Film Works LA Campaign Manager and lawyer Adrian McDonald published a superb 81-page case against state film subsidies. It’s a great weekend read for anyone interested on educating themselves on the whole matter. It’s available here:
Essentially what is happening in the USA and provinces of Canada is a trade war. Various locations are engaged in protectionism against market economics by offering artificial prices to producers through film subsidies.
This is a race to the bottom and I’ve always said on this blog “In a race to the bottom, the last one left standing is the biggest loser.”
That notion is surprisingly mentioned by Canadian officials in comments on their own subsidies as Mr. McDonald points out. Here is the Toronto Film Office:
There is a race to the bottom going on worldwide to establish Booniewoods around the globe. This is a race Toronto doesn’t want to win.
Within North America our success has been successfully copied. Even though the provincial government raised the Ontario tax credit in 2005 to try and fend off the competition, the competition simply raised its credits higher. The race to the higher tax credit is another one we can’t win.
and British Columbia:
At some point, British Columbia may be either unable or unwilling to match another region’s incentives, which could leave BC’s film production industry with a shortage of foreign productions wanting to film in the province.
Adrian also covers the failed 2007 attempt to get the US Trade Representative to petition the WTO to stop the subsidies. I feel he writes the effort off too easily.
It is the sole discretion of the US Trade Representative to approach the WTO with a dispute. As Adrian points out, we still to this day do not know the exact reason for the denial. The freedom of information act request was redacted.
According to some sources involved, I was told the petitioners actually withdrew their complaint. Who knows what was going on there. Also its important to note that this complaint was filed during the Bush administration and relatively low unemployment. The Obama administration certainly sounds interested in combating subsidies and unemployment levels are troubling.
Tomorrow I’ll post another piece of info Adrian McDonald pointed to in one of the comments of my post: The European Subsidy Trade War.