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MR. CHAIRMAN: I welcome the Film Industry of Nova Scotia here today. I think first we will begin by letting Ms. Ann MacKenzie introduce her colleagues and then we will introduce the committee members. If you would like, Ms. MacKenzie, please, the floor is yours.

MS. ANN MACKENZIE: I will do that now. My name is Ann MacKenzie and I am the Chief Executive Officer with Nova Scotia Film Development Corporation. I am very pleased today to have representatives from the film community with me to give their very hands-on detail of what they do and the value of the industry to them.

With me to the right is Chris Zimmer. He is the President of IMX Communications. They are a large feature film company, but they are also branching into television and animation now. Chris has done, his most recent feature films were New Waterford Girl and Divine Ryans, but he has also done the films Love and Death on Long Island, The Real Howard Spitz, and Margaret's Museum. So he has done quite a bit of feature film.

Next to him is Gary Vermeir from ACTRA, the union. Directly behind Gary, to the right, is Barry Cowling, President of Citadel and also an associated company, Topsail. They do television and feature film work. Most notably, recently Barry has co-produced the television series Black Harbour and currently he has the Bette Show comedy series on the go. Next to Barry is Leslie Adamson, she is with the Directors Guild. Next to her is the Chair of her board, Mark Laing. Behind me is David Coole. He is one of our emerging producers. He has done a feature film called Maxwell's Demons and he is also just finished a one-half hour pilot called the Daily Blade which has been picked up for six episodes this year. So that is a great success for him. Also supposed to be with us, and she sends her regrets just in case she does not make it because she was out of town, is Charlotte Shurko from the IATSE Union.

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What I would like to do today is show you a very brief two minute video. It has samples of some of the feature film and television shows that we have invested in in the last year and one-half. It is only a sample. We generally support approximately 100 projects a year. So you can gauge from this the quality of work that Nova Scotia film-makers are doing. I am going to start with that immediately.

MR. CHAIRMAN: Ms. MacKenzie, just before you do, perhaps we could start with the honourable member for Lunenburg West and introduce ourselves to our guests.

[The committee members introduced themselves.]

MR. CHAIRMAN: I guess then, Ms. MacKenzie, if you would like to begin, I understand what we will do is have perhaps a presentation and then we will have a question and answer session. Darlene Henry, of course, has been kind enough to put a microphone in place in case we have questions for people who are not sitting at the table where the mikes are and if it is your area of expertise, then we will perhaps ask you to go to the microphone so with no further chatter . . .

MS. MACKENZIE: I am going to start with the video. Then I am going to very briefly give you an overview of the film industry, an overview of NSFDC and our mandate. Then Chris Zimmer is going to speak on behalf of the film-makers here and Gary Vermeir is going to speak on behalf of the unions, but then everybody will participate in answering the questions.

MR. CHAIRMAN: Okay.

[Video presentation.]

MS. MACKENZIE: That is just a sample, but it gives you an idea of the top quality work that Nova Scotia film-makers are making.

I would like to show you only two overheads. What this graph shows is the growth in the film industry since 1993. In 1993 we had $14 million of production budgets spent in the province. That broke down 50/50 between local indigenous film-makers and guest film-makers. That was at December. We were up to $130 million and you can see the big spike came in 1996. That was about the time that the film industry tax credit started to come into effect in production budgets. Then it has been steady growth since then.

Nova Scotia is the fourth largest film production community in Canada. We are behind Vancouver, Toronto and Montreal, but Nova Scotia is the number one community when it comes to indigenous and indigenous means the percentage of your total production that is done by local film-makers. The value of that is that means that our Nova Scotia film-makers are making Nova Scotia intellectual property. Any future revenue or profit then comes back

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to the province and gets reinvested whereas the offshore foreign stuff, we love to see it come, they spend their budgets here and they employ people here, but then they go away and if those projects make any profit in the future, they go back offshore to the proprietors of that property. So that is a key message to get across on this graph.

What this graph depicts is the level of Nova Scotia Film Development Corporation budget over the last six years and it is how much we paid out in film tax credits over the last six years. Below that, the industry revenue generated, what that really is, it is kind of a misnomer. It is not revenue, it is production expenditures that are spent in Nova Scotia. So that is the direct revenue or the direct expenditures that are generated from that investment and it generally goes around five cents for every direct $1.00 spent in the province. We like to say that is a pretty good return on investment and it is consistent year to year; 1997-98 is a little off and I am not quite sure about that one, but generally it is around five cents.

I put a little folder in front of everybody and there are copies of these slides in the folder. It is the black and blue, the one with the pictures of Nova Scotia on the front. So if you have any questions about anything going through, I will answer them, but then you also have everything to take away.

I would like now to explain a little bit about the foreign offshore revenue. That has been growing significantly, particularly last year we had $60 million spent in the province. There are several reasons why that offshore revenue comes. Most of it is American so they are coming for the value of the Canadian dollar. It is quite a deal for them. They are also coming for our tax credit. It is usually one of the very first questions that they ask us. They are coming because we now have the trained film crews here. We have the trained film-makers on the ground to work with them. We have the infrastructure like sound stages, animation studios, equipment and camera rental places, post-production facilities. So we have everything else that they need to make their life easier when they come here.

Another thing I would like to point out is of that $130 million this year and $119 million last year, each year over 50 per cent of it was spent outside the Halifax area in regions like Cape Breton, Shelburne, Windsor, Chester. It was spread throughout the province.

The mandate of Nova Scotia Film Development Corporation is to grow the film and video industry in Nova Scotia by stimulating investment and employment and by promoting Nova Scotia's location skills and creativity in global markets. What that basically comes down to is we want to grow the film industry both locally, the foreign film industry, and we also want to be able to help them get whatever infrastructure they need to make their film or television projects.

With that in mind, we have two sets of programs. We have one set of programs that is available only to the Nova Scotia indigenous film-maker and then we have another set of programs that is available for the guest film-maker. On the local side we have development

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loans which help a film-maker option a property if it is going to be based on a property, come up with a first draft script or first draft marketing plan, a first draft budget. So it basically helps them to create a Nova Scotia intellectual property.

We have equity investments. What that means is we will invest up to $200,000 in a film or television project, but then we own whatever percentage that is of the equity. It usually comes in around 5 per cent or 6 per cent. So later, if that project becomes successful and revenue is generated and comes back, we get our share after our equity investment is paid back. Our equity investments help film-makers produce larger budgets and we also help to trigger other funds. An interesting point to note is of that $130 million spent in the province, the last spreadsheet I showed you indicated that only $6.2 million came from the Province of Nova Scotia. The rest of that, roughly the $124 million, comes from Ontario. It comes from offshore. It comes from broadcasters who are also outside of Nova Scotia. So our equity investment helps to lever those other federal government funds and to lever the broadcast licences and things like that.

We have travel market assistance money which helps our film-makers to take their completed projects to market. It helps them sell them; hopefully, export them. We have a film industry training assistance program. This program was funded through the Economic Diversification Agreement. What it does is it compensates a film-maker for taking the risk of bumping somebody up a level. So if a guy or a gal has been a second assistant director or a third assistant director for 10 years, we will pay one-half the salary of that person if the producer will bump that person up to a director's position or if it was the third assistant director, up to the second assistant director position and we will support up to four positions per project. We have had this program up and running probably a year and one-half now. One of the fears, I should not say this with the film-makers here, but one of the fears we had when we developed the program, producers are business people and we thought, well, they are going to bump somebody up a level to get the funds and then the next time they hire them on the next project they are going to put them back down to the previous level.

So far, we have put 60 people through that program, and we do post-interviews and post-follow-up with the unions, and 53 of those people have remained at the upgraded level. Essentially what that means is 53 of 60 new people have been brought in at the bottom level for training opportunities. When we started this program we had roughly two and one-half crews. A crew can be 50 to 75 people that work on a film project, and it is everything from carpenters to artists to electricians. We currently have five. We know that the Film Industry Training Assistance Program has been key in getting us up to that level. We have a new media fund where we will provide equity, investments and development loans for entertainment projects that are delivered in a digital format, whether it is a DVD or it is an animation program, delivered on the Internet.

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We also administer the film tax credit which is crucial. It is 32.5 per cent Nova Scotia labour, so you have to employ Nova Scotians to get it. If you don't employ Nova Scotians, you don't get the tax credit, and it is capped at 16.25 per cent of the budget. Last year the film industry in Nova Scotia supported or created approximately 2,500 jobs in the film industry. The film tax credit is one of the key drivers of that.

We also support training and development initiatives. We support other organizations that deliver the training, and then we also develop our own programs that we put money into. The ones that we support that other people deliver are the Atlantic Film Festival and the Atlantic Digital Media Festival, they both have seminar components to them, and we fund the Grassroots Film and Video Training Organizations which include the Moving Images Group, the Atlantic Filmmakers Cooperative, the Centre for Art Tapes and the Shortworks Program.

The programs that we design ourselves, Heather Oke is our Director of Training and Development, and her full-time job is to design programs that address the needs of the film industry in Nova Scotia. It is also her job to go out and find the funds to deliver them. She has been very successful in accessing HRDC money and Economic Diversification Agreement money to support these programs.

