HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

ECONOMIC DEVELOPMENT COMMITTEE

Mr. Michel Samson (Chairman)

Mr. Brooke Taylor

Mr. William Dooks

Mr. Mark Parent

Mr. Howard Epstein

Mr. Charles Parker

Ms. Marilyn More

Mr. Wayne Gaudet

Mr. Harold Theriault

IN ATTENDANCE:

Mrs. Darlene Henry

Legislative Committee Clerk

Mr. Jeremy Akerman, Chair

ACTRA Maritimes Political Action Committee

Mr. Bill Carr

WITNESSES

ACTRA

Mr. Gary Vermeir

Branch Representative

Mr. Nigel Bennett

President, ACTRA Maritimes Branch Council

Directors Guild of Canada

Mr. Jarrod Baboushkin, Business Agent

HALIFAX, TUESDAY, FEBRUARY 8, 2005

STANDING COMMITTEE ON ECONOMIC DEVELOPMENT

9:00 A.M.

CHAIRMAN

Mr. Michel Samson

MR. CHAIRMAN: I would like to call this meeting to order. My name is Michel Samson, MLA for Richmond, and chairman of this committee. This morning we have the Film Industry of Nova Scotia, both ACTRA and the Directors Guild of Canada, here to present. If I could start off by asking the members of the committee to introduce themselves and their riding, before we start.

[The committee members introduced themselves.]

MR. CHAIRMAN: We have two other committee members, Ms. Marilyn More from the NDP caucus, Dartmouth South-Portland Valley, who cannot be with us this morning, and Vice-Chairman Mr. Brooke Taylor, the honourable member for Colchester-Musquodoboit Valley, is also unable to join us due to a bad back, I believe.

Mr. Bennett, it is my understanding that you will be making a presentation to begin with. If you want to introduce the guests you have here with you, the floor is yours. As has already been indicated, our format is usually we allow you to make a presentation and afterwards members may have some specific questions that you can determine, amongst yourselves, who is in the best position to provide an answer.

We also have Mr. Harold Theriault, the honourable member for Digby-Annapolis, who is joining us as well. Mr. Bennett.

MR. NIGEL BENNETT: First of all, I would like to thank the committee for agreeing to see us here. We really appreciate this, we think it is an important time for us to address the committee in terms of the growth of the film industry here in Nova Scotia. I would like to introduce the rest of the people who are here with me today: Jarrod Baboushkin from the Directors Guild of Canada; Gary Vermeir, the branch organizer of the ACTRA Maritimes Branch; and behind us we have Jeremy Akerman and Bill Carr. We were to have Linda Carvery but Linda is, unfortunately for us but fortunately for her, working on a shoot at the moment, so she was unable to come.

The recent announcement that Premier Hamm made, we are very grateful for the increase in the tax credit levels. As you know, previously the tax credit level for film and television production was 30 per cent, it has now been increased to 35 per cent, with a 5 per cent regional bonus and a 5 per cent frequent filming bonus, which means that the maximum amount of tax credit that any producer can get from working in Nova Scotia is 45 per cent.

ACTRA's position had always been that the base level should be raised to 40 per cent, simply to maintain competitiveness with the rest of Canada. At the time that we had a 30 per cent base tax rate, we were the bottom of the table in terms of levels of tax credits in Canada, apart from the top three areas: British Columbia, Ontario and Quebec, who have significantly lower levels but have major infrastructure which we do not have here.

Everything that is shot here, people have to be flown in, they have to be accommodated. Whenever a film has to be processed, it has to be sent out of the province because we don't have that infrastructure to be able to do it here. So there are extra costs for film producers when they come to Nova Scotia.

What we were afraid of as well was that as soon as we announced that our tax credit level was going to increase, that other provinces, in particular provinces which are in direct competition with us, would announce that their tax levels were going to increase, and this did happen. The day after Premier Hamm's announcement, Manitoba announced that it was increasing its tax credit, which was already more than ours, to 45 per cent as a base rate, plus the 5 per cent for regional production, plus 5 per cent for frequent filming. So the maximum we can have here in Nova Scotia is 45 per cent and the maximum that people can have in Manitoba is 55 per cent and this is a huge and real difference, it makes a real difference to film producer's decisions, as to where they're going to film.

One of the things that we want to ask today is that the Economic Development Committee recommend to Premier Hamm that when he announces his budget, that we do increase the tax level from 35 per cent to 40 per cent. Let's remember that in Premier Hamm's announcement, he said that first of all, there was a 10-year commitment to the idea of a tax credit for film and television production and secondly, that he wanted to keep television production and film production in Nova Scotia competitive with the rest of the country. Unless we have a further increase in the tax credit we are simply not competitive.

We are not asking for the same level of tax credit as Manitoba, but we are asking for an extra 5 per cent.

There are other reasons that producers come here to Nova Scotia to film. We have a very good reputation in terms of productions that have already been made here in the past. Our crews are highly skilled, our talent pool is very good and growing. We need this extra 5 per cent to encourage producers to come here and to maintain our competitiveness.

I think we should also be looking at the long-term future of the film industry in Nova Scotia and that there are other areas of film production that should be considered for tax credit assistance. The most important one is commercials. At the moment, only film and television is covered, commercials are not covered by the tax credit system, and maybe that should be expanded. Approximately 25 per cent of the overall income of ACTRA members is from commercials and we're significantly disadvantaged here in terms of commercial production. Maybe in the future, our Alexander Keith's commercials can actually be shot down here instead of being shot in Ontario with that irritating Scotsman in the kilt who does nothing for the reputation of Nova Scotia in the rest of the country.

We should also consider, I think, tax credits for the use of digital technology. More and more in films and television we are using special effects that are created in the computer, rather than in actual real life. There's educational DVD creation, there is computer-generated imagery, blue- and green-screen filming. All of these areas can be considered for extra tax credits. And, of course, animation. We already make two animated series down here, Poko and Lunar Jim. Poko is an award-winning series, it's new stop-motion animation and we are pioneers in that, and that, again, does not qualify for tax credit help. Thank you.

MR. GARY VERMEIR: My name is Gary Vermeir, I'm the branch rep for ACTRA Maritimes. I would just like to make one other point. We are very gratified to see that the Government of Nova Scotia takes the film industry seriously and is investing in its development. We are seeing money coming for training, we're seeing equity investment, we're seeing the tax credit, but one other area where I think the province could do a bit more, in terms of both its visible commitment and its actual commitment to the film industry, is when the province itself becomes a producer of audiovisual material.

We're still seeing a number of government organizations that are not adhering to industry standards, in terms of their hiring of crews and performers for government audio-visual material. We're very happy to see at ACTRA that Communications Nova Scotia is making huge strides and we're seeing more and more ACTRA contracts being signed by Communications Nova Scotia for projects that come out of that agency.

We are still seeing commercials done for Atlantic Lottery Corporation, Nova Scotia Liquor Corporation, that are being done without the benefit of union contracts, without using professional performers or professional or unionized crew. We think this sends a very strong

message to the people within our organizations, who are dedicated to building this industry, that the government doesn't take us as seriously, perhaps, as we would like. So, it's something to think about.

We would love to see the Government of Nova Scotia become signatories to our collective agreements. Thank you.

MR. JARROD BABOUSHKIN: My colleagues here have very articulately addressed the main issues that we feel should be discussed today, so if you'll grant me just a few minutes I'll maybe elaborate a little bit. I would like to begin by thanking the committee for allowing both ACTRA and the DGC the opportunity to meet with you in order to discuss some of the issues currently affecting the film and television industry.

As I mentioned, my time is very brief this morning, so I'd like to take this opportunity first and foremost to thank all of the Parties for their hard work and for the support the industry received in seeking enhancements to the Nova Scotia film industry tax credit. This is a strong and vibrant industry and we're extremely grateful for your recognition of this fact. However, I would also like to bring to the committee's attention that this industry will continue to be challenged to attain its full potential as long as other jurisdictions offer more competitive incentives to both domestic and foreign producers.

On this note, I would like to request that the committee take the Premier's commitment, to continue to observe the tax credit in order to ensure that it remains competitive, to heart. This is an incredibly sensitive industry and it's no coincidence that incentives offered in other jurisdictions were enhanced very shortly after Premier Hamm's announcement.

Nova Scotia has led trade missions abroad to market the talented individuals who make up the Nova Scotia film and television industry, I often ask myself what tools we could offer and provide to the government in order to allow them to better market our industry. I believe that one of the most effective tools to do this would be testimonials from the very people pitching this industry.

I encourage the Nova Scotia Government to work with the relevant labour and industry organizations in order to come to an agreement that will allow our talented Nova Scotian crews and performers to work on government production.

In closing, I would like to thank the committee and the government, including the NSFDC for the support the industry has received. Government, labour and other industry stakeholders often have a variety of different but equally valid viewpoints on any given issue, that they're willing to share at any time. While these points of view may not always align perfectly, I feel it is important for them to continue to be heard in order to make well-rounded decisions that are in the best interests of the industry.

Once again, thank you for your time, energy and support. I look forward to any questions you may have.

