Cost of Canada’s Film Subsidy Race in 2010: $635 Million

The journal of Canadian Public Policy released a study by John Lester, a research fellow at the School of Public Policy, University of Calgary that shows how expensive the film subsidy race in Canada has become. An article about the study is here and the actual study is available for purchase here:

a careful cost-benefit analysis of film subsidies just published in the journal Canadian Public Policy by John Lester at the School of Public Policy at the University of Calgary. Cost-benefit analysis is always sensitive to the assumptions used but Lester’s baseline estimate is that the tax credits to foreign film-makers provide $58-million of benefits at a total economic cost of $510.8-million. When the baseline is so unfavourable, you’d have to more than tweak the assumptions — you’d have to manhandle them — to produce a net benefit.

This is the first time I’ve seen a study that actually shows the total cost of all of Canada’s federal and provincial film subsidies: A whopping $635 million! One should note that this is just for 2010, there have been recent changes in provinces like BC and ON that have made the subsidies even more generous as US studios pit provinces against each other in a bidding war for their films.

So what was the net benefit of all of this after you account for tax revenue generated?? A net loss to Canada of $450 million!

Soldier On.

48 Responses to Cost of Canada’s Film Subsidy Race in 2010: $635 Million

  1. Andreas jablonka says:

    I’m sure somebody will be able to twist and turn this into a great opportunity for Canadian taxpayers to buy themselves a slice of the Hollywood pie.

    It’s just a very very expensive slice….

  2. fgg says:

    cheaper than the US military aid to places like Eygpt rather than providing real healthcare …..

  3. hahahaa says:

    hahaha thats great. Be careful on getting on a political battle about how countries spend there budgets. Thats 450 million that benefits alot of Canadians.

    What does the 1.5 billion in military aid to Egypt get you as a tax payer Andreas ???

    • VFX worker says:

      I would love to see all aid ended, then we could pay for insurance for all.

      What would be interesting is how would everyone feel if the US used the $1.5 billion for film subsidies.

      Maybe movie tickets wouldnt cost $25 a piece.

      And debate go!!

      • minoton says:

        Government financed media . . . You’re going to have to sell me on it.

      • Charlie Don't Surf says:

        sure, there’s tons of examples from all around the world:

        BBC, China Film group, National Film board of Canada, Screen Australia, the European Union’s MEDIA programme.

        etc etc etc.

        I find it bewildering that state funded media is such a foreign concept to you.

      • VFX Soldier says:

        Well when you consider that BC’s finance minister has basically accused the studios of shaking them down and they have had to cut education while raising healthcare premiums you can understand the difference… soon.

        >

      • canadaproud says:

        Wow. Did you someone from the US really just throw down a jab about healthcare and education cutbacks towards Canada? Trust me bro, you don’t want to go there. That’s a debate my 5-year old could beat you in.

        A) We have essentially free, taxpayer funded healthcare in Canada for EVERYONE that obliterates anything you pay for in the U.S.

        B) Canada’s education system is ranked far ahead of the US Public Schools.

        Oh, and we still have money left over to fund films and the arts. You know why? Because we feel like it. You guys fund what you want in the States (military aid, invading foreign countries, banks, rich Republicans), and we’ll fund what we want in Canada (healthcare, education, and the arts). Eh?

      • hector says:

        canadaproud should totally be: redneck proud
        You prove it , my friend!

      • canadaproud says:

        Huh? I’m a “redneck” because I support funding healthcare, the arts, and education instead of the military? I think you’ve got it backwards there my friend. It’s a twisted world you live in if you think that makes me a redneck.

      • hector says:

        Canadian healthcare sucks – waiting lists are forever, you wait for days/months to treat your fever, american universities are still on top of the chart, and the taxpayers money is used to feed fat US prod houses.
        Don’t want to talk about al the money from taxpayers witch goes to the Cosa Nostra family ( see construction mafia in Montreal)
        “we still have money left over to fund films” = bullshit!

      • hector says:

        and strange thing is – rednecks try to copy americans as much as they can, and then when they are not able to do this properly, they start blaming them
        Shame!

      • vfxmafia says:

        I have to say…I agree on the Canadians on this one….

        If the US government stopped the war in Afghanistan…..or…Cut the Department of Homeland Security…or stopped out sourcing the Military to Blackwater….or stopped imprisoning 10% of the population……we could get Single payer healthcare.

        The US wastes our tax money….(but then again maybe so is Canada based on that report)

        The US military budget is more than the entire world’s military combined…..

        I have to admit 3 years ago I never knew what a subsidy was…(partly because Americans are so isolated to world politics)….

        The bottom line is the US and Canada both have subsidys that protect domestic businesses. Whether that gets translated into benefits for their people …is another question.

        In hopes of trying to downplay the “toxic” tone that these forums have turned into…..and maybe call for a more intelligent discussion rather than hurling insults…..I truly understand how and why Canadians embrace the subsidys…….

        maybe the Canadians can understand why alot of the LA artists want subsidys to go away. (mainly because we don’t have them)

        I do know ALL artists can’t go on with this destablized business model. I really don’t care where i live as long as I have stable work and make a home for myself….as long as the checks clear…..and this migrant work has got to stop….I wish would could all agree on a VFX “Hub” or “Hubs”…..where you can get a job based on talent, quality of work, and with a decent wage once again.