We put on business seminars each year. Although the film and television industry is a very creative industry it is a business, it is a multi-million dollar business. There is a lot of business transactions and banking and legal work. So we put on seminars where we bring in lawyers, accountants, bankers, insurance people, and they will take a day or two and they will do seminars for emerging filmmakers to help them in those areas.

We just launched our First Works Program, and that is a very exciting program. We are doing two pilots, one in Sydney and one in Shelburne. We picked those places on purpose because they have sound stages there and they have a little bit of activity going on. A sound stage is a very kindly donated space.

What these programs are, they are designed for youth at risk. Youth at risk being youth between the ages of 17 and 25, who are currently not employed and not in school. We have selected eight participants in Sydney, eight participants in Shelburne, also we have selected two people in Sydney, and two people in Shelburne to act as coordinators and facilitators. These participants are going to do a film, they are going to do everything from write their script, act in it, shoot it, edit it, and we are going to showcase these films at Input 2000, this May.

Input 2000 is a very large public broadcasters forum. It is held every year. They usually alternate, one year in North America, one year elsewhere, one year in North America. Last year it was in Fort Worth, Texas. This year it was supposed to be in Israel but due to the political instability, they backed out. CBC locally, in Halifax, along with Nova Scotia Marketing very proactively campaigned in Fort Worth last year to have Input 2000 come to

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Canada. They were successful and they were even more successful in having it come to Halifax. It is going to be May 14th-20th. There will be in excess of 1,000 public broadcasters and independent filmmakers in attendance. We are going to showcase our youth participants' videos there.

Another unique component of the First Works Program is that it has a leadership development work readiness component. They are not only working with the film-makers, in each of the two areas we have well-known film-makers along with facilitators who are working with an organization called Heartwood. What they do is provide leadership, community development training to youth. That is what they do, solely. They are working with our film-makers and with the curriculum that was donated to our program from the Department of Education and tailoring it to make sure it has the film component and the leadership development component.

We also provide emerging producer awards. These are not large, they are $6,000 but it enables an emerging producer to shoot maybe a 20 minute short piece. It is like their calling card so that when they go to see the big guys, like Chris and Barry, they can have something to show them and say, look, I can do something, I am pretty talented, here is a sample of what I can do. Those are some of the programs that we develop ourselves and we implement ourselves.

We also do marketing initiatives for the province and for our producers. We have twice a year broadcaster forums. One significant challenge Nova Scotia film-makers face is that the decision makers, being the broadcasters and the distributors are all located in Toronto and Montreal, they are not here. It used to be a big joke, it was the most expensive cup of coffee. One of our film-makers would fly up to Toronto, have a 15 minute meeting with a broadcaster, pitch, walk out, fly home, cross their fingers and hope they liked it.

Now twice a year we fly down, usually between six and ten broadcasters, and we fly down the senior level decision makers from all of the broadcasters who are actually licensed and work in Nova Scotia. We have them for two days, and they are ours while they are here for two days. Our film-makers pitch them constantly, they have 25 minutes to pitch their ideas. We work these broadcasters for two days straight. They have been very successful. They have even been successful outside the traditional broadcasting season. The last two times several of our producers have been able to access licence letters outside the normal system, so they have been successful.

We do film industry trade missions. We did one several years ago with Germany. We actually entered into a memorandum of understanding with them. We have done a significant amount of co-production with German companies, and we would like to do similar trade missions in the future, however, they take a lot of work and a lot of organizing. We also attend all of the major film and television festivals and promote Nova Scotia as a place to

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come and do business and promote our film-makers as professional businesspeople that these other producers from away would like to do business with.

Then we have programs that are just for our guest film-makers, our foreign film-makers. We are a film commission and we have a location office, Barbara Stead is our Locations Officer and Public Relations Coordinator. We are generally the first contact with the foreign film-maker coming in. They will call us and they will ask questions about tax credits, about crews, about equipment, and whatnot, Barbara will convince them that they should send her a script and she will read that script, break down the script and identify different areas in the province that might suit that script. Then she will do up a package and she will send it off to them. She will usually send pictures from at least three different areas of the province, and she sends all the tax credit information. We do a production guide; these are usually ready in May and we are completely out of them this year or I would have distributed them here. The production guide lists all of the players in the Nova Scotia film industry. We send them back as well.

Once they get that package from Barbara, if they like the pictures, if they like the package, then she convinces them that they really have to come to Nova Scotia and take a look. When they come to Nova Scotia, we actually pay a location scout to take them around the province for two days. For the most part, once their feet are on the ground, Nova Scotia is an easy sell, the locations are beautiful, the people are friendly, there are all kinds of film incentives that these producers can access, and even if they can't access them directly they get the benefit of them from the trained crews that are around and from the union representation that is here.

Part of our locations office is a complete library of pictures from the province. Barbara works very closely with the regional development authorities to make sure that the pictures we are showing are the most recent and the most attractive of each of the regional development authority areas.

We also do studio meetings with the large studios and we advertise in most of the trade publications. We advertise Nova Scotia as a place to do business and very interestingly, if you look in your package, I included a copy of an article from the Hollywood Reporter in February. Now that issue of the Hollywood Reporter was supposed to cover - they call it film industry north of the border - all of Canada. In the text they did, however, they had almost a page of pictures and they were all of Nova Scotia. So people were thinking we paid them a lot of money to do that but I think we must have just been the only commissions that actually sent them very beautiful pictures.

So I think to sum up, so everybody else can get a chance to talk, the Nova Scotia Film Development Corporation programs, as I mentioned earlier, help Nova Scotia film-makers create Nova Scotia intellectual property. So that means any future revenues, profits, are going to come back and be reinvested in the province. They allow our film-makers to produce larger

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budgets than they normally would be able to and they allow our film-makers to lever the other funds from the other federal agencies like the Canadian Television Fund and like Telefilm Canada. They aggressively promote Nova Scotia as a film location. We also have private-public partnerships. Our new media fund, we put in $400,000; MTT put in $400,000 so we quite often get private partnerships to help us with our initiatives.

All of the broadcaster forums, over half of the money we raise in the community from the people who benefit from film-making, that being the lawyers, the accountants and service providers. We partner with the regional development authorities quite often in the fall, between November, December and January. We did a series of around 12 community meetings where we would organize with the RDAs and we would go out and each time - like the smallest group probably had 30 people show up, in Sydney we had 150 people show up. So we basically just go out there, we talk about the film industry to the communities, we talk about the growth, the employment opportunities and how they can best help themselves when a production is shooting in their area.

We also lever quite a bit of funds. Our budget has been around $3 million. Each year we have been able to lever around $1 million from the federal government through the Economic Diversification Agreement and through HRDC and that is for the training initiatives that we do. Vital to the growth of this film industry is to ensure that we have enough trained crew to meet the increasing production demand.

Another thing that I would just have to touch briefly on is that the film industry is a highly competitive industry. In Atlantic Canada, Nova Scotia was first to market. We were first to market because a lot of governments from all kinds of Parties saw the value in the film industry and came up with programs like Nova Scotia Film Development Corporation and the film industry tax credit. No other province in Atlantic Canada is close to the production that we are generating. However, they are trying to get there.

Our tax credit is 32.5 per cent, while Newfoundland and New Brunswick have a 40 per cent tax credit and P.E.I. is just in the process of finalizing a 35 per cent tax credit. So the competition is fierce. Competition from them is a little scary in that they can look like us. So what we have been able to do to compensate for that differential up until now is that we have all the other infrastructure that the film-maker needs because we were first to market. They do not have it. We have five crews. They would be lucky to throw together one crew in each of those provinces. We have the sound stages, we have the animation studios. We have the equipment rental companies and the camera rental companies. They are in Halifax and they service the Atlantic Provinces. So we are where we are now because of strategic investments before.

Our film-makers are at the stage now that we have probably five or six film-makers who are highly skilled, internationally recognized, so that the people they do business with now are from away or they are from elsewhere in Canada. The industry is based on contacts

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and relationships. It would be very easy for these film-makers to relocate and the skills they have are very exportable because they just need a cell phone. If you are talking to somebody in Los Angeles or you are talking with somebody in the U.K., it does not matter to them if you are in Nova Scotia or New Brunswick or Newfoundland. So I guess the skills that our film-makers have are exportable and it would be nice to keep them here.

[9:30 a.m.]

I think most of the other things I have touched on, how we lever federal funds, the competition from the other provinces. We are the fourth largest production community in Canada; we are the first when it comes to indigenous production. I would also like to share an experience that happened with Alberta, several years ago. Their production industry was up around $150 million and their film programs were eliminated and within that year they went down to $30 million. Now they have since, just last year, re-implemented their film programs and they are starting to grow back again. We actually have two Alberta film-makers who moved to Nova Scotia.

The whole province benefits from the film industry and it is an immediate benefit. The film-makers come and they spend their money immediately. Last year we had $130 million spent in the province. Well, the film industry tax credit is not going to flow for another year and one-half to two years and neither are our equity investments for the most part. So there is a real time delay between the time you get the benefit and the time you actually have to cash flow it.

