The Agenda with Steve Paikin (Audio) - How Can Film and TV Bounce Back in Ontario?

Episode Date: May 14, 2024

After film and television productions in Ontario finally dropped their pandemic testing protocols, they were hit with another setback. When writers and actors went on strike in the United States last summer many American productions that film in Ontario were forced to shut down. As a result, the economic impact of film and TV in our province took a big hit last year, and some in the industry say things have not rebounded as quickly as they had hoped. What can be done to help the industry bounce back? How can we meet the economic goals Premier Ford has laid out for media production?See omnystudio.com/listener for privacy information.

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they were hit with another setback. When writers and actors went on strike in the U.S. last summer, many American productions that film in Ontario were forced to shut down. And some in the industry say things have not rebounded as quickly as they had hoped. What can be done to help the industry bounce back? And how can Ontario meet the highly ambitious economic goals that Premier Doug Ford has laid out for media production? Let's ask. In Grand Canyon National Park, Arizona, via Skype, Marguerite Piggott,

Film Commissioner and Director of Entertainment Industries for the City of Toronto. In Sudbury, Ontario, via Skype, Devon Mahesh. Devin is Director of Industry Development and Production Services at Cultural Industries Ontario North. And here in our studio, Carla Trujillo-Villon, a Film and Television Production Coordinator and member of IATSE 411 and the Directors Guild of Canada. And Rod Butler, Vice President, Content and Regulatory at the Canada Media Fund. Good to have you two here in our studio and to our friends in Points Beyond. Thanks for joining us on TVO tonight. I want to start by having our director, Sheldon Osmond, bring up some numbers here that really tell a very big story. This is the economic impact of film and television in the province of Ontario.

And if we go back to 2021, right in the thick of COVID, we were still doing almost $3 billion of business here in the province of Ontario. And if we go back to 2021, right in the thick of COVID, we were still doing almost $3 billion of business here in the province. The following year, it actually went up a bit to $3.2 billion. But then came the strike, 2023, and business really fell $1.8 billion annually. That is a big drop off. And Marguerite, perhaps we could have you start by telling us those are the numbers. But what does it look like on the ground when you see that kind of drop? Those numbers are really real. It definitely what we're seeing is that coming out of the strike, less production is being commissioned. So there's definitely a downturn. We're feeling that in terms of fewer productions in Toronto.

Scouting, which has been robust at the beginning of the year, is beginning to plateau a little bit. We are expecting a reasonably strong 2024, but it's definitely taking a while to get started. But we know that the pipeline is strong. We know it will come back. It's just taking time. And that's really challenging, given that we've been through COVID and, of course, the strikes. We'll, of course, talk about that pipeline during our discussion here. Carla, what was the strike like for you and your colleagues? Painful. It was really painful. Not a lot of us were working. and the few of us that were,

we were working below our regular pay grade. We were accepting any job that we could get. Meaning what? So if I was a production coordinator, if somebody offered me an assistant production coordinator position, I would take it because that was the only game in town. Even though under normal circumstances, that's not what you would aspire to. That's not normally what I would do. I've done it, but I haven't done it in a while. Gotcha. Devin, give us a sense of what the strike was like in Northern Ontario and the impact it had

there. Sure. By the hard numbers, we were down about 60%. we had 40 productions going down to 16. um it was an interesting time because we have a lot more canadian independent production happening in northern ontario so we were able to avoid some of the um let's say american shows that weren't coming anymore we didn't have them anyways uh so there was a little bit of a um a success in that but coming out of it it wasn't uh a fast return the way we had with COVID. It was almost like projects were stockpiled after COVID and we could jump into a bunch of new productions. But more recently, it's been after the strike, a lot of feels like kicking tires or browsing on projects and not really a lot of things landing the way that they were. So we're feeling it.

There's hopefulness, as Marguerite alluded to, where we think a lot more projects are going to be looking for the rest of the year, but they haven't actually formally committed yet to being here. So that's where we have some concerns. Rod, I wonder with U.S. productions on pause because of the strike, whether the domestic industry here in Canada filled the bill at all. I think the domestic side filled the bill in the sense of the talent is here. The writers, directors, producers, creators, we have a strong system here.

