:
Good afternoon, everyone. I am going to call this meeting number 46 of the Standing Committee on Canadian Heritage to order.
Today we are continuing with our study of the Canadian feature film industry. In fact, it is our last meeting for hearing from witnesses.
In the first hour we have with us from the Directors Guild of Canada, Tim Southam, president at the national office, and David Forget, director of policy, also at the national office. From the Alliance des producteurs francophones du Canada we have René Savoie, the administrator. Via video conference, from Vancouver, British Columbia, from the Moving Picture Company, we have Michelle Grady, head of film.
Each of the three organizations will have up to eight minutes each.
We will start with Mr. Southam. You have the floor for eight minutes.
:
Mr. Chairman, honourable members of the Standing Committee on Canadian Heritage, my name is Tim Southam. I'm a working director, a filmmaker, and the president of the Directors Guild of Canada. With me is DGC's director of policy, David Forget.
I'd like to thank you for the opportunity to appear before you in the course of your current review of the Canadian feature film industry. We are experiencing significant change in the audiovisual sector and commend the committee on its timely decision to review the state of Canadian feature film in particular.
Just as feature dramas and documentary have a special place in the hearts of audiences everywhere, for filmmakers feature film is a foundational art form. Even as other screen genres like Internet and series television become highly compelling media for directors, feature film remains the bedrock form many of us dream most of making.
There are several reasons for this. Some are purely mythological, the desire, for instance, to follow in the footsteps of Truffaut, Spielberg, Campion, Scorcese, Bigelow, Jutra or Cronenberg, but the key reason is that independent feature film is the form that utilizes most completely everything a filmmaker has to offer to the viewing public, as a visual artist, a dramatic artist, and as a storyteller. It's a form that uses the director’s skill set fully, from either writing or working with a writer, through directing actors and composing shots, to sound design and exhibition. It is therefore a form most likely to develop a singular voice and most susceptible of offering a unique viewing experience for audiences everywhere.
Feature film has often been Canada’s best foot forward on the national and international stage.
[Translation]
Unfortunately, despite feature film and documentary's pride of place in the media and in audiences' collective imagination, English Canadian films are becoming orphans in their own land.
Taxpayers who fund these films are denied the ability to access them. Diminished access translates directly into diminished choice for Canadian audiences. Something needs to be done.
[English]
Our focus today is on how we can strengthen existing regulatory mechanisms in support of the financing and exhibition of Canadian feature film, particularly as they apply to the dominant trend towards home and mobile viewing.
Much has changed since the last time the standing committee engaged in a study of the Canadian feature film industry in 2006. Most significantly, digital platforms offer more and more ways to access content. Audiences are more in control of the viewing experience and have more choice than ever before. As a result, there is greater pressure on the historical “orderly” marketplace, and as exciting as these new platforms and windowing strategies may be, they do not yet come accompanied by strong business and financing models.
We also note that several key things have not changed since 2006. It merits repeating that in its 2006 report the committee noted, in its words, an “absence of a broadcasting policy to support the promotion of Canadian feature films”. The report further recommended “that the Department of Canadian Heritage...develop a new policy for the exhibition of priority programming on Canadian television” and “that the Government of Canada direct the CRTC to develop a policy that supports the promotion as well as viewing of Canadian feature films, long-form documentaries, and dramas”.
The report got it right, and in 2015, television is still where most Canadians watch movies. The burning question is, where are the Canadian movies in this home-viewing universe?
The Directors Guild of Canada has three specific suggestions in order to more fully leverage home-viewing trends. All three would result in delivering significant resources to Canadian feature film and documentary without requiring the addition of any new public moneys to the system.
The first suggestion is on Canadian feature films and documentaries as programs of national interest, PNI. To ensure that resources for programs of national interest are allocated in line with the government's policy intent, the CRTC should require broadcasters to set aside a minimum 1% of their Canadian revenue specifically to support the creation of original Canadian feature films and documentaries. These revenues should be sourced from within the broadcasters' existing Canadian programming expenditures requirements, but over and above the existing 5% PNI requirement. The result would be increased and sustained support from broadcasters, addressing the chronic meagre licences currently being offered.
We also recommend that, as Canada’s national public broadcaster, the Canadian Broadcasting Corporation play a more significant role in the licensing and promotion of Canadian feature films and documentaries.
