No risk? No reward: Canadian films

Why English-language Canadian films still don't make any money--and what we need to do about it.

The new film Bon Cop, Bad Cop begins with a striking cultural metaphor. A detective from Toronto and a detective from Montreal meet at the provincial border to ponder a gruesome crime scene. A corpse has been thrown from a helicopter and is cleaved along the top of the Welcome To Ontario/Bienvenue à Quebec road sign. “His heart is in Quebec,” observes the Anglo cop, to which the Quebec cop mutters, loosely translated, “And he's got Ontario up his ass.”

The same may be said about the two solitudes' differing attitudes toward Canadian movies. In Quebec, audiences take their homegrown movies to heart. In the rest of Canada (a.k.a. the R.O.C.,) Canada's film industry is the butt of many jokes.

Last year in Quebec, nearly one in five cinema tickets was for a Quebec film (see “Success to excess,” page 97). Meanwhile, English-Canada films earn about 1% of the national box office. “At least we're not as bad as Canada” was a familiar refrain in Australia's film industry, which has at times enjoyed better than 10% attendance at domestic films. (Australia's national market share plummeted to near Canadian lows in 2004.)

Wayne Clarkson takes some comfort in knowing we are not alone. Clarkson is the executive director of Telefilm Canada, the primary source of public investment in the Canadian film industry. Without Telefilm, an arm's-length agency of the Department of Canadian Heritage, the industry would vanish overnight.

This situation is not new. Far from it. Back in 1999, when domestic audience share on both sides of the language divide was at 1%, then-heritage minister Sheila Copps put a challenge to Telefilm and its clients: we'll give you more money; you get bums in seats; we'll reward you with your own discretionary subsidy dollars. The national target was set: 5% of audiences watching domestic films within five years. Five years on, English Canada's share remains at 1%; Quebec's has soared to 18%. Clearly, there's a problem. Clarkson's–and Telefilm's–task is to fix it.

In June, Clarkson attended the Copenhagen ThinkTank on European Film and Film Policy as an observer (not surprisingly, Australia was the only other non-European nation represented). Sponsored by the Danish Film Institute, the ThinkTank's main talking point was: “why (do) we fund film?” That the focus was posed as a question speaks volumes about subsidy–and the bureaucracy it spawns.

That parenthetical “do”–as in, “why do we even bother investing in a domestic industry”–reflects Hollywood's market power. For most nations, cultivating a local film industry is a thankless task. The local population doesn't care where its films come from and, with no votes at stake, the government follows that lead. Meanwhile, production can only happen through state subsidy, because the local market is too tenuous to promise a return on investment. The only way to foster a local industry is to give filmmakers money. In the middle is an insular bureaucracy that never seems to have enough funding–yet is self-sustaining.

There are exceptions. France has a local market share for domestic films of 37%. In 2005, the Centre National de Cinématographie (CNC) spent Û1.3 billion (more than $1.8 billion) on local film production, about $30 for every one of its 61 million souls. In 2005, Denmark (population 5.4 million) had a local market share of 32%. That year, the Danish Film Institute invested Û27 million ($38 million) in local production, a per-capita spend of $7. Telefilm's total budget for English-language film production was $44 million, a per capita spend (outside of Quebec) of approximately $2.10. Perhaps we get what we pay for.

Clarkson is the consummate culturecrat. Unlike his predecessor Richard Stursberg, the consummate bureaucrat–now stirring the pot at the CBC–Clarkson is a seeker of consensus. He bears a passing resemblance to the farmer of American Gothic, but his manner is anything but austere. Still, his language is necessarily bubble-wrapped, and he phrases his statements as questions.

“Are we creating a culture of reliance on public money? Good question. Are producers adept at getting public money but not private money? Good question. Are we creating a culture of entitlement? Good question.”

It would be impolitic for Clarkson to say so outright, but the answer to each of these is a resounding yes. Although Telefilm instituted a system of performance envelopes–funds earmarked for producers whose films performed at the box office–it is possible to make a living in English-Canada making unsuccessful films. (See chart, below, for details.)

“When something succeeds, Telefilm doesn't know what to do, because it's a system that is not designed to succeed,” says Norman Cohn, a filmmaker who, along with his creative collaborator, Zacharias Kunuk, knows something about success in Canadian films. (They are the creative team behind 2001's critical and commercial hit, Atanarjuat, The Fast Runner.) “As long as it fails, they all have jobs. If they succeed, they put themselves out of a job.” Cohn compares the situation in English-Canada to that of Soviet-era Kazakhstan. “The decisions are made entirely by privileged bureaucrats disconnected from the market.”