I think where it gets challenging is there's no more money in Canada just because the U.S. studios are on pause. And I think, to Marguerite's point, it raises a little bit more of an issue in the sense of there is a strike and there will be a bounce back. But I think with other macro forces at play, there may not be a bounce back that takes the same shape

as we're coming out of Peak TV. Everyone with a Twitter account that was making a joke could get a development deal a few years ago. I think the commissioning and the licensing has started to change. I think the online streamers and the platforms that drove Peak TV had a model of growth, where as long as they kept growing their subscriber base, it's Wall Street that would value them in a very different high way. Now they're being scrutinized to say, have you made profit? So with profit comes ways to cut costs, like maybe

changing the production schedule and shortening it, or as we are well-versed, offshoring jobs. I think in Variety in March, they said that of the billions that Netflix is going to spend in the coming years, more than half is outside of North America. So I think change is coming. I think there will be a bounce back, but it may not look the same as the past. Carla, did you expect that after the strike ended that things would bounce back very quickly? Yeah, we expected the same bounce back that we had after COVID, after they lifted the restrictions. And there was a stock, as Marguerite was saying, there was a stockpile of productions. And did that happen? It has not happened yet. It has not happened. There's been a lot of rumors, but I mean, it's just talk at this point. Marguerite, why would things not have

bounced back as quickly? Well, I think Rob, Rob rather, really gave some good reasons. I think there was peak TV. There was a lot of spending going on on television. It was rising and rising. It was rising in a way that was pretty difficult to sustain. I think many people expected a plateau, potentially an eventual contraction. Add to that inflationary pressures and add to that the fact that everybody, every business in some shape or form was affected by the strikes. And you have a bit of a perfect storm that is causing the studios and streamers to really look at the bottom line, really sharpen their pencils. As Rod said, not looking so much at subscriber growth, but looking at revenue per member, which is a very different metric. which is a very different metric. Within this very challenging environment,

there are reasons to be very bullish on Toronto in particular, on Ontario in particular. And I know we'll get into that down the line. Well, let's let's get into it now. Go ahead. Follow up, if you would, because everybody knows about the American Canadian dollar advantage that Americans doing productions in Canada enjoy. What else is in that pipeline that makes Toronto such a good place to do business? Well, thank you for asking. What we're seeing is that we just, the reason why I'm in Grand Canyon National Park today is because I'm on my way home from Los Angeles, where we just did the mayor's mission to Los Angeles.

So the City of Toronto Film Office took 40 local industry leaders down to L.A. These are union leaders, soundstage owners and operators, post-production VFX. And we met with every mayor and the budget chief and the chair of the film board. And what we kept hearing from everyone is that they love Toronto. They love shooting here. As Rod and Devin both said, as Carla demonstrates, we have the talent here. It's well established. It's a very mature production jurisdiction. So we have very sophisticated soundstage spaces. We have very sophisticated post-production and VFX, award-winning year

after year after year, and that's very well established. But on top of that, of course, we have the tax credits, both provincially and federally, both for production and for post-production and VFX. And those tax credits are an absolutely critical part of our value proposition, as is the currency differential. So what we're hearing from all of the studios and majors, and we were meeting with heads of production, we were meeting with the decision makers who decide where productions worth tens or hundreds of millions of dollars go, they all say Toronto is a top consideration for them for all of those reasons. So as more and more cities and provinces and

countries compete for this business, Toronto is definitely in pole position. And I think we can take a lot of comfort from that. Devin, let me get you to make the same case for Northern Ontario, which has seen, until recently, quite an uptick in production there as well. Absolutely. I think what we can rely on is, as Marguerite mentioned, the tax credits, but also we have a fund specialized in Northern Ontario that helps attract productions as well. That's from the NOHFC. And that program really drives a lot of the decision-making for producers to choose here as a destination. And that program really drives a lot of the decision making for producers to choose here as a destination. And then also leads to a variety of job creation. I think that's the part where we're, you know, most concerned or most excited about the potential for American productions

coming. And even if they come to Toronto, it kind of boosts up our job growth as well, because we're getting people that were trained here, working on projects where they're learning or expanding their skill set, and then coming back with with increased talent. And then that helps to attract more productions to Northern Ontario as well, because we see, you know, that like a show like Shorzy that's filmed here in Sudbury, that that show is, you know, competing around the world for distribution, it is really a top level creation as far as the country goes. You know, that type of show is where we need to see more happening for us to grow as a region. We need, you know, maybe three of those types of shows or four,