The second suggestion is on Canadian feature films and documentaries on video-on-demand and pay-per-view services. Building audiences begins with having access to the content. The CRTC requires pay-per-view and video-on-demand providers to license all new Canadian feature films that comply with relevant codes as “suitable” for each service. However, the commission has declined to provide clarity on how the word “suitable” should be defined. Greater clarity regarding the term “suitable” would result in increased access by Canadians to our cinema on pay-per-view and video-on-demand services.
The third suggestion is in regard to Canadian feature films and documentaries on over-the-top services. In recent years, Canadian broadcasters have had to compete with new over-the-top subscription video-on-demand, SVOD, services. There is no question that exempting over-the-top SVOD services from CRTC regulation has enabled these services to avoid the system-building requirements shared by other content providers, including any participation in the Canada Media Fund. As a result, over-the-top providers operate as free riders with regard to ensuring Canadian content and culture in the broadcasting sphere.
Enshrining this competitive advantage for a subset of providers makes little sense. As an initial step, the CRTC should again require reporting from over-the-top providers regarding: the level of Canadian programming, including the number of titles, hours, and share of total content; the level of expenditures on Canadian programming; Canadian programs for which rights were acquired in exclusivity; and Canadian subscriber levels.
[Translation]
The financing, production and distribution landscapes for feature film and documentary have been revolutionized by the advent of new viewing platforms and digital networks. Yet none of these developments alter the need for a critical mass of capital to generate first-rate content created by Canadians for Canada and the world.
As additional measures, the DGC believes we must strengthen existing tools such as tax credits, the Canada feature film fund, the National Film Board of Canada and the Canadian Broadcasting Corporation, and reverse cuts made to these instruments and services.
In addition, it is important to follow the migration of audiences toward the small screen, and to more effectively secure the involvement of home services for the financing and dissemination of Canadian feature films, including the traditional television networks and new Internet services.
Mr. Chair, committee members, I would like to thank you very much for the opportunity to appear before you today, and would be pleased to answer any questions you may have.
[English]
Hi, everybody. I'm going to speak in French, but I understand English pretty well.
[Translation]
I represent the Alliance des producteurs francophones du Canada, which has 24 members who are producers. These producers all work in French in areas where it is a minority language, from Newfoundland and Labrador to British Columbia, and are mainly developing the television production and digital media industries.
A few members have produced feature films, and a number of them dream of being able to develop projects like this in the future. The example that the growth of the television industry and the development of its talents and capacities in the regions through active participation in the Canada media fund lead me to believe this will happen. Our members currently develop and produce major drama series for major Canadian broadcasters.
To give you a better understanding of our current situation, I have prepared an overview of the status of French-language feature films in Canada in minority situations from the perspective of an Acadian producer working in his area. It's a portrait that I submitted on March 11, 2015. Since the document was written, I have participated on behalf of the APFC in a bilateral meeting with the FCCF, the Fédération culturelle canadienne-française, and with Telefilm Canada. The conclusions we came to following this meeting were very telling. That is why we have modified our presentation for your committee. It is essential for the APFC to have feature films that show the reality of francophones across Canada and that showcase the cultural wealth of our great country.
In the document submitted on March 11, we showed that, for francophones outside Quebec, the feature film industry hasn't changed much in the last 10 years. There was one feature film in 1998 in Acadia, another made for $1.2 million in Ontario in 2011, and three projects made on very small budgets for emerging talents in the last six years. It's a very poor record. Francophone feature films in minority situations is a rare thing.
Almost all French-language feature films in Canada are produced in Quebec. Francophones in minority situations make up 12.5% of the country's francophone population. The Official Languages Act stipulates that federal organizations must take positive action to be equitable toward francophones in minority situations.
The issue of funding a feature film project is often what prevents it from being made. Telefilm Canada, which recently had it's budget cut by 10%, provides up to 30% to 35% of funding to feature film projects. The rest of the funding comes from federal tax credits and provincial programs, as well as distributors or other broadcasters. Otherwise, producers must be clever to find sources of funding to cover the budget and produce the film.
Provincial funding is the main problem faced by francophones in minority situations who want to produce feature films. Quebec invests $25 million a year in cinema. Manitoba is the other Canadian province that provides enough assistance to cinema to make producing projects possible. However, there is no equivalent assistance for francophones in minority situations in the rest of Canada.
