‘Bring Hollywood Home’ Echoes All Way to Canada

Inside the concrete-slab walls of Stage 6 of the Lions Gate Studios is a Spanish-style building that looks like a small California home, down to its red tile roof and backyard barbecue pit.

The cozy abode with its neatly trimmed lawn looks as if it once housed a GI returning from World War II and his family, the kind of place that would easily blend into a neighborhood in San Gabriel, Canoga Park or any number of Southern California communities.

The house was recently the scene of a vicious fight sequence involving Hong Kong action star Jet Li in the feature film “Romeo Must Die,” which Warner Bros. will release next year.

It’s all fake, of course. Outside, it’s Vancouver, with the smell of nearby pine trees and specks of snow still lingering on western Canada’s mountain peaks. But, through a Panavision lens, who can tell?

And that’s the crux of the problem for thousands of rank-and-file Hollywood workers. They have marched, written letters and e-mailed politicians in a boisterous, well-organized summer campaign to press their view that Canada is unfairly poaching California’s movie and TV franchise.

That Vancouver is peeling off Hollywood productions is uncontested--though the magnitude of the defections remains in dispute. What is less clear is whether Hollywood’s workers can pin most of the blame on Canada or whether cost-cutting by Hollywood studios should get more of it.

Lured by a weak Canadian dollar and generous government tax breaks, producers have long filmed thin-profit shows, such as TV movies and miniseries, in Canada. Now more and more feature films and TV dramas are being shot there as well.

The result, Hollywood workers argue, is growing unemployment among experienced film and TV tradespeople, empty sound stages and a dire threat to one of the state’s most important industries. They’re calling on politicians to approve production tax breaks to help “bring Hollywood home.”

“I’m about to run out of money. I’m on fumes, and a large part of it is due to Canada,” said Stephen Katz. The Oscar-winning sound designer was laid off in February as an executive at an equipment rental company.

Although possessing only a fraction of the production facilities of Los Angeles, Vancouver is unquestionably a boom town when it comes to film and TV work.

From his office overlooking picturesque Burrard Inlet, British Columbia Film Commission chief Peter Mitchell uses a color-coded board that covers an entire wall to track the area’s frenetic shooting schedules. At Lions Gate, General Manager Peter Leitch says that nearly all of the work is being done by U.S. producers looking to save money.

The Vancouver Sun earlier this month reported that nine feature films, 11 TV movies and 14 TV series were filming in the Vancouver area, straining film crews there to the point where inexperienced workers had to be brought in.

American stars working in Vancouver, including Sharon Stone, Jeff Goldblum, Robin Williams and Tim Robbins, are regularly seen around town. Makeshift signs are taped to street lights and stop signs, pointing film and TV crews to locations, just as they do in Los Angeles.

At Bridge Studios in suburban Vancouver, a former factory where part of San Francisco’s Golden Gate Bridge was built, a pearl-white space rover sits idle in a parking spot, waiting to explore the Red Planet in Walt Disney’s big-budget “Mission to Mars,” which director Brian De Palma is shooting there.

Intense Cost Pressures

Exacerbating the runaway production controversy is the cooling off of Hollywood’s hyper-growth of the early 1990s, marked by soaring demand at home and abroad for U.S. movies and TV shows.

Entertainment employment in Los Angeles is often hard to track because the state does not count many in Hollywood who work much like independent contractors. Still, Los Angeles economist Jack Kyser estimates that Hollywood’s employment level peaked at 269,300 in February 1998, slipping to about 241,200 today. Although the numbers are substantially higher than five years ago, growth has clearly flattened.

At the same time, Hollywood studios are enjoying a record box-office run this year. But slim profit margins have exerted intense pressure on them to cut costs and trim the number of films they release.

Disney has slashed about $500 million from its annual film budget. It has released 20 movies in 1999, compared with 31 just three years ago and about 40 a year in the early ‘90s. TV productions have tightened as well, with companies airing more prime-time news programs, talk shows and even wrestling in lieu of more costly sitcoms and dramas.

