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The Honolulu Advertiser
Posted on: Saturday, June 1, 2002

Hollywood losing filmmakers to Canada

By Gary Gentile
Associated Press

LOS ANGELES — A new study shows that the production of theatrical films continues to leave the country at an alarming pace.

The amount of money spent to produce films in the United States dropped 17 percent from 1998 through 2001, while production in Canada grew by 144 percent, according to a study conducted by the Center for Entertainment Industry Data and Research. The research group receives support from Raleigh Studios, which has film facilities in Hollywood and Manhattan Beach.

The report found that Canada adopted federal subsidies to attract foreign filmmakers in 1998 that became fully effective in 1999 and 2000.

Canada has been very successful in luring television movie and commercial production, especially movies with budgets of around $10 million.

The new study, which included data from 2001, shows that Canada is having success attracting larger budget films as well.

About $750 million was spent to produce 29 films with budgets between $10.1 million and $50 million in Canada in 2001, the study shows. That compares with $309 million to produce 15 films in the same price range in 1998.

While production of films in the same range also increased in the United States during the same period, the U.S. share of that lucrative market fell.

The study showed that 78 percent of all films in that price range were shot in the U.S. in 1998, dropping to 66 percent in 2001. Canada's share, meanwhile, jumped from 22 to 34 percent.

The author of the study, Stephen Katz, said the numbers show how successful Canadian subsidies have been. Katz said he hopes the numbers help efforts under way in several U.S. states to enact similar subsides

The California Assembly this week passed a bill that would offer filmmakers wage-based tax credits for filming in the state. The bill now goes to the Senate for consideration.

While the bill is designed to keep jobs in the state, it comes at a price.

An analysis conducted by the state's Franchise Tax Board concluded that the credits could cost the state as much as $415 million in lost revenue during the life of the tax credits.

The analysis concluded the credits, which would take effect in July 2004, would cost the state $15 million the first year and $100 million per fiscal year through 2010.