The various provincial organizations that help television production in particular do not have specific programs for feature films, and the current conditions do not indicate that the situation of producers in minority situations will improve in the coming years.
The APFC believes that it is essential to support the development and production of feature films in minority situations. Sections 41 and 42 of the Official Languages Act indicate that federal institutions have a duty to ensure that positive measures are taken to enhance the vitality of French linguistic minorities in respecting jurisdictions like the feature film industry. APFC has the following possible solutions.
We think the government should put in place a special assistance program for screenwriters in minority situations. A small amount would be enough to develop three or four projects professionally. It is also essential to create a special envelope to provide an additional incentive for production projects. An extra incentive in the financial structure to highlight the importance of producing feature films in official language minority communities is necessary to make up for the lack of provincial funding. This type of measure would strongly encourage producers to get involved in producing feature-length films. It would surely have a snowball effect with time, and the number of films made would proliferate.
For the last 10 years, the Canada media fund has set aside a special envelope entirely for producers in minority situations. It has led to the growth of the television industry for francophones outside Quebec. Initiatives like this enable our talent to stay where they live and develop projects in their respective regions.
Through the Canada media fund, we are now producing dramatic series, as well as variety shows, documentaries and programs for young people. These are the same people who often end up on set with seasoned television series performers. They hone their skills and eventually make feature-length films. It is also the same scriptwriters from the regions who have feature-length film projects in their back pocket.
Let's imagine for a moment that there were a way that would enable us to make feature films in French outside Quebec. It would be a marvellous way to see to the future of films conceived and made in the regions that would show the richness of Canadian heritage through the stories and cultural diversity of the people and the landscapes. It is very easy to believe that such a possibility exists and that the federal government's good will could make it possible for such incentives and programs to be created, be it at Telefilm Canada or the Official Languages Secretariat of the Department of Canadian Heritage.
The APFC believes that the programs that govern Canadian feature film financing must develop and provide equitable support to francophones involved in production in minority communities and contribute to the industry's development, as well as the promotion of Canadian culture. An acceptable assistance program would support one or two films a year, worth $500,000 for production and $200,000 for writing. We think that is quite modest to facilitate the production of a few feature-length films and the promotion of this industry for francophones in minority situations. A well designed program would not require much in the way of administration fees.
If the funding that the federal government provided to Telefilm Canada before the 10% cut was restored and was subject to an obligation of putting in place a program like this, it would be a very good policy initiative that would contribute to the promotion of the Canadian feature film industry.
The APFC is sure that the committee will take into consideration these recommendations and obligations under the Official Languages Act of Canada. It also believes that the committee will see to the adoption of conditions that will help ensure the development of the feature film industry. It will eventually allow our members to create, produce and distribute independent francophone feature-length films that will give a voice to francophone communities in minority situations.
Thank you, ladies and gentlemen and Mr. Chair.
I would be pleased to answer any questions.
:
Good afternoon. I'd like to thank the chair and the committee for inviting me to speak with you today.
My name is Michelle Grady, and I have been fortunate enough to be involved in the Canadian feature film industry for over 20 years. For the past seven years I have been head of film for MPC, the Moving Picture Company. MPC has been a global leader in visual effects for over 25 years. The company started in London, England, was purchased by Technicolor in 2004, and we opened up our first Canadian operation in 2007.
The subject of this committee study is a review of the Canadian feature film industry. One of the parameters of your review outlined in the invitation was to explore ways to promote the value of the industry, including the quality production services offered in Canada. The invitation also noted that you'd be interested in hearing about changes that have taken place since the last study on the feature film industry in 2006.
In terms of production services, there's been arguably no greater change in that time than in the introduction and growth of the feature film visual effects industry in Canada. Prior to that time there had been a small industry focused on Canadian television and feature films, but what has developed is an internationally recognized and award-winning hub for large-scale, blockbuster, Hollywood feature film visual effects. In fact, Vancouver has become a top two hub in the world for this work, and Montreal is on its heels.
If we agree that from a commercial perspective a large part of the Canadian film industry is the services it provides to the Hollywood movie business, then we now need to acknowledge the important place of feature film visual effects in that Canadian production services category.
What are visual effects? In simple terms, digital visual effects are the various processes by which imagery is created or manipulated outside the context of live-action shoot. Visual effects involve the integration of live-action footage and computer-generated imagery to create shots that look realistic but would be dangerous, costly, or simply impossible to capture on film.