and then that'll be where we see the growth in multiple cities. Rod, let me give you a chance to contradict Marguerite if you want to. Sure. That is, I want to put this on. You know, lots of jurisdictions are doing lots of trips to Los Angeles. They've got these trade missions going on all the time because everybody wants the business and everybody's offering subsidies to get it done, if I can steal an expression from the Premier. What makes you think that our trade missions to Los Angeles are any more effective than anybody else's? There's nothing that makes

me think that they're more effective. I think everyone is doing trade missions and it's a cliche in Hollywood to say, oh yeah, you're great, you're wonderful and you're amazing. Let's do lunch and let's keep talking. I think just as Hollywood North emerged, we took jobs away from Hollywood. I think it would be naive to think that if there's a cheaper deal internationally, it would be naive to think that if there's a cheaper deal internationally, that Hollywood North would be protected in some way. I think the way that we mitigate against the, let's say, there are peaks, sometimes there's boom times, but in the bust times, I think we need to invest, as Devin said, in Canadian content and culture. I think if we invest in the creators and the amazing writers and storytellers here, it's not going to ever supplant the service production dollars

that come into the province and into the country. But when you're talking about controlling at least the future and not the whims of Hollywood or Silicon Valley, I think there's something to be said for, let's invest in ourselves, let's nurture and kind of plant seeds across the aisle and make sure that our domestic production and our IP in Canada is healthy. I think as we're starting to think about the next few years, we're not even talking about the monster at the door, which is AI. I

think that's going to also radically change things. I think the viewing patterns of someone like my mom in their 70s who's watching movies of the week on cable, on a cable bundle. And better be watching this show right now. And is watching Tonight at 8, exactly. No, exactly. But I think we have a generation that's watching content on their phone. So there's going to be a bounce back. There will be a bounce back. There will be a healthier service production side. But I think we have to start on a macro level, preparing for making sure our domestic supports and pillars are established.

You just heard Rod say maybe some of that effort would be better spent on the domestic industry as well. Do you think there is tremendous value in these trade missions to California? So I don't think that Rod and I are disagreeing at all. I think we're agreeing with each other in new ways. So I think it's not so much that the mission needs to be competitively superior to other missions. Ours is very effective in that we bring down unions and employers together. We bring down the whole industry with us, which others do not. And because we do that, LACs, that we work together. And so when they see that, they know that we can take on bigger projects than jurisdictions where that is less of a defining feature. So that's just a note on

the mission. Also, I think, you know, it's not that the mission needs to be competitive. It's that Ontario needs to be and Toronto needs to be. I think for all the reasons that we've listed, the sophisticated sound stages, talent, post-production, VFX, tax credit, we are. And that's reflected back to us time and again, not just in what people say, but in the choices they make. With regard to domestic production, I couldn't agree more. It's really important for Canada to have a voice, for Ontario to have a voice, for our amazing talent to be celebrated. And we did a breakfast with independent filmmakers who do lower budget stuff in Los Angeles because we didn't want to leave anybody off of our list. in Los Angeles, because we didn't want to leave anybody off of our list. And one of the points I made to them is, don't look at us just as a place to put your productions. Look at us as a creative engine. Look at us as a source. Look at our amazing filmmakers. Look at Sarah Pauly. Look at David Cronenberg. Look at Namesha Mukherjee. Look at all of this talent. These people are,

many of them, are writers as well. The Don McKellars of the world, the Coment Virgos. Look at our novelists. Look at Miriam Taves. Look at Margaret Atwood. Look at Sheila Hetty. You know, so the argument for production in Toronto, in Ontario, and in Canada is dimensional. The need for support is dimensional. It just takes different forms, whether you're talking about domestic or international. Devin, I'm not trying to make trouble here. Well, maybe just a little bit. But let me ask you whether you sometimes think the focus by offices such as Marguerite's are so focused on

trying to get the Americans to come up here that there is a lesser priority put on domestic production. What do you think? I don't think those things are exclusive. When you attract the foreign production, it's not at the expense of domestic. Well, it doesn't have to be. And I don't think that's the vibe I ever got off of Toronto is where we're not creating opportunities for independent Canadians. It's always been a place where people would move from other parts of the country to come and do things in Toronto, right? And I think that's still the case. So in our part, region, northern Ontario, we're benefiting from these missions that come to Toronto.

