When a deal isn’t a deal: Morning File, Friday, April 24, 2015

News
Views
Government
On campus
Noticed
In the harbour
Footnotes

News

1. Film tax credit

Late yesterday afternoon, government officials announced changes to their proposals for film industry support. The technical briefing for reporters was not for attribution, meaning I can’t quote any of the government officials present.

There are lots of moving balls in this, and I’m sure other reporters and film industry representatives will add much-needed detail. I wrote the following immediately after the briefing, and only added a couple of details this morning. I’m sorry the numbers are confusing.

The short of it is that for government budgeting purposes, the dollar amounts have not changed at all. Film industry reps disagree with the language being used, but from the government’s perspective, $24 million will be spent this year (through tax credits) and $10 million next year, with the following details:

• The film tax credit is being scrapped entirely, and will be replaced with a “Nova Scotia Film & Television Production Incentive Fund,” which I’ll call FAT PIF. The fund will be capped at $10 million.

• Film and television productions will apply for FAT PIF grants reflecting 25 percent of their total production costs. The tax credit was for 50 percent of labour costs. Labour costs are generally about half total costs, so on paper the benefit from government could be about the same, but since FAT PIF is capped at $10 million, there’s obviously some winnowing process involved. No details were given.

• In effect, the $6 million that had been calculated for the film tax credit (that was the effective 12.5 percent wage credit the Liberals announced in their budget two weeks ago) will be added to $4 million taken from the $6 million that had been announced for the Creative Economy Fund. The newly created $10 million FAT PIF will be administered by Nova Scotia Business Inc., which will presumably assess applications to the fund.

• The Creative Economy fund was to cover film, television, book publication and other arts, so the $4 million taken from that fund for the creation of FAT PIF includes only the film and television part. It’s unclear what’s going to happen to the other $2 million.

• FAT PIF will not cover animation. This primarily means DHX Media, which produces children’s TV shows. It was explained that regular film and television productions typically film in the summer, so there was a desire for quick resolution, while animation productions start in the fall. There are ongoing discussions about animation productions, and some decision will be reached in the next week or two.

• FAT PIF is a budgeted fund and not a tax credit, so funding from it will be public record. Officials at the briefing spoke of their desire for “transparency.” More on that in a bit.

• Grants from FAT PIF will be capped at “$5 million or less” per production.

I spoke with John Wesley Chisholm of Arcadia Entertainment after the briefing. He said FAT PIF “allows us to get back to work and start discussions.” As he sees it, the reduced tax credit announced with the budget two weeks ago was not “bankable” — that is, no bank would lend money based on the reduced amounts, while grants from the fund are bankable, so that allows him to continue work he has in the pipeline.

Still, said Chisholm, he is dissatisfied with the announcement. “The Department of Finance has the ideological position that the film industry does not contribute positively to the economy,” he said.

I told Chisholm that even though he disagrees with the language and philosophy being used, it looked to me that the total government “spend” on the film industry is being reduced from $24 million this year to $10 million next.

“Next year’s budget is next year’s budget,” he said. “They can’t say what next year’s budget will be today.”

Other media are referring to yesterday’s announcement as a “deal” between the government and the film industry. It’s no such thing. Here’s how director and actor Thom Fitzgerald put it just hours after the announcement:

To my friends in the NOVA SCOTIA SCREEN INDUSTRY. The following are my opinions, and some facts, that do not represent the opinion of any group to which I belong or to which my companies belong. I am not a member of the committee that has been meeting with the Dept of Finance.

What happened today and was announced by government is not a “deal” — that implies some sort of negotiation. It was presented by government. Do not rejoice. This is not good news. Some of this is optics.

The new tax incentive fund formula of 25% of the Nova Scotia spend and 2% bonus for rural shoots and 2% bonus for indigenous (not service) shoots is a formula that is relatively immaterial in terms of its value to any given production. 50% of NS labour versus 25% of Nova Scotia spend is approximately the same on many productions, or a slight reduction. It will slightly favour bigger productions that build sets and book lots of hotels, instead of the smaller local productions which tend to spend a higher percentage of their money on local cast and crew. This aspect of the change is a formula change that is perfectly fine for everybody, and it is the part with which you hear that Screen Nova Scotia is in agreement.

However, it is no longer a TAX CREDIT that can be accessed by any Nova Scotian based production. It is now a FUND that will be administered by Nova Scotia Business Inc. It will be offered (presumably) on a first-come, first-served basis.

The new tax incentive fund, the government announced (to the surprise of Screen Nova Scotia) will fall within the parameters of the budget that was announced two weeks ago. Does anyone remember two weeks ago? That budget contained $6M for the NS film industry tax credit NEXT year. Now they have taken $4M of the proposed $6M “cultural fund” for film, music and publishing, and rolled it into this new “incentive” thus calling it altogether $10M for the film industry.

They have said, when pressed by reporters, $10M is not a “hard” cap. Not a “hard” cap. Last year the $139M film industry triggered a labour based tax credit expenditure of $25M. Next year the incentive fund — calculated at 25% of the TOTAL Nova Scotia spend — is $10M. You with me? $10M is 25% of a NS film industry worth $40M. So a $139M industry becomes a $40M industry.

So the framework of the “great news” is that two weeks ago the NS film industry was completely obliterated, and today it will be maintained “to a certain extent.” That extent, according to this announcement, is less than a third of what it was. One job where there had been three.

Here’s the rub: $10M could be two productions. By winking and saying $10M is not a “hard” cap, the government puts itself in a position to decide in the fall, after this July 1st changeover date, whether they will exceed or will not exceed that cap, and for whom they will exceed it.

