Special Report

Northern Exposure

Jennifer Hunter October 11 1999
Special Report

Northern Exposure

Jennifer Hunter October 11 1999

Northern Exposure

Special Report

Jennifer Hunter

Hollywood star Salma Hayek can be heard skittering, clickety-clack, across the pavement of the studio lot in her three-inch spike-heeled sandals. Heads turn, not only in response to the sound, but to the vision of the sultry 31year-old actress in her clinging, spaghetti-strap shift, her burnished bare legs, her shiny mahogany hair spun into a tight French knot. She is as much of an eyeful off-screen as on. But as she whisks by, Hayek remains indifferent to the gawkers, rapt in conversation with her dialect coach, who is trying to help camouflage her Mexican accent, by flattening the diphthongs and sharpening the j’s. Hayek has been cast in the role of a police detective named

Meredith Kolko in the comedy-adventure film Chain of Fools, and she needs to sound as American as possible.

Chain of Fools, also featuring actors Steve Zahn and Jeff Goldblum, started filming in June, with a budget of $30 million, financed by Bel-Air Entertainment of Los Angeles. There are 287 people on the payroll and 262 of them are Canadian. Five years ago, a movie like this would have been made in Hollywood, but these days, when major studios and television networks are run by Wall Street-listed companies fixated on the bottom line, Chain of Fools was shot at Lions Gate Studios in North Vancouver. Indeed, August and September were busy months at Lions Gate and other Vancouver studios. Chris Carters television series Harsh Realm was filming; Brian De Palma was directing Walt Disney Company’s $ 146-million flick Mission to Mars-, Sharon Stone was wrapping up Beautiful Joe. Throughout the city, eight features were being filmed, 13 television movies were in production, most for U.S. cable networks, and 14 television series were being shot, nine for U.S. companies such as NBC and Columbia TriStar Television.

British Columbia’s unflappable minister of small business, tourism and culture, Ian Waddell, boasts there will be $1 billion worth of film and television production in his province this year. Almost two-thirds of that comes from U.S. sources, and every time Waddell opens his mouth to crow about it film crews in California spume with anger. They say they are losing jobs because Hollywood is shifting work to such places as Vancouver, Toronto

More TV shows and movies are being filmed in Canadadespite Hollywood’s complair

and Montreal. They say “runaway productions”—film and television projects shot in less expensive locales, including Canada, Australia and Ireland—are threatening the health of the 90-year-old U.S. movie industry. Most of their vitriol is directed towards Canada, with its generous provincial and federal tax breaks to foreign and domestic film companies, its low dollar and its able film crews.

Rarely a week goes by when there isn’t an article or letter on the controversial subject in the Hollywood Reporter or the Los Angeles Times. Hostile ads decrying Canada are appearing in trade publications: “Canadian filmmaking sucks,” reads one in Location Update. “It sucked $900,000,000 of American filmmaking dollars into Vancouver, B.C., alone.” Canadian exhibitors have been verbally abused at film trade shows in the United States. Rallies in California have drawn thousands of stunt artists, production designers and other “ below-the-line” workers—those working under the lead

stars, directors and screenwriters—to protest the migration of production to Canada and elsewhere. The unions say they are blocked from working north of the 49th parallel because it is hard to get visas and because of federal and provincial tax credits that favour hiring Canadians. “We’re facing the tactics of a so-called friendly neighbour attempting to buy a fully mature industry,” argues Hollywood art director Jack De Govia, who heads a grassroots organization, the Film and Television Action Committee, and has organized the rallies. “We think this is a terrible thing you’re doing.”

De Govia’s group and others such as the Screen Actors Guild and the Directors Guild of America are pressuring California and Washington politicians to make it more attractive economically to make films at home by issuing their own tax credits. But there is political resistance to tax credits in freeenterprise California, and the state assembly has not made them a priority. Besides, California’s own figures show employment is on the rise in the U.S. entertainment industry, and the state hosts 70 per cent of all feature production starts in the country—six times the amount of Canada, Australia and the United Kingdom combined. But U.S. film unions say they will keep pushing for tax breaks, and point to their own study published in June that claims there were $4.1 billion in runaway productions in 1998, the lion’s share going to Canada. The study claimed economic impact totalled $ 15 billion, including the loss of20,000 full-time jobs.

