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Loonie's loss may be Hollywood's gain

Canadian executives hope a favorable exchange rate will help entice more U.S. film productions to come north.

October 28, 2008|Richard Verrier | Verrier is a Times staff writer.

When the Canadian dollar dropped to a three-year low last week, Judy Ranan wasted no time getting the message out to Hollywood.

"82 cents! 82 cents! 82 cents!" blared the e-mail she sent to 400 studio executives and industry professionals. "Just in case you aren't already aware, the Canadian dollar has dropped significantly in value against the U.S. dollar in the past several weeks."

Ordinarily, a falling currency would not be something to crow about. But as senior marketing director with the Toronto Ontario Film Office in Los Angeles, Ranan hopes the favorable exchange rate will help entice more Hollywood filmmakers north of the border.

Production of U.S. movies and TV shows has declined dramatically in Canada for several reasons, including rising competition from other U.S. states that now offer Canadian-style film incentives and tax credits.

Another factor was the soaring value of the Canadian dollar, known as the loonie, which last year reached parity with its U.S. cousin for the first time in 31 years as the country benefited from a boom in exports of oil, natural gas and gold. That made filming in Canada less of a bargain.

U.S. film and TV production has fallen off sharply across the country, especially in Toronto in Ontario province. The city is currently hosting just one U.S. production, the feature film "Boondock Saints II." This time last year, the city was hosting six U.S. feature films, including "The Incredible Hulk" and "The Love Guru."

"We've had a perfect storm over the past few years," said Karen Thorne-Stone, president and chief executive of Ontario Media Development Corp.

Amid the bleak climate, a delegation of union representatives from Toronto last week quietly visited producers in Los Angeles to promote filming in their hometown.

Filmmakers who shoot in Ontario can get up to 37% of their production costs covered through combined provincial and federal government rebates.

Delegation members declined to comment on their trip, perhaps for fear of offending colleagues in Hollywood who have been outspoken about the loss of jobs because of runaway production.

"It's been a terrible time," said Ken Ferguson, president of the new $60-million Filmport Studios in Toronto. The sprawling facility, which includes a 46,000-square-foot Mega-Stage, has been largely empty since it opened in August.

But he and other industry executives think the exchange rate will bring some relief.

"It will absolutely help," said Los Angeles entertainment lawyer Peter Dekom, an expert in the area of film incentives. "I've seen people who were looking at five locations in the U.S., and suddenly they're saying, 'We've made our choice. It's Canada.' "

The loonie has fallen against a rising U.S. greenback, as investors look for a haven amid a widening global recession. That, along with falling oil prices, has helped trigger a 20% decline in the loonie since early July.

But what's bad for the loonie is good for luring filmmakers.

"There's been a remarkable pickup in the number of calls we're getting," Ferguson said. "The timing couldn't have been better."

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richard.verrier@latimes.com

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