Still, Hollywood is hardly the ghost town some workers in the industry portray it as. The accounting firm PricewaterhouseCoopers, reacting to some news reports claiming that numerous sound stages were sitting empty in Los Angeles because of runaway productions, found instead that 95% of the stages were booked in July.

Indeed, major studios say their lots are jammed, mostly with television work, as producers and stars opt to be closer to home and Hollywood’s creative infrastructure.

20th Century Fox Television says that of 22 prime-time network shows it is producing for the fall season, all but one are being shot in the Los Angeles area. The exception is a new science-fiction show, “Harsh Realm,” being shot in Vancouver.

Still, leaders of the “bring Hollywood home” campaign say they do not believe statistics that suggest activity is brisk, because it is contrary to their anecdotal experiences.

Jack DeGovia, leader of the Film and Television Action Committee, which has organized three protest rallies, says he believes the sound stage occupancy numbers are inflated because studios often reserve facilities for potential projects well ahead of time.

“It is extremely slow, and it has been that way for a year and a half,” said DeGovia, a production designer who worked on the just-released film “Bowfinger.”

This disagreement over statistics is complicating the debate over runaway production.

The Directors Guild of America and the Screen Actors Guild commissioned an independent study, released in June, showing that $2.8 billion worth of production left the U.S. last year to cut costs, $2.27 billion of which went to Canada. Overall, the study estimates, the total impact on the U.S. economy exceeded $10 billion.

Directors Guild of Canada President Allan King says those figures are exaggerated and are fueling “hysteria” in Los Angeles over runaway production. He said PricewaterhouseCoopers officials in Canada calculated the value of productions there to be $573 million, not $2.27 billion, based on audited budgets the Canadian government receives from producers applying for tax credits.

“The amount of work they say is going on here doesn’t correspond with our experience,” King said.

Rajeev Dhawan, economic forecasting director at UCLA’s Anderson School of Business, said he believes the $10-billion-plus total-impact figure is also highly exaggerated. Assuming the $2.8-billion total for runaway productions is accurate, Dhawan said, he believes the overall economic impact would be closer to $5 billion.

Canadian government officials and film executives say Canada’s growing production activity merely reflects the globalization of the entertainment industry, with producers often getting money from partners in numerous countries to make films.

Former Canadian Prime Minister Kim Campbell, now consul-general in Los Angeles, said substantial work on films and TV shows, including most post-production chores such as editing, special effects, music and sound work, takes place in Los Angeles even when the shooting is done in Vancouver.

Campbell said she is bothered by Hollywood’s “entitlement” attitude toward production work, especially when Canada spends far more on U.S. films and TV shows than it gets back in U.S. production work.

For their part, producers say they are being squeezed by studios, which won’t give the green light to films unless their costs are cut to the bone. Producer Lynda Obst, whose work includes the movie “Sleepless in Seattle” and the TV miniseries “The Sixties,” complains that studios routinely require an economic assessment of what it would cost to shoot in Canada. Obst said she is currently resisting studio pressure to shoot a new low-budget film north of the border.

But as long as Canada’s dollar remains so weak, at about two-thirds the value of the greenback, Canada’s cost advantage will be hard to beat. That’s why Hollywood unions are lobbying hard for tax breaks similar to those offered by Canada.

Those efforts, however, appear to be stalling in Sacramento. Studios have been silent on the issue because, according to one executive, they fear that tax breaks could backfire politically for them if lawmakers ultimately perceive them as a windfall for producers and studios who would have shot in Los Angeles anyway.

Lisa Rawlins, vice president of studio and production affairs at Warner Bros., said that, if nothing else, the controversy sends a message to state officials that California’s grip on movie and TV production may not be as strong as they assumed.

“It’s important for the state to send a signal to this industry, telling us that they know we are a vital contributor to the economy,” Rawlins said. “How they choose to do that is up to the Legislature and the governor.”