched i n t o  i twill  history  films  the i n d u s t r y ' s  take remains  i s repeating  R e p o r t i n 19 3 1 .  t o be  itself  Pursuant to a voluntary  i s being adhered  the agreement failings  of the  eign ownership In  federal  issue  the  q u o t a and  quota,  industry.  we  are returning  are s t i l l  no  The  Canadian  i n an  less  policy  closer  films  are being  how  White  apparent  said on  minimum about  the  for-  better.  shown t h r o u g h o u t C a n a d a .  changed,  to.  but  thus the bare  government's  s h o r t , more C a n a d i a n  few, v e r y few,  inquiry  possible  of the  a r e b e i n g shown t h r o u g h o u t Canada b u t  of  an  I t i s also  along the l i n e s  a legislated  being  sector,  trade practices  seen.  attempt to avoid  a  problem  compete. In  the  this  tell.  i n v e s t m e n t of $1,700,000.00 by  t h e y show on  Canadian  has  too early  -  c h a i n s i s n o m i n a l when compared  between  films  may  93  produced,  a profit  and  a number  are  Beyond  this,  nothing  has  to having a Canadian  film •  -  94  -  FOOTNOTES CHAPTER V  C a n a d ipa.n 4. F i l m Development C o r p o r a t i o n R e p o r t 1974-75)  (Annual  1  2  M a r s h a l l Delaney, "Movies: Y o u S h o u l d Know How Bad T h i s F i l m I s . A f t e r A l l , Y o u P a i d F o r I t " , S a t u r d a y N i g h t , V o l . 90, No. 4 ( S e p t e m b e r 1 9 7 5 ) , p . 84. 3 C a n a d ipa.n 4. F i l m Development C o r p o r a t i o n R e p o r t 1974-75)  (Annual  Ibid.  4  5 from the Annual Reports o f t h e Canadian Development C o r p o r a t i o n . C a n a d ipa.n 4. F i l m Development C o r p o r a t i o n R e p o r t 1973-74)  Film  (Annual  7  C a n a d ip. a n 4. F i l m Development C o r p o r a t i o n R e p o r t 1974-75)  (Annual  8 D. J o h n T u r n e r , " F i n a n c i a l T r e n d s I n T h e a t r i c a l P r o d u c t i o n 1 9 7 5 " , C i n e m a C a n a d a , T h i r d E d i t i o n , No. 2 6 , (March 1976), p . 42. 9 Ibid. 10 • . . D r a b m s k y , op. c i t . , 1  1  p. 1 4 3 .  Ibid.  12 Report 1974-75")?^? 1 3  Ibid. Ibid.  D  e  V  e  l  o  ^  e  n  t  Corporation  (Annual  -  95  -  Ibid. Ibid. Ibid. 18  Canadian F i l m Development C o r p o r a t i o n 1 9 7 2 - 7 3 ) , p . 3.  Report  19  Report  Canadian F i l m Development C o r p o r a t i o n 197 3 - 7 4 ) , p . 4.  (Annual  (Annual  Ibid. 21  Annual  a u t h o r ' s c a l c u l a t i o n f r o m d a t a o b t a i n e d f r o m 1974-75 Report of the Canadian F i l m Development Corporaion. 22  I n t e r p r e t a t i o n B u l l e t i n IT-164 p u b l i s h e d under the a u t h o r i t y of the Deputy M i n i s t e r o f N a t i o n a l Revenue f o r T a x a t i o n o n J u n e 5, 1 9 7 4 a t p . 3. 23 S t e p h e n C h e s l e y , " F i l m News: Random N o t e s " , C i n e m a C a n a d a , T h i r d E d i t i o n , No. 29, ( J u n e / J u l y 1 9 7 6 ) , p. 2  T  4  K  7.  ^  Ibid, 25  , T  6  2  h  e  S  u  n  (Vancouver),  D e c e m b e r 4,  1975,  p.  45,  c o l . 1.  m  Turner,  op.  cit.,  p.  43.  27 Ibid. 28 c o l . .1.  The  Sun  (Vancouver),  November 20,  1974,  p.  45,  29 Sandra Gathercole, Cinema Canada, T h i r d E d i t i o n , 3  0  TV,"*  Ibid.  "Combines I n v e s t i g a t i o n " , No. 2 6 , ( M a r c h 1 9 7 6 ) , p . 10.  - 96 31  Canada, Department o f Consumer and C o r p o r a t e A f f a i r s , R e p o r t o f The D i r e c t o r o f I n v e s t i g a t i o n a n d R e s e a r c h C o m b i n e s I n v e s t i g a t i o n A c t f o r t h e Y e a r E n d e d M a r c h 31, 1975, I n f o r m a t i o n C a n a d a C a t . No. (Ottawa: Queen* s P r i n t e r ) , p. 21.  RG51-1975  32 for  a copy  see  Chapter  of the report  see Appendix  VII.  33 34 Appendix  VI.  As i s i n d i c a t e d VII.  from  35  No.  9  "Canadian Filmnews", (August/September,  1973),  the information  provided  Cinema Canada, Second p.  6.  m  Edition,  CHAPTER V I F I L M INDUSTRY  INCENTIVES  T h e r e a r e many w a y s o f s u b s i d i z i n g industry  which  government. evaluate  present  some o f t h e s e  State. to the To  film  those  t o determine  feature  incentives subsidies,  policy proposals t o which  film  which,  industry,  and i f any,  given i t s  while others  submitted  i n the film  i n any d i s c u s s i o n  e n d , we m u s t b e g i n a f a c t which  who w o u l d  have been gleaned  the federal  and be i n v o l v e d  central issue  tervention, by  film  The e x t e n t  influence  this  i s t o analyze  structure.  of foreign  Canadian  Chapter  incentives  the Canadian  Some o f t h e s e study  film  have n o t y e t been implemented by the f e d e r a l  The p u r p o s e o f t h i s  would promote  a feature  design  from  are taken  a from  to the Secretary of government s h o u l d t r y industry  of film  i s , of  course,  subsidization.  by s e t t i n g o u t p r i n c i p l e s f o r i n -  i s almost a film  without  policy  - 97 -  exception  f o r Canada.  overlooked  -  P R I N C I P L E S FOR  INTERVENTION  F i l m making times  be  t o be  labelled  is  industry.  an  a work o f an  98  -  1  i s a business.  a r t which permits art-industry,  but  The  end  the  production  the  fact  product  may of  remains  somefilms  that i t  Like a l l industries,  " I t s u r v i v e s on i t s a b i l i t y t o p l e a s e t h e majority of i t s customers—a majority whose j u d g m e n t and d i s c r i m i n a t i o n a r e o f a s u b s t a n t i a l l y low o r d e r . B u t i f we wish to c a t e r to the m i n o r i t y of f i l m goers seeking products of a high a r t i s t i c order, we c a n n o t d o s o w i t h o u t s u f f e r i n g g i g a n t i c losses." 2  The policies is  first  principle  r e c o m m e n d a t i o n s be  ciples.  The  The  i n d u s t r y i s a l l too  ultimate criteria  millions  of  for  being  this  dollars  b o r n e by  that the  projects  but, f o r the  for  the  insure  the  that competition  Canada.  T h e r e m u s t be  pictures  which  are  capable  then  the of  there  provide Canadian  federal  r e t u r n on loosing  i s no  not  a  industry prin-  profit.  literally  justification  This  i s not  aid specific  commercially  to  say,  limited sought  feasible  basis  films.  government must take into  c o m p e t i t i o n and and  film  proposing  a w h o l e , w h a t m u s t be  i s injected  produced  in  sound b u s i n e s s  p u b l i c purse.  i n d u s t r y as  flow of  Secondly,  being  government s h o u l d  a structure that w i l l a continued  basedon  a n n u a l l y and  however,  is  considered  f o r f u r t h e r p u b l i c i n t e r v e n t i o n i n the  t h a t any  film  t o be  i n the  the  film  variety means by  steps  to  industry in  both  in  which  the they  reach  -  the p u b l i c .  "The  -  99  amount of money made a v a i l a b l e by the s t a t e  f o r loans to f i l m makers and  the terms on which i t i s l e n t  i n f l u e n c e the number and v a r i e t y o f f i l m s from which the p u b l i c can  choose."  3  FOREIGN SUBSIDIES V i r t u a l l y every except  f i l m producing  country i n the  the United S t a t e s , p r o v i d e s a i d to i t s f i l m i n d u s t r y  by s u b s i d i z i n g p r o d u c t i o n and e s t a b l i s h i n g A.  world,  The  quotas.  United Kingdom Of a l l the subsidy p l a n s , the b e s t known and most 4  e f f e c t i v e system i s the Eady P l a n  o f Great B r i t a i n .  Originally,  a v o l u n t a r y agreement under which a s m a l l amount known as a l e v y was c o l l e c t e d by e x h i b i t o r s on each seat s o l d i n t h e i r cinemas, and subsequently turned over to producers o f B r i t i s h f i l m s as a s u b s i d y , t h i s program was  made mandatory by  the  5 Cinematograph F i l m Act  of 1957.  The A c t i s a d m i n i s t e r e d  by  the Board of Trade and has been implemented by v a r i o u s s t a t utes p r o v i d i n g f o r the c o l l e c t i o n o f a s t a t u t o r y l e v y from e x h i b i t o r s and f o r the d i s t r i b u t i o n by the B r i t i s h F i l m Fund Agency of the proceeds o f the l e v y to makers of c e r t a i n  British  films. 6 Only B r i t i s h quota from the B r i t i s h F i l m Fund. f i l m i s 35mm f i l m :  f i l m s q u a l i f y f o r subsidy payments E s s e n t i a l l y , a " B r i t i s h Quota"  (a) the maker of which i s a B r i t i s h  or  Irish  subject  United  a studio  any  studio  have been in  o r a company i n c o r p o r a t e d  Kingdom,  in  100 -  i s used a t a l l ; to British  (c) 75% o r 80% o f l a b o r subjects  t h e Commonwealth o r I r e l a n d . entitles  o r t o persons  screen  q u o t a b u t i t does n o t a u t o m a t i c a l l y  ments t h a t  resident and  subsidy  payments, being  and c e n t r a l l y managed  registered  levy  Kingdom.  a s p e c i f i e d amount.  a m o u n t may b e v a r i e d  gross  box o f f i c e  also  exempt from p a y i n g  t o earnings life  been r e g i s t e r e d .  from  benefits.  Both  time  the percentage  t o time.  Theatres  r e c e i p t s b e l o w a s p e c i f i e d amount a r e the levy.  The F i l m s  f o rthe c o l l e c t i o n  from the fund  The  t o subsidy  i n  i s based on a percentage o f the t o t a l box  beyond  a ceiling  ordinarily  Companies i n c o r p o r a t e d  are not entitled  with  films.  one o f t h e r e q u i r e -  i n , o r companies  stated  proportion  a picture  t o producers  gross  Payments  only  entitle  S u c h p a y m e n t s a r e made o n l y  The  vided  "British  must be met.  Commonwealth c o u n t r i e s  and  as a  films to inclusion i n the British  controlled i n the United  office  costs  domiciled  The q u a l i f i c a t i o n  film  Eady P l a n  such  ( b ) made  t h e Commonwealth, o r I r e l a n d i f  Quota"  to  t h e laws o f t h e  I r e l a n d o r any Commonwealth c o u n t r y ;  within Britain,  paid  under  of the levy  t o the producers of qualified  o f a quota Claims  film  o f 195 7  i n any one  proyear.  a r e made p r o r a t a i n  films a t the box o f f i c e .  i s four  a r e made w i t h  They a r e s u b m i t t e d m o n t h l y  Act  years  respect  and i n c l u d e  a f t e r i t has to individual a  statement  -  of  r e n t a l s e a r n e d by  the  claim.  each to  The  subsidy  total  amount of  his  r e n t a l s bear  the  month.  At  whole year  are  balance  on  It do  not  they  to  the  the  is  the  of  period  covered  by  instalments  bears  the  same  during  a l l qualified  e a c h y e a r when t h e  and  relation  the  month  films  rentals  as  during  for  t h i r t e e n t h a l l o c a t i o n i s made  the of  hand.  the  to  that by  note  burden of  This  out  of  the  that  the  are  exhibitors since  of  the  the  levy  alone  the  c a l c u l a t e d a f t e r the  i n turn, every  the  Eady P l a n ,  means p a r t  d i s t r i b u t o r s and,  $11.00 by  allotment  distributiors  contributed  the  i n monthly  rentals of  known, the  shoulder  calculated  during  i s paid  i s important  make t o  -  Eady money a l l o t t e d  end  ment i s d e d u c t e d . by  film  i n d i v i d u a l producer's  the  the  the  101  Eady  burden  producers.  payments  is  I t has  $100.00 c o l l e c t e d i n l e v y ,  e x h i b i t o r s , $12.50 by  non-British producers  and  the  $9.00 by  paypaid been $67.50  distributors,  British  producers  themselves. The the of  Eady P l a n , the  Players roughly million  for a  and  levy,  i n Canada are  e x h i b i t o r ' s share of  the  presently  $200 m i l l i o n  box  office  way  of  investment.  operated  taking  and  The  are  to  based  of  returning of  the  on  The  b o r n e by  i n 65%  majority  i n d e p e n d e n t s w o u l d be  major d i s t r i b u t o r s would begin  one  overwhelming.  l e v y w o u l d be  are  by  preferably  virtually  O d e o n who  marginally The  arguments  bulk  Famous  Canada's  only  $1.7  smaller,  exempt from the  contribute  a  portion  levy.  of  the  $55,000,000.00 t h a t  Canadian a  distributors  levy would  and  i t would  investment  they receive  would  annually while  contribute  nominally.  the Canadian add  industry  t h e much n e e d e d  the Eady P l a n ,  in Britain  and  In  between the  i n d e p e n d e n t s b u t , more impetus  i n the p r o d u c t i o n of Canadian  Without film  -  begin t o balance the s c a l e s  owned m a j o r s tantly,  102  the essence,  foreign impor-  to private  sector  films.  