      • hector says:

        “I really don’t care where i live as long as I have stable work and make a home for myself” I am afraid it is not possible in this industry anymore.

      • vfxmafia says:

        I guess thats my point. Subsidys have turned alot of us into migrant workers. I am actually contemplating taking a position in Vancouver right now.

      • WhyisthisevenatopiconaVFXblog? says:

        Hector, you’re arrogance and ignorance is truly American. You literally have no clue about Canadian health care and how long it takes to get treated. You get your talking points from all the right wingers who have heard something from their cousin and then spew their mis information on Fox. Have you noticed a reoccurring trend around the world? Nobody gives a shit about America any more because the loudest assholes are the ones who represent you and they have nothing intelligent to say. You constantly throw the world in to turmoil with your wars and your financial crises, you practically invented out sourcing and now you complain when your well oiled machine starts to rust. You guys put your selves in the situation you are in. No one else. Feel free to talk amongst yourselves and shit talk everyone else but no ones going be there when you’re ship sinks, it’s already taking on a lot of water. Get a life jacket.

      • VFX worker says:

        Unfortunately once someone is elected the people can’t control what they do. They are supposed to “represent” but most don’t. So don’t blame the people of the US. We elect who is presented and it’s generally a best of 2 evils. Unfortunately there is a lot of uneducated people here, that don’t pay attention, shit more then half the VFX artist in LA aren’t even paying attention to what’s going on.

        I’m not mad at the people of Canada for what thier elected officials do or don’t do. You are people just like us trying to have a nice life and a good paying job.So don’t throw all of us under the game bus.

        I also have never owned a company, so I in no way started or helped create outsourcing. When I first heard of it in high school, I thought it was a bad idea. I remember a time when if the tag said made “anywhere but the US” you didn’t buy it. You act as if the country took a vote on sending jobs to other countries. Again that was a small group of super greedy CEOs.

        Also outsourcing is not the same as chasing subsidies.

        There is a whole lot of prejudest on both sides. Lots on assumptions and blame. Yet we are all fighting for the same goal. A good fun job that pays well.

      • vfxmafia says:

        hey could we keep the insults to a minimum please…and try and to have more of intelligent discusson. not all of us are stupid americans….there are 350 million of us….

      • WhyisthisevenatopiconaVFXblog? says:

        Rich words coming from you vfxmafia. What’s with the sudden change in attitude?

      • John says:

        “canadaproud says:

        A) We have essentially free, taxpayer funded healthcare in Canada for EVERYONE that obliterates anything you pay for in the U.S.”

        Can you explain to me how it’s “free” when it’s taxpayer funded? I keep hearing this and it doesn’t make sense to me. If a portion of your paycheck goes to covering healthcare then why does everyone keep saying it’s free?

      • Charlie Don't Surf says:

        because even if you are not a taxpayer you still get access to health care.

      • Sash says:

        in other words, you don’t go bankrupt is you break a finger.

      • Coming from Europe I do know that none of the smaller countries couldn’t produce films without subsidies. Also in North-America it’s called film business, in Europe we still consider it as an art form thus we subsidize it.

        Also one thing struck me with this post. I work in the industry and I know things are bad. But why does VFX Soldier attack Canadian subsidies every chance he gets? You’re American I assume? How much money Canada looses shouldn’t bother you so much? What I’m trying to say here is that you guys are barking the wrong tree here. It’s not subsidies that you should be after. They might twist the competition a bit, but if you think about it – for comparison, how much damage to US film industry European subsidies do? Yes, Wachowsky’s came and shot Cloud Atlas at Babelsberg Germany because they got 90M$ to do that. But how jobs have been lost in US because of these subsidies that have been going on since 60′. I think our problems are somewhere else, mainly how the deals with the studios are made.

    • VFX Soldier says:

      Ya know I never thought about comparing subsidies to foreign aid…

      Us gives 1.5 billion to Egypt. Canada gives $635 million to the US.

      It’s like foreign aid, but for US studios who are doing just fine.

      >

    • Andreas Jablonka says:

      nothing I guess. Im not on board of that either.

    • hector says:

      Buy a big umbrella . And good luck !

  4. NotinLA says:

    Man this board is just getting mean! LA peeps you have a chip on your shoulder! It used to be a great place to come especially after the protests but not anymore. And I’m tired of feeling guilty every time I come have a look at what’s new. I’m out.

    • hector says:

      ok…stay out then. But I bet you will be in , just to check from time to time.

    • Dave Rand says:

      I agree, subsidies produce some very mixed emotions mostly based on falsehoods. This drives a lot of fear and separateness in an industry that is supposed to nurture quite the opposite to produce maximum quality and profit.

      When your career becomes driven by politics rather than honest and creative work this is what happens.

      I do not believe John Lester, Research Fellow at The School of Public Policy and former manager of the Tax Evaluation and Research Group at Finance Canada, had the intention of producing meanness in people.

