It's Time To Wean B.C. Film Off Taxpayer-Funded Subsidies

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Every once in a while, you’ll see one of those faded red bumper stickers from 2013, pleading to “Save B.C. Film!” Well, mission accomplished — thanks to a Canadian dollar that has slumped below 70 cents U.S.

The film business is booming in B.C., and industry insiders are “just licking our chops” at the number of Hollywood productions heading north. Unfortunately, that means B.C. taxpayers are about to get dinged with an even bigger bill — a historic amount of film subsidies.

Now, it’s time for Premier Christy Clark to “Save B.C. Taxpayers!” and wean the film industry off the ludicrous tax breaks it enjoys. We must address this addiction to subsidies now, while B.C. film has a powerful advantage over the U.S. thanks to the tanking Canadian dollar.

Documents found in November 2014’s Sony Pictures hack show just how lucrative government subsidies are: film companies get back 58.4 per cent of their labour costs reimbursed from taxpayers.

The documents reveal that Sony paid B.C. residents $5 million to work on the Smurfs movie, and then got $2.86 million back from taxpayers. This for a movie that cost $110 million to make and grossed $563 million worldwide. Smurfs 2 is expected to suck up even more tax money, some $7.7 million of its $13.1 million wage bill.

The decidedly unamazing Amazing Spider-Man 2, which somehow grossed $709 million worldwide, saw taxpayers cover $7.7 million of its $13.3 million B.C. wage bill.

The hacked Sony documents show they expected to get back $38.3 million of the $65.6 million they spent on wages in B.C. from 2010 to 2014.

To put that into perspective, the B.C. government spent $38 million last year to open the Hope Centre for Psychiatry and Education in North Vancouver. For most British Columbians, new mental health facilities are likely a far better use of $38 million than writing corporate welfare cheques to giant U.S. conglomerates.

All told, the B.C. government cut cheques for $1.5 billion in film subsidies over the past five years. That’s more than taxpayers spent on the ministries of aboriginal relations, agriculture and environment — combined.

As if that wasn’t enough, the federal government jumped in with $1.73 billion more nation-wide.

With the low Canadian dollar attracting more filming here, these subsidies are going to soar even higher in 2016-17, as there are no caps on these payouts.

Even with every conceivable tax spinoff included, experts estimate the provincial treasury only got back, at most, half of what it paid out. While the industry touts overall “economic spinoff,” the truth is this money simply isn’t rematerializing in the treasury.

This means B.C. taxpayers have lost roughly $750 million on this industry over five years — money that could have been building schools or hospitals, paying down debt or coming back to us in Medical Services Plan tax cuts.

All over North America, provinces and states have been getting out of the business of cutting corporate welfare cheques to movie companies. Michigan found it recouped just 11 cents of every dollar it paid out and killed its subsidy. New Jersey, Alaska, Washington, Arizona, Arkansas, Idaho, Iowa, Kansas, Saskatchewan, Nova Scotia and Maine ended their subsidies, and Quebec and at least nine states have reduced them. Ontario is also considering a cut.

British Columbians should want a strong film industry, but not one wholly reliant on taxpayer dollars. The provincial government should seize the opportunity that comes with a low Canadian dollar to force the industry to become self-sufficient. If not now, when?

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Source: HP

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