there would  be  no  commercial  the reason i s simple:  "The m o n e y a r i s i n g f r o m t h e E a d y s c h e m e p r e s e n t l y adds n e a r l y 50% t o t h e p r o d u c e r s ' gross o f each B r i t i s h f i l m d i s t r i b u t e d i n t h e U n i t e d Kingdom."9 While  this  success  t o each  benefit  accruing  to  undertake B.  British  a risk  special  to  film  by  no means g u a r a n t e e s  produced, t h o s e who  financial  "potential finance  they otherwise would  monetary  the f i l m  maker  not".10  France a i d to the French  a c c o u n t a d m i n i s t e r e d by  A f f a i r s which a  film  encourages  Financial a  benefit  derives  release  i t s income  t a x and  film  industry  the M i n i s t r y from  reimbursements  comes  of  a special  from  Cultural  admission tax,  from p r i o r  loans granted  produCers.il Each  available based  on  deduction  year the M i n i s t r y  f o r l o a n s and  d e c i d e s the e x a c t  subsidies.  A French  a p e r c e n t a g e o f i t s g r o s s box of taxes) f o r f i v e  years from  office  film  amount subsidy i s  receipts  the date of  (before  first  -  showing, a  but  this  gross over  however,  103  a i d i s reduced  by  a s p e c i f i e d amount.  are not a c t u a l l y paid  against  the p i c t u r e s * e a r n i n g s  against  which  a p r o d u c e r may  -  50%  for features  These subsidy  out as but  draw  with  amounts,  they are i n England  accumulate  as  a credit  for financing his  next  picture. To of  the  film  employed, be  p a r t i c i p a t e i n the subsidy, must be  leading players  developed  and  Since parallels  that  recommended industry cannot a  the end of  and  a f f o r d the  to  be  must  of  film  industry.  a subsidy  subsequent  The  subsidy i t i s  not  French  film  than the Canadian program which  pictures  which  benefits  i f i t i s of  no  first.  Israel  300  Israeli  theatres  government r e a l i z i n g and  industry  designed  65,000 f i l m .  on  their  program of a s s i s t a n c e  Israeli . . , 1 3 .films.  the f i l m  the French  more e s t a b l i s h e d  and  . film  and  i n Great B r i t a i n ,  film  in financing his  The  a  t e c h n i c i a n s have  French  a c h i e v e d by  luxury  second  version  i n France.  the Eady P l a n  i s older  assistance  mately  edited  m u s t be  f o r the Canadian  producer's  C.  i n French, French  the o r i g i n a l  to benefit features  and  and  12 own,  goers  that could  i t s approxinot  support  a wide  ranging  . has  financial  provided  i n c e n t i v e s and  grants  a category of films consisting of  "appproved"  another category c o n s i s t i n g of a l l other  The to  that  with  s i t u a t i o n i n the  i n Canada.  pride  to  a  Although  few  notable  104  -  Israeli Israeli  film film  industry producers  is similar can  point  achievements  "On t h e w h o l e , t h e d e v e l o p m e n t o f t h e film i n d u s t r y i n I s r a e l has b e e n c u r t a i l e d by the l a c k o f a d e q u a t e and p r o p e r f i n a n c i n g . As a r e s u l t , t h e p r o d u c t i o n o f f i l m s was improperly and i n s u f f i c i e n t l y p l a n n e d and organized, t h u s r a i s i n g c o s t s and lowering the q u a l i t y of the f i l m s produced. Lack o f f u n d s a l s o made i t i m p o s s i b l e for I s r a e l i producers to search for s u i t a b l e d i s t r i b u t i o n o u t l e t s abroad."14 Thus, C e n f i l c o - I s r a e l L t d . financing  for  film  production  p a r t i c i p a t i o n s as  guarantees  other  Primarily  a  financial  financing  film  productions,  both  foreign  established  in Israel,  i n v e s t m e n t and and  was  well  as  services  body which  by  way  to provide required  by  participates in  C e n f i l c o makes i t s s e r v i c e s  producers working  of  i n I s r a e l as  to  provide  "loans, completion producers".  1  selected  available  well  '•  as  to  to Israeli  producers. For they tax with  are  granted  refund  on  film".  English  Israeli  The tablishing  additional financial to  32%  a d d i t i o n a l bonus 1  levy  Film  f i l m s q u a l i f y i n g as  t i c k e t s equal  a possible  "quality and  those  This  6  which  i s , of  of  "Israeli incentives the  i f the  course,  gross  film  feature  films",  including ticket  price  q u a l i f i e s as  a v a r i a t i o n of  i n I s r a e l i s administered  a  a  the  under  French  the  Centre. point  being  C e n f i l c o has  that  the  increased  Israeli the  g o v e r n m e n t by  stability  of  es-  conditions  - 105 -  in  the Israeli  to  "stimulate  industry profit  attact  at  producers  t h e same.  time,  ductions  will  fair  Cenfilco  this  could  be  Development Corporation,  new  film  to believe  be  to the industry  t h e i r trade,  that  the  producers  industry  available which with  will, the  the purpose o f t h e  i n v e s t m e n t p r o g r a m o f t h e CFDC. i s no r e a s o n  like  o f employment w i l l  those  means o f l e a r n i n g  there  a  W h e t h e r o r n o t a new  o r whether  i n the Canadian  t h e same t i m e , p r o v i d e  professional  earning  By a t t r a c t i n g f o r e i g n  a d d i t i o n a l sources now w o r k i n g  practical  established  comes t h e o b v i o u s  t o Canada.  h a s t o be e s t a b l i s h e d  remains  those  experience  t o the Canadian F i l m  Canada,  for  a t t h e same t i m e ,  Canada e s t a b l i s h a c o r p o r a t i o n  foreign  principle  aim o f C e n f i l c o i s  shareholders".  that  adjunct  The s t a t e d  growth o f an a l r e a d y  of the I s r a e l i  organization  to  the further  fori t s  suggestion  an  industry.  i n Israel while,  Out  to  film  A t t h e same  these  i n any way a f f e c t t h e p r o d u c t i o n  foreign  pro-  o f Canadian  films. D.  Sweden  ">  Sweden p r o v i d e s important  f o r the c r i t e r i a  means o f f u n d i n g more t h a n  a n o t h e r v a r i a t i o n on t h e l e v y  five  this  f o r p a r t i c i p a t i o n than  subsidy.  performances  A l l Swedish  f o rt h e  theatres  a week m u s t s u b m i t  more  giving  10% o f t h e i r  18 box  office  revenue  per  cent of this  t o the Swedish F i l m  amount i s u s e d  Institute.  f o r direct subsidies  Thirty to  film  production, films.  and be  a  i n p r o p o r t i o n t o box  Twenty p e r  "quality"  106  films  f u r t h e r 15%  i n c u r r e d by  office  cent, however,  of outstanding i s used  these  -  i s used  artistic  to offset  films.  earnings  The  rest  eligible  for prizes  and  any  of  to  technical  losses which  i s used  for  quality might  non-production  purposes. By  adopting  ment C o r p o r a t i o n what the the  technical,  the A.  the  i n the  Canadian F i l m  Develop-  area  of  feature  been a b l e  to  accomplish  Namely, t o produce a p r o d u c t  and  critical  films in  of  acclaim throughout  high  the  world.  PROPOSALS  The  is  achieve  field.  artistic  FILM POLICY  those  could  policy,  N a t i o n a l F i l m B o a r d has  documentary  by  this  most c o n t r o v e r s i a l  associated with  request  the  of  a l l the  feature film  for a legislated  proposals  put  industry in  forth  Canada  quota.  Quotas Various  federal  quota  government of which Presenting  result  proposals  of  a  the  have been put following  i s but  them c h r o n o l o g i c a l l y ,  Report,  c o m m i s s i o n e d by  the  forth  the  a  the  sample.  first  Ontario  to  is  the  g o v e r n m e n t , made  19 public  January  W h i t e when he and of  26, was  t h e r e f o r e the Ontario.  19 7 3 . the  The  Ontario  Report  was  Minister of  recommendations r e l a t e  J o h n F,  B a s s e t t , Chairman of  c o m m i s s i o n e d by Industry  only the  and  t o the nine  man  John  Tourism Province Board  recommended i n h i s  report  Ontario that  February  f o r the  weeks per short  theatre  at  1973,  the  ( t o be  "a  year)  the  Canadian 15%  at  the  Arts  show  years.  Direction  recommended  content  quota  in a l l  (or approximately  for feature  maintained  two  F i l m Committee o f  a minimum o f  per  movie house  l e a s t e i g h t weeks e v e r y  institute  cinemas  films  Ontario  Canadian Conference of  a l l Provinces  commercial  10,  -  that every  C a n a d i a n made f i l m s f o r a t On  107  f i l m s and  present  50%  ratio  seven  for  of  shorts  20 played  per  feature)".  In of  Canadian F i l m Makers  attitude, as  i t s p o l i c y s t a t e m e n t on  calling  modest  level,  available b o d y was every  figure  They be  cinema  to  cinema i n  At  However, the  10%  or  the  25%  or  annual  Director  of  Canadian F i l m  the  i t would  13 22  at  a  Council  a more  for shorts  flexible  as  well  realistically  exceed  of  the  following year  the  weeks o f be  20%  each year  the 10  weeks each y e a r  Canadian F i l m  spring of  extensive  took  the  minimum years for  same  for ini"that  every  Canada".  i n the  An  five  i n Canada should  Winnipeg  vertently,  or  films,  f u r t h e r recommended t h a t w i t h i n  increased  commercial  i t might begin  .  that  1973  quotas  q u i c k l y reach 21  time".  suggesting  commercial  tially.  "while  i t should  screen  i n October of  f o r a system of  features, which  feature  1975,  appear,  treatise  of  the  Symposium h e l d  Michael  Spencer,  in  the  Development Corporation  released subject,  his  report  on  Executive inad-  quotas.  i t recommended t h a t  each  -  Province theatre  agree  to a basic  to run a Canadian  108  -  quota requiring film  f o r "two  T h i s w o u l d mean e i g h t w e e k s a y e a r a n d  each motion  weeks not  picture  i n each  less  than  quarter. four  23 Canadian films also  with  t o "program  than  two  not  less Any  playing to  cloud  time  should tion films  be  is  films  and  theatre  run theatres,  It the serves  they  would  per year f o r not  less  town t h e a t r e ,  i t was  Canadian  film  of  recommended per  quarter  issue.  legislated  Canadian The  no  question  f o r Canadian  at a l l .  t h e r e be  films,  The  however,  i s n o t how films  better  legislated  o r weeks  quota  and  of  only  serves  much s c r e e n  but whether realistic  any  solu-  f o r Canadian  feature  i n this country. As  North  picture  o f t h e number o f days  given  legislated  i s that  run theatres  motion first  75 m i n u t e s .  days".  discussion  s h o u l d be  first  t o show "one 25  t h a n two  the r e a l  than  those  spread evenly over the four quarters  obliged  t i m e t o be  intended to cover only less  Canadian  For the small  2 4  t h e y be  For the new  weeks each  year".  that  24  between  where one  community.  have  for  q u o t a was  a running time of not  town s i t u a t i o n  whole  the  The  drew a d i s t i n c t i o n  small the  films".  provided  f o r under  Section  America Act, the l i c e n s i n g  a provincial  reluctant  to  katchewan  have  question  responsibility,  become  involved  indicated  of quotas  and  92(9)  of motion picture one w h i c h 26  i n .  Only  any w i l l i n g n e s s  even  of the  they have  British theatres  the Provinces Ontario  and  to discuss  t a k e n no  steps  are  Sas-  the towards  -  109  implementation  o f same.  throughout  country, perhaps  output of  the  feature  questionable  films  audience  the voluntary  I n the  quota  continuity  i s best.  and  some o f  as p r o v i d e d f o r i n t h e  Corporation  instead  B.  this  of  With  the Canadian  turn  agreement  Film  feature  limited  remain  of with  between  Development  our e n e r g i e s towards  of Canadian  a  those being  a p p e a l , i t i s s u g g e s t e d we  Odeon, and  of proper promotion  interests  per year  Famous P l a y e r s , and  -  the q u e s t i o n  films.  Promotion It  that  i n an  promotion given  is ironic  and,  industry which of  a t t h e same t i m e , d i s c o u r a g i n g relies  i t s product that  to this  a s p e c t by  those  so  so h e a v i l y little  involved  on  the  attention  proper has  been  i n the Canadian  film  industry. In  i t s policy  statement  on  feature  films  dated  27 October of  the  1973/  the C o u n c i l  of Canadian  few  references to this  appointing  in i t s generality.  