I think most of the rest of the stuff is in your little folder. Opportunities and challenges, just to sum up. Tax credit is crucial. We would love to see it extended. We would also like to see a regional bonus included in the tax credit, particularly where we have sound stages in Sydney, sound stages in Shelburne. It costs more money for projects to be done outside the Halifax region. This is a union issue and it is based on safety so it is a logical issue as well but once you go outside the metropolitan Halifax area, the film-maker has to pay crew members per diems and hotels so it costs more money to go out into the regions. So a 5 per cent regional bonus would just level the playing field and it would overcome those incremental costs of actually going out into the regions. I think I am going to let Chris talk.

MR. CHAIRMAN: Mr. Zimmer.

MR. CHRIS ZIMMER: Thanks, you did well. Mr. Chairman and members of the committee, thanks for listening to us this morning. I was just looking at a very brief presentation. I wrote it up last night and I see I made one typo. I put the word filam down there. It is not a two syllable word, it is only a one syllable word. As you all know, sometimes it is pronounced that way.

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The film industry in Nova Scotia has been on a steady and sustained pattern of growth since the inception of a formalized and considered program of development and support provided by this government with the creation of the Nova Scotia Film Development Corporation in 1990. This was after a lot of work that probably many of you were part of and supported it. Programs of investment, development loans, tax credits, marketing support and promotion have enabled Nova Scotia production companies to move from a cottage industry, previous to 1990, with annual production revenues of well under $6 million to a more mature and established base of industrial - this is where my film word comes in - film and television production with the expenditure in Nova Scotia exceeding $130 million in the fiscal year 1999-2000.

The film industry has done this in partnership with the Government of Nova Scotia. It would not have happened otherwise, that is absolutely sure. This policy has managed to leverage the expenditure of over $510 million of production during this 10 year period which is quite a remarkable achievement. That translates into a lot of jobs, a lot of hotel rooms, meals, gasoline, construction materials, costumes, film purchases, airline tickets, taxi rides, entertainment - well you get the picture.

Last year there were over 2,500 direct jobs created and/or maintained; that is 2,500 mainly young people who can pay their mortgages, feed their families, buy goods and services here, as well as pay taxes here. This is in a knowledge-based industry which is dependent on skilled workers, so that a great deal of attention is paid to the education and training of new film technicians, writers, directors, actors, accountants, managers and even entrepreneurs, which eventually is what the producers are, if you ever wondered what a producer does.

The industry also promotes a sizable service sector where jobs in the finance and insurance sector, computer industry, hospitality industry, construction, transportation, tourism and others all share in the proceeds of this activity. Since over 95 per cent of this money comes from sources outside the province, the leverage that this participation has is substantial on an economic level.

The balance of these production budgets are composed of federal agency investment and tax credits; pre-sales to certain countries, we all go out and sell an idea and get a commitment there; advances from distribution companies; and national and international private investments. To put this in some perspective, 17 per cent of the budgets of Canadian-certified productions, ones that are owned, developed and written by Canadian companies - this is a national statistic - were financed with direct public sector funding. Nova Scotia participation from all programs is 5 per cent or less. Historically, that's the number. The balance of the funding is from private sector sources by way of sales and investments. Just to put a bit of perspective on where the money is coming from and what we have to move to. Now, this has gotten better in recent years.

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Nova Scotia should be proud because much of this growth is due directly to the efforts of Nova Scotia companies focused on creating proprietary films and television programs which are sold not only in Canada but around the world. Movies, comedies, documentary programs, variety, music, television drama series, children's programs, animation, industrial and commercials are all written, filmed, edited, sound mixed and finished here. Sustained growth of these Nova Scotia-based productions is the only sound basis for a long-term strategy in this sector.

Nova Scotia productions began on film quite a few years ago, actually the first film in Canada was Evangeline, I don't remember what year that was - 1914 or 1915 - that was historically, but now it has expanded into the IT sector with digital production technology, computer animation, Internet and web-based E-commerce. Because of the skills developed in the origination and content creation, the finance and management skills learned and developed in the film and television world will enable this industry to grow into the future.

Our world is a quickly changing one, as everybody knows here. One of the good parts that Nova Scotia has because we have had to rely on our own intellectual bootstraps to make things go, we are in a good position to take advantage of change in the whole new emerging web world for distribution and production.

To remain competitive in a regional, national and international arena this growth and sustained activity must continue as a partnership between government and the private sector. This is a valuable resource to be managed and tended because rewards are just now beginning to happen. Economic growth and returns, jobs, the ability to tell Nova Scotia stories and sell Nova Scotian ideas on a world stage and, quite frankly, it is the pride in the beginnings of what is just beginning to be a real success story. Those are all the reasons why we should stay the course in terms of a public-private partnership here.

To this end I just have three recommendations, many of them have been covered and documented by Ann's presentation and I would be happy to answer any questions but the recommendations that we feel are important are:

The programs of the Nova Scotia Film Development Corporation be supported. It is absolutely critical. You go back and you see why there is growth, there is growth because someone had the vision to make the initial investment and to make it happen, and it wasn't by accident that this happened.

We recommend that the term of the Nova Scotia Film Tax Credit Program be extended and that a regional component of an additional 5 per cent be added to encourage production in areas outside of metro Halifax. I see from the list that most of you are in that category.

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I also, just as an aside, I went down and I can see six or seven of the ridings that you represent have had and my own company has had direct involvement in the last two years of production work that has gone everywhere from the New Waterford-Sydney area, Lunenburg, pretty well all around the province. We have been over in the Annapolis Valley too. Any place that we have missed, we will try to pay attention to that in the coming years.

I think that the government and industry should seek ways to help develop infrastructure costs. Part of that is a concerted plan that needs constant adjusting and developing for things. We have had a lot of success with the establishment of post-production facilities and with the sound stages and I think that is a jump up and I think we have to continue to look at that. It is a long-term investment and it pays off.

Direct and indirect marketing programs. I think we have to continue to look at those and be very smart in how we do those.

Education and training programs should continue to be a priority, not only for the Film Development Corporation but for the province in general. The concept of lifetime learning, I don't think any industry is better illustrated than the film industry where we have a very highly educated and trained workforce on all levels. All jobs are quite skilled professions. So we are very happy to support not only the unions and the guilds but any other education initiative. We have always brought on trainees on every production ever since we started because we know that we need people who are smart and able to do it, we can't make it by ourselves that's for sure.

New media, animation, and research and development programs should be encouraged and supported. The world is changing, it is changing as fast as we think and I think if we are going to remain competitive and move into the 21st Century as a player, which we can do, we are actually quite well positioned for it to be substantially directed this way, then I think we have to look at these areas and these programs and see how we are going to grow and not just say, that's enough for that.

So that is essentially all that I wanted to say. We have this all in writing, including my misspelling. I leave you a copy. Actually I will get more for all the members, I didn't know how many Profiles 2000, which is the film and television production industry overview of Canada, and a lot of these statistics in here include what we have in Nova Scotia. I think Ann's presentation probably covers it in more detail but this will give you a picture. In Canada, this industry is a $3.7 billion industry. It is big business, without a question and supports a lot of jobs, a lot of people and interestingly enough, Canada is just becoming one of the most important players on the world stage for film, television and the IT sector of Internet production. Thank you.

MR. CHAIRMAN: Mr. Vermeir.

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MR. GARY VERMEIR: Coming from the performers' union, I can't work without special effects. Let me adjust the overhead projector.

Thank you for giving me this opportunity to speak on behalf of the film guilds. I am Gary Vermeir, Branch Representative for the ACTRA Performers Guild, Maritimes Branch. I will also be speaking today on behalf of our brothers and sisters in the IATSE Local 849 and the Atlantic Council for the Directors Guild of Canada. So I will talk a bit about who we are and what it is that we do.

ACTRA is the national guild that represents performers, so that would be not only the actors but also narrators, stunt performers, in film, television, radio in the English language in Canada. Currently in Nova Scotia, we have 200 full members and 95 apprentices. It is interesting to note that of those 95 apprentices, 80 of them joined just in this past year. So, we are seeing enormous growth within our branch.

The Directors Guild represents the key creative and logistical personnel on films, the directors, the designers, the art directors and that sort of thing. They currently have 87 members in Nova Scotia.

The largest of the group, IATSE Motion Picture Studio Production Technicians Local 849, it represents everybody else sort of below the line. So in Nova Scotia that would be the electrical people, the grips, the gaffers, transport people, set deck, all of that. They currently have 347 Nova Scotians plus 315 people who are working towards their membership, working in-province. Did you see member Steven Reynolds who just directed his first feature film for Chris very recently, the tremendous Divine Ryans.

MS. MACKENZIE: Oh, I have to add, he is also the film-maker who is running the First Works Program in the Shelburne area.

MR. VERMEIR: That is right. So to talk a bit about the labour force that works in the film industry, for the most part, labour is hired project to project. In ACTRA's case, performers are considered to be self-employed, they are free-lance contract workers. Consequently, it is important that the guilds and the unions provide the insurance and retirement benefits that would normally be paid perhaps by an employer. The guilds and unions have also established the codes of practice with regard to safety working conditions and such in the industry nationwide.

Membership growth. It really indicates the expansion and explosion of the labour force in the film industry since 1995. I see that the growth in the membership of IATSE, for example, has grown by 400 per cent since 1995. This is Nova Scotians training, becoming members of the guild, working in the industry. This is Nova Scotians who we lost in the earlier part of the 1990's before the introduction of the tax credit and a lot of the programs

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of the NSFDC who are now coming home because they know that they can make a living here.