MR. CHAIRMAN: Thank you very much for your presentations. I do have some questions. First, Mr. Parent.

MR. MARK PARENT: Thank you for your presentation and for being here and for the work that you do. I'm glad to see the tax credit increased myself, as there were various people in my riding who were phoning and writing me about it and I duly passed on those messages.

[9:15 a.m.]

The first question I want to ask is sort of a broad question and if you would indulge me, and you may not be able to answer it, but since you're here I'll take the opportunity to ask it. I was at a talk Gwynne Dyer was giving at our local high school and he was talking about the change in jobs within the Canadian labour market. He made a very interesting point about the fact that it's his contention we aren't losing jobs, what we're doing is transferring jobs. He said in the garment industry, for example, there were basically about 40,000 people in the garment industry in Montreal in the 1960s, now most of that's out of China. But in the film industry we went from 5,000 people, he claimed, to 30,000 people and he saw this as sort of a cutting leading edge, not just for Nova Scotia but for North American society, this moving into different jobs as it loses jobs but gains others. Do you see that as sort of the future for one of the job generators in Canadian society?

MR. VERMEIR: Absolutely. The film industry is actually a bit of a misnomer, we use that as a shorthand, but we're actually talking about sort of electronic communication. People who are working in the film industry now are also starting to bleed into information technology or bleed into digital media or bleed into Internet technology, as we all sort of converge into digital projectors in our movie theatres and entertainment on our cellphones.

The film industry is a creative industry, it's totally about communication, it's a very fast-changing industry in terms of technology and it means that the people who are attached to this industry - and more and more of these are very highly skilled, highly educated younger people - are taking the industry down the road of technologies that are going to spill over into any number of different industries. In fact, the producers who aren't able to kind of keep up with those changes are the ones who will fall by the wayside; the ones who are sort of locked into traditional broadcast and dealing with the networks are going to find that the market is changing very quickly.

I had a very interesting conversation with Paul Donovan who recently shot The Conclave here in Halifax earlier this winter, and how prescient was that given this past weekend's events? His television film is a co-production with Germany and he feels that

luring the Americans to shoot in Canada, that time has passed and the future is now going to be in Europe. Europe still wants to purchase Hollywood-type, North American production values - productions that look like they're made in Hollywood - but there's less and less appetite to buy that from George Bush, and Canada can become the politically-correct Hollywood for Europe and produce material that has that North American look but is much more politically friendly. So he's working very hard to build bridges with European co-producers and is quite willing to kind of leave the Americans out of the picture in terms of his business plan.

I would agree with Mr. Dyer's assessment that not only technologically is the film industry moving into new areas of jobs, new areas of industry and new areas of economic growth, but there are also new markets out there that we have yet to tap and if we can sort of look at the big picture, Nova Scotia might well be poised to develop these markets ahead of the more traditional, slightly less forward-thinking companies in central Canada.

MR. PARENT: Thank you. That was a very interesting and intriguing response, I appreciate it. Your comment about the base tax rate, the gratitude and yet the request for more, reminds me of a book by a politician, What Have You Done For Me Lately?

MR. JEREMY AKERMAN: That's a good book.

MR. PARENT: It's a very good book, I read it in the Legislature once and quite enjoyed it. Of course, it was written by Mr. Jeremy Akerman.

Two things: one is that the base rate is 40 per cent 30 kilometres outside of Halifax, so that should be stated just for the record; 35 per cent is within HRM and 40 per cent out. The two questions that follow, one is - and this probably doesn't really worry you that much, but you did mention it - that if we raise our rate again, then others follow suit, then we have to raise it again and it comes to a sort of place where it becomes financially impossible for small provinces to compete in that tax credit race. What's to stop, if we raise it again, Manitoba raising it again, and again putting us at a disadvantage, or other provinces? It's sort of a no-win for provinces in some senses.

MR. BENNETT: Indeed, in some senses it is a no-win situation because they can simply follow suit; however, I think we need - particularly with Manitoba, because Manitoba is our main competition. We lost projects to Manitoba last year and they very heavily try to seduce producers into filming there, which is their absolute right.

It's a difficult question to answer because, yes, people will increase their levels of tax credit funding; however, we are now second to bottom in terms of all the provinces in the country, and the only province that is lower than us at the moment is Prince Edward Island where, frankly, almost nothing happens. So this is the situation that we do try to address. I think Nova Scotia was the first province to start tax credit help for film and television and

we've simply allowed other people to get further and further ahead of us.

We should understand too that it's not just a question of competing within Canada, nowadays it's not a question of American productions simply coming to Canada, we're competing with the rest of the world because everywhere is open for business in terms of filming now. The idea of runaway productions coming to Canada, which was a bogeyman sent up by Hollywood in the last five years, Hollywood has now admitted is simply that, it is a bogeyman, that doesn't happen. What's happening is that now American producers are looking for their most economically-viable places to make their productions. They'll go to Bulgaria, they'll go to Prague, they'll go to Australia, they'll go to wherever is most advantageous, and we have to look at the way we compete in those terms.

I think Nova Scotia has specific advantages in terms of locations, in terms of where it is in the world, which make it a good place to film. Yes, other people can continue to increase, but I think we have to send a message strongly to producers that we want them to come here.

MR. VERMEIR: Fundamentally, I think it's a matter of 60 per cent of something is better than 70 per cent of nothing.

MR. PARENT: Is the base tax credit the best way to go to raising the base - that's what you're asking for, another 5 per cent of the base?

MR. BENNETT: Yes.

MR. PARENT: Why is that better than maybe adding on another 5 per cent differential for other . . .

MR. BENNETT: For other areas? Because the base tax credit rate applies to everyone.

MR. PARENT: Business included.

MR. BENNETT: Yes. And if someone comes here and wants to make a film which simply takes place within a city and doesn't take place outside HRM, then they don't qualify for that extra 5 per cent.

MR. PARENT: The base in Manitoba, do you know if it's standard across the province?

MR. BENNETT: They have a regional bonus as well. Their base tax credit is 45 per cent and the regional bonus is 5 per cent.

MR. PARENT: The regional is on top of that.

MR. BABOUSHKIN: And the frequent filming bonus on top of that. So a producer who has completed two projects in that province outside of the metropolitan area has an opportunity to realize a 55 per cent tax credit.

MR. PARENT: You mentioned that there are other reasons which would make Nova Scotia competitive. Could you elaborate on those, please?

MR. BENNETT: I think it's our history within the industry. We were the first, producers came here very early on. We have a history of being able to produce good television, good films, both indigenous films - those are films made by Canadians for Canadians - and also films coming from abroad, from the States, co-productions with Europe. We have that history.

We also have wonderful locations, Nova Scotia is a great place to do business. We have a talent pool which is very strong and is getting stronger all the time. We have highly skilled technicians here already. Nova Scotia was one of the first provinces to actually have a series produced on high-definition video, that was the final two years of the series called LEXX, which was made down at Electropolis Studios. We have all of those things going for us and producers know we can do it and so they come here with a feeling of safety and confidence that we'll be able to . . .

MR. PARENT: So if we keep the tax credit competitive the others will bring the industry here.

MR. BENNETT: Yes.

MR. VERMEIR: That's not the be-all and end-all. Certainly, the tax credit is a huge incentive and it also sort of sends the message out to the world that Nova Scotia is open for business. But we have much work to do in terms of ensuring the viability of our production companies. A lot of producers work from production to production and there isn't a sense of kind of building that base, building that company, expanding laterally.

As Nigel mentioned, we have work to do developing our post-production facilities, so that an entire production can be made in Nova Scotia, not just the shooting and then all of the post-production work is taken to Montreal or Toronto. It would be ideal if all of that could happen in the province. A fabulous example of what I'm talking about is the production company Eco-Nova, which John Davis runs here in Halifax and produces a series called the Sea Hunters, which is seen in something like 160 countries worldwide on National Geographic International.

John started running an eco-tourism business, diving shipwrecks, and produced a video to advertise his company to German tourists. He enjoyed making the video so much that he decided to try to make a series of wreck diving, realized that as he was making the series, okay, we need to have animation to show the ship sinking and sort of add the special effects, so he opened up his own animation unit. Then he realized that sound, when you're doing diving work, is a particular challenge, so he opened up his own sound company. Now he has a shooter, who is his main cameraman, who is also very well known within the corporate circles, so he opened up his own corporate film entity.

Now, Eco-Nova is sort of expanding laterally and providing all of its own services, all of which the profits go into the main company. We need to see more of that in our industry and our producers need to be encouraged to take that broader business look at their industry, as opposed to just working from one project and then coasting until they get funding for another. So, there's a lot of work to be done there but fundamentally, the bedrock of all of this is the province providing the incentive for productions to come here and for producers, both from away and here, to shoot here, and that is the tax credit.

MR. BENNETT: It should be stressed that it is simply an incentive, it's not a subsidy. We're not asking for money. Every dollar that is invested in film production produces $10 to $15 return. We're not asking for that sort of subsidized help, it's an incentive to producers to come here. I think that looking at what you were saying about other provinces increasing and increasing and this terrible chase up to 100 per cent, or 150 per cent or wherever it might end, I think the natural cut-off point is when we simply cannot handle any more production volume here.