problem  F i l m M a k e r s made  which  Realizing  itself  that  was  one  dis-  the best  films , j  in  the w o r l d are  "useless unless people 28  them t o w a n t t o go suggest and  that  see  "individual  ways must be  place".  and  found  them",  films  the Council  need  to insure  know e n o u g h  increased  that  this  about  could  only  promotion  promotion  budgets,  takes  2 9  At promotion  t h e minimum and  of Canadian  as  feature  a first films,  s t e p t o the  proper  i t i s suggested  that  Famous P l a y e r s of  Odeon be  their voluntary  properly  promote  tributors of  and  of  course,  exhibitor film's  total  the  these  and be  quota  not  that box P.  to  production  cost  o f f i c e . . Yet Rocca,  not  they  the  the  required play.  a  set  spirit  to  The  disinvolved,  and  percentage of  the  towards promoting i t . 1974  theatres,  make m o v i e s  why  Canadian  Odeon T h e a t r e s '  that  Rocca Cinemas L t d . as  to  distributor  Canadian f i l m s are  i s reported  up  w o u l d h a v e t o be  that  i n November o f  that  live  being  features  contribute  shown i n C a n a d i a n  do  to  agreement by  Canadian  required  Canadians  required  i t i s suggested  Salmon suggested  -  Canadian features  When a s k e d are  110  j u s t not  are  and  films Chris  good  enough,  successful at  i t s President,  the  John  saying:  "We h a v e p l a y e d many C a n a d i a n made m o v i e s t h a t Famous P l a y e r s and Odeon r e j e c t e d f o r 14 o u t o f 52 w e e k s i n o u r t h e a t r e i n S t . John i n our f i r s t y e a r of o p e r a t i o n , and we made m o n e y o n a l l t h e f i l m s e x c e p t one. I n f a c t , t h e p r o f i t we made f r o m t h e s e C a n a d i a n f i l m s was g r e a t e r t h a n t h e p r o f i t from most of the p i c t u r e s of a l l the major distributors."30 One  r e a s o n why  Canadian f i l m s the  media.  is  Mr.  R o c c a was  his aggressive  successful with  promotion of  the  them i n a l l  He  "runs t r a i l e r s o f his.upcoming f i l m s at l e a s t f o u r weeks i n advance ( i n s t e a d of one); h i s n e w s p a p e r ads a r e two o r t h r e e t i m e s l a r g e r t h a n Famous o r Odeon a d s ; t a k e s s p o t s on b o t h t e l e v i s i o n and r a d i o . T h i s b l i t z campaign i s done f o r e v e r y f i l m he p l a y s . In the case of Canadian f i l m s , h e s o m e t i m e s h a s t o m a k e up t h e promotional material himself."31  -  C.  Withholding On  I l l -  Tax  April  28,  1974,  Peter  P e t e r s o n on  behalf  of  the 32  Council  of  Executive tion  Canadian F i l m Makers wrote Director  proposing  its  withholding  out  of  the  policy  increased Canadian the  1974, It  States, Mr.  by  this  in his  could  a  also  import  because  of  i s not  "the  the  out  that  that  foreign  price  D.  Film  Marketing  Board  A  number o f  proposals  Canadian  the  was  the  pointed  letter  of  Department of  with  not  out  May  do  United agreement".  distribution  i n favour of  usually  amount o f  9,  Finance. to  the  r e c i p r o c a l tax  are  stated  such  having nothing  suppliers the  been  into  Canadian-owned  film  adding 35  as  exported film  realize back  increase  Peterson  often  "we  i n dealing  have a  Mr.  replying  factors  foreign  a valid  by  Furthermore  c o u n t r y we  revenues  argument had  industry  pointed  film  out  Corpora-  immediately  n o t come d i r e c t l y 33  number o f  Canadian d i s t r i b u t o r  a  this  letter  sale  that  on  Spencer i n h i s  film  which  companies which  the  15%  i s p r i m a r i l y a matter of  with  increase  reason  that  Mr.  Canadian  Spencer  to  industry...".  to "balance  the  The  revenues  this  10%  Spencer,  Development  government should  from  stated  film  Canadian F i l m  f o r Canada i s p o i n t e d  Council  has  with  tax  Indicating he  the  the  country.  elsewhere,  to  that  proposal  himself.  of  to Michael  insist  the  tax  this on  to  the  film".  have been put  f i l m m a r k e t i n g b o a r d be  forth  established  recommending to.promote  -  and  deal  i n the distribution  -  o f Canadian  markets.  One  to  the proper promotion  insure  of the duties  112  films i ninternational  of the f i l m marketing board  would  be  and m a r k e t i n g o f a l l Canadian  . 36 features. This if  the film  already for  Canadian  Purchase In  theatre  an u n n e c e s s a r y  and u s e l e s s  has an i n t e r n a t i o n a l a u d i e n c e  been suggested  both  E.  i s surely  that Canadian  expense  appeal.  feature  I t has  f i l m s be  produced  and i n t e r n a t i o n a l audiences.  o f an E x i s t i n g C h a i n  order to insure  screens  i n Canada,  government purchase  that Canadian  f i l m s be shown on  i t has been suggested  e i t h e r Famous  Players  that the  L t d . o r Odeon  Theatres  37 (Canada) L t d . This CFDC's  proposal  a n n o u n c e m e n t i n May  setting  u p i t s own m o v i e  petition  with  that  Media  only  i t was  little  o f 1971 t h a t  chain  t h e two m a j o r  Fortunately Loftus,  makes  more i t was  t o show C a n a d i a n 38  announced  considering f i l m s i n com-  i n February of State's  t h e f e d e r a l g o v e r n m e n t d e f i n i t e l y was 39 • Players.  than the  chains.  O f f i c e r of the Secretary  i n . b u y i n g Famous  sense  However s i n c e  1975 b y  Des  department  "not interested" the talks  have  been  g o i n g o n i n New Y o r k a b o u t t h e p o s s i b i l i t y o f O t t a w a p u r c h a s i n 40 g own 5 0 . 8 % o f t h e C a n a d i a n t h e a t r e c h a i n — s a i d n o t o a n y d e a l " . Famous  Players "the conclusion i s that the Americans—who I n November o f 1974, Odeon T h e a t r e s ' C h r i s Salmon  - 113 was  quoted  Odeon,  -  as s a y i n g " i ft h e government i s w i l l i n g  i t ' s welcome  to i t .  I would  be p r e p a r e d  to  t o buy recommend  41 the  sale  no a c t i o n  t o my  Board  of Directors".  has been taken  i n this  Again,  regard.  fortunately,  -  114 -  FOOTNOTES CHAPTER V I  Kelly,  1  4.  op. c i t . ,p.  2  esturdaj^^^^;^.^™ Kelly,  3  o p . c i t . , p . 5.  ThS_J ^" 5C e? fS27, |fI. ,  U  2  « ! - be S u b s i d i z e d ? "  1  a t  n  F  °  r  e  i  9  n  P  i  l  m  S u b s i d i e s  "'  Ibid.  5  6  Drabinsky,  op. c i t . , p. 129.  7 The J o u r n a l ,  op. c i t . , p.  6.  8 P!an " ?  m  e 9  ^  S  l  ?  ^  ^  '  ^  S  P  °  U  ^  ***  Ibid. Ibid.  "The J o u r n a l L o o k s a t F o r e i g n T h e J o u r n a l , J u n e , 1 9 6 7 , p . 7. 1  1  Film  Subsidies",  12 —And  J o s e f S r y c k , "Where T h e r e i s L i f e T h e r e i s Hope I s r a e l F i l m s " T h e J o u r n a l , D e c e m b e r , 1 9 7 0 , p . 9. 13 Drabinsky,  op. c i t . , p. 133.  14 Film  E. A d d y C o h e n , "The C a r e a n d F i n a n c i n g o f I n d u s t r y " , T h e J o u r n a l , D e c e m b e r , 1 9 7 0 , p . 7. Ibid., 16  p.  8.  D r a b i n s k y , op. c i t . , p. 133.  Israel's  17  Cohen, op. c i t . , p.  115  -  8.  18  The  "The J o u r n a l L o o k s a t F o r e i g n J o u r n a l , J u n e , 1 9 6 7 , p. 1 1 . 19  1973)  a t p.  reported 957.  i n C a n a d i a n News  Film  Subsidies",  ( J a n u a r y 16 - J a n u a r y  31  20 Second  " D i r e c t i o n O n t a r i o ' s F i l m B r i e f " , Cinema E d i t i o n , No. 7 ( A p r i l / M a y 1 9 7 3 ) , p . 70.  Canada,  21 Second  " P o l i c y Statement on F e a t u r e F i l m s " , Cinema E d i t i o n , N o . 12 ( F e b r u a r y / M a r c h 1 9 7 4 ) , p . 4 8 .  Canada  22 Second  "Council E d i t i o n , No.  o f Canadian Filmmakers", Cinema 14 ( J u n e / J u l y 1 9 7 4 ) , p . 6 4 .  Canada,  23 Spencer, 2  c i t . / p.  9.  TU-A Ibid.  4  2 5 , ., Ibid. T  2  op.  •  "  Ibid.  6  27 Second  " P o l i c y S t a t e m e n t on F e a t u r e F i l m s " , Cinema E d i t i o n , N o . 12 ( F e b r u a r y / M a r c h 1 9 7 4 ) , p . 5 0 . 2  8  Canada,  . Ibid.  T  29 Ibid. 30 Cox,  "Rocca's  B i g F i g h t " , o p . c i t . , p.  23.  31 _.. , Ibid. 32 Second  "Council E d i t i o n , No. 33  Ibid.  o f Canadian Filmmakers", Cinema 14 ( J u n e / J u l y 1 9 7 4 ) , p . 6 4 .  Canada,  -  34  Ibid.,  p.  65.  p.  64.  116  -  35 Ibid. 3 6  Ibid.,  37 col.  The  Sun  (Vancouver), February  The  Sun  ( V a n c o u v e r ) , May  The  Sun  (Vancouver), February  13,  1975,  p.  31,  p.  c o l . 1.  1. 3 8 7,  1971,  6,  39 col.  13,  1975,  p.  31,  1974,  p.  19,  3. 40  .. Ibid. x w  41 The col.  2.  Sun  ( V a n c o u v e r ) , N o v e m b e r 18,  CHAPTER V I I SUMMARY AND  The  purpose o f t h i s  of  the structure  in  Canada t o g e t h e r w i t h  impact thereon. summarize role  CONCLUSIONS  Chapter  i s t o present  and behaviour o f t h e feature  a summary o f t h e f e d e r a l  I ti salso  the conclusions  theintention of this  o f these  offered  government's Chapter t o  conclusions,  t o summarize  and on t h e  t h e recommendations  i n Chapters V and V I . As  film  industry  drawn i n Chapter V c o n c e r n i n g t h e  o f t h e f e d e r a l government i n t h e i n d u s t r y  basis  film  a summary  t h e s t u d y was a n i n t r o d u c t i o n  industry,  areas  of possible  further  t o t h e Canadian research  are also  presented.  SUMMARY AND C O N C L U S I O N S Conceptually, three Yet  main branches:  the Canadian production,  a Canadian industry,  feature  film  distribution  and exhibition.  as such, does n o t e x i s t .  - 117 -  industry has  -  Canadian a r e made e i t h e r  feature films  by  t o 1968,  since  that point i n time,  at  not  t h e r e was  produced  5%  In  of  55  companies  of  80%  the  largest  remaining the  box  these,  office  theatre  chains:  (Canada) L t d . theatres  approximately  are films  industry, there  theatrical  On  the  film  aver-  rental  distribution  arms.  Today  distribution  independent,  are  left  rentals  530  this these  65%  the  i n Canada.  to divide  between  branch  exceeds are  companies are  of 350  the  two  drive-ins  than  whose  20%  under  Odeon 30%  of  between  t o t a l box  are  total  annually.  c o n t r o l l e d by  companies  o f Canada's  less  industry, there  $200 m i l l i o n  owned o r  i s well  the  American  them*  Famous P l a y e r s L t d . and  i n Canada,  Today,  for  receipts  While  industry.  States.  films  total  and produced  contributor of  sector of  t h e a t r e s and  approximately  on  Canadian screens  single  United  an  Canadian d i s t r i b u t i o n  exhibition  1,100  carried  f o r e i g n market i n the world  and  film  the  producers.  i s p a i d to e i g h t American  their  remaining  approximately gross  of  million  i s , Canadian,  In  for  of  through  The  i s the  firms promoting  $55  Canada i s the  shown on  largest  presentation  f e a t u r e s have been  to support  films  distribution  i n excess  roughly  that  Canadian  The  country  the  roughly  films.  the  i n Canada.  shown i n t h i s  age,  of  independent  production being  i n numbers s u f f i c i e n t  most o n l y  are  no  -  for theatrical  t h e N.F.B. o r  Prior  but  118  Of  two  Theatres ttfe  total  them  office  account  receipts.  -  The r e m a i n i n g 7 0 % o f C a n a d a ' s controlled dent  either  theatre  the major  by  the independents  since  potential  o f Famous  first  revenues  are tied  arrangements  theatre  owners  product  f o r showing  with  to playing  outlets,  are further  on t h e i r  screens.  are reluctant  of Canadian  feature  run theatres  independent runs  of the film,  their  independent  by b e i n g denied Small  first  and  Through b l o c k  new  independent t h e y have  run theatre  distribution  and  t o p l a c e funds  films  smaller  In the exhibi-  are p u t a t a disadvantage because  investors  controlled  bargaining  distributors,  frustrated  access t o the p r o f i t a b l e  production  first  subsequent  to the l i f e  been denied access t o the p r o f i t a b l e Without  and  c h a i n s and  the major  located  t h o s e owned o r  i s thereby predetermined.  booking  distributors  run theatres  the industry.  independent  are relegated  profit  the control  and Odeon c o n s i d e r a b l e  throughout  the small  owners  film  under  Control of the larger  Players  i s felt  sector,  theatre  indepen-  are s i t u a t e d i n the suburbs  communities.  power w h i c h  o r by t h e s m a l l e r  c e n t e r s o f Canada w h i l e  g i v e n Famous  tion  of theatres  are the larger  in  has  s c r e e n s a r e owned o r  chains.  