While the Canadian equivalent of SAG—ACTRA Performers Guild—has been reluctant to weigh into the debate, Toronto director Allan King, who heads the Directors Guild of Canada, shows no such reticence. He has issued a spate of

There are enough experienced Canadians to fill the jobs— and tax credits for hiring them

letters and editorials published in the Los Angeles Times that pick apart the SAG-DGA study. “To suggest Canada poses any threat to Hollywood-based production is, to anyone familiar with what is really happening, a bit far-fetched,” King wrote. A closer approximation of how much money flows into f Canada from foreign location s shooting is $573 million in 1998, a ï sum determined by PricewaterhouseCoopers, and one, he argues, that accounts for only two per cent of all Hollywood-based production. “If this was the automobile industry, could you imagine such a fuss?” King told Macleans. “GM makes cars in Britain, Germany and Australia. No one makes a to-do about that. But when people want a scapegoat its very hard to stop them.” James Shavick of Vancouver’s Shavick Entertainment Inc. agrees. No matter how sophisticated the Canadian arguments, U.S. unions will never be persuaded, Shavick says. “Protectionism,” he notes, “is an ugly thing.”

The degree of friction is measured, too, by reports from Canadian crews that they are called “ice niggers” or “Mexicans

in tuques” by some Americans filming in Canada. “People have been afraid to complain,” says Tom Adair of the B.C. Council of Film Unions. “If you’re perceived as a troublemaker you may not get hired again.” The argument over runaway production has even been carried to Washington, where Canadian Ambassador Raymond Chrétien has corresponded with California Congressman Howard Berman. “Hollywood’s leadership is not threatened,” Chrétien wrote to Berman. “But as foreign markets become ever more important elements in the growth of this industry, it is only natural that non-U. S. societies will also want to participate in the wealth they generate.”

In Los Angeles, Consul General Kim Campbell has argued that Canadians are huge consumers of American entertainment, and much more money flows from Canada into the United States than vice versa. Even when Americans do come to film in Canada, she told Macleans, 45 per cent of the budget remains in the United States to pay for costs such as postproduction. And the complaint about U.S. union members not being able to work in Canada holds equally true for Canadians in the United States, a point underlined by the scores of documentary filmmakers recently barred by U.S. border officials. Finally, Campbell says, the tax breaks were intended to anchor the industry perma-

nently in Canada. “There were concerns that once the Canadian dollar went up, the Americans would leave and we’d be left with just a bunch of empty Styrofoam cups,” she says, concluding “it’s an arrogant notion that film production only belongs in Hollywood.”

At 9 p.m. in the abandoned Versatile Shipyards in North Vancouver, the film crew of the U. S. flick Romeo Mitst Die is getting ready to blow up a barge floating in the Burrard Inlet. Getting permission to do this took two months, and police, ambulance and fire crews are on hand to make sure nothing goes awry. The man responsible for the detonation and everything else on this set, production manager Warren Carr, is making a few last checks before the barge is torched. Romeo Must Die has a budget of $41 million and is only one in a series of films Carr has worked on for U.S. companies, including Universal Pictures and Walt Disney. “Visualize any major U.S. city where you can find forests, snow, islands and oceans all within an hour’s drive,” says Carr, a Canadian who lives in Vancouver. “There’s variety in the scenery, the dollar is low, labour rates are low, and crews are experienced.” Richard Lewis, a partner in Los Angeles-based Trilogy Entertainment Group, agrees. Trilogy’s lineup includes the television series Poltergeist: The Legacy and The Outer Limits, both made in Canada, the second in tandem with Torontobased Alliance Atlantis. Five years ago, before production of Outer Limits began, Lewis was concerned about finding experienced crews in Vancouver. “But after working here a couple of weeks, that skepticism was dispelled,” he says by phone from his home in Napa, Calif. The ease, too, of the 2V2 -hour flight from Los Angeles, the ability to work in the same time zone, even the rain in Vancouver, which “gives you a very rich-looking image on film,” are all assets, Lewis says. And the low exchange rate allowed his company to save 30 per cent in costs, roughly $300,000 per episode. “That’s a lot of money when you add up 22 episodes a year.”

