It’s an all too familiar story I post about on this blog: US studios fall in love with a government that give them free money. Governments runs out of money. US studios leave for the next sucker.
A BC newspaper reports that government officials may leave out the film & games industry for further support in the future:
An Arts and Culture Branch report created after December 2011 industry meetings, obtained by the NDP via Freedom of Information, said, “Government has taken a close look at the screen-based entertainment industry as a possible focus for the Jobs Plan, and has not found a compelling case for any additional emphasis on this sector.”
“Given that there is no new money, how can the government use (or) enhance its existing suite of tools such as tax credits and regulations to support the development of the industry,” said the report.
Two years ago I predicted problems for subsidized locations due to their government debts. So why is the BC government reluctant to further support the film and gaming industry in BC?
Well here’s a list of what I believe to be the issue:
- British Columbia has some big problems coming soon and needs to cut spending.
- British Columbia’s debt is exploding which may turn into a fiscal tsunami due to creative accounting.
- Credit Agency Moody’s has downgraded the financial outlook of British Columbia to negative.
- S&P has also downgraded six major Canadian banks.
Sort of funny when you consider some BC residents were boasting about the economy there in my last post. The challenges for BC’s film & gaming industry is compounded by the fact that during this time of spending cuts, it may need even more money. Here’s why:
- BC’s film industry has been hurt by bigger subsidies in Ontario and Quebec which recently doubled.
- In the last 10 years, BC has already spent $1.5 BILLION* in film subsidies.
- BC voters also recently decided to change it’s sales tax law which will make filming there more costly.
- The BC gaming industry was a recent casualty after Ontario and Quebec increased subsidies for the games industry.
*I’ve been collecting information on how much BC is spending on film subsidies and will expose this in another post.
Most independent studies show film subsidies to be a big money loser. The ones that do show a return are usually studies paid for by film commissions and US studios which all benefit from the free money being doled out. At the end of the day all you have is a race to the bottom. How many millions more should BC taxpayers give away to the US studios?
It is absurd for BC film supporters to ask for more welfare during a time of cuts. As someone against subsidies for films, what do I suggest BC should do? BC is a huge exporter of natural gas. Part of the reason they are in the fiscal hole is that natural gas prices are declining and other provinces that are increasing their film subsidies also import resources like natural gas from BC. I suggest placing a tax on those imports that counter the amount of film subsidies they offer. It raises more money for BC and immediately makes the film subsidy race a national issue that the Canadian government must resolve.
Until the subsidy race is resolved, professionals in the industry can prepare to pack up and move to the next biggest loser.