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Tax breaks for Canadian movies

Filmmaker Paul Donovan once compared the difficulty of making a movie in Canada to climbing Mount Everest without oxygen. Faced with an indifferent public, harsh critics, limited funds, and foreign-owned movie houses, filmmaking in Canada is, by necessity, a labour of love. Canadian gems like The Barbarian Invasions and Nobody Waved Goodbye have succeeded because of steadfast determination. CBC Archives explores the birth and growth of Canada's film industry.

Give me (tax) shelter!

In the 1970s, dealmakers and tax accountants try their hand at the movie business. Gone are the days of the 1960s auteur-director struggling to survive. Now, thanks to a generous government tax-shelter program, Canadian movies are being made at a fever pitch. Throughout this decade, a slew of lowbrow, American-style films will be produced but few will actually ever be seen by the Canadian public. This Fifth Estate documentary, explores use and abuse of the Canadian tax dollar in the revived film industry.

• In 1974, feature film production became eligible to receive the Capital Cost Allowance (CCA). Under this plan, Canadian filmmakers could deduct 100 per cent of their investment.
• While the CCA initiative was intended to boost the film industry, in fact it had the opposite effect. Some businessmen invested an initial sum of money with the agreement to re-invest a greater sum from the film's profits. As such, many of these investors actually hoped their films would never be released so they would never have to pay the final sum.

• Horror films, lowbrow comedies, and melodramas were the most common film fare produced during the tax shelter era. B-list American movie stars travelled north of the border to star in these campy films, like Running and Final Assignment as heard in this CBC Radio documentary.
• Between 1974 and 1978, the number of government-assisted Canadian productions grew from 3 to 37. But, in the early 1980s, the federal government significantly scaled back the tax breaks for film producers.

• Contrary to the bad filmmaking of the tax shelter years, Ivan Reitman and David Cronenberg are two successful filmmakers who emerged during the tax shelter era. Cronenberg produced a series of cult favourite horror movies including Shivers, Rabid, and Scanners and Reitman made the camp comedy Meatballs.

• Reitman and Cronenberg would go on to achieve critical and financial success but their early films were harshly criticized at the time of their release. Critic Robert Fulford called Shivers "the most repulsive movie I've ever seen." And, Reitman angrily defended Meatballs after he was harshly criticized in a CBC documentary. "They don't have to like me. All kinds of people don't and all kinds of people do. But there was a condescension towards me -- and my audience -- that really bugged me," he told Saturday Night.

• "I think they squandered a grand opportunity and it's largely the fault of producers who were shameless and greedy, people of dismal taste, who were more interested in making deals than films and who made a lot of money for themselves. And so Canadian films do not enjoy a larger reputation anywhere and it's a pity...a lot of damage has been done -- Mordecai Richler, Cinema Canada, May 1985.

• In 1984, the federal government introduced the National Film and Video Policy. Under the policy's umbrella, Telefilm Canada, previously known as the Canadian Film Development Corporation, instituted the 1986 Feature Film Fund. The fund aimed to foster and financially support high-quality, culturally rich Canadian films.

Film Credit: Meatballs, CFDC, Famous Players, Haliburton Films, Mount Royal Entertainment, Paramount Pictures. Running, CFDC, Guardian Trust Company, Universal Pictures.
Medium: Television
Program: The Fifth Estate
Broadcast Date: Dec. 4, 1979
Guest(s): Hilly Elkins, Harry Gulkin, Norman Jewison, Robert Lipman, Bill Marshall, Michael McCabe, Connie Tadros
Host: Alan Burke
Duration: 14:44
Film credits: Meatballs: CFDC, Famous Players, Haliburton Films, Mount Royal Entertainment, Paramount Pictures
Running: CFDC, Guardian Trust Company, Universal Pictures

Last updated: August 30, 2013

Page consulted on December 6, 2013

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