Post Script: Film industry in Atl. Canada

Here we go again. It seems funny to me that we can’t have discussion about this stuff without name calling. Just for the record I looked at the 2007 and 2006 I-O tables and the subsidy to GDP ratios were high so the argument that 2008 was an outlier doesn’t wash. We don’t have the data for 2009 because Statistics Canada’s I-O tables lag by several years.

As for folks who don’t like the Statistics Canada data or say it is ‘doctored’, I guess anything is possible but really if we can’t use Statistics Canada as a credible source of data – what can we use?

If I was a promoter of the film production sector in this region, I would want to do deeper research into these numbers rather than just sending a columnist nasty emails. Statistics Canada could be retained to do a broader output shock on the industry to trace where industry output is going by province and by industry sector. This data could be used to develop a broader understanding of the industry. A direct industry survey could be done to assess the extent of industry leakage – how much activity is leaving the province? Not a rah rah survey but an honest one. My point is that maybe some of the leakage could be curtailed and remain in the province.

In my view (I could be wrong), this industry eventually will need a far lower subsidy to GDP ratio in order to be sustainable. Instead of just crapping all over me why not spend some time trying to figure out how to have a sustainable industry long term?

Just my thoughts.

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6 Responses to Post Script: Film industry in Atl. Canada

  1. I don’t think the argument was sufficiently clear. I understand the essential point – that our investment in the film industry produced a net loss for the province. But it’s not clear what you mean when employing terms such as “negative GDP” – I am not sure it is a common understanding that government expenditures in order to support an industry are subtracted from the value of that industry when calculating GDP. Certainly this method of calculating GDP is new to me (of course, I am not an economist).

  2. Rupert Penjab says:

    David:
    How dare you take aim at the “sacred cow” of so many? No, not the “film industry”, but “the arts”.
    “The arts” is supposed to hold a special place in our economy, a place best not looked at too closely, if at all. Confusing? Confusing for me too.
    I find it confusing: that the same few names seem to crop up, time after time, as recipients of funding for artistic endeavors, almost like there is a big unseen lobby organization to benefit the few, and no matter how “arty” you might be, if you are not a “club member” you don’t get to play.
    To further add to the confusion: it seems when “the arts”, in whatever shape, of form, “the arts” is taking at this, or any moment, starts to look like it is going to break even/make money: it is no longer “the arts”, no longer good, or wholesome.
    Cynical? You bet.

  3. Paul says:

    I think you’re being disingenuous, David. You knew by throwing up those dry numbers the way you did would get a strong reaction. You have been writing the blog for too long to suggest otherwise. Now you talk down to people for the reaction you knew you would get.

    That’s funny to me.

  4. Chris Baker says:

    It is common for those who disagree with statistics to start questioning the methodology. But if the target of your criticism is Statistics Canada, I’m afraid you won’t get very far. Even though the Agency is bearing the burden of numerous attacks by the Harper Cabinet, it’s reputation as the World’s leading collector and provider of quality data remains undiminished. These guys wrote the book (many books, in fact) on data collection and data quality.

  5. mikel says:

    I don’t know about any emails, my point about statistics canada was that it is not specific enough. My point was that there are a few BIG corporations in resource extraction that use loopholes and get subsidies and so avoid income taxes. That forestry in general pays X taxes per subsidy is a different argument.

    Obviously we can’t comment on emails, but the comments were pretty lacklustre. There was a big post with confusing numbers that basically said “investment in film is a dead end”. MY point was that in order to build that industry, you don’t rely on cutting virtually the only support that it had.

    There really SHOULD be a post with the other year’s I/O so that there can be a judgement. At the very least it will be VERY interesting to compare it to 2010 when the credits were cut, and many productions said they were leaving the province.

    But to compare it to forestry again, the point in forestry was that although there were a few ‘big’ players who dodged taxes, they supported enough jobs and indirect investment that it made the practise worthwhile (depending who you talk to). So the point in the film industry is comparable, the data showed that indirect spending made the industry profitable, and at the very most the ‘subsidies’ ranked only about five million. And for that you have to figure out what final product came out of it. To make a comparison, although taxpayers are on the hook for Charles Leblanc’s welfare payments, I personally think that his blog-in entertainment value alone-is ‘worth’ the six thousand dollars of ‘subsidy’ that NBers send his way (and it also has the added value of putting a roof over his head).

    As for statistics canada data, that is ALWAYS highly variable depending of course on what you are looking at. Some published studies from statscan uses other organization’s data, and some they openly admit is restricted by numerous variables. My point though wasn’t to critique the data presented though, because I didn’t even understand most of it, and that the film industry lost more than it brought in wouldn’t surprise me at all. The fact there is ANY industry in the province surprises me.

  6. mikel says:

    OK, enough of the name calling and hypotheticals. Here is where the rubber meets the road.

    This is from Statscan catalogue number 87-010, the service bulletin for the film and video production industry. So lets do some analysis.

    In Nova Scotia its relatively easy,because the province has a crown corporation through which it funds film and video production.

    In 2010, Operating Expenses were 66.4 million, while revenues were 68.7 million. Now, the argument is that subsidies tip the scale. This is where Film Nova Scotia comes in. However, its TOTAL budget is 3 million, only 2 million goes to programming. Which basically makes it pretty much break even. That maybe excludes federal sources, but if you are building an industry, why lament the fact that Albertans are bankrolling your industry?

    In that industry, wages amount to 17.8 million. So the Nova Scotia government is spending $3 million to help bankroll an industry that generates 17.8 million in wages. I don’t know squat about ‘inputs’ and ‘outputs’, but the ONLY thing I can see that would make this industry unprofitable is because the FEDERAL government is putting money into it. And if so, again, what sense does it make to kill an industry just because the feds are putting money into it and making it ultimately not ‘cost effective’?

    And this is really weird, because NB and NS are TOTALLY different. In that same year NB had revenues of 13.3 (68.7 in NS) and expenses of 14 million (66.4 in NS), with wages of 2.9 million, which is practically non existent. So its true that in NB’s case the number is negative, although to be fair, Statscan admits that ‘non incorporated entities are not factored’, and we all know that NB tends to grow proprietorships rather than corporations at this level.

    So those figures are also from statscan, and seem to me to create quite a different picture. Its true, NB is still a ‘losing proposition’, but if you look at the BC, Ontario and NS examples, you need to have some kind of actual industry in order to make the books tip into the black.

    To be fair, in the three years counted in the service bulletin, on only two of those years do revenues exceed expenses. During 2008 the number even in NS is negative. However, that tends to vary. In Newfoundland one year had a 10% profit margin, and a 6% profit margin and the following year saw a -6% loss. Only Ontario and BC had profitable years EVERY year. However, again, we are talking about essentially KILLING an industry before it even gets off the ground in New Brunswick.

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