On March 21, 2012 the provincial government brought down a budget that killed what was formally known as the Saskatchewan Film Employment Tax Credit (SFETC). Not just film but television and interactive productions were eligible for this incentive and its death could potentially mean the end of these industries in what is currently one of the most prosperous and financially stable economies in North America. Reactions to this decision (which was made behind closed doors, with no transparency, disclosure or warning) have echoed throughout Canada and into the US in Chicago, Florida and Hollywood (to name just a few). As a digital marketing professional who recently relocated my head office to Saskatoon in order to work with these industries, I feel compelled to weigh in on this conversation.
The Numbers Don’t Add Up
I have an unabashed love of numbers and data. In my digital marketing job it helps me make sense of things and provides accountability and grounded context for the strategies I create. However, I have spent the last couple of days trying to make sense of the numbers that were used to justify the tax credit cut and cannot.
- Tourism, Parks, Culture and Sport Minister Bill Hutchinson told reporters there was an 18% drop in productions in Saskatchewan last year, but this Nordicity report shows that beyond the big production centres of BC, Ontario and Quebec, Saskatchewan was the only province to experience an increase in film and television production in the 2010/11 fiscal year, up 53% over 2009/10.
- It is true that the SFETC has triggered $100 million in refunds to production companies working in the province since its creation in 1998. But, this number does not take into account the over $600 million infused into the province’s economy by these SFETC productions.
- The government has also said elimination of the SFETC will save $3 million this year and $8 million annually by the end of 2014, but this does not take into account the loss of business when productions find they have to go elsewhere to close their financing. Valerie Creighton, president and CEO of the Canada Media Fund, has stated there will be an immediate loss of $4.3 million from the Canada Media Fund alone and puts at risk the 76% of outside investment coming into the province (in the form of licences, private funds, producer and foreign investment) that gets these projects completed.
- Premier Brad Wall took to social media to tweet “If an industry cannot survive at all without a permanent taxpayer subsidy, should the taxpayers subsidize indefinitely?” This triggered a lengthy response by the Canadian Centre for Policy Alternatives that detailed how every single industry in Saskatchewan is subsidized in one way or another and how if Brad Wall is serious about eliminating such industry support consistently, then he need look no further than oil, gas and potash.
- The government has reported they would expect SFETC refund supported only 355 jobs last year, but Regina shot (and SFETC supported) production InSecurity was responsible for hiring 455 and that is only one of many productions in the province. Virginia Thompson, producer of InSecurity and the now famous Corner Gas, has also noted her latest project gets “$1 million from the credit. About $3 million is spent on wages and $2 million is spent on items like food, clothing and hotels in the province.”
The Times Are A-Changin’
The meta context for this all is the changing big picture for the film, television and interactive media communities throughout the world. The impact of the global financial crisis cannot be underestimated, but even more important is the role of technology and the Internet on how screen media content is being delivered and enjoyed. Everywhere in the world, companies and creators are trying to figure out what the new business model looks like and how storytelling with video is being affected. Audiences are starting to demand what has been coined “transmedia experiences” where they can interact and have a story cross multiple platforms. In all the teaching, reading and writing I do around these issues, I often come across pieces that hail Canada as one of the best places in the world for transmedia development and digital content creation. Tax incentives like the SFETC are part of this picture and without it, Saskatchewan will fall well behind the curve in cutting edge thinking and business models for screen media.
I have been reading everything I could on this issue since the budget announcement last week and have seen some amazing rebuttals. Here is a quick summary of just some of the benefits the SFETC brings to Saskatchewan through its support of local production in film, TV and interactive media:
- Money – these productions provide direct financial infusion into the provincial economy. Not only is about the wages of cast and crew, but also supporting industries like catering, accommodation, and small retail businesses that supply vehicles, props, sets and wardrobe. Each of these people in these businesses in turn pay taxes and buy houses, gas, groceries, clothes, etc within the province as well. The general rule of thumb being used is that for every $1 spent on film and television production, $6 finds its way into the economy (this based on a survey of all the US state tax incentives).
- A diverse economy – support for the film, TV and interactive sectors in the province makes for a healthy and diverse economy, one that understands the value of arts and culture as well as the resource and agricultural sectors. The value of arts and culture to the economy has been tracked over and over and over again.
- A diverse workforce – these industries support workers in the creative and technology sectors and keep our society interesting and are helping the world understand how rich and advanced Saskatchewan and its culture is.
- Keep the kids – youth are always the key to the future of any society and economy. While jobs in the agricultural and resource may be for some Saskatchewan kids, many more look to exciting (and yes “cool”) industries like film, television and digital media to provide a wide range of career options. Without those opportunities here, our population will lose many of its best and brightest as they leave to pursue their dreams elsewhere.
- Tourism PR – when the province becomes the setting for a film or television project, it gets some of the best product placement possible and improves the image of Saskatchewan as a travel destination. This has worked for Newfoundland with The Republic of Doyle, New Zealand with The Lord of the Rings and even Saskatchewan with Corner Gas (a project its producer says would never have been shot here without the tax credit).
My Digital Marketing Perspective
As someone who lives with a marketing brain, I cannot but see this decision and the way it has been handled as a huge PR mistake. It is clear the government did not understand how deep the support for these industries is in Saskatchewan. News stories are cropping up all over the place and massive grassroots support has been rallied already, primarily with the help of social media. You can “like” the cause on Facebook, “tweet” about it on Twitter to Premier Brad Wall or sign the online petition (which garnered over 5,000 signatures in just two days and is still growing). Not to mention letter and post card writing to the government through old fashioned snail mail.
As someone who also lives in the digital space it is important to understand the interactive and technology industries in this province are going to be greatly affected too. The fact this is happening at a time when all media is in flux and trying to figure out the new working model reflects perhaps the worst possible timing. Here we are, a “have” province when everywhere else is struggling financially. There is a HUGE opportunity here to be seen leading the charge with the next evolution of screen media. What an amazing story that would be! The best kind of publicity would be that the solution (or the beginning of the solution) for this crisis came from Saskatchewan. Like the press the NFB is enjoying around the accolades it is receiving for its creative interactive projects, this province could get recognition for being on the cutting edge of new media business models. But we need time and we need support from our home province to do so.
What Do You Think?
Where do you stand on the Saskatchewan Film Employment Tax Credit? Are you worried this is the thin edge of the wedge for these kinds of cuts, just when the industry needs the most support? Please share your thoughts, ideas, questions below or send them to me at annelise (at) veria.ca or on Twitter @veriatweet.
Next issue: 5 Things Film & TV Can Learn From Gamers
Or revisit the previous issue: “Google is Falling! Google is Falling!” or is it, Chicken Little?