A lot of this is just going to be basically reviewing what has already been said by Ann and Chris. The growth of the industry and the growth of this skilled labour pool is due to the presence of the strong local producers. They form the hub or the touchstone of the industry and they are the producers who are committed to the training and the development of the local talent pool which, of course, is, you know, mutually beneficial.

Consequently, our industry is not totally reliant on the offshore guest productions. As Ann said, we love to see them come, they put a lot of money into our members' jeans and they also provide a lot of great experience but should the Canadian dollar spike, places like Vancouver would be decimated because their production is almost entirely U.S.-based. Here, we would still have Salter Street, Imagex and Citadel and so on and so forth.

The majority of the IATSE and DGC members do this full time. This is their living. This is how they pay their mortgages and feed their families. In my guild, we are seeing increasing numbers of performers who are able to make a living at it, who don't have to have a day job, who aren't waiting tables between gigs, people who are getting continuing and leading roles in TV series, for example. We are also seeing the sort of typical Nova Scotian thing of being able to be flexible and to show initiative and be a performer on one project while they are developing another project that they are writing while working on another project as a small producer. So we are seeing that kind of lateral growth. This is where the new film-makers and new companies of Nova Scotia's future are coming from.

The industry itself, well, it is a non-polluting, self-managed industry. It is a flexible industry which doesn't necessarily require huge industrial sites. Films can be made virtually anywhere. Film producers are expert at taking warehouses and such and converting them temporarily into production centres. The enormous spin-off revenue Chris has outlined and the other thing is that it extends Nova Scotia's stories, culture, intellectual property and scenery to the rest of the planet. The high-quality productions that our members are creating, as a result of the producers and the NSFDC's hard work, is the greatest ambassador that Nova Scotia can have in the rest of the world.

Just by the by, from our point of view, one of the benefits of the growth of the industry is that we, in our office at ACTRA, have actually been able to expand our staff which means that we are now able to start looking at doing statistics. So what we have done is we have broken down some of the larger film productions that have happened in the past year and taken a look at how many foreign performers are coming up versus how many Canadian. So this perhaps is less interesting. This graph would show that of the Canadian performers, we are seeing an increasing number - or this is in days worked - of Nova Scotians, of ACTRA Maritime members who are getting substantial roles and working prolonged periods on these film productions. The other thing is that yes, we only have 200 members in Nova Scotia but

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we grant permits to performers from right across the province and these permits become their credits toward membership. This graph doesn't show the hundreds of days worked by the background performers, by the extras. That amount of time is worth hundreds of thousands of dollars over the course of a year.

Another example is the series, Pit Pony, which ran for two seasons in Cape Breton. Cochran Entertainment really kind of made a commitment to casting that production entirely with Nova Scotians. All but one of the performers was Nova Scotian and all but three lived here. So we had Denny Doherty and Jenny Raymond who are both Nova Scotians but make their home in Toronto. So this is proving that Nova Scotia performers now have the talent and the profile to actually carry an entire dramatic TV series.

It is also interesting to note that in 1995, when I was the elected President of the ACTRA Maritimes Branch, we came within a hair's breadth of being closed down by our national office because we couldn't sustain a branch office here. Now we are probably one of the most viable and financially healthy branches in the country with a very vital and active membership, very dynamic council and, as I say, a growing staff. Nova Scotia productions, of course, have won Genies, Geminis and an international Emmy so we are at international calibre now.

What do we need to grow? Well, we need these incentives to remain, to bring in more productions, which provides more dollars to build infrastructure, provides more learning opportunities for crew. We need to increase our infrastructure which means we need more trained crew, more facilities, more support services. So we need to sort of expand the people who are working in the fringe areas, providing everything from - for example, I have a family friend on the South Shore who made I think close to $100,000 renting porta-potties to a very large production. You don't necessarily think of that when you think of the film industry but when you are out in the wild, you gotta go and producers are going to pay for that.

We need more training opportunities, from the guild's point of view in that we all represent either the Maritimes or the Atlantic Region. We are also looking for more regional cooperation so that our performers can work in Atlantic Canada.

Some of our concerns. We want to see the development of our labour force to meet continued growth and advances of the industry. We are worried that any reduction in incentives will stop the growth of the industry and will cause our members who work in film full time, to go elsewhere, to go where the work is. We want to keep them here in Nova Scotia and they desperately want to stay here in Nova Scotia.

This is just a sidebar, a series of Keith's commercials, the first of which is now running, was the largest commercial shoot ever done in Nova Scotia and this was just done this past year. They shot two years' worth of commercials as if it was a mini-movie, a small feature film. It had a budget of well over $1 million and 80 Nova Scotian performers got work

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on that series of commercials. Again, this is another aspect of the expansion of the film industry in Nova Scotia and we are also seeing an expansion in the television commercial aspect of the industry as well. I remember Tom Gallant as Alexander Keith.

In conclusion, basically as Ann has said, the film industry is a cutthroat industry in terms of competition. Every province is vying to get the Toronto production, the Vancouver production, the Hollywood production, the U.K. or German co-production to come to their province. As Chris has said, we have now developed the infrastructure, developed the production expertise, have developed the skilled labour pool, have developed the experienced performers, to compete on an international level. But we cannot rest on our laurels and we have to continue to be competitive in terms of incentives and programs like professional development, that sort of thing, if we are going to hold where we are and indeed, hopefully, keep growing. So that is all I have to say, thank you very much.

MR. CHAIRMAN: Thank you very much, presenters. Now we will move into our question and answer segment of the committee meeting. I know all honourable members are chomping at the bit to ask some questions. Who would like to be first?

In the interest of time I wonder if we could ask all honourable members to just ask one or two questions in the spirit of cooperation?

The honourable member for Cape Breton Centre.

MR. FRANK CORBETT: Mr. Chairman, I would like to thank the presenters for their fine presentation. I have many questions but in the spirit of cooperation I will acquiesce to your request. Again, thanks for coming and I can remember back when everyone was agog in Cape Breton because they did The Bay Boy in Glace Bay. When you think back, there is someone who went away, Daniel Petrie, and came back and gave something back to his community. I think he was probably largely responsible for starting a film industry here in Nova Scotia or kind of giving us the confidence that we could do it here.

I have a few quick questions and one of them is, we have just seen the demise of the Pit Pony in Cape Breton. In the last five or six years it was interesting to see the graph from 1995 to 2000 on the growth of the industry, whether it was actual production, employees, or so on. With that came the specialty services. What was always a bone of contention with me in the television industry with specialty services was, I believe all but one of those services are done out of Toronto. I think WTN is Moffat and it is done in Winnipeg. I know this is before your time as CEO, but was there any kind of push from the film development agency here in Nova Scotia to go to the CRTC and say look, if you are going to grant these types of licences then we have to look at expanding the universe outside of Toronto?

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[10:00 a.m.]

MS. MACKENZIE: Every time decisions like that are made we actually do written submissions to the CRTC and when they go around and do their regional presentations, we also present. I can't say it has fallen on deaf ears but there are all kinds of people like us doing the same thing, probably with a lot more clout than we have. That is one of the reasons though that we actually bring all of these broadcasters down to Halifax for our broadcaster forums. It is only a slight step to compensate for it but at this stage it is all we can do if we want to have their presence here.

MR. CORBETT: You know, most of these specialty channels, I guess you could look at what we call earth broadcasters, have certainly become smaller in the sense of ownership. You basically have Global, Baton, and CBC, but the two major private sector networks. There used to be a whole lot of privately owned television stations out there whether it was CHUM doing a lot of it or Carleton or all these other companies that were out there. Now they are basically centrally owned through Izzy Asper and his company or through Baton that may actually go to BCE now.

When you narrow the market down, that obviously narrows your ability to negotiate anything because there are fewer people doing fewer things. On a very personal note, I don't think the private broadcasters in this country do enough for Canadian production. On the other hand, a lot of these same earth broadcasters own the specialty services. Back to you Ann, how involved are they, whether it is Baton, or CHUM, or Global, in the sense of looking at Nova Scotia as a market as opposed to doing it in Toronto by Torontonians?

MS. MACKENZIE: Some of them have regional offices now in Halifax so that, in itself, is a commitment. CTV, Johanna Lunn Montgomery is in Halifax, she has given a lot of development to local producers. Global has a person here too, they are not so committed. They did do a bunch of half-hour dramas but that was part of another licensing agreement. Vision is here as well. Sometimes the only way they will give any regional support is if it is a requirement of some other thing that they want. The specialty channels, there are pluses and minuses. There is a ton of them now so that means they need a lot of programming. Unfortunately, since there are so many of them the license fees are getting smaller but there are a lot of issues at play there.

MR. ZIMMER: You are absolutely right, ownership and control of a sector of the broadcast industry is something that is sadly lacking in Atlantic Canada, not only in Nova Scotia but in all of Atlantic Canada. If you look at the West, just ignoring Quebec and Ontario, as we all like to occasionally, there are investments and initiatives that have come out of the West, Izzy Asper and Shaw and all of that which have been very aggressive and successful. Any support that we can get for initiatives which are coming will be appreciated. I think it is essential.

