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While the Toronto international film festival has become one of the most important for the cinematographic industry and after that the international film festivals have honoured the canadian cinema notably with The Dismantlement of Sébastien Pilote selected for Cannes's Critic's week and Tom at the farm of Xavier Dolan awarded in Venice, it is interesting to focus on the canadian cinematographic industry itself.

 

Indeed the country has also become a key player in movie industry, partly because of its  business relationships with the US but also through its own production. Moreover, the Canada can be envisaged as a possible partner in a view of a cinematographic coproduction : during the past few years the amount of  canadian coproductions' activity reached  an average per year  of 500 millions canadian dollars (a little more than 350 M euros).

 

This interest is well understood by the cinematographic industry : on the margin of the Quebecer cinema's week in Paris are held french-speaking coproduction's meetings. This event is organized by the Society for the development of the cultural enterprises (SODEC) for  10 years now and encounters a great success.

Mesrine's saga of Jean-Claude Richet, Hidden Diaries of Julie Lopes-Curval , Jappeloup of Christian Duguet, Cafe de Flore of Jean-Marc Vallée... facts are here : french-canadian collaboration in the movie industry is productive.

 

France is even one of the principal partner of the Canada, with an average of 12 coproductions per year. This is explained notably  by shootings in collaboration with Quebecer coproducers, with who the relations are eased thanks to common language and culture but also by a favorable framing.

 

We will see that the french-canadian relationship rests on firm bases (I)but that the Canadian provisions even if consequent remains restrictive (II).

 

 

Old and abundant French-canadian relationships

 

From the beginning to the end of the 80s, France and Canada have established some provisions in order to favor the collaboration between the two countries. Therefore it exist a coproduction agreement and a  coproduction micro-treaty on which we will linger. Besides, also exists a provision in favour of the televisual sector and another one for animation movies.

 

French-Canadian coproduction agreement

Since 1983 the reaching of a coproduction agreement between France and Canada allows  the  producers working together to establish  official coproductions and thus to obtain the benefit of   film funding in each country.

This agreement is composed in a classic way and aim to favour the collaboration between the two countries.

It is therefore understood  that  the respective contributions of the co-producers of both countries may vary from 20 to 80% by cinematographic work.

Moreover the text predicts that the collaboration must be real and must not fall under the category of financial coproduction : "The minority co-producer's input must include technical and artistic contribution. In principle, the minority co-producer's contribution  in creative staff, technicians and actors must be proportional to its investment "

Furthermore, the shootings in studio as well as the post-production or the animations and special effects must imperatively be realized in one of the countries.

 

French-canadian coproduction micro-treaty

Beyond the French-canadian coproduction agreement a device was introduced in order to favor at most the collaboration between the two countries. It is why since 1983 also exists a micro-treaty between them. This bilateral fund applies when France and Canada jointly agree to support some projects who present a common interests for both countries.

It is agreed that priority will be given to the movies with an artistic interest for both countries, shot in French language and to non-european coproductions.

It is understood that the solicited amount can't exceed  20% of the coproduction share in the respective country and that the granted amount must be equal to the percentage of its contribution in the coproduction.

Again, it is essential that a balance of contributions be made​​: collaboration must be effective

In terms of figure : the annual fund allocated by France on the behalf of this treaty is of 750 000 euros. In order to compare, the similar  treaty which exists between France and Germany disposes of a 3 millions euros fund. Nethertheless this fund is not to be considered as  insignificant, its contribution reaches an average of 80 000 euros per supported  project. As exemples,on the behalf of that treaty, CNC has supported Incendies of Denis Villeneuve (70 000 euros), Cafe de flore of Jean-Marc Vallée (100 000 euros) or the animation movie The day of the crows of  Jean-Christophe Dessaint (136 000 euros) 

On the Canadian side, telefilms Canada, Canadian equivalent of CNC, is in charge with this device and predicts an aid which can reach 210 000 for a majority coproduction or 150 000 for a minority coproduction.

 

It appears well through this development that everything is done to encourage French-Canadian collaboration. French producers should to work on this possibility when they consider a coproduction, especially as Canadian aid to movie  production can be substantial.

 

Substantial but constraining  Canadian supports

 

Canada disposes of several support fund, on federal and local levels. The main funds are managed by Telefilm Canada (federal), SODEC (local) and the Ontario Media Development Corporation (local). There are also many tax credit devices. We will here put aside the fund of the National film board of Canada which is very selective and not really suited  for international coproduction.

 

 Téléfilm canada

Telefilm Canada is a federal organism under the Department of Canadian Heritage specialized  in the promotion and development of the Canadian audiovisual industry.

It provides financial and strategic support to the Canadian film industry. That is especially  this organism who manages the fund for feature films. This fund has a substantial budget : 73 millions euros  for 2012, with an average contribution of € 2 million per film. The grant can be up to '€ 3 million for a co-production of Canadian majority, always within 49% of the total budget or of the coproduction share. It must me spent in the country or in the region if a tax credit is also claimed. It is understood that the spending obligation is proportional to the financial commitment of the canadian coproducer.

In order to benefit from this fund a movie must fulfil some pretty strict criteria : to be conform of a cultural test demands, to be shot in French or English language,  to have a canadian director and/or main actor and have a budget minimum of 250 000 CAD (about 176 000 euros)

So, it appears difficult to obtain this support for a movie who is not of canadian initiative and/or of canadian majority. And, in fact it is very rare: 47 coproduction supported in 2012 only 3 were in the minority. With regard to the French-canadian  collaborations this fund has recently supported the Canadian-french movie Inch'Allah of Anais Barbeau-Lavalette, Café de flore of Jean-Marc Vallée or the frenchier  Jean-Pierre Jeunet's last movie The young and prodigious TS Spivet.

