Cover Story

Behind all that phoney tinsel are some equally phoney dealings

Lawrence O’Toole September 25 1978
Cover Story

Behind all that phoney tinsel are some equally phoney dealings

Lawrence O’Toole September 25 1978

Behind all that phoney tinsel are some equally phoney dealings

Cover Story

Lawrence O’Toole

Ten years ago the Canadian film industry was a quiet little thing—so quiet it would have made a nun nervous. Every now and then it dabbed a little Evening at the National Film Board behind its ears and timorously trotted itself out into the public gaze. Nobody gave it a second glance. This week the Canadian film industry—200 features later—is parading its wear and wares at Toronto’s Festival of Festivals, having a go at the glitz and the glam, flaunting a bit of trash and flash here and there, corralling cuties and beauties from far and near. Possibly the largest film festival in North America, in a city that has more casual moviegoers per capita than any other on the continent, it will screen enough movies to make the gluttonous gag. As a final frisson it will host the Canadian Film Awards which, in previous years, amounted to an event as auspicious as handing out holy pictures as prizes for schoolwork.

If it all sounds a trifle vulgar, then the festival and the industry will be giddy with glee. No starlets will be waving bikini tops above their heads, courtesy of the Canadian climate, but the festival’s organizers are probably looking into it. With a high international profile after just three years of operation, thanks to a well-oiled publicity machine, the festival joins the ranks of the arrivistes: such prestige names as Martin Scorsese and Brian De Palma attending, more than 60 feature films, red-carpet world premieres followed by the usual flying carpet disco parties, and an expected 40,000 souls who’ll want tickets.

It will even have them coming up here: Warner Brothers is flying in 47 showbiz movie junket junkies from the U.S. for the premier of Who Is Killing the Great Chefs of Europe? Glitter galore and then some more. Anything Cannes can do Canada can do too.

The Film Awards, or Etrogs, Can-

ada’s Oscars, will get an international showcasing, and Canadian movies will see the whites of the eyes of others, other than the Canadian public. A decade ago the industry practically consisted of Don Owen’s Nobody Waved Goodbye and, trouble was, anyone who ached to make movies was exercising his pinkie with a fare-thee-well gesture and heading south, like the geese in the film board documentaries. In 1967 with the formation of the Canadian Film Development Corporation (CFDC), a fed-

eral agency set up to help film-makers, an industry, if not born, was at least conceived.

Since that time the fledgling enterprise has made movies—Mon Oncle Antoine, Goin’ Down the Road, Who Has Seen the. Wind, Les Ordres, Why Shoot the Teacher, The Apprenticeship of Duddy Kravitz, Outrageous!, Blood and Guts—that have shown what is funny, embarrassing, depressing, important and moving about living in this country. None was a big money-maker; some made marginal profits; others were bad beyond belief. Now a 10-year-old contender, the Canadian film industry is punch-drunk with hope.

“We’ve bust that confining mould of

good taste,” croaks director Peter Pearson (Paperback Hero). “We have an industry that can produce skin flicks and horror films, as well as tough political dramas.” No longer is it mandatory that Canadian movies frame tastefully appointed images of moonlit lakes heavily orchestrated with loon calls. Such directors as David Cronenberg (The Parasite Murders, Rabid) can churn out crass, salable product with the best (or worst) of them. While some purse their faces into prunes and demand retribution from the grant-giving gods, it’s the Cronenbergs who are giving the industry the shot in the arm it desperately needs.

Bill Marshall, producer of Outrageous! (the most radical rebel against confining good taste), lights into “the whiners and complainers.” This contingent insists, with some justification, that despite the brouhaha of festivals in Toronto and Montreal within weeks of each other, Canadian movies this year are horrible and terrible and we’re-never-going-to-see-them-again. “Sure, this is a dry year but they think making films is like a shoe factory—so many have to come off the production line every year. Last year was a good year, this year is a bad year. So what?”