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The one glimmer of hope here is the whole digital world because that is going to throw the whole traditional broadcast distribution network world on its rear end. Those are opportunities that we have to seize and grasp now. We have been developing technology, I know Collideascope Inc. has been working on special programming for this because there is going to be broadband broadcasting, narrow-casting really, over the Internet and that is one way that we can take initiative, that sort of goes back to the new media and I think it has to be areas like R & D. We are either going to be a player or we are going to be lost in that world as well. So that is coming up.

MR. VERMEIR: A good example of that, it is not audio-visual, it is just audio, is the Nova Scotia Kitchen Party that the CBC has been webcasting. I was talking to Glenn Meisner, the producer of that the other day and within 10 minutes of the first broadcast they were getting e-mails back from Denmark and Turkey and places like that from people who were excited to be able to hear this Nova Scotian music over the Internet, so that is where it is going.

MR. CORBETT: Just another short question and if we come back around and I have time for more I will add some on the end. It is interesting when we talk about the new media and the fund. It is probably the involvement of MTT at that level and the government and the funding I think is due to end this year, the $175,000 and let's hope it sees its way beyond this year. Again I go back to traditional broadcasters, if we can call them that, that they become very insular when times get a little tight, they don't move out to the regions, they pull back to the centre and so on. You were talking about the new media and the digital aspect of it and whether it is to be able to do the Kitchen Party here in Halifax and have people from Denmark listening to it. How do we create the market so that it expands here? I guess I should probably be talking more to the producers on this. How do we keep that market here? At one time you thought of Halifax as being the place of the new music industry and so on, how do we make Nova Scotia the place for the New Media?

MS. MACKENZIE: Actually, Frank, I would like to take a stab at that. Just a little bit of background, Chris mentioned Collideascope and the President is Steven Comeau, you have probably seen a lot of him lately, he was in Maclean's Magazine recently and what not. He is like a hybrid producer actually, he does some television stuff, he does a lot of New Media stuff, he does some animation stuff. One of the things that he has developed is this television in a box for the Internet. Actually NSFDC through a New Media program did invest in that. Just on that side, too, we are talking with MTT about renewing it. They kind of were at a frozen state with the merger and all that has been going on, but things are starting to move ahead on that.

One thing that our new media producers could really benefit from, and I know that the provincial coffers are really stretched, is a New Media tax credit. All of the areas in the country that are doing very well, particularly Quebec, well Quebec has just jumped in on the New Media scene. They have these centres of excellence for new media. This federal

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government fund is available for New Media companies and last year Quebec accessed over 68 per cent of it. They were able to do that because the New Media fund, where it is a new industry, a higher risk industry, the programs are more geared toward the safer deal, the safer deal being the deal that brings more money to the table.

So Quebec, they have like a 40 per cent New Media tax credit and they have all kinds of other incentives available for New Media companies. They access 68 per cent of this federal money that is available for New Media companies. I think Atlantic Canada, not Nova Scotia, accessed around 2 per cent. So if we want to be competitive in that area and give our New Media producers a little something to make their deal look a little better, a New Media tax credit would certainly help in that direction.

MR. DONALD DOWNE: I want to thank Ann, Chris and Gary for an excellent presentation. I have had the opportunity to meet before with Ann and others to talk about this industry. In fact, as the questions keep coming back to the same issue time and time again we actually did in a previous life, when we were in government, bring forward the enhanced film tax credit for areas outside Halifax. First we helped bring it in at 32.5 per cent and then to increase it, 37.5 per cent for rural area development and I was very happy to see in fact rural development actually happening for that.

The other one, the multimedia tax credit, I think 15 per cent is what we had actually recommended as well because that is another one of these emerging industries. Historically we look at Nova Scotia and, being a farmer, the resource industries are always key but you cannot just live on the resource sectors, you need to broaden the scope, as it were, of a growing economy. At a time when slash and burn, or cuts, are always going to be with us and I don't dispute that, but if we don't grow the economy, that is really where the essence is in having sustainability within government.

The film industry is a prime example, when you consider about $9 million, through tax credits, have gone to help support the film industry and we have $130 million that is direct dollars going into the economy, the return on the investment is probably one of the best we have ever done. So I want to compliment the industry for its tenacity and leadership and certainly for an excellent presentation today.

We are talking about 2,500 jobs. We are talking a very substantial opportunity for this province and my concern is with the last budget that was to cancel those initiatives that we had brought in to help stimulate the economy and to help develop the industry; the multi-media one in Quebec, they have taken over. They own that part of the market. It is wrong. Why can't we have part of that initiative and we will have if we are prepared to make some of those investments in a multi-media sector. I have met people who are involved with that and they are just crying to say that we can create new wealth right here in Nova Scotia if we have just a small lever of a springboard of help to move us in there.

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My concern is with some of the comments that have been made. I know when the Tourism and Culture Minister, Rodney MacDonald brought forward support for the cultural industry, that for two years there was a lot of work done by the industry. It was non-partisan, it was industry driven, coming up with a strategy and part of that strategy is what we are talking about here today. Some of the government comments were almost like, well we really are not interested in that. It doesn't really mean an awful lot. Well, it means an awful lot to the industry and an awful lot to the economy of this province and I think it is about time. I am probably a pretty strong individual when it comes to growing the economy, I believe very strongly in that, but the arts industry, that is a major part. We just have never understood it to the degree that we should.

If you go to New York, you know New York for no other reason than what you have read or what you have seen on TV. New York is like a movie star. The City of New York just blows you away when you walk . . .

MR. WILLIAM ESTABROOKS: Is there a question there, Mr. Chairman?

MR. DOWNE: Yes, I will have a question here in a second. So we need to do more of that in the Province of Nova Scotia and I think we can have that identity. I would just like to make one other comment. I am concerned that we don't freeze-frame this industry. I am concerned that we don't put this industry in a downward spiral by saying we cannot make those investments. I think when government makes that determination in the next budget, they need to make sure they balanced off the issue of driving and growing the economy and your industry is a major part of that success story if we are prepared to be bold in it.

The issue of the legislation that currently exists for industries to access film tax credits. I understand when that legislation was changed, it was to say to the large companies coming in, the bigger more substantive companies coming in, couldn't grab hold of those dollars and take them all themselves. It was basically geared to help some of the small emerging industries in the Province of Nova Scotia to have access to these dollars. The legislation, as I understand it, basically allowed for made-in-Nova Scotia companies to keep those dollars and to expand.

I understand now some of them are wanting to change that legislation because they have become big and now they want to be able to grow with that as well. Can you tell me what the position of your organization is with regard to those proposed legislative changes that some of the industry are recommending?

MS. MACKENZIE: Well, Don, I would like to take first crack at that. First of all, I would like to address some of your preamble to your question. (Laughter)

MR. DOWNE: They get all worked up when I do that.

MS. MACKENZIE: I will be succinct.

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MR. ESTABROOKS: We hear it in the House all the time.

MR. DOWNE: Well, if you would ever do something about it, it would be all right.

MS. MACKENZIE: Gone are the days of the Industrial Revolution. We are now in the days of the technological revolution. Sorry, Don, agriculture and things like that, they are just not going to be the mainstay. It is the service and more in the technology, bio-chemical, all the film digital stuff, (Interruption) intellectual property. That's where the growth is going to be. That's not just me, that's like any analyst you want to talk to on Bay Street. We are in the technology revolution now, put your money behind the service providers in those areas.

That aside, the film industry in Nova Scotia, $130 million, is an integral part of Nova Scotia's economy. That is direct spending. We do not even address the spin-off benefits of that $130 million. It is just the direct money spent so if you were to go with a Statistics Canada multiplier, whatever, they would generally multiply that by two, but we only talk about the direct spending. We don't even look at the tourism impact. When Chris did Margaret's Museum years ago, people went to visit Glace Bay. The Titanic people were coming here to Halifax in droves the year before last. Hopefully when New Waterford Girl gets released some time next year or this year . . .

MR. ZIMMER: April.

MS. MACKENZIE: April, okay. Hopefully tons of people will visit New Waterford. The tax credit, you are talking about the asset cap, Don, in your question, your direct question. We are very much advocating that the asset cap be eliminated. When the film industry tax credit was first introduced our industry was at a developmental stage. One of the proponents of keeping that asset cap in is now the major proponent looking to get rid of that asset cap. Everybody knows it is Salter Street Films. They represent a huge portion of our film industry, over 50 per cent. Over 50 per cent of those 2,500 jobs, they are creating. They want now, where they are approaching, and we strongly support it, the $25 million asset cap mark for that to be eliminated. It is a labour-based tax credit, so as long as you are employing Nova Scotians, why does it matter the size of your company, it just means you can employ more Nova Scotians.

One thing that we propose to finance, to mitigate, their fear was that if you do that then Disney and Columbia Tri-Star, all those big companies are going to come in and our money is just going to go out the roof. I hate to tell you, they do that now. The way the legislation is scripted now these offshore companies come into Nova Scotia, they set up totally autonomous Nova Scotia corporations and they access our tax credit. Blue Moon done by Columbia Tri-Star was one case in point. It is the only one where it has happened, but the way the legislation is written it can happen. Our suggestion was to put a two-year residency requirement on the filmmaker who is applying, the major shareholder of the corporation applying for the tax credit. In that way, we could keep Nova Scotia companies like Salter

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Street Films here, keep employing Nova Scotians and control the people from outside coming in. Does that address it?

