Canadian dollar's rise curbs its advantage
Monday - April 17, 2006 | by Livi Dolgin
As the Canadian dollar (known as the "loonie") continues to rise, film and television production companies are losing ground against the high costs of creating our favorite show. Shows such as Stargate SG-1 and Stargate Atlantis film in Canada in part because of the cost savings and the relative ease of dealing with Canadian unions, compared to the same in the United States.
However, the future bodes a different financial picture. Gone are the days when the Canadian dollar was just 64 cents to the U.S. dollar. Currently it is trading at about 87 cents to the U.S. dollar, near its 14-year high. Financial forecasts indicate that the Canadian loonie will rise to 90 cents on the U.S. dollar shortly.
The cost savings of doing business in Canada has eroded significantly.
Filming in Canada by U.S. production companies, known as "runaway productions" to Hollywood executives, saves about 10 percent versus the cost of filming in the U.S. But with the rising dollar, those savings will disappear. And that means less business for the Vancouver film industry.
To combat that differential, the British Columbian government was forced to match the Ontario and Quebec tax breaks, currently at 18 percent. Without that kind of help, many fear the Canadian film and TV industry still can't survive.
Robert C. Cooper, Stargate executive producer and writer, agrees. "I don't know if the Canadian industry is at that point right now that it can sustain itself without that help," he told Global National.
According to a Global National newscast this weekend, at risk are the 37 productions slated for the Canadian Vancouver industry this spring. Vancouver's film industry is busier than it's been in 15 years.
But Cooper does not envision moving the Stargate productions back to Los Angeles.
"We're really at that stage where the infrastructure is here so moving it would be difficult," he said. "But if the tax credit went away it would be gone."
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