Monday, October 5, 2009

Oh Canada?

Well, it's a big day. You might remember that screenwriter who became a development executive for a pay channel in Canada (see Distributors post). We'll call her Rachel.  And her company is the Eh Movie Channel, eh? I had given her a copy of TD to read.  Well, she called back. 

She liked it. 

She really liked it.

And she wanted to talk to me about it.  She was considering putting it into a development deal with Eh and provide us with a little bit of money for a rewrite and maybe some casting.  I was silent for what seemed forever and finally managed to say, as calm as I could, "well, that sounds nice".  And there's more. 

But first a primer on how it works in Canada.

Shirley and I had discussed the possibility of Canada as I knew the system there quite well, having been involved in the complex funding process that Canadian filmmakers have coped with, and in the last 15 years, many American films have taken advantage of with incredible tax credits. 

The Canadian system is based on this premise: there is no private money available to make movies. 

They had a 100% tax shelter for 10 years, but greedy accountants and lawyers caused it to end. Now it's a web of funding agencies, some private, some federal and some provincial.
Because that's the only way Canadians could ever get money to make their movies. 

The Feds offer a government investment of 50% and one hell of a paper chase. A large portion of funding comes from private broadcasters, networks and distributors and this is mostly because the Feds force them to take some of their profits from the American shows and movies they run (and make money with) and put it back into the fragile Canadian film industry. To the tune of  $80 million.

I like to call it guilt money, it's used for for script development, film development and equity financing. Many Canadian filmmakers have to patch a variety of different fund agencies together, each with different criteria. Slow and frustrating, but they eventually get to make their movie.

And we're not even talking tax credits yet.

But you have to be Canadian.  So now you're saying, "sure Jim, you might get some of that $$ but what about us. That's an unfair advantage.  Well, not really.  There is another way, and it concerns the notoriously generous Canadian tax credits that many states envy and dislike.

Tax credits can reach as high as 65% in some cases, and this is usually in labor costs. You spend $1 million on local labor and you get almost $650,000 back.  Nice.  Of course you might be spending millions on other costs but still, that's a nice check to get back.  And this works for anyone in Canada or from anywhere in the world.  You don't have to be Canadian, but you have to incorporate your production company in whichever province you choose to film in.  Some places like Alberta offer around 25% on all money spent there while others offer tax credits on labor. 

But it's not as restrictive as you might think.  You still have a say and it's still your movie although the copyright remains in Canada.  And that's really not an issue as it doesn't matter where the copyright sits.  Brokeback Mountain was done with friends of mine in Alberta who provided the tax/incentive money. They got Executive Producer credits, show up once and then for the wrap party.  Capote was also done this way, as are a lot of US movies. 

So where does Travel Day fit?

Somewhere between the two methods above.  Ironically TD was intended to be filmed in Alberta among the Rockies, and then we considered LA and Big Bear or maybe around Lone Pine in the Sierras.  It's set in open prairie and mountain foothills.  And since I'm Canadian I qualify for Cancom funding.  This is an extra 15% or so but some Canadian content rules fall into place.  There are 10 positions in which Americans or other foreign people can only to to 4 positions, all creative including writer, actor, director, producer,DP, editor, Production designer and a few others.  So out of that you need to have at least 6 points going to Canadians.

Rachel had one more suggestion.  More?

She offered to call local producers and suggest they look at our project.  Why?  Because they could come in with the labor tax credits and some equity and provide the crew and administration costs.  It would mean that we would have to follow certain content restrictions but it could work quite easily.   And having Rachel call them would obviously mean more than if I did.  After all, they get money from hers and other Canadian pay channels. But they had to like the project.  

And that's where we sit today.

I really never expected this to happen, I didn't dare dream that it could happen. Three months after we started this project, we had, in theory, and I stress "in theory", most of the budget. With the 50% from the original US exec producer and an equal amount from a Canadian producer we could make Travel Day.  But right now it's still a work in progress.  There is paperwork to do,  and I haven't heard from the LA funder even after I emailed him.

We're not home yet.

Is it easier?  Yes.  

Do we have a better chance at actually getting this movie made?


But until I'm on the set watching Shirley do her first shot with a film crew and film in the camera, I'm not going to believe it.

For now, maybe a little bottle of champagne.  Or a Molson.


  1. Hoor-eh! Congrats, Jim!

    Proud to be Canadian!

    - From your salmon-fishing friends in BC

  2. Wow - things are really looking good for you! I'm so glad. This post was very informative. I had some idea about the funding process (and the complications involved) and the fact that in Canada this usually extends the amount of time it takes to make a movie (sometimes by a lot) but seriously... no money from private investors at all? Incredible. I still don't get that part. So if I wanted to invest a grand towards your movie, I couldn't do it unless I was incorporated or part of some funding agency?

  3. Private investors will come from the American side for a little over half the budget, depending on the exchange rate. And they usually write big checks. There are very specific rules about who can invest, called Blue sky laws, meaning that an investor has to have a worth of at least $1 million or earn at least $200,000 a year. This protects both me and the small investor who can't really afford to invest.

  4. You're gonna write a book when this is over, right, Jim? What do you think, Shauna J-O, got potential?

  5. Yes, Jim, you should totally write a book about the industry/your experiences/etc. And, I also think a documentary about the steps towards making your next film project would be so interesting. We in the general public don't really understand what goes into making a film. We just show up and watch it on the big screen. Jim, you need educate the people!
    - One of the members of the general public

  6. Kevin Penner (from Swan River), is that you?

  7. Shauna, you're anything but the general public, a wonderful writer in your own right not to mention excellent lawn bowling player. This is beginning to sound like a Swan River lovefest!!

    About the book, well, if the movie gets made, the book will follow.