MR. ZIMMER: Just the point that with Salter Street, all the tax credits are reinvested, it is not profit that any of the companies take and stick in their pockets. There seems to be somewhat of a misconception. Every dollar goes back to hire actors, hire crew, buy goods and services, spent right here in Nova Scotia. That money has actually been absolutely key for the Nova Scotia producers to be able to go out and leverage along with any amounts that are invested by the Film Development Corporation, that is what we use to leverage federal dollars, that is what we use to leverage the 83 per cent of the production budgets which come from outside Nova Scotia. That is where we go and we can say, we have this tool and it goes back in, it gets reinvested, we don't get it until it has been spent. Actually the government has recovered all or more of the expense before they actually write the cheque. I don't know if you all realize that, the money has been recovered through the tax system previous to actually writing the cheque. That is just to address the asset cap thing.

If it is a Nova Scotia company, if the control is for our benefits, then I think growth and success is something that we should celebrate not resent. For that system because it is so closely tied to labour, I think you should look at it very closely, that it go to local industry, the local resident companies have to be involved in it, and that it not be Nova Scotian tax dollars that are going to Hollywood. They have too much of our money now, and we have to try to figure out how to get more of their money here.

MS. MACKENZIE: That only happened the once but it could happen over and over again because of the way the legislation is written, it can. Just to clarify what Chris is saying, we are one of the culprits that forced the filmmakers to actually end their financing plans. If the budget for one of Chris' movies is $3.5 million, and maybe there might be $700,000 of tax credit, well we insist that that $700,000 go into making that movie, so it is part of the production budget. It doesn't come out and go back into corporate overhead. It is directly used to finance it.

Just on tax credits in general, to give you an idea of how crucial film tax credits in particular are to this industry, you have provinces like Ontario, British Columbia and Quebec all with film industries over $1 billion and they all have pretty aggressive film tax credits. That is no coincidence, you know, if you want to be in this business, if you want to grow, you need them, plain and simple.

Another thing to keep in mind is even if you were to change the tax credit in a very slight amount, that would have a hugely disproportionate negative effect because where we require it and every other place does, it goes into the financing, it is very hard to finance a film and television project. Sometimes you can get down to that last 10 per cent to 15 per cent and it just will not go forward. It is very hard to bring all the players in. So any change will have a disproportionate effect.

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MR. CHAIRMAN: Mr. Estabrooks.

MR. ESTABROOKS: I want to talk about sound stages and their use. We have five in Nova Scotia. Could you tell me, Ms. MacKenzie or Mr. Zimmer, do you feel that some of these sound stages are underutilized?

MS. MACKENZIE: I can tell you first from the provincial standpoint none of the sound stages is up to full capacity. For one thing the film industry is seasonal, there are at least three months of the year it is down. Three of the sound stages in the Halifax area are kept busy. Electropolis is owned by Salter Street, so they keep that studio pretty darn busy. Chris is a partial owner in CineSite so he puts a lot of his work and service work, the stuff that he works with for Los Angeles companies into CineSite. TourTech is owned by Peter Hendrickson. When both CineSite and Electropolis are up and busy, he picks up the slack in the film industry, but he also does the music side. So in Halifax they are faring okay.

Sydney, you know, we are going to have to wait and see. They had Pit Pony in their area right from the beginning. Well, now, it is like, okay, it needs another production. It is a little more difficult to get people to go to Sydney, a little easier than Shelburne because Sydney does have an airport and it does have a lot of restaurants. It does have a lot of hotels and the facilities that you need and it has some beautiful locations. It has had a lot of things shot there. So that may be an easier sell.

Shelburne sound stage is going to be a difficult one, not an impossible one. Again, it has a spectacular location. It has had a lot of production activity there, but I cannot lead you astray, that is going to be an uphill climb.

MR. ESTABROOKS: One more if I may, sir. I certainly congratulate you on, a picture is worth a thousand words, what an absolute coup. I would just like, because Prospect is there, it is getting close to Peggy's Cove as the most photographed church I am sure in Eastern Canada. The locations for these films, if you want a beach, okay, who determines? I know it is a rather mundane question, but I know what it means for local economies and I know what it means for the take-out joint or just the fact of promotion of putting these - you know, I see Crystal Crescent Beach listed there. How are some of these things decided?

MS. MACKENZIE: What happens is, as I mentioned earlier, Barbara Stead is our locations officer and public relations coordinator. She has all the initial contact with the foreign film-maker, the guest film-maker, and they will send her a script. She will break it down. Sometimes they are looking for maybe five things. So it is not the most obvious. She might read a script and it might say, Johnny runs down the main street which has a parade square in the centre and an historic church to the right. What she will try to do is fill in the most difficult piece to find. Believe it or not, old churches are really hard. Although we have a lot of them, they are very difficult, like in a centre area. So she will find the most difficult thing first and then she will try to find the rest of the stuff. She will always send at least three

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areas of the province that suit it and then when the film-maker comes here, she puts them with a location scout and that location scout takes them everywhere, even places that they have not seen the pictures for, but the first contact would be Barbara Stead in our office.

MR. CHAIRMAN: Mr. Chipman.

MR. FRANK CHIPMAN: Mr. Chairman, I had my question answered about the tax credits.

MR. CHAIRMAN: Perhaps I could direct a question to Gary. Regarding the apprenticeship program, a number of young people who perhaps feel they have the talent to become an actor or presently are doing some stuff through high school or community theatre, be it directors or narrators, what have you, how does a young person, get into the union?

MR. VERMEIR: Speaking for our union, they have to get the gig. They have to get the job and that can take the form of a non-speaking role on a TV commercial up to a speaking role on a feature film, but it is up to their own personal initiative, their training and their talent, as to how they actually get that first role. There is no sort of tried and true path for a performer. Some of them will actually go and study theatre at Dal and National Theatre School. Some of them will come at it by getting involved in some of the grass-roots programs here like Filmmakers Co-op or the Centre for Art Tapes.

Some of them, quite frankly, just happen to be in the right place at the right time. For example, The Real Howard Spitz was looking for a young girl to play opposite Kelsey Grammer and I believe Chris had John Dunsworth, the casting person, just go into some schools and talk with some kids and Genevieve Tessier kind of rose to the top. Since that point she has become a full member and has actually had three or four significant roles just by virtue of the fact that she just has that kind of personality and very sensible parents who keep her grounded. So there are a lot of ways to skin this particular cat. Once they have that first credit and are interested in pursuing that work, then they can pay their $30 and become an apprentice. After five more such credits they are then eligible to join as a full member.

This is very much different than SAG, the Screen Actors Guild, in the United States where you only need one credit, but then you have to pay $1,000 to become a member. We consider ourselves a union of professionals so you actually have to have a body of work before you are eligible to become a full member.

MR. CHAIRMAN: I have had a number of young people express that they find it extremely difficult to break in. Some of them, you know, minor in theatre at university, and so I guess what you are advising is it is best just to persevere, keep pushing, and look for that break.

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MR. VERMEIR: I cannot speak for the other guilds, but with our guild I will frequently have young performers who are fresh out of high school or fresh out of university come to me and say, well, I am off to Toronto, I am going to go and make my fortune in Toronto; not realizing that there are more ACTRA members, there are more professional performers in Toronto than there are in the rest of the country put together. The competition there is absolutely cut-throat whereas here with 80 new apprentices just in the past year, we are growing very rapidly and there is a lot more opportunity for a young performer to actually end up with a series role on a feature film or a television series. We are now becoming a real kind of portal. When I was acting, lo those many years ago, we would sit around and twiddle our thumbs and wait for the film to roll into town in the summertime if we were lucky and then, you know, put on our McDonald's aprons for the rest of the year. Now we have this incredible turnover of new talent finding opportunity, rising from the ranks and developing careers here and not having to go to Toronto.

MR. CHAIRMAN: Who among our guests could answer whether or not there is any potential or a feeling that there is a potential for a Nova Scotia talk show, television? (Interruption)

MR. VERMEIR: It is interesting though to see, and Chris could probably speak to this too, how the opportunities are starting to expand. We sort of started with a very much dramatic history, with feature films, Salter Street's early films, but now we are moving out into a lot of different areas into the speciality networks and such. My wife, for example, is in the process of developing a speciality show for WTN on weddings and on the wedding industry. There is just a huge amount of opportunity out there, a talk show may be another direction to go. There is such a hunger and appetite now for content that really all it takes is ideas and a little cleverness to produce a product here.

[10:30 a.m.]

MR. CHAIRMAN: Just one more quick question . . .

MS. MACKENZIE: Brooke, on that, you might have an opportunity to pursue that because at Salter Street's annual meeting just last week they announced that they were applying for three specialty channels themselves. The opportunity is there.

MR. CHAIRMAN: There are probably some Jerry Springers around here. (Interruptions) Ms. MacKenzie I heard you mention to Mr. Downe something about competing interests or something between the resource-based, maybe I misheard. Would you mind repeating or clarifying that for me?