For our industry to be vibrant, we have to keep on growing, it's no good trying to stand still. In the last three years we have lost production volume, simply because we have become less competitive with the rest of Canada. So now we have that ground to make up and we need to increase from there.

MR. PARENT: I have more questions but I've run out of time, so I'll come back in the second round. Thank you.

MR. CHAIRMAN: Mr. Dooks.

MR. WILLIAM DOOKS: Welcome, gentlemen, it's very nice to see you here today. I have a couple of questions.

On an average movie, a movie must be rated in some manner, 1 to 10 on the popularity or whatever jargon you may use. How much money does a movie pump into Nova Scotia? How much money are we putting into our economy? Is it $1 million, $2 million, $5 million, on a standard shoot, and we're talking on an average type of thing?

MR. BENNETT: It's difficult to say, it depends on the size of the budget of the film. Last year the total production revenue for the province was just over $100 million and three years ago it was $130 million.

MR. DOOKS: Should I be using the word "movie" or "film"?

MR. BENNETT: Whatever you want.

MR. DOOKS: That's a lot of money, there's no doubt about that.

MR. BENNETT: Yes, it is.

MR. BABOUSHKIN: And that has been for the past six years.

MR. DOOKS: So when we talk about the tax credit or tax break, how does that work exactly? In Nova Scotia we have a federal tax and we have a provincial tax. The province giving 35/40 per cent break or credit, if you will, is that just on the provincial side of taxation? What is the mechanism for the film producer to get that money back, how does that work?

MR. VERMEIR: It's based on Nova Scotian labour, so the more Nova Scotian labour that is employed on the film, determines the amount of that money spent on labour that is returned to the producer, to help him fund that production.

MR. DOOKS: So the provincial tax that would be paid on the labour?

MR. VERMEIR: Exactly.

[9:30 a.m.]

MR. DOOKS: It goes back through an application process or some type of . . .

MR. VERMEIR: And it's capped at a percentage of the budget of the production. So it's not as if a producer is going to be able to find a way to entirely find his production on the tax credit, it is capped.

MR. DOOKS: On labour only but it's not on gas, meals, accommodations or this type of thing? A lot of people are confused on this tax issue. I've been asked, what type of tax credit do they get? Of course, I've always referred to maybe the HST or something like this, so this is why we would like to have clarification on that.

MR. VERMEIR: Again, it's entirely labour based, so they have to hire Nova Scotians before they get anything back. The other thing is that that money then goes back to the

budget of the production, so the tax credit is not designed to go into the pocket of the producer, necessarily, it's all part of the budget of the production.

MR. DOOKS: So that's on the provincial level. Federally, what support does your industry get?

MR. VERMEIR: There is a federal tax credit as well on film, which has recently been increased.

MR. DOOKS: What's that amount?

MR. VERMEIR: Again, it's a labour-based tax credit as well. There was a bit of a furor back before Mr. Martin became Prime Minister, when the tax credit for foreign production was increased at the expense of the tax credit for Canadian production.

Actually, one of the problems of our industry is that the funding process for film is so Byzantine and so complex, that the federal tax credits grind against the provincial tax credits and together they can't exceed a certain ceiling. Then there are a number of different funding bodies like the Canadian Television Fund, the LFP, Telefilm, so it's a very complex system that producers have to wade through in order to make their funding work for projects. One of the things that we're lobbying for federally is to try to simplify and streamline this process, to make it easier.

To a large extent, the world of the film producer is one of paperwork, lawyers and accountants, in trying to make all of these various entities work.

MR. DOOKS: Federally, of course, the tax would be equal across all territories or regions?

MR. BENNETT: So the difference between provinces is the provincial tax credit.

MR. DOOKS: What other monies do you get for your industry federally? Let's say ACOA money, do you get grants for buildings, new theatres? How are you promoting your industry within our province so that we will have the appropriate infrastructure to attract people to come? You must have to have depots, parking places, you must accommodate these filmmakers coming in, it's more than just location?

MR. VERMEIR: Very much so. In fact, if you talk to our friends at IATSE which is the technicians union, they are quite adamant that we need a large sound stage in this part of the world, which will enable us to attract American feature films. The majority of the American production that comes to Nova Scotia is what we call movies of the week, the small TV movies that appear on CBS once or twice and are never heard from again, and are entirely location based, they shoot them on location. But we're not going to get Daredevil

and the X-Men and the effects-heavy productions here, because we don't have a sound stage big enough to accommodate them.

MR. DOOKS: Of course, I'm the MLA for the Eastern Shore and I don't know if you are aware where the Eastern Shore is but I must put this in at a committee meeting. We're

the riding outside of Dartmouth, still within the catchment area of the HRM. My riding has beautiful beaches, rivers, natural wilderness areas and so on and so forth, which would be friendly to making a lot of nature movies or sports and this sort of thing. So in saying that, how do you work or what mechanism do you have in place to sell Nova Scotia and the things that we have in Nova Scotia, to attract filmmakers to come here? How do you reach out and say, hey, we have this here, come to us, rather than them phone up and say, do you have that?

MR. BENNETT: We have the NSFDC, the Nova Scotia Film Development Corporation, which is a government-funded body. They publish a production guide which goes out and tells of all the facilities that we have, all of the locations that we have. We, at ACTRA, are going to be producing a DVD, which will feature our members here, so that we can show exactly what we have in terms of talent, for producers.

MR. VERMEIR: Our branch was the first to put our talent directory on-line so that any inquiry we get from anywhere in the world we can essentially say, go to this Web site and you can see the talent that we have in the Maritimes region. But marketing is a huge problem.

Most American feature films have a huge portion of their budget, sometimes a larger portion of their budget for marketing, than for the actual production of the film. In fact, the marketing budget of even small American feature films, generally exceeds the entire budget for a Canadian feature film. Marketing is a huge problem for producers in the Canadian film industry, particularly for feature films. Access to screens is another big problem. Access to television.

In 1999, the CRTC significantly weakened the Canadian content rules for Canadian broadcasting, which meant that things like eTalk Daily and Canadian Idol could be considered Canadian content, which meant that because of that weakening of those rules we went from 12 dramatic series being made in this country - a number of which were made here - down to two or three, because it was much cheaper for the private broadcasters - CTV and Global - to do eTalk Daily and just hire Ben Mulroney to gush over American stars, than it was to actually produce a dramatic series. But, Ben Mulroney gushing over American stars does not say anything, does not tell Canadian stories, does not reflect their identity back to them. So, we're pushing very hard for the CRTC rules to be reinstated.

MR. DOOKS: Mr. Chairman, that will end my questions at this point and maybe I'll have a few a little later on. I do thank you, today and would ask you to remember the attributes of the Eastern Shore and you would have an opportunity someday to visit. Call me

and I'll show you around. (Interruptions) But I think it is only appropriate for me to mention the riding, it's a beautiful riding and we have a lot of things to offer there.

MR. BENNETT: I have to tell you that I used to live in Smithville, Guysborough County and drove down the Eastern Shore often.

MR. VERMEIR: My colleague just told me that a lot of Riverman which was an MOW for A&E was shot in your part of the world.

MR. DOOKS: Yes, the Musquodoboit River.

MR. AKERMAN: We have the mosquito scars to prove it. (Laughter)

MR. DOOKS: Thank you.

MR. CHAIRMAN: Thank you, Mr. Dooks. I noted you didn't mention your prosperous clam digging industry as well down on the Eastern Shore, which may be the cause for some sort of Canadian production in the future. Mr. Gaudet.

MR. WAYNE GAUDET: I, too, want to thank our witnesses for their presentations this morning. I want to focus a little bit on the tax credits again. Do all provinces offer tax credits?

MR. BENNETT: No. Alberta has a different system. Alberta makes direct grants to producers rather than offer tax credits, but apart from that, I think every province does.

MR. VERMEIR: Saskatchewan also came out and said that they don't wish to play the game either and they tend to just open their chequebook, I think, when there is the possibility of a production floating around which is, from our point of view, a less desirable way to go about things because it's not even-handed. The nice thing about a tax credit is you hire Nova Scotia labour, you fill out the paperwork, you get your tax credit, it's not sort of you get a grant and you don't. So, Saskatchewan and Alberta are a little more loosey-goosey, in terms of the way that they do it.

MR. GAUDET: You mentioned earlier that Manitoba is our main competition. Why is that?

MR. VERMEIR: I think in terms of they're about the same size as we are, so they're attracting the same type of production which is the American MOW, the small series, they don't have the sound stages, as we don't. VZS which is in town right now shooting Ambulance Girl with Kathy Bates, their production company is called VZS Halifax Pictures # 6, because they've been here six times, this is their sixth project here in Nova Scotia. They actually have an office in Winnipeg and every time they have a new production, we start

courting them, because they can generally shoot their production either here or in Winnipeg.

I know that last year when they were shooting Reversible Errors here in Halifax, their producers all got these big boxes with Winnipeg postmarks on them and they opened them up and there were leather jackets from the Winnipeg Film Commission for all of the producers, just to kind of go, guys, remember Winnipeg. So I think it's an economy of scale that the size of the production community, the cost of shooting in terms of permits and other things is about the same, so it just becomes a matter of who can offer the sweetest deal.

