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

Abstract

The feature film industry in Canada is dominated by two large foreign owned theatre chains and eight foreign owned distribution firms, who, by engaging in a series of interrelated trade practices, have managed to gain effective control of not only the marketing of feature length motion pictures in Canada but their production as well. In 1968, the federal government's stated purpose when establishing the Canadian Film Development Corporation was to foster and promote a feature film industry in Canada. Since that time, the government has taken additional measures designed to influence the industry. This study attempts to measure the impact of these initiatives on the film industry in Canada and concludes that they have had little or no significant effect. While feature films are finally being produced in this country, few of them return a profit. Consequently, the private sector is reluctant to invest in the production of Canadian films. Indications are that tax incentives will not improve this situation since it was concluded that the primary purpose for investing in films is not to reduce taxes but to return a profit, substantial tax savings notwithstanding. Co-production agreements with other nations assist Canadian producers in financing their productions but it is still too early to draw conclusions about the full potential of the co-production agreements. Canada's competition laws have only recently been extended to services such as the film industry, so again it is still too early to draw any conclusions. From past experience, however, the results do not appear encouraging. Voluntary quota agreements between the two large theatre circuits and the Canadian Film Development Corporation have resulted in Canadian films being shown throughout Canada but only in an apparent attempt to avoid legislated quotas and thus, early indications are that the letter and not the spirit of the agreements is being adhered to. Canada's foreign ownership legislation has had absolutely no affect on the extent to which the film industry in Canada is foreign controlled. In short, from a business point of view, and it was concluded that the film industry must be run as a business, the Canadian film industry remains much the same as it was before the government's involvement. The study, therefore, looked at the film subsidies of a number of other countries and some of the Canadian film policy proposals submitted to the Secretary of State's Department, in an attempt to isolate incentives which would help develop a Canadian film industry. It was concluded that a film levy like that of the Eady Plan in Great Britain, would not only halt the flow of substantial sums of Canadian source funds to foreign controlled corporations but it would also make available to Canadian producers a source of funds which is presently being supplied by the Canadian taxpayer through the Canadian Film Development Corporation. A levy, it was concluded, would also encourage private sector investment in the production of Canadian motion pictures. Further it was concluded that the supply of Canadian films at this time does not warrant a legislated quota and what Canadian films need instead is better and proper promotion. It was also.concluded that the. federal government should be encouraged to negotiate and complete further co-production agreements since they increase the potential sources of financing available to the Canadian producer as well as make available the advantages of whatever subsidies the co-producing nation has imposed, be they quotas, distribution agreements or levy participation. Finally it was concluded that the federal government should take steps to attract foreign productions to this country because they not only provide additional sources of employment for those now working in the Canadian film industry and, at the same time, provide those new to the industry with a practical means of learning their trade, but they also have the added advantage of injecting large amounts of capital into the Canadian economy generally.

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