a n d Odeon  Canadian  theatre  by i n d e p e n d e n t s  The m a j o r i t y Players  119 -  now  s c r e e n s ..  exhibition  i n the  and Canadian  producers  go w a n t i n g . Even for  a Canadian  i f a distribution feature with  agreement could  one o f t h e m a j o r s ,  be  guaranteed  i t s potential  -  profit  i s e a s i l y manipulated  location Players  i ti s assigned o r Odeon.  according  factor involved.  s c h e d u l e o f Famous.  a number o f t h e a t r e s  The p r o b l e m ,  Increased  number o f p r i n t s r e q u i r e d  costs  however,  and t h e majors' i n recent  The r e c o u r s e  times,  then  i ti s unreasonable  to alter  Part  o f the problem  until  proper  sector  however,  i s because the  o f the industry and  i s paid  t o the d i s t r i b u t i o n and  o f Canadian  feature  films,  film  industry.  incentives  t o promote  i n Canada.  will  n o t be a with  implemented by t h e government. Development  and develop  And w h i l e  have been produced w i t h  there  There has a l s o been a problem  1968, t h e Canadian F i l m  was e s t a b l i s h e d  ordi-  described.  attention  some o f t h e p r o d u c t i o n  and  just  impact on t h e i n d u s t r y ,  has been on t h e p r o d u c t i o n  In  t o expect  the oligopoly  focus  exhibition  become  i s t o government i n t e r v e n t i o n .  n o t been s i g n i f i c a n t .  industry  i s sub-  i n the industry f o r  p o s i t i o n has, i fanything,  The g o v e r n m e n t ' s  Canadian  f o r the  and the a d v e r t i s i n g expense  the s i t u a t i o n has e x i s t e d  nary market conditions  has  i s the high  , Since  stronger  producer  himself  are incurred  stantial.  decades  date and  One a l t e r n a t i v e t o t h e i n d e p e n d e n t  "four-wall" h i s film.  risk  to the play  i n the booking  and/or d i s t r i b u t o r i s t o rent and  120 -  the feature  approximately  CFDC a s s i s t a n c e  a t t e m p t s h a v e b e e n made o f l a t e  Corporation  since  160  film features  i t s incorporation  to increase  the quality  -  of  i t s product,  attract  by  the  consequently,  box in  the  Canadian  tinued that  Further, nition order  of  film  not  simply  only  their  Canadian  off.  ventures of  the  entitled  increased  df  film  the  risk.  i s primarily to  realizing  i f shown o n l y  that  laws  i s the  i t will written  Board's  Department of  not. permit off  decision  Canadian  found  in Currie  and  MNR  the  conconclusion  primarily tax  because  saving.  onerous  defi-  complied with  f i l m s do  not  i n the  Revenue's  and  of the  denying  and  return  take  present  in  potential  Canadian market  income'  the  Canadian  funds  unwilling to  National  'other  Foreign  to  the  the leveraged p o r t i o n  against  increase  w r i t e - o f f , the  the  i n Canada are  A n o t h e r d i s i n c e n t i v e as  investment  Yet  leading  t h a t because of  the  sector  allowance while  t o be  to  and  incentives  write  because  is  investors.  t h a t m u s t be  profit  t o be  100%  grosses,  concluded.  cost  money i n f i l m  suggested  investors  that  capital  as  nominal.  tax  i t was  abroad  not  their  "Canadian f i l m "  appeal  a  been  f i l m s do  to  private  foreign productions  and  i t was  office  a profit  has  investment,  place  return  box  Canada's p r e s e n t  to  investors  the  tax  flow  Canadian  consider  industry  films qualify for a to  that  a result,  q u a l i f y f o r a 60%  feature  a  will  i f we  As  film  public sector  films  low  have r e t u r n e d  grosses.  Nor  of  relatively  few  -  e i t h e r i n Canada or  i s especially true office  the  f a c t remains  a mass a u d i e n c e  evidenced  This  the  121  the  Canadian  pronouncement an  investment Taxation  deductibility  -  of  any  portion  expect  i t to  of  return  While some o f  the  industry,  the  the  g o v e r n m e n t has  sector, film  while  the  foreign  largest.  During  in  the  C F D C was  market  exhibition  proceeds,  i n an  Court  Appeal.  how to  Odeon and  long be  the  a p p e a r , i n an  of  the  to  thus  nothing  either  a  sixth to  indications  the  struc-  distribution  "promote  films  the  distribution  the  the  of  feature  most  being are  the  that  their  Famous  positions  has  been  launched  into  the  and  to what stage  this  investigation  seen.  are  The  now  early  being  l a s t such  a l l Co-accused  Canadian Film  it  and  attempting  a voluntary  films  quota  the  In  dissolve  sector  virtually  therein.  same p e r i o d ,  Canadian would  industry,  In  h a d . a n i m p a c t on  a c q u i t t a l of  Pursuant to and  say.  for American  inquiry  remains  resulted of  to  to  sector.  an  practices,  reasonably  serve  Odeon have s i m i l a r l y s t r e n g t h e n e d  While trade  the  performance  the  not  production  Canada moved f r o m b e i n g  important  and  of  the  early  done has  or  industry",  Players  too  sectors  behaviour  i f i t could  a g r e e m e n t s may  besetting  i t is s t i l l  exhibition  -  profit.  co-production  and  ture,  investment  a  problems  1'22  Ontario  q u o t a b e t w e e n Famous  Players  Corporation,  shown t h r o u g h o u t Canada b u t  apparent attempt to  indications  agreement i s being  investigation  i n the  Development  industry's  adhered  are to.  that  avoid the  a  bare  only,  legislated minimum  -  Both Foreign in  the Canadian Business  Investment Review Acts  their  failure  \  Corporations  and the  have been e q u a l l y d i s a p p o i n t i n g  t o resolve the f o r e i g n ownership  the  industry.  had  much o f a n e f f e c t  industry.  123 -  In fact,  I f such  issue i n  few o f t h e government's p o l i c i e s  i n promoting a Canadian  i s truly  recommendations m i g h t be  their  feature  have  film  a i m , some o f t h e f o l l o w i n g  considered.  RECOMMENDATIONS Using is  as a c r i t e r i a  a business,  Film  the f i r s t  Corporation  the  last  years,  two y e a r s .  million  then,  opposed  erably be  total  o f ever  m i g h t be g i v e n  to a participant  to return a  profit.  rental  that after  revenue has been  two  returned.  recouping  the approximately  invested.  In this  regard,  t o t u r n i n g t h e CFDC i n t o i n the production  of  $17 con-  a bank as  films.  i s a l s o s t r o n g l y recommended t h a t a l e v y , p r e f -  along  the lines  implemented.  halting  be e x p e c t e d  a 32% r e t u r n on i t s i n v e s t m e n t s f o r  t h a t was o r i g i n a l l y  It  industry  t h e 32% r e t u r n has been earned b u t t h e r e i s  likelihood  sideration  the f i l m  Y e t the problem remains  90% o f a f i l m ' s  In effect little  boasts  that  recommendation i s t h a t the Canadian  Development C o r p o r a t i o n  The  the fact  the flow  corporations,  This  o f t h e Eady P l a n would have  Kingdom,  the advantage o f n o t only  o f Canadian source  i t would  i n the United  funds  to foreign  controlled  a l s o make a v a i l a b l e f o r C a n a d i a n  producers by  the  of  a  a source of  Canadian  also  f i l m s as  enhanced.  tax  advantages order  to  ance p e r m i t t e d For in  our  may  ture,  be  levy  as  be  percentage by  these  of  films.  to  and  production  production  they  increase  the  of  who  would  argue  a  w o u l d be  cost  that  allow-  these  levy plan  films pic-  could^be  c e r t a i n percentage of  w h i c h m i g h t be  be  a  To  further  incurred  Canadian  further  agreements. of  the  Film  such  engaged p r i m a r i l y i n  features.  Not  subsidies  they quotas,  promote  encouraged  finanacing,  of whatever  i m p o s e d , be  contain,  mass a p p e a l  f e d e r a l government i s  advantages  must  engaged p r i m a r i l y i n  p o t e n t i a l sources  has  the  i s e n v i s a g e d when t h e  the  be  Canada  " q u a l i t y " f i l m s and  further co-production  nation  t h a t we  c u l t u r e , even though  mass a p p e a l  the  capital  in  lesser  remain i n  greater  the .private s e c t o r  make a v a i l a b l e t h e producing  w o u l d now  losses  i n Canada,  negotiate  foreign productions,  o f f s e t any day  investment  f u r t h e r consequence  for  Development Corporation  the  a  for prizes  The  imposition  p o t e n t i a l return would  Sweden, whereby  to  supplied  films.  Canadian  used  being  The  sector  f o r p a r t i c i p a t i o n i n the  used  productions  CFDC.  p o t e n t i a l l y p r o f i t a b l e as  that  could  critics  the  the  as  to  advantage of  the  criteria  b a s e d on  flowing  "Canadian"  films,  not  foreseen  notwithstanding,  take  i s presently  through  producers'  I t i s also  funds p r e s e n t l y  -  encourage p r i v a t e  the  the  in  funds which  Canadian taxpayer  levy would  124  only  do  they  also  the  cO-  distribution  guarantees  or  country's  a  l e v y whereby  total  box  office  I t m u s t a l s o be recently  entered  into  this  country.  industry  and,  at  industry  with  the  they of  a l s o have  capital  o r weeks not  the  with  quota  present  instead direct  promotion  and  for  showing  only  of  also  productions sources  Canadian  those  learning  new  film  to  their  injecting  actively  a certain  the trade,  large  amounts  number o f  suggestion being  their of  efforts  toward  Canadian  films.  days  films  t h a t the  then  per  the  is CFDC and  proper  Should  circum-  number o f days r e q u i r e d  renegotiation of  recommended c o u r s e  feature films  to  foreign  a g r e e m e n t b e t w e e n Famous P l a y e r s  films,  Famous P l a y e r s and  required  i t i s therefore  showing of Canadian  increase i n the  Canadian  agreement i s the output  an  whereby  the  distribution  warrant  provide  only  additional  i n the  means o f  f o r the  Odeon and  stances  the  C a n a d i a n economy g e n e r a l l y .  set aside  the  working  advantage of  recommended, however,  remain  only provide  now  added  in  t h a t Canada has  to a t t r a c t  same t i m e ,  legislated  are  taken  practical  the  into  A  the  participates  p r o d u c t i o n , and  They n o t  f o r those  film  gross.  film  o f employment  the  -  recognized  recommended t h a t s t e p s be to  125  of  action.  the  With  present a  limited  year,  i t i s recommended t h a t  not  Odeon and  the major d i s t r i b u t o r s  be  promote Canadian  become i n v o l v e d f o r t h o s e  films  but  that i t assists  t h a t the in  CFDC  producing.  While they  t h e s e r e c o m m e n d a t i o n s may n o t b e f a r r e a c h i n g ,  are based  dustry  i n two r e a l i t i e s :  i s s t i l l  i n i t s infancy  develop  i t m u s t be c a u t i o u s  at  stage  this  feature tion  film  drawn and c o n c l u s i o n s  based  limited A.  data  inferences  sources  Areas o f Further  the study  was t o p o i n t  study,  •not h a v e  The C a n a d i a n  film  distributors.  feature  purposes the  o f the Canadian  taxpayers $25 m i l l i o n  Film  through the to the  industry  and i n d i c a t i o n s a r e t h a t  with  until  a t the marketing  a Canadian  to the  of further research,  g o v e r n m e n t h a v e now c o m m i t t e d  t o look  i t i s  questionnaire,  one o f t h e main  out areas  t h e CFDC's p r e o c c u p a t i o n made  Therefore,  through  Study  Development C o r p o r a t i o n .  with  either  a n d Odeon a n d t h e m a j o r  an i n t r o d u c t o r y  promotion of a feature  data  including, but not necessarily  o f w h i c h w o u l d be a d e t a i l e d study  federal  informa-  of  on t h e i n d u s t r y a c c o r d i n g  t o , Famous P l a y e r s  that  have h a d t o be  Canada i n i t s annual  involved  2.  o f the Canadian  was n o t o b t a i n a b l e ,  Statistics  companies  As  first  that  and present  principal  few and;  recommendations.  on secondary  data  i n -  taken to  do n o t have enough  government agencies o r the i n d u s t r y .  obtain  are  study,  film  any steps  and, a t f i r s t ,  t o make f u r t h e r  because primary  recommended  of  and t h a t  i n d u s t r y , we s i m p l y  Throughout t h i s  the  1. t h a t C a n a d a ' s  i n t h e development and study  o r f a c t s on which  simply  126 -  film  production, of feature  industry.  