MR. GAUDET: I think in terms of same size, maybe for my own personal information, how big is the film industry in Nova Scotia? How many people does it involve? What kind of numbers are we looking at?

MR. BABOUSHKIN: Indirectly, you're looking at over 2,000 jobs per year.

MR. BENNETT: And in direct terms, in terms of ACTRA members, there are over 500 ACTRA members in the Maritimes.

MR. VERMEIR: Then you have to add into that the spinoffs of cabs, lumber, hotel rooms, restaurants, equipment. I think if you were to talk to any of the hoteliers downtown or any of the car rental agencies, they would tell you that the film industry is a significant part of their business. A film lands in town and for 60 days it's a very intense user of services and materials.

I know, for example, the Delta Halifax has put a push on now that they are going to be the film hotel in Halifax. They see it as enough business that they have actually tasked people with making sure that all film business goes to that hotel. There are 2,000 people who work in the film industry, who make a large portion of their living out of the film industry, but then there is this much wider net of goods and services that are purchased by the industry as well.

MR. GAUDET: I heard earlier this morning that there are extra costs associated with shooting here in Nova Scotia. Are we looking at 5 per cent, 15 per cent, what's the amount?

MR. BENNETT: The tax credit level in Ontario at the moment is 18 per cent and here it's 35 per cent. Producers come down here and say that it costs them in the end just about exactly the same amount to film here as it does there, so it's a significant difference because we don't have infrastructure here. That, I think, is something that if local government - and it is - is significantly committed to the future of the film industry, we should be looking at how we can encourage the development of infrastucture down here.

MR. VERMEIR: Which leads me back to my own sort of political drum that I like to beat which is, a lot of that expertise that's flown in by producers, we in the unions feel

really don't need to be flown in because we have the talent here but there is a bias towards making sure you get the Torontonian to come in. So, when we see our own provincial government buying into that and flying in performers, or flying in directors, for work that's being commissioned by the provincial government, it's a bit of a kick in the teeth for those of us who are working in the industry.

MR. GAUDET: Coming back to the tax credit. Looking at t he recent increase in the tax credit and whereas other provinces have come on board which still puts us at a disadvantage, are there any types of guarantees that if the tax credit did go up again - maybe it will, I don't know - that other provinces will just keep on playing the game? I'm just curious how does that game work?

[9:45 a.m.]

MR. VERMEIR: I think there has to be a sort of critical mass. I think there's going to be a point where you can only race to the bottom for so long. I think there's going to be a natural governor in the size of the industry here. As Nigel says, ultimately, we're only going to need to raise the tax credit until the three and a half crews that we have in Nova Scotia are busy all the time, in which case then we're not going to need to go any further. With only three and a half crews we can only handle a certain amount of production and that's what we're looking for, is to be able to work to our capacity. We are not going to need to go to a 75 per cent tax credit in order to keep those people busy. That's sort of the way that we see it, that it's not going to be a race to absolute zero, but I'm not an economist so I don't know.

MR. BABOUSHKIN: What we do need to ensure is that our hat is always in the ring, that we are always challenging for those productions that are considering the various jurisdictions in Canada. What I mean by that is to have a substantial difference between two very similar jurisdictions puts us at a disadvantage. As Nigel pointed out this morning, we're not asking for a matching of the Manitoba tax credit because we realize that there are some costs associated with filming in Manitoba that aren't associated with filming here.

What the additional 5 per cent would do is ensure that we are still in the same realm of competition, that when a producer considers Manitoba versus Nova Scotia and takes into account different costs and different expenses, that he says it's fairly even in terms of what we can do. Now we can sell the province on other things, other than the tax credit. The tax credit is a tantamount incentive to bring producers here. Once we ensure that we're always competitive on that level, we can use our other attributes to sell the jurisdiction.

MR. BENNETT: I think this comes back directly to your question about why Manitoba is the one that we pick on here. I think the real answer to that is that Manitoba has gone out very aggressively to try to persuade productions to go there. They have really, really been aggressive in their sending of gifts, in their tax credits, in every element of trying to

persuade producers to go there.

MR. VERMEIR: I think it's interesting that while New Brunswick has had a 40 per cent tax credit, lo these many years, they have not been a huge draw of production and to a large extent, that's because they don't have the infrastructure, they don't have the concentrated crew that Nova Scotia has. We have the capacity, we have the personnel, we have the track record. We just need to make sure that, as Jarrod said, we're just on par with our nearest competitors in order to stay in the game. Once we have that bare minimum then the producers and the personnel, the expertise, the locations here are going to do the rest of that job for us. But poor New Brunswick is struggling because they don't have that concentration of expertise that we've gathered over the past 10 years.

MR. GAUDET: My final question is, assuming that the tax credit does not go up or it is not increased by an extra 5 per cent, what kind of impact will that have on the film industry here in Nova Scotia?

MR. BENNETT: It's difficult to accurately predict in terms of numbers, but certainly, we will be at a disadvantage. It means that we will be able to only offer a tax credit of 10 per cent less than Manitoba, and also less than other provinces in the country.

MR. VERMEIR: I think it's worth pointing out that again, the bread and butter productions that we tend to see in a market of our size are the movies of the week and they are so tightly budgeted that the difference of 10 grand or 15 grand on one side or another, can tip the balance. With American feature films - we had The Shipping News here, we had K-19 here - the budgets are so huge that on the grand scheme of things, that amount of money - the tax credit - isn't a huge deal for them. But on these smaller productions with the smaller producers, that $10,000 to $20,000 can make the difference as to whether they shoot here, in Manitoba, or in Fredericton.

MR. GAUDET: Thank you.

MR. CHAIRMAN: Mr. Parker.

MR. CHARLES PARKER: It's an exciting industry for sure, it has a lot of potential here in our province and you're doing a lot of things right. I guess you have a way to grow and it's that infrastructure that you really need to build on, but the potential certainly is there. I'm sure it's a risky business too at times for the producers who want to come in here, they're taking a gamble. Maybe they already have their TV show sold, but I guess for feature movies they're hoping it's going to be a success at the box office or whatever.

The workers who are in the industry though here in the province, are they guaranteed they're going to be paid? Whether it's an actor or somebody helping out on the production, do they get guaranteed pay or is it sort of based on how the movie turns out?

MR. VERMEIR: Certainly, on a union production - and, again, this is one of the reasons why we feel it is so important that ACTRA is strong - our members, as are Jarrod's members to a large extent, are self-employed, they are freelance contractors who go from production to production and if they're lucky they move from one production to the next. If there's no other production to move to they are in trouble. Once they are on a production and a contract is signed, the unions take performance bonds from the producers to ensure that everybody is paid. Also, I think, part of the procedure of the tax credit is that monies aren't returned to producers until such time everybody has been paid.

MR. PARKER: Is there a guaranteed rate of pay for each level, from the actors on down to the seconds . . .

MR. BENNETT: There are certain minimum levels of pay, yes.

MR. PARKER: So that's guaranteed to the workers?

MR. BENNETT: Yes.

MR. PARKER: Can people make a pretty decent living from it in the province?

MR. BENNETT: Yes. Ten or 15 years ago no, but now, yes, absolutely you can make a decent living. I do. (Interruption)

MR. PARKER: I hear a groan in the background, I'm just wondering if . . .

MR. VERMEIR: Not everybody does. You are sitting here with three of the busiest actors in Nova Scotia but not all of my members are as busy as these performers are. A lot of our members make their living simply doing background work which, of course, pays a lot less.

Ours is an unusual union in that our members are continually having to compete with each other for each and every job. There's no sort of guaranteed seniority, you audition for every role that you want and if you're lucky, you get that work. We also have a lot of different areas of expertise within our various unions. My wife, for example, makes almost all of her earnings doing voice-overs for commercials.

MR. PARKER: I know Mr. Carr has been involved in commercials, and Nigel and Jeremy too have been involved in various productions, but can you just give us a little background on some of the work that perhaps you, as individuals, have been doing?

MR. BENNETT: I've just been passed a note from Jeremy which gives a brief history of the last three years in Nova Scotia, of the way the industry has suffered in the last three years. In 2002, the Magic Rock Productions had five productions and in 2003 they had three,

in 2004 they had one; that is reduced. Can I give the rest of these figures out?

MR. AKERMAN: Certainly.

MR. BENNETT: Jeremy's income in 2004 was less than 50 per cent of what he earned in 2002; that again is a big reduction. We have certainly suffered in the last three years because of increased competition from other provinces in the country.

In terms of what we've done, I'm doing a play at the moment at the Neptune; I've been a series regular in three different series in Canada: Forever Knight which was shot in Ontario, Psi Factor in Ontario, and LEXX which was shot down here; I've been a guest performer in most Canadian series; I've done several larger American feature films: The Skulls; Murder At 1600; Narrow Margin; Legends of the Fall, all playing principal roles. So yes, a lot of work.