It is perceptions like these that are eating the hearts out of U.S. guild members who, until a decade ago, could easily come up north to work since there were few skilled Canadians. Now, there are enough savvy Canucks to fill the jobs— and tax credits for hiring them. Bryan Unger, the DGA’s associate western executive director, says the tax credits have offended many of his guild members. “The only goal of those

tax credits was to attract American production to Canada,” he adds. “From our perspective, it was a way to seriously undermine not only our contracts, but our working base.” Unger says he has talked to the Hollywood movie studios about the issue “until Fm blue in the face,” but few financiers are ready to listen. “Its so economically attractive to film in Canada, the choice is made for them,” he says ruefully.

The average cost of making a film in the United States, according to the Motion Picture Association of America, doubled between 1993 and 1998, from $38.1 million to $76.9 million. Star salaries have shot up, so have marketing costs, while box office receipts have dwindled. Slapped on the wrists by their corporate masters, companies such as Walt Disney have lopped production, releasing only 15 films this year, compared with the usual 25. “We weren’t getting enough return from the pictures we were making,” says Paul Steinke, senior vice-president for motion picture production finance at Disney. He acknowledges some of the television shows and films, such as Mission to Mars, that Disney would have traditionally made in Los Angeles have been shifted north. “That’s the type of Hollywood flick you’d normally produce on the back lot in Los Angeles,” Steinke allows. “But there were major cost incentives to come to Vancouver.” The savings, he figures, could add up to $10 million. He concludes that to win back business to Los Angeles, California-based unions need more than tax credits; they need to become competitive with Canadians. “The industry here,” says Steinke, “needs to be shaken up.”

Just outside the former Shaughnessy Hospital in Vancouver, crews are preparing to film an episode of First Wave, which runs on the Space Channel in Canada and the Sci-Fi Channel in the United States. The series has a dash of Deep Space Nine flavoured with The Fugitive—aliens try to conquer Earth but are thwarted by Cade Foster, who is on the run from the police. The series’ creator, Los Angeles writer Chris Brancato, is on the set supervising the shoot, making sure the director’s interpretation of the script conforms with Brancato’s own vision of how the show should look. “First Wave couldn’t exist without the tax incentives in Canada,” says Brancato. “We simply could not afford to do this in L.A.” In fact, it was Vancouver-based producer Larry Sugar who gave Brancato’s idea the nod and found the means to get it on-

air in Canada, then sold it in the United States and 55 other countries. “When I think of this supposed issue of runaway productions,” says Brancato, “I realize people don’t understand that companies are taking multimillion-dollar gambles knowing full well the odds are 90 per cent the show might tank and they will lose every dime they invested.” Paul Bronfman, president of Toronto-based Comweb Group, notes U.S. producers have kept largely silent about the union fracas. “They still very much want to shoot in Canada, but they don’t want to defy the SAG and the DGA,” says Bronfman, who along with U.S. producer Stephen J. Cannell built what is now known as Lions Gate Studios. Bronfman and Adam Ostry, who heads the Ontario Film Development Corp., argue Hollywood decision-makers will continue to see the competitive advantage of Canada Even if the dollar rises, Canadian crews are so skilled and the facilities so good that the industry will continue to thrive, Ostry says. In Ontario last year, film and television production hit $750 million, but over half of that was domestic. While foreign investment has helped, he says, “it isn’t the source of our creativity. We created the industry ourselves through the CBC and the National Film Board. That’s something the American unions don’t seem to understand.”

The growth of cable networks has been a boon for Canadian producers like Shavick and Robin Spry, president of Montreal’s Telescene Film Group Inc. Telescene undertakes joint ventures with companies such as Fox Family Channel to produce programs like Big Wolf on Campus, a show the American unions interpret as “runaway.” “The product may be on U.S. television, but it’s not a runaway production,” Spry says with a touch of irritation in his voice. “It didn’t exist until some Canadian thought it up.” Back at Lions Gate Studios, Hayek and her dialect coach have disappeared into the soundstage. Steve Zahn isn’t needed yet, so he leaps into his trailer to grab a bottle of water. Asked about the pressure on U.S. actors to boycott Canada and stop runaway production, the 31-year-old actor from Minnesota shakes his head: “I’m more concerned with finding good material than worrying about where I’m working.” And there’s the rub for California-based unions fighting runaway production. Stars want good roles, studios want to save money and create good entertainment. By filming in the Great White North, they can have it all.