 

Society for the development of the cultural enterprises (SODEC)

Quebec is a natural partner for a french-canadian coproduction,  as having the same language favor efficient exchanges.

Founded in 1975 the SODEC aims to “Promote and financially support the creation, production, distribution, dissemination and exploitation of quality films”. In this sense it is an intersting financial partner when we wish enter into a Quebecer coproduction. In 2012 the SODEC was granted with a 23 millions euros fund. This organism helps in average 27 coproduction per year. However we have to say that most of them are  of Canadian majority (average is 22 majority coproductions for 5 minority coproductions).

The SODEC's aid can be up to 265 000 euros for a minority coproduction and up to 1,15 millions euros for a canadian majority fiction. The aids' amounts are consequent and in 2012 the average amount was going from 190 000 euros to 850 000 euros for majority coproductions. It is understood that these aids must me spent in the region up to 75%.

 

In order to benefit from this fund it is necessary to fulfill the criteria of a cultural test and a Quebecer distributor is required   or failing that, 40% of the foreign financing has to be confirmed. It may be noted that, as at the federal level, the criteria put in place are strict and promote coproduction with a Quebecer majority.

Nethertheless the coproductions with Quebecer producers are pretty  diversified : in this way this fund has   supported films such as  Hors les murs of David Lambert (with Belgium), Le magasin des suicides of Patrice Leconte or even the two lasts Xavier Dolan's movies, Laurence Anyways and Tom at the farm, both coproduced with MK2 productions.

 

 

Ontario media development corporation

In the same way that the Quebec as the SODEc Ontario has an organism dedicted to cinema development : the Ontario media development corporation.  It disposes of a fund in favor of long-length features, even if its budget is considerably more restricted : an annual budget of approximately € 3 million is provided. In the case of international coproductions, the production companies can present an application representing 15% of the ontarian and canadian part of the budget. However, the financing granted to international coproductions will be limited to 70 000 euros if less than 50% of the shooting is planned in Ontario. This threshold can rise to 140 000 euros if at least 75% of the Canadian budget is to be spent for hiring Ontarian residents or for buying some ontarian goods or sevices.

 

Criteria involve that the project  fulfils the demands of a cultural test, has a budget higher that 770 000 euros and has a confirmed Canadian distributor. It is agreed that the expenses must be realized in the region proportionnally to the Canadian coproducer's share.

 

This  aid is very difficult to obtain, and not really suited for international coproductions. It contributes only to an average of 4 coproduction projects per year. Nonetheless we can remind that this fund has contributed to the financing of Foxfire of the French director Laurent Cantet.

 

Now we have described the main aids in favour of cinematographic coproduction in Canada, and before we broach the advantages of the different tax mechanisms, we have to evoke the available workforce and  infrastructrures in Canada.

Canada disposes of a large number of film studios and this can facilitate the shooting organization when it is planned to build some shooting sets. Shooting in Canada can become rather advantageous  because the  construction raw materials are rather cheap.

Besides, the  canadian technicians' minimum  salaries are less high than the predicted minimum wages in France. As an exemple, for a director of photography the minimum weekly wage fluctuates between 515 and 670 euros, depending on the movie budget, when in France it is fixed around 2000 euros, no matter the movie budget. We can state here that Canadian wages are fairly interesting for French producers.

 

Advantages and disadvantages of the Canadian tax system for movie production

In Canada it is possible to benefit from two kinds of tax credit : one for the production services the other for the production itself. These tax credits are not addable. The tax credit on services has a weaker rate, this is why we will put it aside in our argument.

Then we have to distinguish federal tax credit from the regipnal tax credits, they are addable.

 Many provinces predict their own tax credit on favor of movie production. Among them we can quote Ontario, Nova Scotia, British Columbia... all compatible with the federal tax credit. We will limit ourselves here taking the example of Quebec to observe the following facts:

 

- canadian devices are more flexible than the French mechanism ; all fiction film or animation eligible for the co-production agreement is also eligible for the benefit of the tax credit as long as the Canadian coproducer  justifies  of a  national diffuser or distributor.

- The rate of these tax credit is intersting, even more because they are addable : being 25 % for the federal tax credit and 32,5% to 65% for the Quebecer tax credit (French language, special effect...) while the French rate is only 20%.

- there is no maximum amount  for these tax credit

 

Indeed, the Canadian tax credit mechanism  seems to be very favorable for movie production.

It should be noted that we have  to minimize this assessment : indeed the eligible costs base is very narrow, it takes account only of the expenses made because of the workforce's hiring.

These very attractive rates are therefore moderated by a low eligible costs base.

It is also to be noted that the payment term of the canadian tax credits are long and generally happen when the shooting is over and at the end of the fiscal year. This system doesn't really permit to help in financing the movie. The benefit of the canadian tax credit is more on the long term than in an immediate funding. This can reduce its interest for the coproducers who are looking for immediate investments and  financing.

 

 We have observed that the French-canadian relationships are efficiently encouraged but it remains that they are restricted by the canadian aid's mechanisms. The Canadian aids are numerous but stay extremely constraining, the benefits of the tax credit are real but remain limited. Even the low wages are counterbalanced by the geographical distance. It thus appears that if a coproduction with Canada can be interesting it will be primarily based on  cultural, geographical or artistic interests.

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