MR. PARKER: Just out of curiosity to give us some idea. I want to shift gears maybe a bit and ask about the government's own productions. You mentioned earlier about the lack of support maybe around the Nova Scotia Liquor Corporation and some of their advertisements, Atlantic Loto and so on, that are being produced outside of Nova Scotia even through they're for Maritime audiences.

Just recently our government announced their wake-up program, I think it's called Come to Life. It's a $7 million production that is going to be played to advertise to Nova Scotians, Maritimers and beyond. Do you see any area there where ACTRA is going to be involved?

MR. VERMEIR: Actually, the Tourism Department tends to hire local - and I believe that there is a mandate - advertising agencies. Those advertising agencies are signatories to our agreement, so most of the people that you see in Tourism spots are our members. In fact, the voice-over on the Tourism Spots right now is John Dunsworth, who's one of our life members actually, Mr. Lahey from Trailer Park Boys and that's great. Again, a significant part of the income of my members and a significant part of the income of those members in those spots has been earned from the work that they did in those Tourism campaigns.

Of course, it being Nova Scotia Tourism, they have to shoot it in Nova Scotia, but Atlantic Loto shoots in Toronto, the anti-smoking campaign that flew in Toronto performers for those spots, these are problems, these are things that we look at and go, there's absolutely no reason in the world why Nova Scotia performers could not have been doing that work. So that's when we get a little squirrelly.

MR. PARKER: It seems like if the Nova Scotia Government is going to support our industry here and they're offering tax incentives, tax dollars to do that, why can't government departments that need advertising or commercials also be producing through ACTRA and

through your own members right here in Nova Scotia? It's a way to encourage and build up our industry and it just makes perfect sense rather than going outside.

MR. VERMEIR: I want to say that I think Communications Nova Scotia is coming around to that and we've been seeing more and more work coming through our office for Communications Nova Scotia. I think we're still seeing some audiovisual material and commercials and such being produced by other departments, where that message has not gone through.

MR. PARKER: I guess that's the message that we, as MLAs, can bring forward to government and through this medium here today, maybe that's more awareness that more has to be done in that area. Just a short snapper here. You mentioned earlier, Nigel, about blue- and green-screen filming. Can you tell me what that is?

MR. BENNETT: It's very much what it sounds like. You will film against either a bright green or bright blue background and then in the computer afterwards they will insert a background into that. The blue screen can be replaced with an actual background. The movie Spiderman, a lot of the stuff that was happening there, apart from the fact that most of it was computer generated, but some of the actual swinging through the air would have been done in front of a green screen. He would swing on a trapeze and land and then they would put the background in.

MR. VERMEIR: I'll give you a local example. My wife did an episode of LEXX with Nigel where she was the commander of the space shuttle and had to take a spacewalk, so they had her in a huge spacesuit, they stuck her on a bicycle seat which was on a pole that was 12 feet in the air, against a blue screen. She - very painfully, sitting on this little bicycle seat for hours at a time - had to do the kind of floating in space in front of the blue screen and then they would add the star field in behind her by computer to make her look like she was in space.

MR. PARKER: That explains it then, okay. I have one final question around location. We have a beautiful province, all kinds of coastline and I'm sure I could give some good reasons about Pictou County as to why it would be a great spot to film. Pictou Island is one place I'll mention, it's a unique island out in the Northumberland Strait that I think would be a great location for a movie, a film . . .

MR. DOOKS: A pirate movie.

MR. PARKER: Maybe that, a ghost ship or whatever. Anyway, we have lots of unique locations in Nova Scotia. Somewhere in this background material I was reading about location scouts. Can you explain what that is? When somebody wants to produce a movie or a TV show, how does that play into it?

MR. BENNETT: They'll hire a location scout.

MR. BABOUSHKIN: If a producer is looking for a particular type of look, feel, or

type of landscape, what they'll do is engage a location scout, which are people whom I represent that are familiar with the province, with the landscape. That person will take them to the various locations around the province that might be able to work, or to any locations they might suggest that would work as an alternate, to view those locations often, or to take pictures and send them the locations to try to get an idea of the feel of exactly what type of scenery you are dealing with.

[10:00 a.m.]

This goes back to a little bit about what we were talking about before. These are also

the people who often have the opportunity to drive around with a producer and market the province. They are taking them to actually see one of these locations and they can say, well you know, we also know these folks down at ACTRA or Delta, who are really film friendly and they're willing to do this and we have great crews and the government is very supportive of the industry. So it's quite a pivotal role because on one facet you're marketing the province on its sheer geography and then also you're having direct contact with the producer one-on-one and not only showing them the beauty the province has to offer, but also getting to kind of do your shtick about exactly what else the province has to offer on top of locations.

MR. VERMEIR: Generally, location scouts also have established relationships with the owners of these various locations, with Dalhousie, or whomever, that they are able to finagle the use of those properties. So a good location scout is worth his weight in gold because he can not only schmooze the producers, he can also establish a level of trust with the property owners, and then he just has this encyclopedic knowledge of the province, so that when they say this takes place in a desolate farmhouse in the middle of wherever, he knows exactly which one it is and goes there and takes the producer there.

MR. BENNETT: Another little personal note, although I did live in Guysborough County, I now live in Linacy.

MR. PARKER: You know Pictou County very well then, super. Thank you.

MR. CHAIRMAN: If I could ask a few questions, myself. Mr. Parker was talking a bit about productions outside of Halifax in the rural parts and talking earlier, you mentioned about the challenges with the infrastructure here in Nova Scotia, compared to other jurisdictions. Once upon a time, we did have fairly decent infrastructure in rural areas of this province, most specifically the sound stage down in Shelburne County and the sound stage in Cape Breton. It is my understanding that neither of those facilities is currently in use or available for use in that regard. I'm wondering if you could tell us exactly what sort of impact that has had on your association in view of attracting films, especially for production outside of Halifax?

MR. VERMEIR: As far as I know, Shelburne is still sort of in play and I had actually

heard rumours that a production may be going there this Summer. Filmscape, though, in Sydney, you're right, is no longer happening. To a large extent it's about cost, it's about having to truck people and equipment out of the city.

One of the reasons why Halifax has been so successful is you're literally minutes away from rural locations, but you can still drive back into the city at night. When you're in Shelburne or you're in Sydney - less so in Sydney, I'm actually surprised that Sydney didn't survive - you're miles away and if you need your fax machine fixed, it's going to take a long time to get it back to Halifax. The other aspect of it is if you're making a feature film with American stars, they like their creature comforts and Halifax can provide those in terms of restaurants and things to do, and nightlife. It's a little harder to entice a Harrison Ford or a Kevin Spacey to spend two months in a small rural area. So, again, I think producers will, for the most part, try to keep their productions in an urban centre that has access to rural locations. But that said, again, I'm hearing that there may well be a significant production going to Shelburne this Summer.

MR. CHAIRMAN: I'm pleased to hear that. I'm wondering if you have any statistics on how many productions had taken place in Cape Breton prior to the closure of the sound stage there?

MR. VERMEIR: Cape Breton continues to be a location for French-language production because of Louisbourg and there have been a few French-language features that have shot there because of those unique locations.

Filmscape was essentially part and parcel of the Pit Pony project and Pit Pony was shot there, the series. Essentially, when Pit Pony and Cochran folded, I don't think anything went back into that space afterwards - I don't believe so. Prior to that, Cape Breton, of course, was a location for a handful of feature films, Bay Boy and Candy Mountain and such were shot there, but I'm not quite sure why we don't see more film activity in Cape Breton.

MR. CHAIRMAN: That's certainly one of the concerns that our caucus has, having had the opportunity of being in the previous government, we were certainly very supportive of not only Halifax, but the areas outside: Shelburne, Cape Breton and other areas of the province. When we talk about the lack of infrastructure, to me we had that in Cape Breton and we've basically lost it. That, to me, is a setback rather than an opportunity to move ahead, and it's unfortunate that we don't have more of that infrastructure.

In that regard, what role does the province have, or can it take, in establishing more infrastructure in this province that would make us more attractive for the film industry, regardless of whether it be here in metro or outside the province, how much and what type of infrastructure do we need?

MR. VERMEIR: I think one of the largest areas, and I don't know if you gentlemen

are familiar with the strategic study done on the film industry that was released in July - and there are a number of good recommendations in there - but one of the aspects is training. We were very sad to see the demise of the Moving Images Group - which was sort of the pan-industry training organization for the film industry that ACTRA was a member of, DGC was a founding member of - it was unable to get any kind of operating capital from the NSFDC and eventually had to fold, which puts the training onus back on the individual unions as opposed to being coordinated through a central body.

You're not going to see the development of post production and the other aspects of the industry and the infrastructure that we need here without trained people to run them. It's then going to be a matter of importing existing companies and asking them to set up satellite outfits here in Nova Scotia. So I think training of specialized crafts and skills, training of producers in perhaps better business practices and business skills, is going to go a long way to making those things happen. As Nigel suggested, perhaps some incentives for a further increase in the development of digital media and post-production facilities would also be a great thing.