“Despite appearances the industry’s going down the tube,” Sandra Gathercole, speaking for the 14,000-member Council of Canadian Film-makers, states flatly. The council, watchdogging the government’s behavior in the matter of international co-productions such as Full Circle with Mia Farrow and Keir Dullea, contemptuously dismisses the recent co-production spate as “window dressing. The regulations governing Canadian content are so loose you could drive a truck through them.”

In 1975, concerned about the creasing investment in Canadian films, the federal government announced an extremely seductive tax incentive—a 100-per-cent tax write-off on investment in any “certified” Canadian feature film. Production, as any fool might have imagined, picked up; but what seemed a boon for the industry has turned into a curse.

To become certified, a film must earn six of 10 points set down by the Income Tax Act: two points each for director and screenwriter, and one point each for highest-paid actor or actress, second highest-paid actor or actress, composer, art director, cinematographer and editor. If these people were, at some point, Canadian.

Under the provisions of co-production treaties, which change from film to film, resources of two countries can be drawn upon for talent, financing and distribution. Carlo Ponti’s A Special Day with Sophia Loren was a 100-percent write-off. It had to use Canadian content in it and the nominal Canadian content was John Vernon and some technicians.

A Canadian co-production can, in effect, use more foreign talent than Canadian. The rules can be bent as easily as boiled asparagus. Gil Taylor, the coproducer of Leopard in the Snow, an official Anglo-Canadian co-production, wasn’t allowed on the set most of the time, much less given responsibility. One American screenwriter has complained to the Writer’s Guild of America about another co-production, that he was unfairly denied screen credit, his name having been replaced by a Canadian willing to rent out his passport to get those two points needed for a 100per-cent writeoff. The treaty between Canada and Israel for The Magician of Lublin stipulated that the script be written by a Canadian. It was, however, written by an Israeli, so the investors are flying a Canadian writer to London for two or three days for a “rewrite.” Canada, luckily, pulled out of the deal.

Clamoring for more Canadian talent to be used in Canadian films, most of the people in the industry are blithely unaware that passports are lent out for points, that scarecrow producers and writers are appointed for certification. There have even been cases of co-productions where one set of credits was used for the film in question when shown outside Canada, and another set used inside Canada, using Canadian names, of course.

The prosperous in the international production pas de deux, such as producer-director Denis Héroux can’t speak highly or effusively enough about co-productions. “How else,” he asks, “can local people work with stars like Sophia Loren?” Another argument is that technicians can “gain valuable experience.” But technically Canadian films are world-class: this year’s crop— Blood and Guts, Marie-Anne, In Praise of Older Women, Two Solitudes, even the heinous I Miss You Hugs and Kisses—are as slick as American movies.

Writer-director Ralph Thomas, whose Tyler won the International Critics’ Award two weeks ago for best Canadian feature at Montreal’s World Film Festival and whose CBC series For The Record provided employment for top Canadian directors who were out of work, looks beyond technicalities. “Sure, the co-productions keep technicians busy, but you don’t build an industry with technicians. You can start one with them and then you build it with writers, directors, actors. The coproductions bring in hacks while people like Claude Jutra can’t get work in film.” He claims, too, that scripts, the bane of the industry, “get written between 6 at night and 4 in the morning

because there are writeoffs for completed films, but very little in the way of development money.”

Co-productions aside, why were the two leading actors (Stacy Keach and Jean-Pierre Aumont) in Two Solitudes, which will be released next week, not Canadian? They couldn’t sell tickets to a dog show. Nor could the supremely untalented Elke Sommer, imported and paid $100,000 for I Miss You Hugs and Kisses, partially financed by the CFDC. A leading actress for 25 years, Frances Hyland has to scramble for $20,000.

The iceberg that is also known as the Canadian film industry, showing its top one-tenth and catching all the light on the surface, has been begrimed underneath. For some time the Canadian film industry has been unwittingly larding the coffers of a bunch of Winnipeg dentists and Toronto lawyers who were using production of Canadian movies for their brilliant tax-deferral schemes. And here’s why so many Canadian movies have been so putrid.

