One of the biggest hurdles to film production in Canada, and likely any other jurisdiction, is the ability to acquire sufficient funding to complete a production. Sometimes producers have an established reputation and can easily obtain private financing. Usually, however, these opportunities are restricted to big blockbuster films. For smaller films, with limited access to cash, there are a number of government agencies that provide different types of funding to burgeoning Canadian producers.
In Canada, public financing now accounts for 51% of total financing of local feature films. According to “Profile 2006: An Economic Report on the Canadian Film and Television Production Industry”, 30% of financing for a film comes from public funding agencies such as Canada Feature Film Fund, Canadian Television Fund (Equity Investment Program), Telefilm Canada and various government departments and agencies. The remainder of the funding is provided indirectly through federal tax credits at 7% and provincial tax credits at 14%. During the same period, private financing represented only 12% of Canadian feature film financing.
Considering the heavy reliance on public funding, it is not surprising that industry supporters spend a lot of effort lobbying the government to maintain, if not increase, the amount of available funding for productions. However, both the federal and provincial government argue that it is challenging to find support for all these programs. Film tax credits offered by both governments are often the most highly criticized because the government argues that the amount spent over the course of a year is unpredictable. In fact, in the 2004/2005, the federal government spent $19 million on tax credit claims. Provincial governments spent $35 million. Both figures exceeded the amount budgeted by the government. On the other hand, direct funding programs like Telefilm or Canada Feature Film Fund are provided with a specific budget to be allocated based on strict eligibility criteria and no flexibility is provided for distributions over the designated budget. For this reason, the government finds this alternative more attractive. However, the argument against converting all funding into this formula is that the criteria are overly restrictive and subject to the discretion of those in power in these departments and agencies. It is argued that many excellent feature films would not be made because one individual or the department may have biases against a certain genre, plot, or producer.
There is no simple solution to this problem. For this reason, both programs continue to exist in order to allow all productions equal opportunity of obtaining the necessary funding. Despite the fact that many provinces, including British Columbia and Ontario, have attempted to phase out the use of tax credits, it is unlikely they will be successful without great resistance unless the film financing system is completely overhauled. Without the tax credit system, what remains is a completely discretionary funding program that may see the cultural landscape of Canada dictated by a few. This does not seem like the best result for Canada.