As a quick example, suppose this dialogue we're having now is part of a sci-fi movie. Aliens invade the room that I'm in. Aliens disembark their ship, take me onto their ship, and leave. We would film me with a little bit of dialogue. As soon as the aliens come in, that entire scene is digital; it's created on the computer. I would be created in the computer, right from all the follicles in my hair, to my jacket, to the room. The rest of that scene is entirely digital, done within the computer.
Here are a few compelling statistics for you in terms of the importance of VFX. Every one of the 50 highest grossing films of all time heavily employed visual effects. More movie budget dollars are being allocated to visual effects, which now garner 30% to 35% of production spending for the top 50 movies, compared to about 25% four years ago. VFX is a high employment industry; it takes an army. A 2013 study tracking the growth of visual effects within top-grossing films noted that on 25 of the recent VFX-focused films, VFX jobs accounted for 45% of the jobs on the film.
As we can see, VFX is a growing sector, but taking this a little bit closer to home, of the top nine companies in the world servicing this niche market, eight have set up significant operations in Canada. I'll list them because you may not be aware of the names: MPC, ILM, Digital Domain, Sony Pictures Imageworks, Double Negative, Framestore, Method Studios, and Scanline.
When we opened up MPC Vancouver in 2007, we were 50 or so people; today we're 600. We opened up in Montreal in 2013 and we're 550 people there today. We can take that growth curve and to varying degrees map it onto the 15 or so companies that have either been homegrown or are Canadian locations of international brands. On a creative level, we're delivering some of the best work in the world. Since opening in Canada, MPC has been nominated for several Academy Awards, and we've won one.
Why is the growth of VFX important? Our film industry is transitioning, like many, to a largely digital workflow. In so doing, new types of jobs are being created; new companies are forming, and in general, new opportunities are developing. In that context we have established a globally recognized centre of excellence within Canada. The types of jobs being created are highly skilled, highly paid, and in high demand. The average salary in my company is 48% higher than the Canadian average salary. Our average age is 29 years old, and we have many opportunities for employees at all levels of the experience spectrum.
Given the growth of our industry, demand for talent by far outstrips the supply of talent. As a result, we are developing creative ways of growing the workforce, including taking on intensive and expensive training programs. In both MPC Vancouver and Montreal, for example, we've developed an academy where we hire three rounds of 25 new grads per year, and provide them three months of paid additional training and a 12-month employment contract. These brand new artists who have just graduated have the opportunity to work on the biggest, hardest, most successful movies coming out of Hollywood today, such projects as Batman v Superman, Terminator 4, The Fast and the Furious franchise, and the list goes on.
How can the government help promote the value of the industry? The provincial and federal governments have been essential partners to industry in the success story of Canadian feature film, and specifically in the development of the feature film VFX sector. To continue to support this success story, government can ensure we have supportive policies in the crucial areas of tax credit, immigration, and education.
The VFX work we're talking about is competed for fiercely on an international scale. The work does not have to come to Canada. It can go anywhere at the push of a button. This has led to many jurisdictions offering new and improved tax credits, but one of the towering strengths of any film tax credit system, in my opinion, is consistency and predictability. A federal film tax credit policy and practice that supports the themes of consistency and predictability is a great support.
The international competitive nature of this sector also has implications for our workforce. Talent moves around, and we need to have quick and seamless access to it if we are to compete. This does not mean the industry is not committed to the development of Canadian talent; it is. However, given the nature of the industry and its rapid growth in Canada, access to foreign talent is a competitive necessity. As a result, immigration of highly skilled talent to bring experience and mentorship to Canadians is absolutely critical. Immigration policy and practice that strengthens our ability to offer jobs and offer work permits quickly and consistently is a great advantage.
As we try to increase the numbers of Canadian youth who are ready to enter our growing industry, having schools that are generating graduates who are properly trained for the work of today is crucial. In addition, helping employers with the financial burden of internal training to upscale new graduates would encourage more employers to develop internal programs like the one we've developed at MPC.
In conclusion, what I'm attempting to demonstrate is that feature film VFX is arguably the biggest advancement the Canadian feature film service sector has made in recent years in terms of expanding the business model, and we've developed this at a time when VFX in feature films has been growing in importance in the film industry as a whole. With government as a partner, we've built a centre of excellence within Canada that is competing and winning on a global scale. We create highly desirable jobs for the present and into the future.