There are going to be shows that take place in rural areas. There's going to be shows that require more months of snow. So they find locations that end up benefiting us. They bring a movie that'll come here that we wouldn't really have access to otherwise. It's a meeting that happened in LA during a mission like this, where, you know, the conversation started and then, you know, maybe someone at Ontario Creates is like, oh yeah, there's a perfect spot outside of North Bay that'll fit that movie perfectly. And then we end up attracting it and having the resources that can fulfill that. And I think, you know, to the point of having 40 people

in various parts of the industry visit another city, I think that that cohesion and showing that is really what we try and do in Northern Ontario as well. When we go to Toronto or when we go to TIFF or when we go to one of the American showcases, we're able to demonstrate that things can get done here. And I think on the scale where you're looking at maybe, you know, a $100 million movie or a series that are reaching $200 million,

like those types of projects only have a limited amount of space in the world that they can fit into. And to have that here, I think, attracts certain technology investments, certain infrastructure investments, and other things that benefit the entire province once it's all said and done. Rod, well, you tell me if I'm wrong. I did infer from your comments that you think there is more of an influence, or an emphasis rather, on trying to get the big deal in California at the expense of the local industry. I think we need to have both. But I think in terms of our long range protecting our vision,

we both need industrial autonomy and cultural. And I think if we start to think about CanCon, and people cringe when they think of, oh, it's poorly lit or it's not the same as the US studios. I think Canada has to do a better job of exporting itself and its brand. And I think if we start to invest, again, we need the US dollars. We need the foreign investment here too. It's not necessarily a fixed sum game. However, I think on a macro level,

we need to start to reinvigorate and relook at how we're investing in Canadian content, where again, the production and the IP is owned in Canada and exploited by Canadians. I think when we're talking about the next 20 years, we cannot be this walled garden anymore. We have to look to promotion, not protection. Well, to that end, I remember attending this press conference back in January. Amazon MGM Studios made a big announcement with Pinewood Studios. And the premier was there, the culture minister was there, the mayor of Toronto was there, lots of VIPs from the business were there. And here is a little snippet from that press conference. Sheldon, if you would. Today's announcement is going to expand the company's footprint even further.

Amazon MGM Studios commitment to lease one hundred and sixty thousand square feet of space at this world classclass facility right here in the portlands it's going to boost film and tv production and help ensure that the industry will continue to grow and flourish for years to come now carla i'm willing to bet you didn't vote for him but having said that what do you think of that announcement i think that's great but i've heard that um I've heard rumors about that for years. So if it happens, great. You're not sure? I'm not sure, yeah, until I see it. You're from Missouri on this one.

Show me. Yeah. Okay. Marguerite, let me put it this way. The premier has also said that he wants this industry in this province to be a $5 billion annual industry. And as we know from 2023, they're at a billion eight now. We're a million miles away from that goal. So tell me, is that a realistic goal to set? I think it's a very ambitious goal and I welcome ambition. With ambition, there needs to be strategy. With ambition,

there needs to be support to help us all get there. The premier wisely did not distinguish whether that industry is international or domestic. As we're all agreeing with one another, it needs to be both. And each side needs different types of supports. So I think we'll work together and we will get as close as we can to the Premier's goal, if not surpass it. Rob, he's talking about more than doubling the size of the current amount of business done here. Is that doable? Doable? I don't know. I love the ambition, as Marguerite said. I think it's great to have high goals. But again, we keep coming back to, I think if we let outside forces that have a history of being extractive define where we're going to go, I think we have to chart our own course. So

yes, we will work in complement and we will work with these new players. But again, I think in terms of the long range plan, we have to set our own course. And I think five billion, sometimes people like to politic. And I think that's a great number. Time will tell if he can reach that. For sure. Devin, what do you think the odds are in getting to a five billion dollar business here in the province? I'm confident we will eventually get there in terms of what needs to happen. If you look at a place like los angeles they're doing 29 billion u.s so you know that's not a huge when you look at what five would be canadian out of that like that that's not a huge take from the international world of production so if we look

