The Race Down Under

Some VFX related news in the land down under:

Sydney has beaten Vancouver to James Mangold’s The Wolverine, the sixth film in the X-Men franchise, principally because the Australian Government is providing a one-off cash incentive of $13.2m.

Vancouver film production reaction here. Apparently an almost 50% labor subsidy in Vancouver isn’t enough for some producers. Interestingly the article claims that most of the post production will be done in the US.

In New Zealand, some politicians are questioning the effectiveness of VFX subsidies in inhibiting home grown talent:

An application by Oscar-winning effects company Weta Digital to bring in hundreds of foreign workers proves New Zealanders are missing out on plum film industry jobs, Labour says.

A document leaked to Labour Party spokeswoman for labour issues Darien Fenton reveals Weta has applied for Immigration Department permission to employ 369 highly skilled overseas film workers in 2012.

The usual argument by subsidy supporters is that the money foreign VFX talent spend on lattes and local taxes offset the taxpayer costs. There’s never really been an independent study in New Zealand about the return but most film subsidies in the US are found to be money losers.

Soldier On.

9 Responses to The Race Down Under

  1. Dave Rand says:

    A few quotes from the Vancouver Sun that just kinda popped out at me :

    “Don’t look for Hugh Jackman’s mutant superhero Wolverine in Vancouver because the next X-Men movie will be filmed Down Under, taking with it nearly 2,000 jobs and $82 million out of Vancouver.”

    —We should all send sympathy cards for their loss.

    “B.C. has many advantages when it comes to getting film and television production jobs, including great crews, great infrastructure and competitive pricing.”

    —Competitive pricing eh?

    “More and more there is pressure on the costs of pictures and the numbers were not adding up [in Canada.]”

    —So we need foreign taxpayers to foot the bill to supplement our meager earnings? How do ya like these apples?

    Wolverine Boxoffice $373,062,864

    The greatest asset that money can buy is politicians and more leverage.

  2. deanareeno says:

    This quote from the Van Sun article:

    “Some commentators at the time said that Ontario’s more generous tax credits were luring film companies east, and away from B.C.’s film industry, which employs 20,000 people involved in 281 productions in 2011.”

    …struck me as odd, because B.C.’s labour-costs credit for foreign production is 33%:

    http://www.bcfm.ca/programs/tax-credits/pstc

    …and Ontario’s credit is 25%:

    http://www.omdc.on.ca/Page3401.aspx

    Now, the credit for VFX/animation is higher in Ontario (20% vs 17.5% in B.C.):

    http://www.omdc.on.ca/Page3402.aspx
    http://www.bcfm.ca/programs/tax-credits/pstc (see the DAVE section)

    …but relative to the point of the article the “commentators” in the above Sun quote are wrong — Ontario has *less* generous tax credits for the majority of labour costs for any live action film production than B.C. Unless I’m misreading something.

    This National Post article form February:

    http://goo.gl/0m4M5

    …indicates that Ontario is doing better because of:

    (1) talent
    (2) quality
    (3) infrastructure
    (4) 75% of all film & t.v. production in the province being domestic

    Just for clarification.

    • Dusty says:

      The difference between the BC tax credit at 33% and the Ontario tax credit at 25%, is the BC credit is only on eligible labour costs of BC resident workers and the Ontario tax credit is calculated as 25% of all qualifying production expenditures incurred in Ontario, typically known as an all production spend. For example a movie may have a 20 million dollar spend in BC but the labour costs are only 4 million dollars, the tax credit is 33% of the $4mil whereas in Ontario it would be 25% of the $20 mil. That is a substantial difference that is driving production Ontario.

  3. deanareeno says:

    Oops, (4) above should read “70%”, not “75%”

  4. Craig says:

    Wow. That last link you provided regarding Alaska film incentives was amazing. I’ve never seen such a well-formed analysis against film subsidies.

    Just like public funding of sports stadiums only transfer funds from taxpayers to rich owners, film subsidies transfer money from taxpayers to production studios. In both cases, the politicians get a sexy and fun public image, but the regular people get screwed time and time again.

    Government subsidies for private industry are always bad for tax payers and gold mines for politicians and their special interest. The numbers don’t matter if the pols can get the press to do positive stories about the subsidies.

    Google “The Fatal Conceit”

    • Craig says:

      Oh, and just check out how Curt Shilling is doing these days. Not too popular with the Rhode Island tax payers, I hear.

  5. Craig says:

    Governments throw money into film subsidies because they are flashy and glamorous. They attract attention and lend themselves perfectly to our modern entertainment-style news. A movie-making company is much more likely to get a spot on the 6 o’clock news than a cardboard box making company would. Even if the box company hired 50 times more workers.

    Would Rhode Island have given a $75 million loan guarantee to Curt Schilling if he was building a company to make affordable accounting software? You bet they wouldn’t.

    When will people wake up and realize that government is not the solution to all problems. The risk taken by private investors is now being pushed upon taxpayers for no good reason. It’s a big con. Privatizing gains (good publicity / campaign donations for politicians and tax breaks / subsidies / bailouts for corporations). Government has not business taking money from you and I and giving to private companies in order to pick winners and losers. It is corrupt and shameful to say the least.

  6. Craig says:

    The BC ration on domestic vs foreign productions is something like 20 percent vs 80 percent and from what I hear that number hasnt changed since 1979 when the BC film office opened(foreign productions greatly outnumber domestic productions).
    Toronto is in a better position because it isnt a labor province-they make business decisions there and initiate projects. Vancouver does not. Only time they give lip service to it is when there is a US strike that shuts down work here or a fluke change in currency value.
    BC was born a labor province and still is. Most of the companies here are out of towners who are only taking advantage of the money give out. If other places get fed up with the money giveaway I bet BC will be the last to clue in and change. I dont remember the last time a BC premier left office who didnt leave before election time because of massive scandals.
    Too much rain and marijuana plant pollen makes the people apathetic.

  7. Dave Darkovski says:

    The only reason the movie is being made in Aus is because Hugh Jackman is Australian and also happens to be an executive producer.The vfx work will not be done in Aus due to the fact there isnt a firm who can handle the amount of shots.
    Things are pretty grim indeed for work here unless that is your French / Italian or from other tin pot European economy.

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