Before 1975 and the 100-per-cent write-off incentive, the rules governing investment were different: investors, as long as they invested a sizable amount, got a 60-per-cent writeoff on the total cost of the movie, without laying out the total cost. (Nowadays, an investor must write a promissory note that he’ll pay the total cost.) An investor puts $50,000 into a movie that costs $300,000 to make. Even though his original outlay was only $50,000, he could nick off 60 per cent from $300,000—or $180,000, quite a drop from his onerous tax bracket. The government allowed this because it assumed it would get back the tax on the entire $300,000 when the investor paid his taxes on the profits he made from the movie. Except: the investor and his colleagues in chicanery made as sure as they could that they

backed a dud movie that didn’t have a fighting chance of showing a profit. If the movie did show a profit, the investor was no further ahead and the “deal” backfired the way it did on Zero Mostel in Mel Brooks’ The Producers when his Broadway show, Springtime for Hitler, was so awful it became a hit. Investors stopped movies from making profits, and naturally those Canadian movies had a monopoly on mediocrity. All told, the investor makes money: a penny saved on taxes being a penny earned.

This tax trick is called levering, the possibilities of which, as one Toronto lawyer put it, “brought out the wharf rats in droves.” The beginning of the end began when Revenue Canada began to reassess every movie deal made since 1973, starting with an insipid little item called Mahoney's Estate, backed by a bunch of Toronto lawyers, released as Mahoney's Last Stand for two weeks in a Toronto theatre. (To make sure a film flops, publicity is avoided and it gets token distribution.) The Mahoney test case should be settled in late fall, and there are a battery of others to follow.

The future of the film industry is “going down the tube.” Investor confidence is cooling. Given the general economic recession, an investor might feel more comfortable with the company of pre-

ferred stocks instead of a feature film, and the tax department’s reassessments make it difficult for him to pull a fast one.

The CFDC, which has directly funded movies to the tune of $24-million (less than the budget for the upcoming The Wiz), is dependent upon the secretary of state’s budget—recently slashed by $160 million. The CBC, the major buyer for Canadian film output, has had its budget cut by $71 million. The figures aren’t as bad as they appear to be, contends Secretary of State John Roberts, but says that it will be the “small” movies (more short subjects and documentaries, the world stereotype of Canadian film) that will be made. Earlier this year Roberts tried to minister to the ailing industry through a proposed 10-per-cent tax on distribution revenues which would have doubled the CFDC funds. His suggestion was greeted by his cabinet pals (not big on culture) as though one of Satan’s minions had passed wind.

“The (movie) climate is good, but to have rational growth money has to be certain. It’s a chicken-and-egg situation—you can’t raise money without stars, and you can’t get stars without money,” laments 20-year veteran Allan King ( Warrendale, Who Has Seen the Wind). The Canadian public can’t be all that concerned: a recent urban survey conducted for Weekend magazine revealed that nearly a third of those polled have never even seen a Canadian movie. Surpassing the problem of making Canadian movies is selling them.

“Publicity is the last thing that should be cut out of a picture’s budget,” says publicist Helga Stephenson, “but it’s always the first. What good is it if you have the most wonderful movie in the world and six people come to see it?” A publicity director for a $3.5-million Canadian movie currently being shot is typical of the lack of savvy in the film industry’s public relations field: “Well, we all know,” he said, naysaying the suggestion that it be hyped in the U.S. as well as Canada, “if a movie’s a hit in Canada it will be a big hit in the States.” No batting of eyelashes was recorded.

“Everything’s addition and subtraction. The rest is conversation,” explains a businessman offering John Garfield a bribe to throw the fight in Body and Soul. Canadian movies have, like fights, been “thrown,” by the adder-like machinations of the money-men.

At the Festival of Festivals there’s lots of “conversation.”

Somewhere, a Winnipeg dentist is watching Heaven Can Wait, and smiling.

But Canadian movies will be made by those who want to do just that—make movies. Or is that a pipe dream? f?