films,  efforts we  will  I t i s suggested  -  that  i t i s time  to reevaluate  the  Corporation. The s e c o n d  that  and e q u a l l y  this  turn,  a possible  final  facto  would  Court Order,  it  i s hoped  of  I n v e s t i g a t i o n and Research  by  that  i t i s argued  film  they have g a i n e d In this  will  booking  cease  a t a minimum,  a s now  up de  regard,  pursuant  i ti s difficult  t o an Order  to envision  suggested  determine  the impact  of tax incentives  investment i n motion  that  i n the industry p r o h i b i t i n g same.  the  methodology  a s t u d y be u n d e r t a k e n  picture production  be p r i m a r i l y a study o f those  Investigation  the practices of  practiced  i ti s also  higher  and, i n  by t y i n g  t h e Combines  involved,  would  that  industry.  under  end, and t h a t  and b l o c k  While  i n Canada.  t h e p r e s e n t i n v e s t i g a t i o n by t h e D i r e c t o r  achieves this  the majors  industry  outlet f o r films that  c o n t r o l o f the Canadian  of  o f t h e r o l e p l a y e d by  necessitate, 'inside' information  market  centralized  and o b j e c t i v e s  important recommendation i s  and Odeon i n t h e f i l m  While  Act  the purpose  a d e t a i l e d s t u d y be u n d e r t a k e n  Famous P l a y e r s  the  127 -  as an inducement i n Canada.  to  to  This  i n the professions  and  income t a x b r a c k e t s . Before  introducing  a levy,  i t i s suggested  feasibility  s t u d y be u n d e r t a k e n  be  retained  by t h e e x h i b i t o r s and t h e methods and  by  which  to  the producers  the funds would  t o determine  that  a  t h e amount t o criteria  b o t h be c o l l e c t e d and d i s t r i b u t e d  of Canadian  films.  As p a r t  of this  same  -  study,  i t i s anticipated  determining of  Israel  attracting  e s t a b l i s h e d i n Canada f o r the  federal  or p r o v i n c i a l .  between  the  greater  Provinces  the  inducements  to  foreign  be  problem areas  future author  done on  that  purpose.  pointed out  should  collected  one  avail  i n this  level:  competition  number o f  foreign  each Province  offering  producers.  the major  any  of  a t what  areas  of  further research  motion p i c t u r e i n d u s t r y i n Canada.  other  its  but  country,  into  as C e n f i l c o  purpose  further,  increase the  i n this  study  concepts  may  and  point being  on  quent  a  The  carried  These are into  undertaken  a c o r p o r a t i o n such  foreign productions  productions  -  t h a t r e s e a r c h be  whether or not  be  128  of  Should  a  subse-  these  areas  or  any  i n this  study  or  further,  himself of  study,  then  the  of  information  i t will  have  the i f  or  served  -  129  -  BIBLIOGRAPHY  BOOKS Adams, W a l t e r (ed.) 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Don M i l l s O n t a r i o : CCH Canadian L i m i t e d , 1975. White, Peter. Motion Picture Queen's P r i n t e r , 1931.  P E R I O D I C A L S AND  Industry  I n Canada.  Ottawa:  ARTICLES  C h e s l e y , S t e p h e n , " F i l m News: 3 r d e d . , N o . 29 ( J u n e / J u l y  Random N o t e s " , C i n e m a 1 9 7 6 ) , 6-7.  Canada,  C o h e n , E. Addy. "The C a r e a n d F i n a n c i n g o f I s r a e l ' s . F i l m I n d u s t r y " , The J o u r n a l o f t h e P r o d u c e r s G u i l d o f A m e r i c a ( D e c e m b e r , 1 9 7 0 ) , 7-8.  - 131 Cox,  Cox,  Kirwin. "The M a j o r s a n d t h e M a n d a r i n s : Through t h e Y e a r s " , C i n e m a C a n a d a , 3 r d e d . , N o . 22 ( O c t o b e r , 1 9 7 5 ) , 18-22. Kirwin. "Rocca's N o . 25 ( F e b r u a r y  BigFight",  1966), 22-26.  Cinema Canada,  \  3rd ed.,  Delaney, M a r s h a l l , "Movies: Y o u S h o u l d Know How B a d T h i s F i l m I s . A f t e r A l l You P a i d F o r I t " , Saturday N i g h t , (September 1975), 83-85. Fadiman, W i l l i a m . " S h o u l d A m e r i c a n F i l m s Be S a t u r d a y R e v i e w ( A u g u s t 5, 1 9 6 7 ) , 1 4 - 1 7 .  Subsidized?"  F o r r e s t e r , James. "Council o f Canadian Filmmakers Presents P e t i t i o n t o P a r l i a m e n t " , M o t i o n V o l . 5 No. 3 ( 1 9 7 6 ) , 6-7. G a t h e r c o l e , S a n d r a , "Combines I n v e s t i g a t i o n " , 3 r d e d . , N o . 26 ( M a r c h 1 9 7 6 ) , 1 0 .  Cinema  Canada,  R o l l e r , George Csaba. " S y d n e y Newman", C i n e m a C a n a d a , 2 n d e d . , N o . 15 ( A u g u s t / S e p t e m b e r , 1 9 7 4 ) , 4 2 - 4 6 . Mayer, M i c h a e l , The J o u r n a l 1-8.  "Problems I n F i n a n c i n g of the Producers Guild  Feature Films", o f America (June  1974),  S c h n e e r , C h a r l e s H. " W i l l S u c c e s s S p o i l The Eady P l a n ? " The J o u r n a l o f t h e P r o d u c e r s G u i l d o f A m e r i c a ( J u n e , 17-19.  1967),  S p e n c e r , M i c h a e l D. " R e : Q u o t a s f o r C a n a d i a n F i l m s i n C a n a d i a n M o t i o n P i c t u r e T h e a t r e s " , Cinema C a n a d a, 2 n d e d . , No. 18 ( M a r c h / A p r i l , 1 9 7 5 ) , 8 - 1 2 . Sryck, Josef. "Where T h e r e I s L i f e T h e r e I s Hope--And I s r a e l Films" The J o u r n a l o f t h e P r o d u c e r s G u i l d o f A m e r i c a (December, 1 9 7 0 ) , 9-11. T u r n e r , D. J o h n . " F i n a n c i a l Trends I n T h e a t r i c a l P r o d u c t i o n 1 9 7 5 " , C i n e m a C a n a d a , 3 r d e d . , N o . 26 ( M a r c h 1 9 7 6 ) , 4 1 - 4 3 . "Canadian Filmnews", September 1973),  Cinema Canada, 6.  2nd e d . , No. 9  (August/  " C o u n c i l o f Canadian F i l m m a k e r s " , Cinema Canada, N o . 14 ( J u n e / J u l y 1 9 7 3 ) 6 4 - 6 5 .  2nd e d . ,  " D i r e c t i o n O n t a r i o ' s F i l m B r i e f " , Cinema Canada, No. 7 ( A p r i l / M a y , 1 9 7 3 ) , 7 0 - 7 1 .  2nd e d . ,  - 132 -  "The J o u r n a l Looks at F o r e i g n F i l m S u b s i d i e s " The J o u r n a l of the Producers G u i l d of America (June 1967), 1-11. " P o l i c y Statement on Feature F i l m s " , Cinema Canada, 2nd ed.. No. 12 (February/March, 1974), 48-53.  STATUTES CITED Canada Business C o r p o r a t i o n s A c t S.C. 1974-75, Chap. 33. Canadian F i l m Development C o r p o r a t i o n A c t . Combines I n v e s t i g a t i o n A c t .  R.S.,  c. 314 as amended.  F o r e i g n Investment Reveiw A c t S.C. 1973-74, Income Tax A c t S.C. 1970-71-72,  1966-67. c. 78.  c. 46.  c. 63 as amended.  •  CASES CITED C u r r i e v. M i n i s t e r of N a t i o n a l Revenue Rex v. Famous P l a y e r s  (1932) O.R.  (1975) 29 D.T.C. 57.  307  FU_ v. Howard Smith Paper M i l l s L t d . (1957) S.C.R. 403. U n i t e d S t a t e s v. Paramount P i c t u r e s ,  334 U.S.  131.  OTHER SOURCES Canada, Department of Consumer and Corporate A f f a i r s . Report of The D i r e c t o r of I n v e s t i g a t i o n and Research: Combines I n v e s t i g a t i o n A c t f o r the Year Ended March 31, 1975. Ottawa: Queen's P r i n t e r , 1975. Canada, Department o f N a t i o n a l Revenue. Interpretation Bulletin IT-164 (June 5, 1974). Ottawa: Queen's P r i n t e r , 1974. Canada, House o f Commons, Committee on B r o a d c a s t i n g , F i l m s and A s s i s t a n c e to the A r t s , N a t i o n a l F i l m Board, Hearing, 29th P a r l i a . , 2nd S e s s i o n . Ottawa: Queen's P r i n t e r , 1 9 7 4 . Canadian Cablesystems L i m i t e d The F i n a n c i a l Post C o r p o r a t i o n Service. Toronto: Maclean-Hunter L i m i t e d , 1973.  -  133  -  Canadian Film 1969-70;  Development C o r p o r a t i o n , Annual Reports: 1968-69; 1970-71; 1971-72; 1972-73; 1973-74; 1974-75.  C a n a d i a n News  (Ottawa), January  Financial  P o s t , June 19,  16,  1975.  1971.  "Motion P i c t u r e P r o d u c t i o n " S t a t i s t i c s Canada Annual 63-206: 1970; 1972; 1973; 1974. "Motion  Picture  Theatres  and F i l m  Canada A n n u a l C a t a l o g u e (Vancouver),  Distributors"  63-207:  February  1970;  The  Province  The  Sun  (Vancouver),  D e c e m b e r 4,  1975.  The  Sun  (Vancouver),  D e c e m b e r 6,  1974.  The  Sun  ( V a n c o u v e r ) , November 20,  1974.  The  Sun  ( V a n c o u v e r ) , November  1974.  The  Sun  (Vancouver), A p r i l  The  Sun  ( V a n c o u v e r ) , May  The  Sun  (Vancouver),  7,  25,  18,  12,  1974.  1971.  February  13,  1975.  1974.  Catalogue  Statistics  1972;  1973;  1974.  -  134 -  APPENDIX I  GLOSSARY  Over the years the f i l m i n d u s t r y has developed a vocabulary unique unto i t s e l f . S i n c e i t has been i m p o s s i b l e t o d i s c u s s the i n d u s t r y w i t h o u t using many o f these terms, a b b r e v i a t i o n s , and i n i t i a l s which w i l l o c c a s i o n a l l y be b a f f l i n g to the reader, the f o l l o w i n g g l o s s a r y has been p r o v i d e d . While the d e f i n i t i o n s make no c l a i m s to e x a c t i t u d e , they are based and o f t e n quoted from p r i o r s t u d i e s , the aim being to a s s i s t i n comparing the p r e s e n t r e p o r t w i t h o t h e r s . Other than t h i s , the terms as d e f i n e d are intended to convey the meanings i n which the terms are used i n t h i s study. ANSWER PRINT - The f i r s t p r o j e c t i o n p r i n t o f a newly completed f i l m . I t i s submitted by the l a b o r a t o r y f o r the a p p r o v a l or comments o f the producer. As a r e s u l t of the examination of the answer p r i n t the g r a d i n g o f v a r i o u s scenes may be changed o r the c o l o r balance may be a l t e r e d i n subsequent p r i n t s or other c o r r e c t i o n s may be made. BLOCK BOOKINGS - Block booking i s the l i c e n s i n g o f f i l m s only i n groups and not s i n g l y . Exhibitors are forced to rent the l e s s e r q u a l i t y f i l m s i f they want those w i t h p o p u l a r s t a r s . The number of f i l m s i n a b l o c k o r group i s n o t uniform. BOOKING - The a c t o f w r i t i n g i n t o the c o n t r a c t the dates upon which a p i c t u r e i s t o be "played" a t an i n d i v i d u a l t h e a t r e . The term "Booking" i s a l s o a p p l i e d so as t o i n c l u d e both booking and commitment. The c o n t e x t w i l l determine the sense i n which the term i s used. BOOKING AGENTS - E x h i b i t o r s combined by employing agents t o b a r g a i n f o r f i l m s f o r a group. CCFM - C o u n c i l o f Canadian F i l m Makers  booking  -  135 -  CFDC - Canadian F i l m Development  Corporation  CFEG - Canadian F i l m E d i t o r s G u i l d CRTC - Canadian Radio and T e l e v i s i o n Commission CSC  - Canadian S o c i e t y o f Cinematographers  CIRCUIT - A group o f cinemas w i t h a common owner f o r which f i l m s are gooked through a c e n t r a l o f f i c e . CLEARANCE - A clearance i s the p e r i o d o f time, u s u a l l y s t i p u l a t e d i n l i c e n s e c o n t r a c t s , which must e l a p s e between runs o f the same f e a t u r e w i t h i n a p a r t i c u l a r area o r i n s p e c i f i e d theatres. COMMITMENT - A pre-season c o n t r a c t beween the E x h i b i t o r and the D i s t r i b u t o r f o r the r i g h t to one o r more p i c t u r e s t o be played during the next "season" a t one or more t h e a t r e s on dates t o be determined. DIRECTOR - The D i r e c t o r i s d i r e c t l y r e s p o n s i b l e to the producer and s h a l l be r e s p o n s i b l e f o r d i r e c t i n g the p r o d u c t i o n a c t i v i t e s o f the c a s t and crew as c r e a t i v e l y and e f f i c i e n t l y as p o s s i b l e i n order t o get the necessary photographic coverage o f the b e s t dramatic r e s u l t s o b t a i n a b l e . DIVORCEMENT - Complete s e p a r a t i o n o f ownership and c o n t r o l of cinemas from t h a t o f f i l m p r o d u c t i o n companies. EXCHANGES - Exchanges are the wholesale o f f i c e s i n major c i t i e s t h a t n e g o t i a t e l i c e n s e s w i t h , and d e l i v e r f i l m s t o , the t h e a t r e s i n t h a t area o f the country. FIRST RUN - The f i r s t showing o f a p i c t u r e i n any c i t y , town o r zone. FLOP - A p i c t u r e which f a i l s to a t t r a c t patronage and consequently f a i l s to produce expected box o f f i c e r e c e i p t s . FOREIGN FILM SUBSIDIES - V a r i o u s s u b s i d i e s a r e g i v e n by c o u n t r i e s , government agencies, banks. Some s u b s i d i e s a r e based on money spent i n the country. Other s u b s i d i e s are a v a i l a b l e only t o c i t i z e n s o f , and c o r p o r a t i o n s i n c o r p o r a t e