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!