Thank you again for the opportunity to speak, and I'm open to questions.
:
You're quite right, and those who have told the story of how series have become a dominant storytelling form in the screen industries are bearing out all our experiences. Many more people watch and enjoy series and feel that television series are as good an experience for the viewer as a feature film.
That's reflected also in how our members work. We work a great deal in television series, and by television series I mean serialized entertainment on all platforms, and many of our members work in feature film.
I would draw one key distinction, which I think is of interest to this committee in one way, and that is one of our most distinguished members is Clement Virgo, who is the writer, director, and producer of The Book of Negroes, which started as a feature film project and became a miniseries, as did Orphan Black by the way, a well-known Canadian series.
Clement draws the distinction between his work as a filmmaker on the one hand and on the other hand as a hard-hat director, as he calls it. By a hard-hat director he means the way he spends his time when he's offering his services as a gun-for-hire director on any number of projects around the continent.
He has directed The Wire, a famous HBO series. He is very active in Canadian episodic, but he does draw a distinction between that work and the work he does as a feature filmmaker primarily, but also as a feature filmmaker working in formats like the miniseries, for instance, The Book of Negroes, or for example, a series that he may have conceived himself, written, or put together with fellow writers.
In the end it goes to authorship. What feature film has tended to do in our low-budget environment, an environment in Canada where we don't have a lot of money, is it has allowed individuals like me to be both the writers and directors of a single work and therefore the authors of that work.
A series tends to take me and put me in just a little part of it. I'll direct one or two episodes, and I'm certainly not the writer of that series. It's using my skills and my craft, but it may not really be drawing on me as the total progenitor of that project.
I think what's great and worth sustaining in the focus on feature film is that this 90- to 120-minute thing is likely to be a very authored thing in Canada and in some sense have its own voice and be its only story, a story that can go to festivals and go into cinemas and onto television around the world, with a kind of specificity that may be more representative of the story I want to tell than the larger format series.
In a sense, it's simply an instrumental difference between the two functions. That is what I meant when I said that feature film employs me more totally as an artist than series most often, but it's not exclusively the case.
In terms of tax credit as a first line, in the service sector the most difficult thing for our clients is uncertainty, if they feel that tax credits in the jurisdiction are not solid or are wavering. They're planning their budgets so far ahead that seeing this jurisdiction as consistent and easy to use is a huge draw. It doesn't take their eyes off of us, as a start.
With regard to the tax credit itself, visual effects for feature film and television does not exist anywhere in the world in any form without a reasonable tax credit incentive. It's the competitive environment that we work in.
When it comes to immigration, we're growing quickly in Canada. As I said, it's been over the last four years that we've become one of the top two hubs in the world for this.
Generally the work is growing, but we're attracting that work from other sectors. There's talent out there who have been working at this high level for years. We don't have the volume of artists in Canada yet, and we don't have enough artists who have worked at this peak performance level. We use immigration to bring in the numbers, but also in terms of bringing in experience.
:
Currently, broadcasters have in the overall requirements with regard to the Canadian programming that they license, the 30% number. Within that 30%, a portion is targeted to programs of national interest, in other words, programs that are high risk. Dramatic series, feature documentaries, feature films are examples.
The 5% is a subset of the 30%. Of the 30% in the overall that they need to spend on Canadian programming, they need to spend 5%, so the other 25% they can spend on Canadian content as they see fit. The 5% is targeted to these high-profile projects.
Our contention is that feature films and feature docs are within the category of 5%, but in fact, when we look at the numbers, there is not much money actually being spent to license them. Our suggestion, not to want to rob Peter to pay Paul, is that broadcasters be encouraged to continue spending money where they are now on dramatic series, for example, and that the obligation within the 30% be increased by at least 1% and that 1% be targeted at feature films, so that we arrive at actual spending on feature film licensing to help.
The theme here is to have a more integrated system where we move away from a silo where feature film exists only in theatrical experience to one where it's integrated both for online services and broadcasts. This is a way of integrating broadcasters into the financing and licensing of features.
I hope that I've answered the question.
Thank you very much for the opportunity to appear today. I am the director of content for Telus. I am responsible for managing Telus’ community television commitments in British Columbia and Alberta. With me today, as you've met, is Ann Mainville-Neeson. She's our vice-president of broadcasting policy and regulatory affairs.