We're poised in the middle of a real transition in our industry whereby perhaps the days of film are numbered and we're moving into high-definition video and other media for capturing those images. So I think to some extent there has been some reluctance to establish a post-production film facility here because we're not sure how much longer we're going to be using that medium. But, again, I'm talking out of my area of expertise here.

MR. CHAIRMAN: That's it for me, thank you.

Mr. Epstein.

MR. HOWARD EPSTEIN: My life generally in politics tends to make me feel that I mostly just have a walk-on part, but I never realized that so many of my colleagues actually want real walk-on parts in films, to judge by what Bill and Charlie had to say. I can say on behalf of Halifax Chebucto, please don't come and make a film in Halifax Chebucto, we're a nice, quiet residential area. In fact, many people having to do with the arts and culture sector live quite happily in my constituency, I know lots of them, and like many of my colleagues around the table today, I have lots of respect for the sector. I know people who are producers, directors, writers, and people who do sound work and film editing and so on. It's certainly a vibrant community and one, I think, for which we all have a lot of respect. At the same time, we're concerned to know a bit more about this industry and there are lots of things you said that are quite fascinating and begin to give us something of an education about how the industry works.

A lot of what you say has to do with the idea of attracting business here and also growing business here. But a lot of that emphasis was in terms of being competitive. I think we're still trying to understand a bit more in detail about how that works and it would be

useful, I think, to get a bit more detail about that. For example, I had the impression that when it came to large feature films, that the issue of competitiveness didn't revolve so much around the tax issues that we started off discussing, but it had other factors; for example, the attractiveness of a location or the availability of crews to work on the films. So does this imply - am I understanding this correctly - that there's some other segment of the industry - you mentioned movies of the week - that you're really talking about for which the tax credit is designed?

MR. VERMEIR: The tax credit is applied uniformly on all . . .

MR. EPSTEIN: Sorry, but is it really effective is perhaps the way I should have asked the question.

MR. BENNETT: I think it's really effective in terms of the productions that have a tighter budget, the large . . .

MR. EPSTEIN: Which would be what?

MR. BENNETT: Which would be movies of the week, which would be TV series, any of the lower end, if you'll excuse the expression. Large Hollywood feature films tend to have very large budgets and are not as concerned about the tax credit. But there are comparatively few of those that come here. Our bread and butter here in Nova Scotia is very much movies of the week, series, miniseries.

MR. EPSTEIN: I noticed that you pointed to an 18 per cent decline over the last few years in terms of the number of dollars that were spent in the industry. Is that because that represents a decline from having some of the big feature films here previously?

MR. VERMEIR: Yes, but primarily it's a decline in dramatic television series.

MR. EPSTEIN: So can we look at those two parts?

MR. VERMEIR: Sure.

MR. EPSTEIN: Why did we get any big feature films, any big Hollywood films here in the first place? Why did they even come here?

MR. VERMEIR: The best year that we had in the industry was the year we had The Shipping News, K-19 and a number of smaller American features shoot here. It was an extraordinary year in that the Screen Actors Guild and the Directors Guild in the United States were poised to go on strike, so the studios in the United States needed to get their inventory shot and in the can before this strike would happen. So production levels just ramped up uniformly, and we were fortunate in that these two productions, one of which was

set in Newfoundland and one of which was set in the North Atlantic, both had location requirements that we could fill. So the combination of the urgency to get these things made and the location requirements, brought these two very large projects into Nova Scotia.

That's all well and good, I mean it's certainly great for our industry, for our people to be able to put these Hollywood feature films on their CVs and for Halifax to say, look, we have Harrison Ford, Kevin Spacey, Judy Dench wandering our streets because they're working here. But it's the longer term projects, the 26-episode TV series, that essentially create our industry, that provide daily work over a long period of time for our members, and allow those workers to start in an assistant capacity in the beginning of the series and work themselves up to key positions and management positions by the end of the series.

MR. EPSTEIN: But before we move to that, can you make any suggestions to us about ways in which it might be possible to attract these very large feature films?

MR. VERMEIR: Again, they're huge devourers of resources, they're huge devourers of crew and they're huge devourers of space. K-19 is a good example. We got all the exterior Summertime shooting, it was the largest water shoot since Water World and they were using actual naval vessels, actual submarines, no special effects, we were out there. But we didn't get the section of the film that dealt with the interior of the submarine because they needed a big sound stage to build that submarine.

MR. EPSTEIN: Electropolis wasn't going to do it?

MR. VERMEIR: Electropolis wasn't going to do it, plus Electropolis, I think, was booked at that time. So there was no place to shoot that because we don't have that big sound stage capacity that a lot of these sort of special-effects-heavy feature films are going to require.

[10:15 a.m.]

MR. EPSTEIN: When you say three and a half, does that mean a crew as measured by a feature film or a crew as measured by a movie of the week?

MR. BENNETT: I would think movie of the week because the feature film crew is much, much larger.

MR. BABOUSHKIN: Seconds and thirds of almost all of the positions.

MR. EPSTEIN: So a feature film would have used up our three and a half crews, one film?

MR. VERMEIR: Yes. This actually was one of the misfortunes of last Summer, we

had an American feature film that was scheduled to shoot here in August. At the last minute, that deal fell apart, that work didn't happen and a lot of the other work that might have come to the province during that period of time also didn't happen because they were under the impression that the crew resources were going to be used up on the American feature film.

MR. EPSTEIN: So is it fair to say that we were lucky to get those large feature films and that we would probably continue to get part of them if they came again?

MR. VERMEIR: There are so many considerations that go into those decisions and we're constantly being scouted as feature film locations. That's when other things weigh into the mix. We were scouted for the Narnia Chronicles which is going to be the next Lord of the Rings mega-production, mega-series. I think ultimately they decided to go to Norway or someplace like that.

MR. BABOUSHKIN: Somewhere in Europe.

MR. EPSTEIN: That's too bad, they could have involved Mark as a consultant with the CS Lewis . . .

MR. BENNETT: It also comes back to infrastructure because most large-budget Hollywood movies nowadays will use some sort of computer-generated imagery or some sort of animation technology in what they're doing, and we don't have that.

MR. EPSTEIN: Can I ask if Canadian companies or companies that have a lot of Canadians in them that have located in Hollywood have done productions here? I'm thinking about Northern Lights. Has Northern Lights ever done productions in Nova Scotia or New Brunswick?

MR. VERMEIR: No.

MR. EPSTEIN: Is there any reason for that, particularly?

MR. VERMEIR: Again, it depends on what their slate is, what they're looking for, what their locations are.

MR. EPSTEIN: Have they been targeted ever?

MR. VERMEIR: You would have to talk to Ann MacKenzie about that.

MR. BENNETT: I'm sure they would have been, but Ann is the person to ask about that because she's in charge of the missions that go down to LA to try to sell the province.

MR. VERMEIR: She's the one who gets to go to LA and talk to people.

MR. EPSTEIN: So that's it on large feature films. Tell me now about the other kinds of productions for which the tax credit is likely to be most effective. I guess the question there is again, do we need any other kind of infrastructure? We've heard about sound stages, when it comes to those, are we needing a larger sound stage than Electropolis for the movie of the week and other kinds of series?

MR. BENNETT: I think there are disadvantages in Electropolis which discourage a lot of people. We have Electropolis and we have Tour Tech at the moment, so we have two sound stages at the moment, neither of which are massive. There's one large studio at Electropolis but it's not an ideal place. It used to be a generating facility, it has been converted and it has all the disadvantages of somewhere that has been converted to be used as something else. It's cold, it's drafty, it lacks certain facilities, it's not a purpose-built facility and I think if we're looking at the long term and the long-term secure growth of the industry, then we need some sort of purpose-built facility here.

MR. EPSTEIN: Can I hear, as well, about the education and training for people? I know we have some formal programs, that is at the community colleges and now NSCAD has a bit of a film program. I'm wondering if, in your view, those programs are of a sufficient size or scale or if there's more that can be done there or whether this is an industry where a lot of the training happens on the job? Can you just tell us a bit about this?

MR. VERMEIR: Both the community college and the NSCAD program are essentially entry level, they allow people to get in and get their feet wet and get kind of an overview of how it works. The community college program, it's my understanding, more so than the NSCAD program, deals with the industry of filmmaking, whereas NSCAD deals with more of the craft of filmmaking. It has actually been one of the concerns that we've had at ACTRA that the people coming out of the program haven't had enough instruction in the business end of filmmaking, which as filmmakers/producers/directors is going to fill the majority of their time once they're out there trying to make a living. They learn a lot about the art of the art, but not about the business of the art. As I tell my new members when they come in for training, the film industry is all about money.

MR. EPSTEIN: In their careers so far, I think that the Donovans have really been probably the most successful film people that we've had, and yet here they are, these are Nova Scotians who chose to stay here. In fact, I can tell you why it's called Salter Street Productions. In 1979, the Donovan brothers lived in a very grotty apartment building at the corner of Salter and Hollis Streets, and that's where they originally developed their plans to go ahead and become filmmakers. I know this because I had one of the apartments immediately next to theirs. It was a terrible building that no longer exists. But that's where it comes from. But they stayed here and their careers have been built here. Is there potential for others and are there other local people like that who are doing the same kind of stuff?