MS. MACKENZIE: I was saying that supports and investments, strategic investments, if you are looking for more of a return on your investment or more of a payback, they would be going into the technology service-driven industries as opposed to the traditional resource-

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based depletable industries, that was more of what I was saying. Nova Scotia has a large number of universities and the people in Nova Scotia are highly educated. If we pursue more of these service-driven industries, then our youth can stay here, stem our brain drain, they could stay here and work in industries here. That was more of what I was really getting at.

MR. CHAIRMAN: Okay. I wasn't certain because . . .

MS. MACKENZIE: And I was just making a joke because . . .

MR. CHAIRMAN: I think there is growth potential perhaps in all industries.

The honourable member for Victoria.

MR. KENNETH MACASKILL: Mr. Chairman, with the permission of my colleagues to my left, if I could go into a short preamble.

I want to thank you for your presentation this morning. Gary, I want to remind you that in my other life, I was in the what you called it the porta-potty business (Laughter) That was not the title we had on them in my day but until 1990 that was part of my business. You mentioned somebody made $100,000. I think my first venture into that business with the film industry was My Bloody Valentine. I want to tell you that it is not easy servicing a crew down in the mine while in the porta-potty business. I must say probably my reputation in that business was better than it is with the politicians.

I want to ask you, Gary or Chris, this industry goes hand in hand with tourism to a large degree. I guess in tourism what we find is the more tourism you get, the more strain on our present infrastructure, like roads, sewer and water. We find that as more tourists come each year, the strain on our infrastructure demands more dollars into our infrastructure. I guess when we talk about the film industry, the infrastructure for some years to come, with the steady growth as it is, may continue. Is our infrastructure from the tourism industry good for this type of growth for many years?

MS. MACKENZIE: Are you saying, can the tourism industry support the huge demands?

MR. MACASKILL: No, can the film industry, with the present infrastructure they have in place, support this steady growth for many years?

MS. MACKENZIE: It could, with the existing programs in place and remaining. We, in our business plan project growth, but it depends on how regional the film industry goes out. Obviously when something was shot in Shelburne, there is the Ox Bow Motel there and there are some bed and breakfasts, but I think how they handled it was some people actually rented their houses. I think what happens is as the demand continues, everything else rises up to meet

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the challenge, but one can't really get there before the other because they are kind of symbiotic and work off each other.

Just a note, right now on our books we have scouts. Scouts are scouting companies which have already called us, given us their script, saying they are looking at Nova Scotia. We also know they are probably looking at New Brunswick, Newfoundland, whatever, but on our books we have projects with combined budgets of approximately U.S. $90 million that are telling us now, you know we would like to come and shoot there this spring, this summer. So that is going to be a lot of demand. There is going to be a lot of demand for your actors, there is going to be a lot of demand for infrastructure like hotels, restaurants, the whole bit. That is, if, they decide to come. One key factor in that would be the programs that they believe are here now and the programs that will actually be there in reality when they make those decisions.

MR. VERMEIR: That kind of growth generates infrastructure as well. Again, just for my guild, the growth over the past couple of years and the amount of production here has caused two stunt companies to now start looking into setting up shop, satellite offices from Toronto, here in Halifax. We now have a fight director who has moved into town and has settled here.

These were skills that producers would always have to go to the larger markets and import whenever they had a production that required stunt work or fight choreography, now we have people who are actually experienced, they have gained their experience on Toronto's nickel, and are moving back home and setting up shop here and making those services available at a much cheaper price to the local producers. It is kind of a natural growth. Work breeds this expansion of the support services and infrastructure.

MR. MACASKILL: Basically your two main components would be the sound stages, and tax credit?

MS. MACKENZIE: And our programs tax credits. Another thing that I neglected to mention, one of our federal government partners, ACOA, has agreed to provide NSFDC, in each of the next two years, $93,000 to help market Nova Scotia abroad as a place to shoot your films. We also access money through Industry Canada, they help us work with the regional development authorities to do videos of Nova Scotia and show each of the areas that we are trying to promote. What these organizations have decided, federally, is they want a consistent message getting out for Nova Scotia so rather than the piecemeal approach by all kinds of different regional areas and things, they put the money in our hands and then we partner with each of the regions to do that. Because we access so much federal government for these programs, we will be wandering the lay of the land in the next year or two.

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We did organize a meeting with Senator Boudreau to get an idea of the federal government's plans for future investments in Nova Scotia in the film and television industry. A very clear message that he responded back to us, come and see me after April 6th, and know this, that a lot of the money that you access comes through the Economic Diversification Agreement. Well, if the provincial government isn't at that table, we are not either. You access money through ACOA, you access money through HRDC, we are not going to be in the position that if the provincial government significantly steps back, the federal government is not going to come and pick up the slack in the film and television industry.

That was a little disconcerting to us because as I mentioned earlier, we can access up to $1 million a year from the federal government in the film and television industry. So it is just something to keep in mind.

MR. MACASKILL: So the 32.5 per cent tax credit, that won't leave us in the competitive field to other jurisdictions? Would we lose to other jurisdictions if we stay at that level in your opinion?

MS. MACKENZIE: That is a very difficult question, because I am also an accountant, and there comes a time when you think there has to be some sanity. If somebody went up to 50 per cent, would we go up to 50 per cent? It is almost like a bidding war. I think that kind of gets a little crazy. Are we competitive at 32.5 per cent? In Halifax we are because we also bring the infrastructure, because let's face it, seriously you couldn't put a crew together in some of the other Atlantic Provinces; we have five. We have the sound stages, and we have everything else I mentioned earlier. So 32.5 per cent is competitive for Halifax. Is it competitive for the regions? No. They don't have that infrastructure. Would 37.5 per cent be? It certainly would be a help and would certainly level the incremental costs of doing business there.

That is just me personally being a chartered accountant and being fiscally responsible. I don't believe that we should just keep this war of one-upmanship because sooner or later somebody is going to say, there is a line in the sand. It might have diminishing returns after a while.

MR. CORBETT: Mr. Chairman, just a comment. We did do a live talk show out of Nova Scotia when 90 Minutes with Peter Gzowski Live was done here in Halifax. It was on par with any production, so we can do it. I think when the Comedy Network, when there were applications sent out for that, I think the CHUM Group when they were looking at it if they were successful in their bid for the Comedy Channel, they were going to do it out of Halifax. I think that was up on Robie Street as a matter of fact.

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Gary, one of the things I wanted to talk to you about is training workers in this industry. I think it is Rockport, Maine, that does training, whether it is television, telepictures, cinematic releases, and it seems to be very popular. Has that idea really been looked at for Nova Scotia? I think my good friend from Victoria would say Baddeck would be a great place to put that, and something like that. Has that been kicked around? What is its state?

MR. VERMEIR: I think our first sort of serious kick at that kind of training was the Moving Images Group, which is all the film associations and organizations which meet together as sort of an industry panel to determine what training we would like to have in the short term for the professional workers in the industry. Then we have an administrator that we task to find the instructors, to find the funding to put that together. We are now also seeing the NSFDC partnering with MIG, with community colleges, and I should probably pass this on to Ann who knows more about it.

MS. MACKENZIE: We have actually had a film school project in the works for two years now. Again, we access money for this project through the Economic Diversification Agreement. It started out with a feasibility study. An entertainment group called Nordicity Group at the time, it was then purchased by Coopers & Lybrand and then merged with PricewaterhouseCoopers, did the initial feasibility study about establishing a film school in Nova Scotia, because that would be the last piece of the puzzle to complete all the infrastructure and to develop the filmmakers of the next generation.

The initial report that they tabled, which was well over a year ago, we rolled it out to the community. Although their initial report said yes, a film school was needed and it was economically feasible and viable, the model they used was, for lack of a better word, quite elitist. You would have been paying a $20,000 tuition fee, it was not accessible to Nova Scotians. When we rolled that out to the community meeting and it was a very large attendance and it did have in attendance filmmakers, broadcasters, the existing training organizations, all of the grass-roots training organizations we invest in. It had business community, it had the universities and community colleges. It was a very large community-based group.

The consensus that came out of that meeting was yes, a film school was required, no, not the model that that report was putting across. So the positive thing that came out of that was it kind of, out of adversity, united the community because they then knew exactly what it was they didn't want. At that meeting, we struck up a committee, a program curriculum development committee, and again it had representatives from Nova Scotia College of Art and Design, the Nova Scotia Community College, the Moving Images Group, the Atlantic Filmmakers Cooperative, Shortworks, Centre for Art Tapes, it had film-makers, it had broadcasters, it had lawyers, it had bankers. It was a huge community-based group and they developed a curriculum for a film school.

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Just to make it succinct, the model they saw was three-tiered, like three circles. The circles being academic, technological and professional development. Immediately NSCAD came to the table for the academic side, saying, we have been developing a Bachelor of Film Studies for awhile, we will worry about whatever has to be done with the Maritime Provinces Higher Education Committee but we slice off that as we should be the people there. It was a community group and it was well, do that, that would be good, whoever is going to deliver it, it would be great to have it. Community college was so swift and proactive, they immediately launched their two year screen arts program last September, all coming out of this curriculum report. Then on the professional development side, a steering committee was established with representatives from the community, and they were going to address the high end of professional development because a consensus was reached that for the ongoing day-to-day grass-roots professional development, the four organizations, Moving Images Groups, Atlantic Filmmakers Co-op, Centre for Art Tapes, Shortworks were doing a great job, were absolutely necessary. They were accessible, the flexible, they were designed in tune with the production community, so that if you were offered a project, you could take a course.