I am very excited to share with you details about a funding model we have created in support of the creative community in the west. In a manner that is quite unique among community programming services, Telus Optik Local’s funding model engages viewers in the funding decision, which in turn ensures that there is an audience ready and waiting to watch the programming once it is has been created and made available.
Telus operates broadcast distribution undertakings in B.C., Alberta, and Quebec, and as such we have committed to supporting the creation of local content. One of the ways Telus is allocating this funding is through our community programming funding program called Storyhive. Storyhive is a social platform that empowers audiences to move from being passive viewers to becoming active catalysts in creating, building, and supporting content creators in our communities. Storyhive is analogous to crowdfunding platforms such as Indiegogo or Kickstarter, except that instead of asking the community for money, content creators ask for votes to show community support for the content they want and they get funded and produced.
The Kickstarter-inspired model allows all content creators in British Columbia and Alberta to submit their story ideas, and then the public gets a chance to vote on the project that they feel should receive funding and go into production. The success of Storyhive is that communities get involved in the projects at their ideation stage, which results in viewership of the programming at the final stage of presentation on the community programming service.
Moreover, the Storyhive platform facilitates and encourages collaboration between the various components of the creative community in British Columbia and Alberta. An exciting component of the platform includes a creators directory, where directors, writers, producers, composers, social media specialists, and people with all kinds of backgrounds can connect. It's basically a mini LinkedIn for the creative communities of B.C. and Alberta. Telus also provides successful applicants with comprehensive training to allow them to create the best possible project out of their idea.
As of today, we have funded over 59 projects through Storyhive and more than 1,800 creators have been involved. I personally have met all of the 59 producers of these projects and I can honestly say these grants and the experience in audience engagement are making a difference. Our goal is to make Storyhive one of the most popular and credible funding sources for community content creators and emerging filmmakers in British Columbia and Alberta. In this way, Telus is supporting the creation of community programming that is valuable and relevant to today’s audiences.
We believe that there has never been a more exciting time for Canadian storytellers. Storyhive is a new and innovative way to reach audiences and create engaged communities by involving them in the decision-making. We’re not just creating content for the sake of meeting our regulatory obligations; we are creating meaningful content that Canadians want to watch. With this very open platform, anyone can apply for funding and get the help they need to bring their ideas to the screen. Storyhive is bringing a powerful force of creatives from B.C. and Alberta entering the market. So please stay tuned; you'll see lots more people coming from this platform.
Thank you.
:
Mr. Chair, members of the committee, as I understand it, I am your last witness to appear in the context of this study. I very much appreciate the time that you are giving us today.
My name is André Provencher and today I am honoured to represent Quebecor Content and TVA Films, which is our business unit most specifically involved in feature film distribution and in audiovisual content for television markets, DVDs and digital platforms such as on-demand video and on-demand video subscription services.
Throughout its history, Quebecor has shown deep attachment to and unfailing, tangible support for Quebec francophone cinema. The project we call “Éléphant : mémoire du cinéma québécois”, launched in 2008 at the initiative of its principal share holder, is probably the most substantial illustration of that attachment and support.
To date, Quebecor has invested more than $6 million to restore 200 films from Quebec's cinema repertoire and has made them available to a wider public on a number of easily accessible platforms. The success and expansion of this philanthropic project are such that they now go beyond our borders, extending as far as the Cannes festival. Actually, in a few weeks, a few days, on Éléphant's initiative, the prestigious international festival will, for a second year, screen a classic from Quebec's cinema repertoire, Michel Brault's film Les Ordres.
That shows the extent to which Quebecor is committed to Canadian cinema, particularly French-language cinema. In that spirit, we are delighted with the study you are conducting on the Canadian feature film industry and we congratulate you on it. We are also grateful for this invitation to present our point of view to, and have discussions with, the members of the committee.
It must be said that the Canadian feature film industry increasingly has to deal with significant issues. A number of them arise as a result of the diversification of distribution platforms, especially digital ones. The multiplicity of choices open to consumers brings with it an evolution in behaviour that requires each of the players to redefine their strategic approaches and their particular position in the value chain. In that sense, we feel that it is necessary that any examination of the Canadian feature film industry should not only include the impact caused by the digital age but should also address the inertia that stands in the way of a genuine and worthwhile transformation of Canadian cinema. René Bonnell, the author of a particularly thorough examination of French cinema that was conducted last year, expressed the hope that we will avoid proposing changes while nothing really changes at all.