The government is telling the public they didn’t back down and they’ve capped the industry support at $10M and they want to tell the film industry to hear that it’s not a “hard” cap and they will “give what the industry needs.”

The bottom line question is whether the government is lying to the people, or to film the industry, ’cause both things can’t be true.

Two weeks ago the government announced it wants to reduce the industry by 75% using one method and today they announced they want to reduce the industry by 75% using a different method.

I add this: It’s really important to acknowledge that two weeks ago there was a budget announcement that would have destroyed the entire NS film industry on July 1st. We are now talking about workable support for a $40M+ production industry. It’s real and it’s bankable. We’re open for business.

One detail that needs further exploration is movement of whatever film support is given away from the government bureaucracy and over to Nova Scotia Business Inc, a crown corporation. The same budget announcement took tourism support away from the the old Department of Economic and Rural Development and Tourism and put it into the newly created Nova Scotia Tourism Agency, which is also a crown corporation.

There might be good arguments for having crown corporations do some of this work, but it is a big philosophical shift in how we go about governance.

In terms of film industry support, the move to a crown corporation clearly was made in order to reduce that support in a manner that is one step away from the normal bureaucracy. “Transparency” cuts both ways. While we’ll know exactly who gets how much film support, we won’t know how the decision to give the support was made.

2. Tuition

Students showed up at yesterday’s Board of Governors meeting at Dalhousie University to protest the board’s approval of a three percent tuition increase, reports Moira Donovan.

This article is behind the Examiner’s paywall and so available only to paid subscribers. To purchase a subscription, click here.

The Liberal government has given universities a one-year exemption to the three-percent cap to tuition increases, but it looks like most universities are too far along in the budgeting process to change their earlier plans to stay within the cap. Still, it’s worth pointing out that with inflation running less than two percent annually, a three percent increase year after year is a substantial shift of the funding load off government and onto student debt.

3. Life

Karla Nicholson, president of the Quinpool Road business association, and area councillor Linda Mosher want to tear down the Life sculpture in front of the former Ben’s Bakery, reports the CBC.

Reporter Carolyn Ray tracked down Josef Drapell, the artist behind the sculpture. Drapell was an immigrant from the former Czechoslovakia who spent a couple of years in Halifax on his way to Toronto and becoming an artist of some renown. He’s never seen the completed Life, but explains it this way:

The central form ‘male’ is tall, impenetrable; the central form ‘female’ is shorter and receptive. From the left and from the right ‘the forces of living’ compress both sexes with reality (concrete walls). The three glass boxes represent our intelligence, our feelings, our emotions and our rationality.

On sunny days, the sun plays in them with that extra uplift, on cloudy days everything is back to ‘normal.’ The pairs of Plexiglas rods cast into the concrete walls represent our curiosity and symbolize our desire to see beyond the concrete reality of our limited world.

In our explorations of the universe we sometimes succeed, or pay with our blood (the fluorescent red Plexiglas).

4. Medical marijuana

“The week of Nov. 18, 2013, Health Canada sent letters to about 40,000 people authorized under the Marijuana Medical Access Program to acquire the drug for medical use or who were licensed to to grow it,” reports Sherri Borden Colley. “The mail-out had the name of the program and the participants’ names in clear view on the envelope.”

The mail-out had the effect of telling neighbours and anyone else who saw the envelopes that the recipients were using medical marijuana. The Federal Privacy Commissioner has concluded that the mailing violated the Privacy Act, and now lawyers are lining up to file a class-action lawsuit against Health Canada. A hearing is set for June.

5. Ship of Theseus

The 13th century BCE founder of Athens may sail to Nova Scotia this summer in a boat that may or may not be the Bluenose II.

6. Skydiving

Carol Murray says getting in an airplane, flying up to three or four miles high, opening the door, and jumping out may not be safe. When she did it:

She doesn’t remember hitting the ground.

When she came to, she had two broken legs, a broken pelvis, a punctured lung and a chipped vertebrae. Her right femur protruded from her leg and nine centimetres into the ground.

She spent two years in a wheelchair and three years in physical therapy before she was able to walk with a cane.

I’m convinced. I won’t jump out of airplanes.

Views

1. Admitting mistakes

It’s nearly impossible for politicians to admit mistakes, says Graham Steele:

When politicians won’t admit a mistake, the fix can get distorted in order to let them save face.

Instead of doing the right thing, the government does whatever makes the politician look best. Image rules.

Government

City

No public meetings.

Province

Legislature sits (9am–6pm, Province House)

On Campus

No public events.

Noticed

Lately, I’ve been transfixed by NASA’s Astronomy Picture of the Day. Usually the picture is of some far off galaxy or nebula or a planet in an interesting position, but today’s sci-fi looking photo is a terrestrial scene. Explains NASA:

Who guards the north? Judging from the above photograph, possibly giant trees covered in snow and ice. The featured picture was taken a few winters ago in Finnish Lapland where weather can include sub-freezing temperatures and driving snow. Surreal landscapes sometimes result, where common trees become cloaked in white and so appear, to some, as watchful aliens. Far in the distance, behind this uncommon Earthly vista, is a more common sight — a Belt of Venus that divided a darkened from sunlit sky as the Sun rose behind the photographer. Of course, in the spring, the trees thaw and Lapland looks much  different.

In the harbour

Americas Spirit, oil tanker, New York to Imperial Oil
ZIM San Francisco, container ship, New York to Pier 42, then sails to sea
Torino, car carrier, arrived at Pier 31 this morning

Tasman Strait sails to Mariel, Cuba
Fusion sails to Saint-Pierre
Oceanex Sanderling sails to sea

Footnotes

I’m concerned that the internet may have destroyed the tradition of people writing cranky letters to their local newspaper.