Based in Nunavut, Cohn and Kunuk are intimately familiar with Telefilm's bureaucracy, having forced it to change in order to get the funding for Atanarjuat. (Until they came along, Telefilm had no provision for making large-budget films that were not in English or French.) Set for release on Sept. 29, their second film, The Journals Of Knud Rasmussen, also set primarily in Inuktitut, was the Opening Night film at the Toronto International Film Festival. Opening Night at Toronto is a piece of serious leverage–and Cohn is not afraid to use it.

“The subtext of a 1% success rate is that the films are terrible, and therefore the filmmakers are terrible. We have proven that maybe it's not the filmmakers' fault. We function in a system where you can't make a film unless you're validated by the infrastructure. The films that are released are the films they choose to finance.”

Changing that infrastructure is not easy. Process-wise, it works very well. Government subsidy dollars mesh with government regulation. For example, Canada's pay TV operators are major investors in Canadian movies but not because they want to be. A pay TV operator like The Movie Network is required by the CRTC to broadcast a certain amount of Canadian content. But there's an incentive: TMN receives a 150% schedule credit for each pre-brought Canadian movie it shows, thus buying itself extra time to screen Hollywood movies. It has no stake in the Canadian product.

Canadian distribution companies are not obliged to distribute Canadian films. But the handful of companies eligible under Telefilm's terms would be foolish not to, given Telefilm, through its Marketing Assistance Program, returns 75% of the marketing costs. The distributor can pick up the rights to a movie for X dollars, knowing the pay TV operators and traditional broadcasters will buy it for X+Y%. But again, no one has a stake in the film's success. No wonder Wayne Clarkson is asking: “Where is the risk?”

That question has been ringing in the echo chamber of the system. Since January, Telefilm has been convening working groups to address the issue. “How do we bring responsible risk into the process?” Clarkson asks. “If a distributor is genuinely at risk, then they should be genuinely rewarded.” The problem is no one knows how to define that risk. Indeed, Clarkson uses inverted commas when he says it: “risk 'to be defined.'”

It's blindingly obvious who should be taking the risk: private investors. But no one wants to risk money investing in films that don't make money. Kevin Tierney at Park Ex invested in Bon Cop, but only because it was, in his opinion, a movie that had potential. “Movies would be judged differently if there was risk involved,” he says. Then again, Tierney is based in Quebec, where Bon Cop is doing gangbusters.

“The most sensitive issue,” says Clarkson, “and one [English-language producer] Robert Lantos is the most vocal on, are the films that end up in a theatre that don't merit a theatrical release. They end up in a cinema for a week or two, to everyone's disappointment–the director, producer and the paying public. How do we stop that? The machine, with all the honourable and right intentions, is fostering that.”

Norman Cohn has an idea. He is proposing a northern distribution scheme to bring motion pictures to aboriginal audiences, starting with the Opening Night film of the Toronto International Film Festival. High-tech but relatively low-cost, it would involve a travelling high-definition digital video projector (Rasmussen was shot entirely in HD), a hard drive holding the film and a technician/projectionist. In other words, a 21st-century approach to distribution in the real Great White North.

Cohn has spent much of the summer chipping away at Telefilm's bureaucracy, trying to get his company, Isuma Distribution, eligible for distribution funding under Telefilm's rules. The regulation required a distributor have five years' experience. There is no distributor north of the 51st parallel with five years' experience. And Alliance Atlantis Motion Picture Distribution, which holds the rights in Canada, ceded northern rights to Isuma.

In an e-mail exchange with Telefilm that lasted months, Cohn made the case that his proposal represents everything Telefilm claims to stand for: distinct, innovative, bringing the cinematic experience to Canadians who could never otherwise experience it. A senior Telefilm executive, Dan Lyon, replied with an e-mail, to which he attached the text of another e-mail sent by an anonymous industry rep. It was a pastiche of Cohn's letter, adjusted so as to appear to be from a Mennonite filmmaker seeking help distributing his film The Journals of Jimmy the Mennonite. “They think it's a joke,” says Cohn. “One per cent is a joke.”

On September 8th, Clarkson and Cohn met officially over lunch at TIFF to discuss the impasse. The meeting was fruitful, and Isuma and Telefilm are now in negotiations to get Isuma some form of meaningful distribution financing. It's going to be a long haul. But Clarkson knows all about long hauls. He is preparing to run his fourth marathon. “I was doing 10K runs, but it hurts too much,” he says. “With a marathon, it's just: don't fall down.”

“Don't fall down” could be the motto at Telefilm Canada. In 2007, the agency marks its 40th anniversary. After nearly 40 years, a 1% rate doesn't seem like much to celebrate. But consider the alternative.