Indeed, adapting to current and expected challenges requires the Canadian feature film industry to question the foundations and the mechanisms that govern it. But we do not believe that new, more restrictive rules for Canadian distributors, or even adding new public funding without a new balancing of the business risk, can be among the solutions to be considered.
Historically, the Canadian feature film industry has allowed creators, filmmakers, artists and craftspeople to reflect our country's culture and values by building a rich, diversified and unique repertoire. This fundamental contribution has been largely built thanks to the policies and the funding that have been put in place over time by federal and provincial governments. We have certainly obtained a number of benefits from this, including a lot of filmmaking and an industry that generates indispensable economic results.
This must all now be consolidated and built upon in order to take advantage of the current digital environment. To that end, we have identified four changes or structural adjustments for your consideration, under the general heading of bringing cinema and the Canadian public closer and more strongly together. In other words, we want the starting point for any transformation of the industry to be with consumers.
The first change deals with the financial circumstances of the companies and their business risks. It seems to us that the time has come to review the distribution of the risk among the producers, who have to take very few risks, and the distributors, who are always financially exposed. We therefore congratulate Telefilm Canada for its recent initiative to review the weighting given to financial and qualitative factors in their analysis of the performance of feature films. In fact, we would be in favour of a weighting that would make financial criteria clearly predominant. That would allow the true extent of the financial risks undertaken by companies to be considered and, at the same time, create more focused incentives to seek private financing.
The second change deals with the selection of the feature films to produce and finance. The current process is dominated by government agencies. In recent years, those agencies have given disproportionate importance to art films to the detriment of films with more public appeal. We must become more concerned with popular cinema that will generate self-sustaining revenue that is essential for the survival of a number of aspects of the industry. From that perspective, the voices of distributers, promoters and theatre owners must be more clearly heard.
The success of feature films depends on all links in the value chain being involved in advance. Eventually, the method of selection must be “debureaucratized” and must be built on the envelope system similar to the one that contributes to the current success of the Canada Media Fund. Under that system, the market, not the bureaucracy, decides the programs to produce.
The third change involves distribution and tackles the particular situation of the francophone market. In 2012, our subsidiary, TVA Films, was forced to give up its theatre distribution activities because of the negative profitability and the excessive level of concentration in the hands of a virtual monopoly. Beyond the need to introduce and maintain more dynamic competition in the francophone market, we are of the opinion that the requirement for theatre showings should be progressively eliminated so that audiences can be reached wherever they are to be found.
In the United States, Netflix and YouTube specifically have announced that they will be producing films to be shown first on their own platforms. The marketing and distribution plan for a feature film must no longer be imprisoned in a “one size fits all” formula.
In fact, those plans must be tailored to more effective and profitable ways to promote the shows. In some circumstances, for example, projection simultaneously in theatres and on digital platforms would make it more possible to reach audiences in places far removed from large centres. Innovation and experimentation are values that are becoming increasingly indispensable in these areas.
The last change involves international co-production and exports. We can be proud that Canada has already taken concrete measures to encourage international exchanges, especially by means of co-production treaties. There are effective measures that can be made flexible in order to avoid undesirable effects like cost inflation. Our industry, our companies, should also be encouraged to seek out strategic and financial partnerships with their foreign counterparts, no longer in a piecemeal way, but more globally.
In conclusion, the Canadian feature film industry is facing major challenges that cannot be solved by minor changes. We have to review each of the conditions of development and make sure that they stimulate and empower all those involved so that Canadians and our entire film industry can reap the benefits.
Thank you
My thanks to all three of you for joining us today. You are our final witnesses on this topic. It is fascinating to me that, in both cases, you talked a lot about television although our study is on the film industry. I suppose that there is nothing surprising in that, because of the fact that television is clearly the broadcasting medium that is in second place in terms of its popularity with consumers in Quebec and Canada.
Mr. Provencher, you clearly have a wealth of experience. I remember running into you back in the day when you were at TVA. You oversaw the implementation of business models on a number of occasions. In fact, your four recommendations are still largely based on the business side of production, and on the financial dimension.
How do you see the future of television? The financial difficulties of all mainstream television stations have been in the news recently. As I often like to recall, when we were elected in 2011, few of us had iPads. We all have one now.
How do you see the future of our cultural content?