d i n , the country g i v i n g the subsidy. IATSE - I n t e r n a t i o n a l A l l i a n c e o f T h e a t r i c a l Stage Employees  -  136  -  LEVY - A sum s t a t u t o r i l y deducted from the b o x - o f f i c e r e c e i p t s of a l l f i l m s b e f o r e these are d i v i d e d between d i s t r i b u t o r and e x h i b i t o r . The B r i t i s h F i l m Fund Agency shares out the Levy Fund between B r i t i s h f i l m s a c c o r d i n g to the r e l a t i v e amount o f t h e i r earnings from f i l m h i r e . The r a t e of Levy i s one-ninth o f the amount by which the payment f o r admission exceeds l i d . MPAA - Motion P i c t u r e A s s o c i a t i o n of America, Inc. Formerly c a l l e d The Motion P i c t u r e Producers and D i s t r i b u t o r s of America, Inc. Created a censorship branch - P r o d u c t i o n Code A d m i n i s t r a t i o n (PCA), c r e a t e d an a d v e r t i s i n g ( d i s ) a p p r o v a l branch - A d v e r t i s i n g Code A d m i n i s t r a t i o n (ACA). MOTION PICTURE EXPORT ASSOCIATION - Source of i n f o r m a t i o n concerning f o r e i g n c o u n t r i e s ' p r o d u c t i o n ( s u b s i d i e s ) , d i s t r i bution, e x h i b i t i o n . MOVEOVER - A moveover i s the p r i v i l e g e given a l i c e n s e e to move a p i c t u r e from one t h e a t r e to another as a c o n t i n u a t i o n of the run a t the l i c e n s e e ' s f i r s t t h e a t r e . and  NABET - N a t i o n a l A s s o c i a t i o n T e c h n i c i a n s , AFL-CIO.  of B r o a d c a s t i n g Employees  NEGATIVE - The f i l m b e f o r e or a f t e r i t has been exposed i n a camera before or a f t e r i t i s processed so that i t c a r r i e s an image with the o r i g i n a l tone i n v e r t e d . "Positive" prints are made from n e g a t i v e p r i n t s . OVERAGE AND UNDERAGE - Refer to the p r a c t i c e of u s i n g excess f i l m r e n t a l earned i n one c i r c u i t t h e a t r e to f u l f i l l a r e n t a l commitment d e f a u l t e d by another. POOLING AGREEMENT - An agreement by which the r e c e i p t s and expenses of two o r more t h e a t r e s are pooled and p r o f i t s or l o s s e s d i v i d e d between the p a r t i e s to the agreement. for  POSITIVE PRINT - P r i n t from a n e g a t i v e . projection.  Normal p r i n t  RELEASE - When a p i c t u r e i s ready to be e x h i b i t e d and the p o l i t i v e p r i n t s are ready f o r s c r e e n i n g and d i s t r i b u t i o n , the p i c t u r e i s s a i d to be r e l e a s e d . RELEASE-PRINT - P r o j e c t i o n p r i n t of a f i n i s h e d f i l m . ROAD SHOW - A road show i s a p u b l i c e x h i b i t i o n of a f e a t u r e •in a l i m i t e d number of t h e a t r e s , i n advance o f i t s g e n e r a l r e l e a s e , a t admission p r i c e s h i g h e r than those c u s t o m a r i l y charged i n f i r s t - r u n t h e a t r e s i n those areas.  - 137 ROUGH CUT - F i r s t assembly o f a f i l m i n which the s e l e c t e d takes a r e j o i n e d i n sequence, b u t t h e f i n e r p o i n t s o f e d i t i n g have not y e t been c a r r i e d o u t . RUN - The p e r i o d f o r which a p i c t u r e i s hown i n a t h e a t r e --sometimes spoken o f as a c o n t r a c t . RUSHES - F i l m t h a t has j u s t been exposed by a f i l m camera; p r i n t s o f scenes e x a c t l y as they were shot i n the camera b e f o r e any c u t t i n g or e d i t i n g . SECOND RUN - The next showing o f a p i c t u r e a f t e r the f i r s t run. 70 mm. FILM - One shot on l a r g e r than normal ( i . e . 35 mm.) stock and shown by s p e c i a l p r o j e c t o r s on a l a r g e r than normal screen. SNEAK PREVIEW - The only method o f market t e s t i n g t h a t approaches a s c i e n t i f i c survey i s the sneak preview o f an individual film. At the preview the audience i s q u e s t i o n e d about i t s r e a c t i o n s . The producers then may d e l e t e p a r t s o f the f i l m o r make s m a l l a d d i t i o n s t o i t . SUBSEQUENT RUN - A l l showings a f t e r a f i r s t r u n — w h i c h may be a second, t h i r d , f o u r t h , f i f t h o r s i x t h r u n . for  ZONES - Zones a r e the areas i n t o which a c i t y i s d i v i d e d purposes o f g r a n t i n g e x c l u s i v e r i g h t s t o runs.  -  138 -  APPENDIX I I  DISTRIBUTORS OF FEATURE LENGTH FILMS IN CANADA  I t i s d i f f i c u l t , i f not i m p o s s i b l e , t o d e f i n i t i v e l y compile a l i s t of a l l d i s t r i b u t o r s o f f e a t u r e l e n g t h motion p i c t u r e s i n Canada. Each year some w i l l go o u t o f b u s i n e s s , some w i l l change t h e i r l o c a t i o n , others w i l l e n t e r the i n d u s t r y f o r the f i r s t time and s t i l l o t h e r s w i l l combine o p e r a t i o n s . Yet each year the Canadian F e d e r a t i o n of F i l m S o c i e t i e s compiles a most exhaustive index o f 16 and 35 mm. f e a t u r e f i l m s a v a i l a b l e i n Canada together with an a l p h a b e t i c a l l i s t i n g o f a l l d i s t r i butors i n the i n d u s t r y and t h e i r addresses. The f o l l o w i n g i s from t h a t Index. ALLIED ARTISTS  Allied Artists 85 E g l i n t o n Avenue E a s t , S u i t e 204 Toronto, O n t a r i o , M4P 1H5  AMBASSADOR  Ambassador F i l m D i s t r i b u t o r s 88 E g l i n t o n Avenue E a s t , S u i t e 400 Toronto, O n t a r i o , M4P 1B8  ASTRAL ASTRAL/COLUMBIA  A s t r a l Communications L t d . 224 Davenport Road Toronto, O n t a r i o , M5R 1J7  ASSOC. CO-OP  A s s o c i a t i o n Co-operatives des Productions A u d i o - V i s u e l l e s 9 6 Quest Sherbrooke Montreal, P.Q., H2X 1X3  BELLEVUE BELLEVUE/FOX BELLEVUE/MGM  B e l l e v u e F i l m D i s t r i b u t o r s Ltd, 35mm D i v i s i o n 277 V i c t o r i a S t r e e t Toronto, O n t a r i o , M5B 1W2  -  139 -  - AND: Bellevue Film Distributors L t d , 16mm D i v i s i o n 40 L e s m i l l s R o a d Don M i l l s , . O n t a r i o , M3B 2 T 5 - BRANCH O F F I C E S 8 20 - 1 6 t h A v e n u e Calgary, Alberta - AND  S.W.  -  2 5 0 R o s e De L i m a M o n t r e a l , P.Q.  Street  - AND Bentley Street S t . J o h n , N.B. - AND  -  1644 W e s t 7 5 t h A v e n u e V a n c o u v e r , B.C. - AND  -  20 S t e v e n s o n R o a d Winnipeg, Manitoba BRANDON  Brandon F i l m S e r v i c e Brandon U n i v e r s i t y Brandon, Manitoba  CANSOV  Cansov Films S u i t e 4 0 4 , 55 B l o o r S t r e e t T o r o n t o , O n t a r i o , M4W 1A9  CFDC  Canadian Film-Makers' D i s t r i b u t i o n Centre 406 J a r v i s S t r e e t T o r o n t o , O n t a r i o , M4Y 2G6  CFI  Canadian F i l m I n s t i t u t e Film Library 30 3 R i c h m o n d R o a d O t t a w a , O n t a r i o , K1Z 6X3  -  140 -  CFI/CFFS  Canadian Federation o f F i l m Canadian F i l m I n s t i t u t e Film Library 303 R i c h m o n d R o a d O t t a w a , O n t a r i o , K l Z 6X3  CINE/ART  C i n e - A r t F i l m D i s t r i b u t i n g Co. L t d . 800 De M a i s o n n e u v e E a s t , S u i t e 6 0 0 M o n t r e a l , P.Q., H 2 L 4 L 8  CINE/FRANCE  Cine-France D i s t r i b u t i o n Ltee. 690 O u e s t , R u e l a G a u c h e t i e r e M o n t r e a l , P.Q.  CINEMA I I I  Cinema I I I 5 800 M o n k l a n d A v e n u e M o n t r e a l , P.Q., H 4 A 1G2  CINEPIX  Cinepix Inc. 8275 M a y r a n d M o n t r e a l , P.Q.  Societies  - AND Cinepix Inc. 696 Y o n g e S t r e e t Toronto, Ontario M4Y 2 A 7 COOKE  CO-OP  W i l l i a m F. C o o k e T e l e v i s i o n P r o g r a m s S u i t e 5 0 6 , 696 Yonge S t r e e t T o r o n t o , O n t a r i o , M4Y 2 A 7 CINEASTES  Co-operative Cineastes Independants (Independent Filmmakers' Co-operative) 2026 O n t a r i o E a s t M o n t r e a l , P.Q.  CRAWLEY  Crawley Films For d i s t r i b u t i o n contact: NEW C I N E M A E N T E R P R I S E S 35 B r i t a i n S t r e e t T o r o n t o , O n t a r i o , M5A 3V8  CRITERION  Criterion Pictures Corporation Ltd, 5800 M o n k l a n d A v e n u e M o n t r e a l , P.Q., H 4 A 1G2 - AND  -  -  141  -  Criterion Pictures Corporation 1541 B a r r i n g t o n S t r e e t , S u i t e H a l i f a x , N.S., B3J 1Z6 CZECH  EMBASSY  DABARA  DANTON  DEC  Czechoslovak Consulate-General 1305 P i n e A v e n u e W e s t M o n t r e a l , P.Q., H3G 1B3 Dabara Films 367 Q u e e n S t r e e t W e s t T o r o n t o , O n t a r i o , M5V  2A4  Danton Films L t d . 250 M e r t o n S t r e e t T o r o n t o , O n t a r i o , M4S  1B1  Dec Films 121 A v e n u e Road Toronto, Ontario,  2G3  M5R  DELMAR  Delmar A u d i o - V i s u a l S o c i e t y 1664 B a s e l i n e R o a d O t t a w a , O n t a r i o , K2C 0B7  DERMA  Derma C o m m u n i c a t i o n s 892 S h e r b r o o k e W e s t M o n t r e a l , P.Q., H3A 1G3  ELLIS  R a l p h C. E l l i s E n t e r p r i s e s 556 C h u r c h S t r e e t T o r o n t o , O n t a r i o , M4Y 2E2  FAROUN  Faroun Films D i s t r i b u t i o n 136 S t - P a u l S t r e e t E a s t M o n t r e a l , P.Q., H2Y 1G6  FRANCE  FILM  FRENCH  EMB.  FRONTIER  Ltd. 216  of  Canada  Ltd.  France F i l m 1 4 0 5 Rue A l e x a n d r e - D e s e v e M o n t r e a l , P.Q., H2L 2V5 Le S e r v i c e C u l t u r e l de l ' A m b a s s a d e de ( F i l m L i b r a r y o f the F r e n c h Embassy) 464 W i l b r o d S t r e e t O t t a w a , O n t a r i o , KIN 6M8 F r o n t i e r Amusements S u i t e 701, 4 4 E g l i n t o n Avenue T o r o n t o , O n t a r i o , M4R 1A1  West  France  -  HIMBF  IFD  142 -  Hungarian Section o f Independent Mutual B e n e f i t 214 B e v e r l e y S t r e e t T o r o n t o , O n t a r i o , M5T 1 Z 3  Federation  International Film Distributors L t d . 20 B l o o r S t r e e t W e s t T o r o n t o , O n t a r i o , M4W 1 A 1 - AND International Film Distributors L t d . 5 801 M o n k l a n d S t r e e t M o n t r e a l , P.Q., H 4 A 1G4 - AND I n t e r n a t i o n a l F i l m D i s t r i b u t o r sL t d , 820 - 1 6 t h A v e n u e S.W. C a l g a r y , A l b e r t a , T2R 0S9  ITE  International Tele-Film Enterprises 47 D e n s l e y A v e n u e T o r o n t o , O n t a r i o , M6M 5 A 8  LAPOINTE  J.A. L a p o i n t e F i l m s I n c . 1575 D u t r i s a V i l l e S t . Laurent M o n t r e a l , P.Q., H 4 L 4 J 7  LIGHTHOUSE  Lighthouse Films L t d . c/o B r i g h t o n T h e a t r e 127 R o n c e s v a l l e s Avenue T o r o n t o , O n t a r i o , M6R 2 L 2  MARLIN  Marlin Motion Pictures L t d . 47 L a k e s h o r e R o a d E a s t P o r t C r e d i t , O n t a r i o , L 5 G 1C9  MUTUAL  Mutual Films/Le Films Mutuels 225 Roy S t r e e t E a s t M o n t r e a l , P.Q., H2W 1M5  NEW C I N E M A NC/CRAWLEY  New C i n e m a E n t e r p r i s e s 35 B r i t a i n S t r e e t T o r o n t o , O n t a r i o , M5A 3 V 8  NFB  N a t i o n a l F i l m Board o f Canada 1 Lombard S t r e e t E a s t T o r o n t o , O n t a r i o , M5C 1 L 9  -  143 -  NFB/GBC  CBC T e l e v i s i o n P r o d u c t i o n s N a t i o n a l F i l m Board o f Canada 1 Lombard S t r e e t E a s t T o r o n t o , O n t a r i o , M5C 1 L 9  PALLAS  Pallas Films S u i t e 5 0 6 , 696 Yonge S t r e e t T o r o n t o , O n t a r i o , M4Y 2 A 7  PARAMOUNT  Paramount P i c t u r e s C o r p o r a t i o n 1 Yonge S t r e e t T o r o n t o , O n t a r i o , M5E 1 E 5  PEERLESS  Peerless Films Ltd. 10 70 De B l e u r y Rue M o n t r e a l , P.Q., H2Z 1N3  PRIMA  Prima F i l m I n c . Suite 205 135 E s t , Rue Sherbrooke Montreal, P.Q., H 2 X 1 C 6 - AND Prima F i l m Inc.. 6 7 Yonge S t r e e t Toronto, Ontario,  M5E 1 J 8  PROSPEC  Les F i l m s Prospec I n c . 7017 C o t e S t - L u c B l v d . M o n t r e a l , P.Q., H 5 A 1 A 9  RITTER  George R i t t e r F i l m s L t d . 82 E d i t h D r i v e T o r o n t o , O n t a r i o , M4R 1 Z 2  SAGUENAY  Saguenay F i l m s S u i t e 570 102 B l o o r S t r e e t W e s t T o r o n t o , O n t a r i o , M5S 1N1  TELEGENIC  Telegenic Programs, I n c . 250 M e r t o n S t r e e t T o r o n t o , O n t a r i o , M4S 1 B 1  TFS  Toronto Film Society 184 C r e s c e n t R o a d T o r o n t o , O n t a r i o , M4W  1V3  -  144 -  UNITED ARTISTS UA/MGM  United A r t i s t s F i l m Exchange S u i t e 800 2180 Yonge S t r e e t T o r o n t o , O n t a r i o , M4S 2 B 9  UNIVERSAL  Universal Films 2450 V i c t o r i a P a r k Willowdale,  Avenue  Ontario,  M2J 4A1  - BRANCH O F F I C E S UNIV/CAL  Calgary,  Alberta  - AND UNIV/MO  Montreal,  P.Q.  - AND UNIV/STJ  St.  J o h n , N.B. - AND -  UNIV/VAN  .  V a n c o u v e r , B.C. - AND -  UNIV/WIN  Winnipeg,  Manitoba  WARNER BROS  Warner Bros. D i s t r i b u t i n g L t d . 