      Quite the opposite, he wanted to shed light on falsehoods so that we can all seek a better way.

      Without that we’ll continue to live in fear of our careers, each other, and only feel “enlightened” when it’s our job that leaves.

      • LAskyline says:

        I note that the “Financial Post” also had a great long hysterical screed shedding light on the “falsehood” of climate change, so at least we know which side of the political spectrum this great searchlight of truth is coming from.

      • chexmix says:

        To LAskyline:

        Well you have to understand Canadian subsidys is a HUGE election issue. I don’t know much about the BC elections…but what articles I read….is the BC liberal politicans are running on raising films subsidys from %33 to %40. The conservatives obviously oppose that.

        Not surprising an articles like this are found in a conservative publications. Honestly I don’t think it matters to politicians what the issue is …as long as they can fight over it for political gain.

        I wouldn’t read to much into what the news source was as long as the facts check out. Facts are Facts.

      • SkullAndBones says:

        That paper is just reporting on a study. The only relevant question regarding bias is if there is reason to believe that John Lester or the journal of Canadian Public a Policy is biased. And even if they are, that doesn’t necessarily negate the report. But either way it’s the only relevant question regarding bias.

        Also, I find it highly amusing how aggressively defensive the posts have been from Canadians in this thread considering that the report itself is from Canada, not the US or anywhere else.

      • LAskyline says:

        I’m not Canadian, and I don’t work there. I just think that you should treat a publication that cherry picks reports for an anti-tax/anti-gov point of view with a healthy degree of suspicion – worth noting that they didn’t publish anything about Lester’s previous report on Canadian government R&D incentives where he decried the reduction of subsidies.

  5. scathie says:

    “at the School of Public Policy at the University of Calgary”

    You mean at the most right-wing of right-wing institutions in the country? Next you’ll be quoting the Fraser Institute and telling us all how global warming is a fraud.

    This blog has gone from mildly interesting source of information to complete joke in a remarkable amount of time.

    • VFX Soldier says:

      Did you get a chance to read the report? It’s very thorough and the the numbers come from government sources.

      Can you provide a source from you information that shows how much th film subsidy programs cost? BC’s own finance minister has said numerous times they pay 350+ million and it leads to a net loss.

      Would love for you to inform us with the facts.

      >

      • scathie says:

        You mean from Christy Clark and her right wing thugs? Yeah, they’re an impartial source of information. Solider, you’re going from bad joke to pitiful joke.

      • VFX Soldier says:

        The current administration you are calling right wing thugs were the ones that increased the film subsidies over the years and added the extra provisions so 60% of VFX salaries would be subsidized by the government.

        The NDP worked to remove the HST which voters agreed. The film industry was against this as this exposed them to a tax hike yet the film industry rallied behind the NDP in the hopes they would increase the subsidies $100M on top of the already $437M approved by those “right wing thugs”

        It might be a good idea to start using facts instead of name calling.

        >

      • Jaclu says:

        “It might be a good idea to start using facts instead of name calling”

        Uh, Christy Clark removed the HST.

        Moron.

    • LAskyline says:

      See my point about “cherry picking” the report above

      • Look at the big picture says:

        Cherry picking? As opposed to pro-subsidy studies commissioned by either film studios or local film boards who REALLY have something to gain by fudging the numbers?

        Subsidies are meant to attract and build new self sustaining industries. After 20+ years of ever increasing subsidies, the film and VFX industry in BC is not self sustaining at all. This is basic economics. The referenced study just reinforces what’s painfully obvious. That’s the opposite of cherry picking.

  6. trueform says:

    so when does the protest about LA subsidies scheduled to begin?

  7. Coming from Europe I do know that none of the smaller countries couldn’t produce films without subsidies. Also in North-America it’s called film business, in Europe we still consider it as an art form thus we subsidize it.

    Also one thing struck me with this post. I work in the industry and I know things are bad. But why does VFX Soldier attack Canadian subsidies every chance he gets? You’re American I assume? How much money Canada looses shouldn’t bother you so much? What I’m trying to say here is that you guys are barking the wrong tree here. It’s not subsidies that you should be after. They might twist the competition a bit, but if you think about it – for comparison, how much damage to US film industry European subsidies do? Yes, Wachowsky’s came and shot Cloud Atlas at Babelsberg Germany because they got 90M$ to do that. But how jobs have been lost in US because of these subsidies that have been going on since 60′. I think our problems are somewhere else, mainly how the deals with the studios are made.

    • VFX Soldier says:

      Did you read my other post from this week? I argued against california subsidies too and did in fen when the VES tried to support ca subsidies.

      The reason for all my posts on Canada? There is a significant debate in that country right now about the film subsidies. Those subsidies play a HUGE role in putting VFX facilities out of business and causing constant cycles of displacement in the industry.

      >

  8. charlie says:

    California spends $4.17 Billion a year in subsides, directly benefiting much of the population there. http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html?_r=0#CA

    • LAskyline says:

      Oh, those are all local indigenous industries that are threatened by international competition. Like Twitter, Netflix, UPS, Disney, Chevron and so on. You can’t honestly expect them to stand on their own feet now, can you?

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