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### Viewing cable 08TORONTO273, Ontario Film Industry Reels From High Loonie, Fears Loss of

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08TORONTO273 | 2008-09-12 20:05 | 2011-04-28 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Toronto

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    VZCZCXRO2939
    PP RUEHGA RUEHHA RUEHMT RUEHQU RUEHVC
    DE RUEHON #0273 2562005
    ZNR UUUUU ZZH
    P 122005Z SEP 08 ZDK
    FM AMCONSUL TORONTO
    TO RUEHC/SECSTATE WASHDC PRIORITY 2592
    INFO RUCNCAN/ALCAN COLLECTIVE
    RUCPDOC/USDOC WASHDC

` `

    UNCLAS TORONTO 000273

    SIPDIS
    SENSITIVE

    E.O. 12958: N/A
    TAGS: ECON EINV PGOV CA
    SUBJECT: Ontario Film Industry Reels From High Loonie, Fears Loss of
    Federal Funding

    Sensitive But Unclassified - protect accordingly.

    ¶1. (SBU) Summary:  Despite local incentives and new filmmaking
    facilities, the strong Canadian dollar and Ottawa's arts funding
    cuts threaten to further cripple an already weak Ontario film
    industry.  End Summary.

    ¶2. (U) Toronto's strong film and television industry has suffered as
    the Canadian dollar has risen against the U.S. dollar.  The Toronto
    films and television industry peaked in 2000, with C$1.3 billion in
    on-location shooting.  It fell to C$704 million in 2006, rebounding
    slightly to C$755.8 million in 2007.  New U.S. incentives, such as a
    35% tax credit in New York on filmmakers' expenditures, make
    shooting in Canada relatively less attractive to producers than
    before.  In addition, a months-long strike in 2007 by the Alliance
    of Canadian Cinema, Television and Radio Artists also furthered
    industry woes.  The resulting dearth of productions has taken its
    toll on Ontario's film and television industry.  In 2007, Toronto's
    Cinespace Studios was forced to close, reducing the city's
    production space by 20 percent.
    ¶3.  (U) In addition to relying heavily upon American productions,
    Ontario's film and television studios depend on a steady stream of
    smaller Canadian productions to remain profitable.  Canadian content
    laws and federal arts subsidies have helped to keep these Canadian
    productions coming.  However, local media analysts fear that federal
    funding cuts will dry up these Canadian productions.  The Harper
    government announced in early August that it would cancel Heritage
    Canada's C$9 million Trade Routes export support fund as well as the
    Department of Foreign Affairs and International Trade's PromArt
    program, a C$4.7 million artist travel support fund.  In addition,
    Bill C-10, introduced in Ottawa in February, would allow Canada's
    Heritage Minister to deny tax credits to productions he deems
    contrary to public policy.  Local arts personalities have decried
    these moves, fearing they will cripple Toronto's film industry and
    defund its annual HotDocs international documentary festival and the
    Toronto International Film Festival.

    ¶4.  (U) The governments of Ontario and Toronto have moved to attract
    more productions.  The Ontario Media Development Corporation (OMDC)
    offers a tax credit to Canadian or foreign-controlled production
    companies equal to 25 percent of their Ontario labor expenditures.
    In addition, Ontario gives local Canadian-controlled corporations
    tax credits worth 35 to 45 percent of their Ontario labor
    expenditures.  The Toronto Film Board has begun offering U.S.-based
    productions incentives such as free location permits, a reduced rate
    on city services and free use of all City of Toronto-owned
    facilities and properties.  Finally, on June 17, OMDC announced a
    C$2 million initiative that would award early-stage film, television
    and other Ontario-based media companies up to C$100,000 each.

    ¶5.  (SBU) Investors in a new film production complex hope to lure
    American producers back north.  On September 8, econoff and PAO
    toured Filmport, a C$80 million, 47 acre film studio on Lake
    Ontario.  When completed, Filmport's seven sound stages will cover
    120,000 square feet and include a 46,000 square foot sound stage,
    the largest soundproof sound stage in North America.  Filmport is
    largely funded by private companies and individuals, who invested
    their own money and also borrowed C$24 million from GE Capital.
    Filmport is on the site of a remediated industrial site acquired by
    the Toronto Economic Development Corporation for a token amount.
    The first phase of the complex opened on June 5, and its grand
    opening was on August 20.  As of July 8, the complex had lost C$3
    million.  According to executives at Filmport, it can host up to
    four major productions at any given time, as well as a number of
    television series.  Only one feature film is currently scheduled to
    shoot at Filmport.

    ¶6. (SBU) Comment:  Provincial and municipal incentives and
    increasingly desperate local studios may make filmmaking in Ontario
    slightly more attractive to American producers in the short term.
    However, despite the optimism of Filmport's investors, Ontario's
    film industry will suffer as long as the Canadian dollar hovers near
    parity. End Comment.

    NAY

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