70 C a r l t o n S t r e e t T o r o n t o , O n t a r i o , M5B 1 L 7  ZODIAK  Zodiak I n t e r n a t i o n a l Productions I n c , 16 W e s t m i n s t e r A v e n u e N o r t h S u i t e 206 M o n t r e a l , P.Q., H 4 X 1 Z 1  - 145 -  APPENDIX I I I  THE UTILIZATION OF TAX DEDUCTIONS IN THE FINANCING OF CANADIAN FEATURE FILMS: AN INDUSTRY EXAMPLE  "The  Twister"  about  i s a feature  men who p l a y  d r i f t e r ,  a fast  be  around.  but  pushed when  when,he's  he goes, pushed,  Proposal  with  gun,  length  guns.  western,  Able  a  Willing  story i s a  a n d a man who d o e s n ' t  He d o e s n ' t people  know where  breaks  f o r Financing  t o  he's going,  g e t o u t o f t h ew a y .  a l lhell  like  loose.  "The T w i s t e r "  -  146 -  THE OBJECT  We propose to make a Western feature film,"The t e l e v i s i o n and t h e a t r i c a l release. i s $500,000.  Twister",for  The cost of the production  The minimum expected returns w i l l be $1.5 m i l l i o n .  DISTRIBUTION OF PROCEEDS  100$ of the proceeds from d i s t r i b u t i o n of the f i l m w i l l go to the investors, u n t i l the f i l m has returned the cash investment. A f t e r the cash investment has been returned, the proceeds w i l l be s p l i t , with 50% going to the investors, and 50% going to Highlight Productions Ltd.,for writer,actors,fees and r e s i d u a l s . (see diagram 1  "Schematic Breakdown of Investment")  TAX SAVINGS ON INVESTMENT  With the new C a p i t a l Cost Allowance f o r motion picture investment, the investor i s allowed to deduct 100% of h i s investment from h i s taxable income. For an investor i n the 60% tax bracket, t h i s means that an investment of $100,000. w i l l give tax savings of $60,000. or an actual cost of investment of $40,000. An investment of $100,000. costs the investor only $40,000. (see diagram!  "Actual Cost of Investment")  INVESTMENT AND OWNERSHIP  The t o t a l cost of the f i l m production  i s $500,000.  Investment w i l l be i n blocks of $100,000., each block purchasing 10% ownership of the f i l m . The net r e s u l t i s that the f i l m w i l l be owned as follows 1 10%  by each of three investors f o r a t o t a l of 30%  20%  by the Canadian Film Development  50%  by Highlight Productions Ltd.,with the benefits of t h i s ownership going to the cash investors u n t i l the investment i s repaid.  (see diagramt  Corporation  "Schematic Breakdown of Investment")  'i  -  SCHEMATIC  147 -  BREAKDOWN OF I N V E S T M E N T  Investors $300,000.  C.F.D.C. $200,000.  make 8 1  The Film  Sales Theater & T.V. Less D i s t r i b u t i o n Costs  Production Company Fori writers,actorsj pre -pr oduc t i on] A various fees  C.F.D.C. 20%  I Investors I 30%  NOTE i A l l monies from sales,100% go to the Money people u n t i l i n i t i a l investment returned. That is,60% of i n i t i a l returns to investors and 40% of i n i t i a l returns t o C.F.D.C. u n t i l $500,000. repaid. A f t e r which the returns are s p l i t as i n above diagram.  -  148 -  ACTUAL COST OF INVESTMENT Assumingi  Individual Taxpayers  $100,000,  Investment  $200,000.  Individuals Taxable Income  100%  C a p i t a l Cost Allowance ( C C A . )  Taxable Income $200,000.  less $100,000. Invested 100% C C A .  equals ACTUAL COST OF  Net Taxable Income $100,000.  $100,000. INVESTMENT IN THIS TAX BRACKET IS $40,000.  >  -  le 88 Tax On Net Income ffe^n.nno.  equals Net Cash Investment $40,000.  si/  Tax Saving $60,000.  * NOTEi Tax payable without investment, $120,000.  -  149 -  Profits  Of the p r o f i t s that occur a f t e r recoupment of cost, money gets 50% of the p r o f i t s and the creative, (producer,director,writer,actors and pre-production investor) receive  50%,  Thus i f the f i l m earns $1,000,000. i n p r o f i t , each investor would receive $100,000. i n p r o f i t per 10%  participation.  NET RESULT  The net r e s u l t f o r an investment of $100,000. i s that an investor ( i n 60% tax bracket) receives $60,000, i n tax savings t h i s year.  That i s , f o r a  cost of $40,000, the investor has f u r t h e r tax savings of $60,000. and 10% ownership of what w i l l be a profitable  film.  I t i s expected that a good f i l m w i l l r e s u l t and that a return of investment and a p r o f i t ensue. Any income derived from t h i s investment would be classed as taxable income.  -150  PROMISES  AND  -  GUARANTEES  In t h i s venture  the p a r t i c i p a t i o n of the investors  w i l l be protected by Highlight Productions Ltd. Investors w i l l not be subject to any  liabilities  or r i g h t s of action against them, beyond the l i m i t s of t h e i r investment. Investors i n t h i s venture, by avoiding l e g a l forms, such as incorporating a separate l i m i t e d company f o r this, production, or by f i l i n g partnership papers are at an advantagei 1)  high l e g a l costs are  avoided  2)  assets of Highlight Productions Ltd. are available to guarantee protection against a d d i t i o n a l costs without impingeing upon the ownership p o s i t i o n of the-investor.  3)  the tax issue which seems to be i n some doubt, that i s , whether i n a partnership,or corporation investors can apply the tax c r e d i t against other sources of income outside of t h i s partnership or corporation, - i s avoided.  -  151 -  HIGHLIGHT PRODUCTIONS LTD. FURTHER GUARANTEES I  1)  The investor w i l l be able to claim the tax c r e d i t on t h i s investment,-regardlesB.  2")  that the f i l m w i l l be completed on budget,on time.  3)  that a bond w i l l be purchased to insure the completion.  k)  that the investor's ownership w i l l not be 'WateredDown'' by requests f o r a d d i t i o n a l funds.  5)  that the investors, at a l l times, w i l l be kept informed on the production, that upon request they w i l l be permitted to v i s i t the sets and locations.  6)  that i n v e s t o r s , i f they so desire, w i l l be advised regarding any major developments which would a l t e r Highlight Productions Ltd. p o s i t i o n i n t h i s venture.  7)  a l l books,agreements,contracts etc. w i l l be available f o r inspection at a l l times by the investor, and that advise or questions from the investors w i l l be given serious attention.  Size of budget,or cast of stars does not guarantee a high grossing p i c t u r e . What makes a motion picture f i l m successful i s mysterious and intangible - a q u a l i t y that a t t r a c t s the public p a r t i c u l a r l y young people - i n mass proportions and lures i t to the box o f f i c e . I f a f i l m possesses t h i s intangible, i t becomes an investment that makes ordinary investments pale by comparison. The  preceeding i s but a rough outline of a s i t u a t i o n  that we have investigated i n d e t a i l .  We expect questions  and would l i k e to be given the opportunity to answer them.  -  152 -  The investment i s $100,000, f o r each 10% ownership of the film,"The Twister". Cheques are to be given to Mr.Graham Chambers f o r safekeeping. For each 10% ownership p o s i t i o n -  One cheque i s f o r $100,000. payable to "Highlight Productions Ltd.,Special Account 'out* " at the Royal Bank of Canada, Main Branch, Hastings & G r a n v i l l e .  Mr. Chambers i s to release these cheques to Highlight Productions Ltd. a f t e r i A)  S a t i s f y i n g himself with the documentation and that i t records each investor as owning 10% (or i t s multiples) of the f i l m .  B)  S a t i s f y i n g himself that "Highlight Productions Ltd#,Special Account, 'out' " has the r e s t r i c t i o n that cheques written must be f o r v a l i d production expenses and further must be co-signed by hims e l f or Mr.Jim Westwell or made payable to the o r i g i n a l investor. A f u r t h e r r e s t r i c t i o n i s that any balance i n the account and any i n t e r e s t must be cleared on or before the year end,1975•  In conformity with the above I hereby tender Mr.Graham Chambers a cheque t o t a l l i n g $100,000.(or i t s multiple) to purchase a 10^ i n t e r e s t (or i t s multiple) of the film,"The Twister".  -  153 -  PRE-PRODUCTION INVESTMENT COST OF PRE-PRODUCTION T o t a l pre-production expenses are $22,304.92 . F i f t e e n thousand d o l l a r s of t h i s w i l l come from a private investor, with the balance of $7t304.92 comming from the C.F.D.C.  RETURN OF PRE-PRODUCTION INVESTMENT Pre-production investment w i l l be considered a f i r s t expense against the budget, and w i l l be returned on or before the beginning of shooting. It i s important to note that the pre-production investor i s taking no r i s k on the success of the f i n i s h e d f i l m . BENEFIT OF PRE-PRODUCTION INVESTMENT The pre-production investor w i l l be e n t i t l e d t o 5# of the proceeds from d i s t r i b u t i o n of the f i l m , a f t e r the f i l m has returned i t s production cost, (this compares with 10% of proceeds f o r each $100,000. of production investment.) In other words, the pre-production investor gets 5% of the p r o f i t s f o r $15,000., with h i s investment returned on the completion of f i n a n c i n g . He i s i n a f i r s t - i n , f i r s t - o u t position. TAX SAVINGS FOR PRE-PRODUCTION INVESTMENT Because of the 100% C.C.A..for an investor i n the 60% tax bracket, an investment of $15,000. gives a tax saving of $9,000., or an a c t u a l cost of investment of only $6,000. (see diagrami  "Actual Cost of Pre-Production Investment"  - 154 -  ACTUAL COST OF PRE-PRODUCTION INVESTMENT  Assumingi  Individual Taxpayers  Investment  $ 15,000.  Individuals Taxable Income  $200,000.  C a p i t a l Cost Allowance ( C C A . )  100%  Taxable Income $200,000.  •  1ess $15,000. Invested 100% C C A .  eq uals ACTUAL COST OF $15,000. INVESTMENT IN THIS TAX BRACKET IS $6,000.  Net Taxable Income $185,000. r  1<»S8 Tax On Net Income $111,000.  eqiials Net Cash Investment $6,000.  ± Tax Saving $9,000.  * NOTE 1 Tax payable without investment,$120,000.  -  155 -  PRE-PRODUCTION INVESTMENT  AMOUNT INVESTED! OWNERSHIP OF FILMi  $15,000. 5%  REPAYMENT t  $15,000. when f i l m i s financed and production begins  PROFITi  5% of f i l m returns once i n i t i a l investors have been repaid  NOTEi  The pre-production investor i s taking no r i s k i n terms of the q u a l i t y or sales of the f i l m . The t o t a l cost of the f i l m i s $500,000. and the minimum expected returns w i l l be $1,500,000.  In conformity with the above I hereby tender Highlight Productions Ltd. one cheque f o r $15,000. which i s a loan against the production cost of the f i l m , and a purchase of a 5% i n t e r e s t i n the p r o f i t of the film,"The Twister".  -  156  -  APPENDIX  THE  USE  OF  LEVERAGE IN  IV  FEATURE F I L M  INVESTMENT  The f o l l o w i n g e x a m p l e f r o m I n t e r p r e t a t i o n B u l l e t i n I T - 1 6 4 i l l u s t r a t e s t h e g e n e r a l f e a t u r e s o f a l e v e r a g e d i n v e s t m e n t made p r i o r t o the completion of the f i l m : (a)  The  film  has  (b)  Financing of  a budgeted the  film  cost of  i s as  $500,000.  follows:  (i) $180,000 o b t a i n e d t h r o u g h l o a n s and a d v a n c e s by o t h e r p a r t i e s i n v o l v e d i n p r o d u c i n g , e x h i b i t i n g and d i s t r i b u t i n g t h e f i l m ; (ii) an i n v e s t m e n t o f $200,000 by t h e C a n a d i a n F i l m D e v e l o p m e n t C o r p o r a t i o n (CFDC) p u r s u a n t t o p a r a g r a p h 1 0 ( 1 ) ( a ) o f t h e CFDC A c t ; (iii)  a cash  investment  of  $120,000 by  the i n v e s t o r .  (c) A l l m o n i e s a d v a n c e d w i l l o n l y be r e c o u p e d f r o m e a r n i n g s from the d i s t r i b u t i o n o f the f i l m . In addition, a l l p a r t i e s s h a r e , i n a s p e c i f i e d manner, i n the e a r n i n g s i n excess of those used t o repay the advances. (d) For h i s investment the i n v e s t o r purports to o b t a i n t i t l e t o the f i l m upon i t s c o m p l e t i o n . None o f t h e o t h e r p a r t i e s h a v e any e f f e c t i v e r e c o u r s e a g a i n s t t h e i n v e s t o r f o r m o n i e s a d v a n c e d s i n c e t h e i r r i g h t s t o r e p a y m e n t aire l i m i t e d t o t h e i r p a r t i c i p a t i o n i n the earnings of the f i l m . (e) The f i l m i s p r o p e r t y o f t h e i n v e s t o r d e s c r i b e d i n C l a s s 18 o f S c h e d u l e B o f t h e I n c o m e T a x R e g u l a t i o n s and as s u c h i s s u b j e c t t o a c a p i t a l c o s t a l l o w a n c e r a t e o f 60 p e r c e n t .  