MR. BENNETT: I think there is certainly potential for that and I think that the Donovan brothers have to be congratulated for what they've done; Paul and Michael are both committed to making movies here in Nova Scotia, very committed to bringing in as much of the work that they do as they can. Although Salter Street as an entity no longer exists, both of the brothers are still producing films down here, they're still working.

MR. VERMEIR: I would also make mention of Wayne Grigsby and Big Motion Pictures, who came down here to shoot the series Black Harbour and elected to stay, and is also, I would say, one of the top three or four producers in this region. He produced Blessed Stranger, the two Trudeau movies, and he's about to do another miniseries here.

MR. BABOUSHKIN: He had previously been considering filming elsewhere, but due to the tax credit announcement, the budget worked for him to stay in Nova Scotia, which just goes to show you the effectiveness of the tax credit on these types of productions, how it can mean a yes or a no for this province.

MR. EPSTEIN: One last quick point. You were asked about the Nova Scotia Liquor Corporation. Can you give me examples of things that they filmed but filmed elsewhere, or filmed partially elsewhere?

MR. VERMEIR: The Liquor Corporation has a spot that I think is still running, which is essentially about carding underage drinkers who try to buy liquor and it certainly was not done with professional performers. I think it was probably done with a couple of guys who actually work at the NSLC, and I don't know where the young people came from. But I have to look at that and say, okay, there's a commercial, a PSA being shot by a government agency and those are jobs that my members could and should have had.

MR. EPSTEIN: I just want to nail this down to be clear, because it's one thing to say they're not working within the confines of the collective agreement that represents, as you said earlier, the industry standard and they're working outside that, but it's not like saying they're working completely outside the province, those are different points.

MR. VERMEIR: With Atlantic Loto, those spots are shot in Toronto.

MR. EPSTEIN: You were very clear on that, but it was the NSLC I was wondering about.

MR. VERMEIR: The NSLC I was concerned about because they were just essentially done without professional performers.

MR. EPSTEIN: Okay, got it. Thank you very much.

MR. CHAIRMAN: Mark Parent.

MR. PARENT: I only have 10 minutes, so I have to go very quickly, so very quick snappers. Radio - I grew up in radio; my father was the director of a radio station in Bolivia. Amongst our esteemed listening audience was Che Guevara, so if you read his diaries from his time in Bolivia. With the role of radio, I mean to me, I still think radio is a better medium than television - you'll be disagreeing with me, but it's a wonderful medium. Is there any future for radio in Nova Scotia?

MR. VERMEIR: A large portion of my membership's living back when I was an actor was earned doing radio drama on CBC. That has all but faded away, that's not done anymore. We have very little to do with private radio except in the production of radio commercials. As for our speculation on the future of radio, I just added Paradise Radio to my Favorites on my computer, and I think you're going to find more and more people are going to be listening to radio through their computer and less and less to the millions of spots and commercials on private AM/FM radio. But that's just my opinion.

MR. PARENT: That's interesting. In terms of needing animation, computer-generated effects, et cetera, one of the jewels of the province is the Centre of Geographic Studies in Lawrencetown, it's world-renowned. I thought we were doing something similar to that, but with animation and computer effects with the Nova Scotia Community College, Truro Campus, and that's obviously not true then. But the potential is there. If it can be done in Lawrencetown in the geographic sciences, it could be done anywhere. I can't overstate COGS - my son went there and they graduate after one or two years with $40,000 jobs with job-hunters coming from all over the world after them. So if it can be done in that field, why can't it be done in . . .

MR. VERMEIR: It is happening. Collideascope has just opened its third animation studio because it has more work than it can handle. It's producing its own television series, it's producing animation for other clients . . .

MR. PARENT: Can this be done in conjunction with Nova Scotia Community College, can they play a role in helping to facilitate this?

MR. BENNETT: I'm sure they could. Sheridan College in Ontario has an animation program and is actively scouted by Disney Studios all the time They go straight from there, straight to Los Angeles

MR. PARENT: That's what I'm thinking that we should be looking at in our province. Sorry to be so hurried, but we have very little time.

Reality TV, which I don't watch and I don't like, but it's big - it's obviously low-budget, I guess.

MR.VERMEIR: It is waning.

MR. PARENT: Is it waning? I was going to ask whether we should be getting into that market or whether it's going the way of the dodo bird.

MR. BENNETT: I think it is. The advantage for producers to do reality television is also its disadvantage, in that it's a one-time thing. There is no syndication in reality television, you can't show it again, because people know the outcome, so it doesn't work. So although it's cheap to do up front, there's no back-end income coming in for the producers. I think producers are now starting to realize that; it's been big for what, 10 years I suppose, and they're now starting to feel the pinch because there is nothing there to put in syndication. All those repeat shows that you see on small television channels, especially in the States, small affiliates, there's nothing there to put on, so I think reality television is going to go the way of the dodo bird.

MR. PARENT: So it's not something we should be chasing after to . . .

MR. BENNETT: Do you want my personal opinion? I certainly don't ever watch it, I think it's a pointless exercise.

MR. PARENT: But it is big.

MR. BENNETT: Yes, it is big.

MR. PARENT: I notice that in the film industry production activity, the highest year for Nova Scotia for in-house films was in 2002, and it's been going down the last three years. But non-Nova Scotian productions have been going up in the same sort of period, is there any explanation for that, because the two trends aren't matching each other?

[10:29 a.m. Mr. Wayne Gaudet took the Chair.]

MR. VERMEIR: To a large extent it has to do with market. It's much more difficult now to market Canadian product overseas. As I said, because of the CRTC caving in to the private broadcasters, there's less market on Canadian channels. Now, the CBC is sort of the main purchaser of Canadian dramatic product; Canadian feature film gets 1 per cent, sometimes less, of the screen time in Canadian theatres. It's enormously challenging for Canadian producers to get their product seen in their own country.

MR. BENNETT: Canada is regarded by the American film industry as part of its domestic market and that is a perception that needs to be changed in order for Canadian filmmakers to have any chance to get their films onto screens, to get them in front of the Canadian public.

MR. PARENT: Very quickly, I want to part with my colleague here and join with my colleague here, Kings North, Kings County, the Annapolis Valley - we have a very strong

arts community in my riding, in fact, one of the strongest in the province. So we would encourage you, and I make the same offer as my colleague, we will wine and dine and . . .

[10:30 a.m.]

MR. BENNETT: I've never lived there, but I have worked in Wolfville. (Interruptions)

MR. PARENT: I don't want to pre-empt anybody, but I'm wondering, really what I've heard you ask is - this committee, if we could have a motion or a letter, I don't know if we need a motion - for consideration to raise the base credit from 40 per cent to 45 per cent. Also, I think it's a very important point that you made that Communications Nova Scotia in particular, and other government agencies, should use local talent. I see no excuse for them not doing it and I'm wondering if we should have some sort of two-part motion, or two motions, or if just a letter would do. But I would suggest that we write to the Premier and - is Ernie still the minister in charge (Interruptions) That we write to Ernie with a copy to the Premier then, and we either make it as a motion if we want to do that, but one motion would be to consider raising to 45 per cent and the other motion would be . . .

MR. BENNETT: To 40 per cent.

MR. PARENT: Sorry, 40 per cent. I'm thinking outside HRM, it would translate to 45 per cent. I'm just reflecting my riding. So it would be a 5 per cent increase: 40 per cent HRM and 45 per cent outside HRM.

Then the other motion might be, there's really no excuse - and I think we all agree that Communications Nova Scotia and other government departments, when they're doing productions - to hire outside the province. If the talent is here, there's absolutely no need and no excuse, and I think we should make some sort of motion to that effect, or at least include that in a letter. Really, it's up to the chairman whether you want me to make a motion at this stage, whether you'd like a letter, whether you want to wait. But those are two things I think we need to come out of this meeting.

MR. CHAIRMAN: Maybe we can come back to your motions, we still have the member for Digby-Annapolis.

MR. PARENT: Sorry.

MR. DOOKS: Do you want a movie down in Digby?

MR. HAROLD THERIAULT: There's a movie down there every day, honest. (Laughter)

I wanted to thank you for your presentation. I would like to talk a little bit about competition here and I thought that's what the gist of this was all about, competing with other provinces. You say that from 2001 to 2004, there are 500 less people working and $10 million less generated. Is that from not having a high enough tax credit? That's what I took that to mean.

MR. VERMEIR: We saw a contraction of the Canadian film industry during that period of time. A lot of that had to do with the political tenor in the United States following 9/11, a lot of it had to do with things as bizarre as SARS, a lot of it had to do with a lot of other jurisdictions and regions around the world suddenly ramping up their incentives. I think ultimately it boiled down to the fact that the film industry became much more competitive globally: we weren't just competing with other Canadian provinces for American production, we're now competing with 40 American states for Hollywood production, we're competing with Eastern Europe, we're competing with New Zealand and Australia. So it's rather facile to say that it's just because we don't have a high enough tax credit. What we're actually saying is we are now in a much, much more competitive industry worldwide and the tax credit is a significant part of that.

MR. THERIAULT: What do you see happening if you don't receive this higher tax credit? Do you see the industry's continued decline here?