at america we look at europe we look at as Asia and some of those productions then coming to Toronto or Canada or Ontario rather on hold like that, that seems like a nice fit. And if you look at, you know, just from our practical growth, more than doubling is our goal. We have to get infrastructure around studio builds and attract some top tier television and then that would help us be able to do it. But that would contribute to the Ontario bottom line. television, and then that would help us be able to do it. But that would contribute to the Ontario bottom line. Like, I could see that happening. And you look at, you know, like, where we are, and some other parts of the province, you can see where year-round production isn't really happening yet. So if you had studio infrastructure, where, you know, the weather wasn't affecting the quality of the output, you would have more talent development. I can see all of that happening and driving us up towards 5 billion. You know, if it lands at 4.2, not 5, you know, maybe that's the right

number. I don't have the insight to really know what the max capacity of our province is. But I think that there's a lot of room to grow. And you also see an interest in, especially young people, because we tour the colleges and universities quite a bit, and we see an interest in both film, television, gaming is another space where new jobs are coming up and people want to work in that space. So visual effects is an area where I think that Ontario can grow as a province. Maybe we invest more in that type of infrastructure and we see some growth that way. Maybe there's some new jobs that can be created around environmental considerations. I know that that's like an entirely new factor that's creating job growth and interest and people who are very keen on getting environmentally sustainable productions going. Maybe that's a whole other set of jobs or ways that we can create in the industry.

Maybe there's some investments that will help us be a leader in that space. You know, so maybe five billion of dollars that might not happen, but maybe there's some other leadership within the industry that we can be doing as Ontario. Gotcha. With just a few minutes to go here, let me circle back to something Marguerite raised earlier in our discussion and see where we go on that. Anybody who watches a movie and watches to the end will notice how many different jurisdictions around the world offer tax credits and subsidies in order to get production happening in their jurisdiction. And it's, I mean, those credits can go on for a long time. And we're up there too. And I guess, okay, Marguerite, start off on this.

We are big players in the subsidies and tax credit pool. Are they doing the job? Are they doing the trick? Because everybody's offering them right now. And what makes ours any better than anybody else's? So thanks for that. When we were down in L.A., we met with a lot of people who are in roles like vice president of incentives, vice president of finance, et cetera, things like that. People who could actually open up to us and show us cross sections of how our tax credits compare across jurisdictions, not just in terms of the numbers, but in terms of how they actually hit the bottom lines of projects, which is a very nuanced and challenging thing.

And what we see is that our tax credits are highly competitive. The people that we were speaking to, of course, always want more. They want us to do tax credits for above the line talent, which is actors, directors, producers who are not necessarily Canadian and so on. There are always requests for more. But the fact of the matter is our tax credits are competitive. And the reason why Ontario is competitive and Toronto is competitive is because it's not just about the tax credits. The industry has been burned by jurisdictions that decide there's gold in them, there are hills, and they want to get into film and television.

And so they create a wildly generous incentive and then it doesn't pay out and people get really burned. So they value the stability of the tax credits here. They value the maturity and the substance of our talent, which is built equally by international and domestic production. They value the infrastructure.

We have 2.5 million square feet of studio space with another 750,000 being built. So that's what they value. Tax credits are part of an overall value proposition that is extremely persuasive to them. Carla, how about you? Are they as generous as they need to be to get our share of the pie?

The tax credits? Yeah. Yeah. They are. They are. We play well in that field. We play well in that field. Yeah. The fact that they want. I mean, yes, they always want yes they always want as margaret said yes they always want more but i think i think we've given them a more than their fair share rod what do you say i think what margaret said is right it's tax credits are competitive i think there's always going to be a race to the bottom of there's someone else that can have a better deal but i think it's our infrastructure our talent i'm reminded the biggest service production in canada last year or ever was The Last of Us, an HBO show based on a video game filmed in Alberta for the first

season, then picked up and moved to Vancouver and BC. So province to province, year to year, stuff can change. So I think the tax credit stuff is great. We need to make sure the incentives and the levers are all there. But I think we have to, in terms of promoting ourselves, talk about, again, who we have in terms of talent and a deep bench. Gotcha. That's our time, everybody. I want to thank all four of you for joining us on TVO tonight and shining the spotlight, if I can use that metaphor,

on part of our economy that is hugely important. Okay, let's say thanks to Marguerite Piggott, the Film Commissioner and Director of Entertainment Industries for the City of Toronto. Devin Mahesh, Director, Industry Development and Production Services at Cultural Industries Ontario North. He joined us from Sudbury. Carla Trujillo-Villon, IATSE 411, Directors Guild of Canada. And Rod Butler, Vice President, Content and Regulatory at the Canada Media Fund.

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