APPENDIX V  CANAQfAN FILM  D E V E L O P M E N T  CORPORATION  SOCJETE D E DEVELOPPEMENT D E L I N D U S T R I E CINEMATOGRAPHiOUE C A N A D 1 E N N E 1  February 2U, 1976. ¥z- Gear^- P. Destoyni& r  Ysztxtu P L a y e r s L i m i t e d L  Re: Quota and iuycsirtytr.t programme Gaxr Mr. Destounis: A s you. a r e aware, the C a j ^ J i a n F i i a D t v e l a p r i E n t C^flxsTatiW' ("CFDC**-) I?, tSva lateral agency iv-sporisii>Lc far* tha  develop ri^nt o f a f u t u r e filrt industry i n Canada. As such, tha Secretary °t'State l&s requested the CFDC'. To formalize and to monitor the q u o t a and investment p r o g r a ^ a e ufdeh he prcjosed to you arrf *fcd.eh. you have accepit-d. This l e t t e r , T h c m f o r e , whsn countcrsigrsed by y a i j -will coi&titute thfc -undertcking of Fwacus Players Lusitfed < "Fonrsj-.") ccnsarpJrisr investment i n ami the exhibition o f C^adiart filature f i l r o <?.:<er>aiivji."t<.*.r r t f e r r o ] to as *the i/rcgrvOTjjfc;') for the. juried of August 1st, 1975 to J u l y 3jst, 1575 (liereinafterr e f e r r a l to as "the prograrnsc period"). 1  1  1 For the purfsosea »3f th* progrctnrria, a Can*3lan feature i'iltt is a f i l m cf ?»t less than ninety (303 jsdnvites running ti#e and which: <a) hs& tfesv c e r t i f i e d by tha Secrctarv o f State Ai; »eet±riH tbt*. c r i t e r i a for rv-oiupt o f the IOCS G*oita± cost «Uowanec set forth i n fiuhsectiais 2104 (2) <h) and. 1104 (10) o f the Incase Tax E p i l a t i o n s , or, (b) hd& beer, c e r t i f i e d as a co-produrtticn under an afifee&ent' between Canada and aT&tr>sr> oewfttry* or, (c> has been product with tha financial assistance of the- CFDC, c r , (d) M s bean produced by the Uaticr^l Fi2ia -Board Of Canada, /2  13.0  2 T h e CFDC v d i i make a v a i l a b l e - t c r«Rnv-i3 a c o n s o l i d a t e d l i s t o f t h e C<iffc**ian i t e . U c x : f i l m s c u r r e n t l y a v a i l a b l e v r i t h i i c the- s a r S i i K j o f c l a u s e 1 t I n s l u d i n p , d u b b e d f i l i u s a n i I T J W b u d g e t f i l n s s ) m a q u a r t e r l y b a s i s t i d i n g Ihft prograRT&e p e r i o d . 3 E * j r i i ? f . t h e pr*?i«EE*i p e r i o d , F a m o u s v i l l i n v e s t d l l i o n d o l l a r s ($i,{K&,S8&> i n t h * p r o d u c - t i c n o f - S s n a & a n o r e cd  feature filing. U  -  E u r d n g the- p r o g w m m e . p e r i o d , ( a ) ramcus- rayAartakes t o 4 2 x h i b . i t f o u r W E C & S <if C a n a d i i s n f e a t u r e f i Iras i n e a c h , t h e a t r e w h i c h i t o m s -and/or c o n t r o l s e x c e p t i n t h e c a s e o f drive-in thoatrts. <b) I n t h e c a s e o f d r i v e n i n t h e a t r e , d u e tt» t h a i r *  i n crtdv d r i v ^ i n . t h o a t r e i t o u r s w a i / o r c o n t r o l s . 5 CFDC w i l l j r o r d t c r aixi s u p e r v i s e t h e progr«2nK u n d e r t a k e n b y facExis. I n order:- t o - a s s i s t t h e C F D C i n t h i s o p e r a t i o n s F&ECMS has foivarded t o t h e CFDC a l i s t o f t h e t h e a t r e s i t c v n s a n d / C E ~ c c ? i t r o l s w h i c h l i s t i s . a n n e x e d h e r e t o a s S c l s e d u l c "A", faacus u r d c r t a V r e s t o i n f o r m tl»e CFDC' o f a n y c h a n g e s i n s a i d S c h e d u l e A at th^- c v A s r t e r i y m e e t i n g s r e f e r r e d t o i n c l a u s e 8. n  6 -  Famous w i l l f o r w a r d  M  t o t h e CFDC o n * q u a r t e r l y  basis,  d e t a i l * * * r e p o r t s showing,*(a)  i t s prxypased  actual investnerfts,  , ( b ) t i t l e s o f t?je C a n a d i a n f e a t u r e f i l m s i&Ach have- b e e n s b c u i , (c)  t h e narres o f t h e t h e a t r e s  i n*hich the f i l m s  have b a s s shewn, a n d , (d>  I t e "bsngfe o f t i a r e d u r i n g w h i c h t h e f i l s s h a v * been s h o w ,  7 The quarterly s p o r t y r e f e r r e d t o i nclause 6 w i l l be cs2<3e a v a i l a b l e Hy t h e CFDC t o t h e C a n a d i a n f i l i s z n t f i s t r y a n d t o p w i r c x i a l g o v c t t ' r c a n t s u) 1h t h e c ^ . f e p t i o A o f FairtDus* p r o p o s e d o r a c t u a l i n v e s t m e n t s i n Cajjftdian f e a t u r e f i l m s w h e r e t h e t o t a l Amount o n l y wD.t p a c a d e a v a i l a b l e ,  ,.../3  APPENDIX C A N A D I A N S O C I E T E  FILM D E  VI  D E V E L O P M E N T  D E V E L O P P E M E N T  C I N E M A T O G R A P H i Q U E  C O R P O R A T I O N D E  L  160  INDUSTRIE  C A N A D ^ E N N E  Mr* H.T. Blumsom fresidsnt, Odeon Theatres (Canada) L i m i t e d  p.e: P^p"*^ | d investment prcgranrrg a  n  Dear Mr, BLumsauu As you ar<e aware, t h e Canadian Filza DevelopiKAtL C o r p o r a t i o n ( T F D C ) i s the F e d e r a l agency r e s p o n s i b l e f o r the der.ielcpnent o f a feature f i l m i n d u s t r y i n Canisks. As e u d i , the- S e c r e t a r y #f 3 bate has requested the CFpC fovt a l i w and t o irrrdttti' '.jwta and investment prcgrasiae u h i c h he proposed t a you and which you have accepted. T h i s L e t t e r , t h e r e f o r e , when countersigncd by you, v i l l c o n s t i t u t e u n d e r t a k i n g o f Ddetrt Theatres (Canada) Limited ("Odk^on") osrKssarning investment i n , and the e x h i b i t i o n o f Canadian foitTjr\3 f i l m s (hereiHsf t c r r e f e r r e d t o as "tfsc prcgraj-nw'') f a r t h e p e r i o d o f Dec^rLer 1 s t 1975 t o November 30th 19?6 (.heroimfter re-f erred t o <as *the pro£fan»e p e r i o d " ) , 1 F o r -the purposes o f the prcgranroaj a Canadian f e a t u r e f i l m i s a. f i l m of not l e s s than seventyfive. mi4>utes rwc«in& t i c i s and vtfdch: (a) has been c e r t i f i e d by the Secretary o f S t a t e as jseetinf; the- c r i t e r i a iac r e c e i p t o f t h e 20C& c a p i t a l c o s t allowance s e t f c r t h i n subs e c t i o n s 1L0H (2) (h) and HO** (LO) o f the Incojfi Tax RegsilaticnS:, o r , ;.•:-  (h) has been c e r t i f i e d as a co-praiurticrv under - • • an-agreszsent between Canada and another (c> has been produced w i t h the f i n a n c i a l a s s i s t enca c f the CFDC, c r , (d) ftas been produced by the N a t i o n a l F i l m Board of CajjaAs. /2  H.T.  Blumscia  -2-  rebruary 13»  2 - The CnX; w i l l make a v a i l a b l e t o Odeon, a. cons o l i d a t e d L i s t o f t h e Canadian f e a t u r e f i l m s c u r r e n t l y a v a i l a b l e w i t h i n the cj^aning o f elaus&'X < i n c l u d i n g dubbed film and low budget f i l i n s ) o n a q u a r t e r l y b a s i s d u r i n g the progressae p e r i o d 3 - D u r i n g tha prcgramrje p e r i o d > Gdeon w i l l i n v e s t f i v * )-«ndrei thousand d o l l a r s C$5!>0»000) i n t h e pr^odoctior. o f Ccfiddian f&ahzre £ilns. H -  During tha pix^rftrtwc p e r i o d , (a)  "*#*3ertakes t o e x h i b i t fair- veeXs o f Canadian feature f i l e s i n each t b e a t y * 'which i t ewre and/or o c t r o i s except i n t h e c a s e o f dnjve-in theatras.  (b) I n t h e case o f d ^ i v e - i n t h e a t r e s , due t o t h e i r " sefla«t»l c f ^ a t i n g p e r i o d s , Odeon untks^takes t o to^dhit ens week o f Gamdjiin fea.t?jr>£ f i l s s is* each d r i v e - i n t h e a t r e i t owns and/or c e n t r a l s , 5 - CFDC w i l l stffiitOP and s u p e r v i s e the prograsisa undertaken by Odecxi. I n o r d e r to a s s i s t "the CFDC i n t h i s o p e r a t i o n , Odeon has &3ivarded t o t h e CFDC a l i s t o f the t h & s t r e s i t awns and/or c o n t r o l s which l i s t i s annexed hereto as S c h a i i l e "A". Odeon undertakes- t o i n fare the CFDC o f any Ohanges i n s a i d Schedule "A" a t the. q u a r t e r l y meetings r e f e r r e d t o i n claiasa S, 6 - Odecn. w i l l forward t o the CFDC c n a q u a r t e r l y b a s i s , • i a t a i l c d r e p o r t s stewing; <a) i t s proposed o r a c t u a l investroe-ntSy (b) t i t l e s o f 1±e CaniKiian f e a t u r e f H a s vjhicb have bean e h ^ n , ( c ) t h e naaas o f t h e u«eatres i n which the fil*<» have been shown* stnd <d) t h e length of t i m s d u r i n g which the f l b u s have been shra)« . ? - The q u a r t e r l y reports r e f e r r e d t o i n c i ^ y s e $ w i l l ba s i d e a v a i l a b l e b y the CF&2 t o the Canadian f i l m industry' and t o p r c v i n c i a l g t ^ m r i e n t s w i t h the eTEe^tkyts o f Odeon's f t i ^ c w d o r a c t u a l investments in Canadian faitjjzvr f x l n e where the t o t a l ZitiMXCt axLy w i l l ix maie a v a i l a b l e .  APPENDIX V I I  TOWN OR CITY C J T E O L i V1LU"  THEATRE  T I J t E OF THE FI1K  SEEKS  UAYS JOURS  British'Co.«irabjj Vancouver  Port Alberni Vernon  Daic^aa Placfc Barniby Cineaa. Coronet: North H i l l Cepito.1 Towue  It seemed Sunday In i t seccod 3r s r - r e s ^  Jan i s  like the like Ijke  a Rood idaji country a. good Idea a good i d e a  1 i ? 2 4 3 6  Jam* tu<5dY Kr^vitr  Alberts Red Beer  Place Plata  It seemed If.kn a good Idea  Sask^rchewaa n  •i  M Saskatoon  Broadway Capitol KeLro^olitan. S t a r l i t ? Drive-In Capitol Midtowa Ca^ttol  Brandon  G r e e n A c r e s Ti.In  Metropolitan  <Iapirol raresouht  H M  ff K  11 fill  «  T„i}_ C l r t e s a Eglititcm KallywruOd Imperial  tin1versify C&d&xbrao Gulden N i l e Town* 4 C o u n t r y Westwood u 'Hortht-'cxt D r i v e - I n St&cborou-ih U - l n  Jam * J t seeaed l i k e a good i d e a Sunday i n t h e c o u n t r y Hy p l e & t u r e i s Tt seened l i k e a good i d e a Jan i s My p l e a s u r e i s ' Sunday l a t h e c o u n t r y  1 1 3 1 2 1  Secomncndation £ox fiiercy Sfic^s^^nd.atian f o r mercy I t saeaed l i f c * a good i d e a  1 1 1  I t Mir-med li>.e a good fdea F o r br.rttvr £ f o r w o r s t I t sccsErai l i k e a good i d e j T^c.cKEatndcition f o r n-rcy L i t i s ny l a t h e r t o l d me TVie c a n who sV.ird down E v e r e s t I t sfceceu l i k e - a good idea. ^r.r-oCT.v^dation f o r mercy T t xewaed l i k e a good'idea Rr.coraneadatiC'Q f o r laercy Pvecoasafftdatlon f o r ncrcj' Recoataindat Jon f o r mercy I t seeaed l i k o a p.ood Ldao. fieeOKiefld*tioo f o r mercy RCTDrroendaliOrt f o r B.crcy I t i ^ e a t d l i k e a good i d e a  2 3  1 1 A 7 4 3 41 2 2 J 2 4 1 1 1  -  164 -  3/ TOVM on cm C I T E on viu.p.  W:.\TRF. C7  TITLF. OF T«F. FTLM TTTRF.finFILM  £-»sr1 in&ton Cincssa J s c J i G n n Squar**.  3 r ?c«v?rd 5 J k e .-i £ooij i d e a I t S C O T ^ l i k e a £oo»? fd?-3 JJrrcrpTSPndw'ion F o r m e r c y  VEEKS  DAYS •JOUKS  Ontario  London  Kill Park Kefcont Ottava M Sudbury Windsor  Bartit  P l a n e <Je V i i 3 c BritJitmia D r i v e - I n Capitol City Centre Centre Devonshire Fa.Lice i v l n E a s t H. i n &ar.y Koxy  EelLvvilJf: Corn v» JJ  BcIJ«*viIl« I», I n  K i n g s tea Of i l l 14  Seaway D r i v e — I n Capitol Geaeva (ftrillia Drive-In  5t-Catbr.ri.nn5  Jytn Ct-intrp if  If  ^ofss-r.tl  liV.o.  a  good  3 1 3  idea  3  f o r mercy The n a n v h o tskled d u w i Everest. Jteeotiaemi^tlon f o r mercy I t -wwifcri l - i k n a C O P O " -}(Jp--a I t s c e s e d l i k e n Rood I t scaned l i k e a 2 J fcfea RecDssraendatiim f o r nercy I t occsaed 1 i k e a good i d t a T h e n a n *>ho s k i e d dovn E v e r e a t I t BtzskA l i k e a g o o d 3d&a Retoaaeudaticyu f o r e e c t s R e c n r n e a d a r t o n f o r ©ercy I t j u m o a "I iV.- A g o o d i d e a J U - c o & ^ c n r f s r i o n f o r Ts.crcy Ssspctey i n t h r c o u n t r y  3 1 1 2  RECGsrrandati'-m  1 1 1  0 0 <  I t secmtA l i V . e a R o o d i d e a Sunday i n . rb>-- c o u n t r y I t s-tt-aed l i V e . f l g o o d id<w Ec-c'oaiaendation, f o r M e r c y Lo.vlwi * L a u g h i n g I t FrsTT!»N3 U l c f ! a p.ond "' '1fcc-\*«rr?t'.ndat i o n f o r AW-rcy I t seeffif4 l i k e a g o o d i & r *  1 3 2 I 1 3 3 3 3  3  J 1 1 1 2  <  {Juebec lloutre-al  it M H  Clite-Centre Tatiaieu F l * e o - y i . U e Kari<?  'Sftovdon  •V<??t»oimt  Rivali  Crcw»f ielri P.irfc,  It  seeded l i k e a good i d e a PQ*I* l e t i e i l i e u t e t p o u t l e n i r e Ku&t&Dg l i e s s y farther t o l d a t L i e a By f a t h e r t o l d a e I t SCeimt*?. l i f c v a f.OOij i d t a . Kustanr. iHi.ddy K r ^ v i t r . ( f r . ) IhiAdy X r a v i t s <fr.) T*-rt«san5 HaRtanj; I L r.eeraed l i k e a good lAe& Frip$;an!V JtentJinfl  1  3  2 5 1 4 2 1  1 3 1 4 3 2  -  KirtN  OR  CITY  C1?F. 01' VTLLE  TtioATHE  Qijchcc  Chicduticti  £1 Tirana  Grauhy  Cinema  St-Hyacinthc  Ma::k£  •n  lroi'K-?.iv Letaa Cap 1 Co 1  Nov  F.rsivitfc  (ft.)  Pour 3e m e i l i e u r et powr lo. p*rc".  Dollard Drive l o Canadfea  »  Sydney Truro  3/ DAYS JOIiRS  I I T I E OF THF. F I L H  &>dd?  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