For the high-level professional development, we had a consultant look at the best way to go forward on that. The consultant we chose was actually head of development for the Canadian Film Centre for eight years, and then she moved from there to the American Film Institute for four years. She has just finished her report, and we are at the stage where we are looking for $100,000 to hire a creative director and just launch that. That was part of the reason for the meeting with Senator Boudreau, to see where we could look federally to access that money to hire the creative director.

That is the status of the Nova Scotia Film School. We are here, but it is more of a virtual school. It is not going to be lots of investment in bricks and mortar, it is going to be a lot of collaboration.

MR. CORBETT: One quick one because time is running short. I won't ask a Don Downe question, I will ask a Frank Corbett question, a short snapper. The music industry is quite huge in Atlantic Canada and indeed in Nova Scotia; MIANS is active. How active is your group with MIANS in and around music videos?

MS. MACKENZIE: We actually have had MIANS to present that at our board of directors. There are ways we can assist MIANS to have local musicians more involved in the film process. There are things that they have to do to address that first, and Chris can certainly speak to that. Simply Nova Scotia, they are not busy all the time, however, they have a union agreement which basically prices them out of the market. As ludicrous as it sounds, it is cheaper for one of our local film-makers to go and hire a symphony in Czechoslovakia to work on their film. We have met with the board of directors of MIANS and Symphony Nova Scotia, and they are all working to try to address this, again that is a contractual union issue.

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In other areas, we award more points to projects that apply for our funding if they use Nova Scotia musicians, the same if they use Nova Scotia talent, the same if they use Nova Scotia writers. We are the Nova Scotia Film Development Corporation, so the more Nova Scotia elements you bring to the table, the more favourable your project becomes in the long run, so we do that. We also have approval at the board level - and we haven't done it, yet - to invest in small music videos to help local musicians get themselves a demo to promote themselves a little better. But we work closely with MIANS because basically that is their mandate and we are just trying, where one industry complements the other, to come to a way that we can help them that helps us too.

MR. ZIMMER: I think you also would discover that there is a lot of informal stuff that goes back and forth between the music industry and the film industry. I know we regularly provide film stock and shooting facilities to musicians who want to do their own videos, and they quite frequently go and use technicians, actors, people who have their training and make their living off the film industry and come in, and do this on a much more ad hoc level. I think the two industries are very closely linked. It is also a place where I think growth will come because, once again, it is intellectual, something of a talent base, something we do well.

MR. VERMEIR: I think you are also seeing a lot of the musicians moving into the mainstream film industry as well. Just in the past year we have had Ashley, Heather Rankin, Lenny Gallant, J. P. Cormier, and Kim Stockwood, they have all had roles in Atlantic Canadian film projects. They are now actually sort of seeing themselves as working in the whole industry as opposed to just being musicians, which is tremendous because they bring a whole degree of profile to the projects that wouldn't otherwise be there.

MS. MACKENZIE: In one of our feature films last year, Beefcake, the score was written by a Nova Scotia musician. He got a Gemini nomination for that. That is a first. We are getting there.

MR. CHAIRMAN: At this time, I would like to be devil's advocate and thank the presenters for coming in and making what was really an excellent presentation. Would one of the presenters like to make some closing comments. We do have other business, committee members, to deal with, and I know we all have commitments outside of the committee here. Please feel free, someone on behalf of the presenters.

MS. MACKENZIE: I am going to quickly just say that in your brochures there are a couple of press releases which recap the production industry as of December, just to give a little more idea of what we were saying. It kind of talks about our First Works program. Just from our perspective, by referring back to the Voluntary Planning report that was done up, great report, and it came up with some good methodology on how to go forward. One of the recommendations that we fully support and feel that we fall under is that low cost-high value

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programs should be maintained if not enhanced. We like to think that at five cents for every dollar attracted to the province we are a pretty low cost-high value program. Thank you.

MR. CHAIRMAN: Thank you very much. Committee members for our next meeting we have a date of April 4th and the Grape Growers Association of Nova Scotia will be coming in. The meeting is from 9:00 a.m. to 11:00 a.m., the same as this morning. Perhaps we will just take a minute here to let our guests exit. With the approbation of committee members, we may perhaps be a little more forceful in limiting the minutes regarding their presentation. We had quite a contingent in this morning. (Interruptions)

MRS. HENRY: You tell them five minutes.

MR. RICHARD HURLBURT: Maybe have direct questions from the committee members instead of a 10 minute preamble.

MR. CHAIRMAN: Well, the editorial comments should be certainly cut back.

MR. DOWNE: We were talking about the next meeting date. We have two meetings going on at the same time and some of us are on both committees. It is getting hard, because you like to have continuity, it is important to be here, it is important to be at the Human Resources Committee. Surely to goodness we can try to find a date, not on the same days at the same time.

MRS. DARLENE HENRY: We had tried this previous years, this committee used to meet Friday mornings but unfortunately the House is in session at that time. Outside the House, if you want to meet on Friday mornings, that is fine, but if you want to meet on Friday mornings when the House is in session, you are going to have to juggle between here and there. So we went to Tuesdays, and unfortunately the Human Resources Committee is now meeting on the second half of their mandate, that makes it hard when you have Human Resources, Resources and then try to get Economic Development stuck in there. We can meet once a month if that makes it easier so there won't be any overlap, but right now the committee meets bi-weekly.

MR. CHAIRMAN: Could I just ask Mr. Downe, if I might, are there are other members of the committee who have a conflict with another standing committee?

MR. DOWNE: I guess I should get off the committee. (Laughter)

MR. CHAIRMAN: We certainly appreciate your editorial comment, we would miss that. (Laughter) If you can make some other arrangements; it is really difficult to do the scheduling and this seems to be the best time that we could come up with. I would like to, if possible and with all appreciation for your concern, stick to Tuesdays because of other commitments that we have in our ridings and in our caucuses and other committees actually.

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Some of us meet every Wednesday morning at 8:00 a.m. in the Public Accounts Committee. If you could make some arrangements, Don, to address your concern, I think the rest of us can, perhaps, sustain at this time.

If I could move along in the interest of time, we have a few pieces of correspondence regarding Leon Thompson's request to appear before the committee. How does the committee want to handle that?

MR. MACASKILL: I think the letter is self-explanatory, isn't it?

MR. CHAIRMAN: The letter is self-explanatory.

MR. MACASKILL: It is an issue now between the minister and Mr. Thompson?

MR. CHAIRMAN: Yes, Mr. Thompson advises that he is not intending to proceed with the matter set out in the notice of intended action.

MR. MACASKILL: Instead he is looking for a meeting with the minister.

MR. CHAIRMAN: He is looking for a meeting with the minister. I think that should suffice.

MR. ESTABROOKS: Mr. Chairman, I can't agree with that because of the fact that it seems to me that there are some things that when we look at Economic Development and Transportation, I think that Mr. Thompson could clarify some of the very issues that we have been presented with in the past. I am aware of the fact that we have this correspondence here from Mr. Delaney, but I am under the impression that Mr. Thompson would still like to meet with us. I might be wrong about that, but I would encourage us to reconsider that. He should be considered as a possible witness at a future date.

MR. CHAIRMAN: If I might, with the indulgence of the committee, Mr. Estabrooks, you also, I am sure, have seen a piece of correspondence and read the correspondence from his lawyer, Anne Derrick, who indicated that, "Mr. Thompson is not satisfied to have his views represented to the Minister through senior departmental administrators -- his interest is in meeting with the Minister himself. He does not intend to have me accompany him at any such meeting and he is comfortable addressing . . .", the issues by himself between him and the minister.

I believe, and perhaps Darlene could clarify this, that letter dated February 10th is subsequent to his original request to appear before this committee. Do we have clarification on that?

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MRS. HENRY: Yes, he wrote and asked to come before this committee, I received a copy of the correspondence. It was asked of the committee at that time to get more clarification on any possible lawsuit to the Crown and to TANS. It is basically up to the committee, if they wish to meet with him. In there, one of the lawyers had said that it is up to the minister if he wishes to meet with Mr. Thompson.

MR. CHAIRMAN: Do you know if Anne Derrick's letter regarding Mr. Thompson dropping his intent was after he asked to appear before this committee. That letter clearly points out that he wants to meet with the minister, but he did, in all respect, ask to meet with us.

MRS. HENRY: I can't remember the date of the letter, I think it was before . . .

MR. DOWNE: Just to resolve it, I think Kennie is right that he is requesting a meeting with the minister. But for clarification here, would it be appropriate for the Chairman or Darlene to contact Mr. Thompson and just ask him if he is still anticipating or wanting to meet with this committee, and that will clarify that point.

MR. CHAIRMAN: Is it agreed?

It is agreed.

The next meeting will be April 4th, the Grape Growers Association.

[The committee adjourned at 10:58 a.m.]