MR. BENNETT: Well, we certainly won't be in as competitive a position as if we did have an increase. It's a very mobile industry, producers make their decisions very quickly, they make them based, essentially, on financial considerations and they will simply go elsewhere. So, yes, I do see a decline if we don't remain competitive.

MR. BABOUSHKIN: I think it's easiest to look at it this way, that as the global industry becomes more competitive, there are more choices for you to locate your production and, therefore, you can automatically kind of eliminate those that don't fall within the competition criteria that you need to make your project viable. The more of those that are out there and the further down the list that Nova Scotia registers, it just translates into a smaller number of productions that will actually look at this jurisdiction.

MR. THERIAULT: So the higher we can afford to put this tax credit, the greater we can grow this industry in this province?

MR. BENNETT: I think so.

MR. THERIAULT: A little from a lot is better than a lot from nothing.

MR. BENNETT: Absolutely. I think it's not just a question of foreign productions coming to Nova Scotia, there is also a very strong indigenous filmmaking industry here, young local producers who want to make their films, who want to create a vibrant industry.

The tax credit for those people is an integral and invaluable part of their whole budgeting. They are not working with millions of dollars, they're working with thousands of dollars, so the tax credit really is important to them. For us to have a vibrant indigenous industry means that we can grow, we can develop new producers, directors and actors, we can grow our industry from the bottom so that it's not just a service for foreign producers.

MR. THERIAULT: Can that be proven in a business plan, that the higher the tax credit is, if you double the tax credit from what it is now, that you could double or better the industry?

MR. VERMEIR: I think if you take a look at this year's figures for Ontario and Vancouver, the reports that are coming out of Ontario and Vancouver since they increased their tax credits at the end of last year, are that suddenly work is flowing into those provinces. When they poll all those producers they're saying it's because of the tax credit, I'm going to save money, I'm going to be able to shoot in the two largest production centres in the country, I'm going to have access to the largest crew and talent pools, I'm going to have access to all this infrastructure, and I'm going to get some money back to boot.

So both of those jurisdictions are now predicting that they're going to have much bigger years than they had last year and they're putting the credit squarely on the shoulders of increasing their tax credit and that's just in the four or five months since they announced their increases. I think key studies such as those seem to bear that out.

MR. BABOUSHKIN: I think also another indication is if you were to canvass the NSFDC and ask them the number of calls they have received from potential producers since Premier Hamm's first announcement was made, you'd find that over last year it probably dramatically increased as well.

MR. THERIAULT: Thank you.

MR. CHAIRMAN: Charlie.

MR. PARKER: Maybe I'll just follow up on that. Can you tell us right now what is happening as far as movies of the week, or features, or films? What's happening here right at this time?

MR. VERMEIR: Currently, we have two MOWs shooting in the city, Ambulance Girl which stars and is directed by Kathy Bates, and this is VZS - which is Von Zerneck-Sertner Films - it's their sixth project that they've shot here in Halifax, they're an LA-based company; The Dive from Clausen's Pier, the local service producer is Mike Mahoney of Magic Rock Productions and that's being shot for the Lifetime channel in the United States; we have the Canada-Russia hockey miniseries being shot in Fredericton but that's being co-produced by a Nova Scotia company, Trailer Park Boys Productions; we are looking at Fade

Out, which is an American feature film shooting here this Spring, it's like 95 per cent sure; we're looking at Wayne Grigsby and Big Motion doing a miniseries shoot here this Spring/Summer, that looks fairly certain - what am I missing? - Beach Girl, which is a short series again, Magic Rock is doing that for Lifetime in the States, it's just going to be an MOW and then four hours. Is there anything else?

[10:39 a.m. Mr. Michel Samson resumed the Chair.]

MR. BABOUSHKIN: Those are all of them and again, there are inquiries daily and the tax credit has had a profound effect on it.

MR. PARKER: Any big scoop that you're not telling us about? (Interruption)

MR. VERMEIR: We're still waiting to hear about a soap opera, a CBC daytime drama, which a Halifax company - Michael Donovan's company - and a Vancouver company won the competition to each produce a pilot and we're hoping that they'll get the contract.

MR. BENNETT: And this is called North/South.

MR. VERMEIR: And that would be huge for us.

MR. BENNETT: That would be many, many episodes and many years of work. Also,

The Conclave, there's a possible extra six instalments of that to come along.

MR. EPSTEIN: Did you say a soap opera?

MR. BENNETT: Yes.

MR. EPSTEIN: A day soap opera or a soap opera as the title?

MR. BENNETT: No, it's called North/South, it's a daytime soap.

MR. EPSTEIN: Is this Floyd Kane?

MR. BENNETT: Yes, it is.

MR. BABOUSHKIN: Something else that you probably read about in the newspaper is the possibility of a Trailer Park Boys feature.

MR. EPSTEIN: Yes, Floyd is great.

MR. PARKER: So lots of potential, then.

MR. BENNETT: Absolutely.

MR. PARKER: Thank you.

MR. CHAIRMAN: That being the end of the questions, Mr. Parent, I understand you may have a motion to make.

MR. PARENT: I want to ask your advice, Mr. Chairman, whether you think this should be two different motions or one motion. I don't know if you were in the room at the time . . .

MR. CHAIRMAN: I do have it in front of me and looking at it there seem to be two separate issues, so I would probably recommend that you break it down into two motions.

MR. PARENT: The first motion would be that we would support and ask for consideration to be given for the base tax credit rate to be increased by 5 per cent and we would write the minister with a copy to the Premier.

MR. CHAIRMAN: And you're suggesting it be written to the Minister of Economic Development?

MR. PARENT: Yes.

MR. CHAIRMAN: Any discussion from members?

MR. EPSTEIN: I missed it, the first one was . . .

MR. PARENT: To increase the tax credit base rate by 5 per cent.

MR. CHAIRMAN: To 40 per cent.

MR. PARENT: Yes, that we would support that and ask that consideration be given to that.

MR. CHAIRMAN: Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

We will draft that letter and have that sent off. You had a second motion, Mr. Parent?

MR. PARENT: Who seconded that motion?

MR. EPSTEIN: I think I did but can I just ask about this? I don't know if it matters to the member or not but perhaps on this side of the table we ought to make the second motion. I don't know if it matters on the internal dynamics of this but . . .

MR. PARENT: No, in fact, it's probably best I not make both motions but I do feel strongly about this motion. (Interruptions)

MR. EPSTEIN: So do we. (Laughter)

MR. PARENT: So if you would make it I would be happy to second it.

MR. EPSTEIN: The second motion is that the committee write to the appropriate ministers, drawing their attention to the fact that we've heard that some of the film and television productions coming out of the government are not all made in Nova Scotia and we would ask them to look at this with the view of trying to ensure that all these productions are made with Nova Scotia talent.

MR. CHAIRMAN: And with that, Mr. Epstein, I believe there was also a mention specifically about Atlantic Loto.

MR. EPSTEIN: And that this should extend to the province trying to use its influence with any of the Atlantic Provinces interprovincial agencies, such as Atlantic Loto.

MR. CHAIRMAN: I think it's important to mention that specific institution because they're not just Nova Scotia based, they cover the Maritimes. Any discussion on that motion? I'm wondering with that, Mr. Epstein - this is just a suggestion - if we could ask if the province would be so kind to provide us with the statistics over the last couple of years to give us an idea how much work is involved and how much of it has been done in Nova Scotia, compared to other jurisdictions, just to give us a better - is it one project a year, is it a dozen, I don't really know.

MR. EPSTEIN: A good idea, a very good point and I think in the letter you could include that observation. Thank you.

MR. CHAIRMAN: Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Mr. Bennett, if you have any closing comments that you or your colleagues here would like to provide the committee, the floor is yours.

MR. BENNETT: I simply want to thank the committee again for seeing us today and to say how encouraged I am with the committee's attitude towards the film industry, the obvious level of commitment that there is here to the maintenance and growth of the film industry within Nova Scotia. Again, on behalf of all my members and all the people who work in the film industry, I want to thank you all very much.

MR. CHAIRMAN: On behalf of the committee, I certainly want to thank you for your presentation today. We realize there were some different attempts to get you in and there were some intervening factors where we weren't sure if you still wanted to come in, but obviously, that was the case. (Laughter) I think what you've seen here is there is all-Party support for the industry, regardless of political lines, we're all in this together for the growth of our province and that we realize this is an important, emerging industry to help us move our province forward and to take important economic steps. Again, I thank you.

[10:45 a.m.]

Just before adjourning the meeting, members, we are tentatively scheduled for Thursday, April 21^st with Economic Development. We did make a request for a specific project, Snair's Bakery and it's my understand that there is an individual that they want specifically to be present to answer any questions, and there's a question of scheduling for that individual. Right now, we are tentative for April 21^st, there may be a need for us to move that date around and we'll try to give you notice as soon as possible, once we can confirm that with Nova Scotia Business Incorporated. It's tentative at this point; hopefully, we'll get it locked in and inform you as soon as possible.

The meeting is adjourned.

[The committee adjourned at 10:46 a.m.]