The NS Film Financing Debacle: The Cost of Cost Certainty
“Film Tax Credits: a tale of two jurisdictions” is the latest from Halifax journalist Stephen Kimber on the devastating 2015 cuts to the Nova Scotia film and television industry by the austerity-driven Liberal government of Stephen McNeil, wherein he compares the decision in April 2015 by the Liberals to do away with the Nova Scotia Film Tax Credit (along with Film and Creative Industries Nova Scotia, the government agency that administered the credit along with equity investment and development programs, which were also cut), with the recent decision of Pennsylvania to provide emergency funding to restore their credit on the grounds that is was an “essential service.”
An excerpt:
Premier Stephen McNeil, on other hand, eliminated Nova Scotia’s film tax credit in last spring’s budget. Its replacement — the Nova Scotia Film and Television Incentive Fund — has been an abysmal failure. The industry reports 82 per cent fewer film jobs in the last quarter of last year compared to 2014. And it predicts even worse to come.
McNeil’s response? In December, he shrugged the industry he decimated was in “a transition,” so “we’re moving on.”
Perhaps Nova Scotia’s economy is doing so well we don’t need a thriving film industry.
Nova Scotia has serious problems that require progressive, forward-thinking solutions. Cutting a program that had worked well for twenty years, and that led directly to the growth of a stable and prosperous industry that leveraged external investment and employed a skilled workforce, was the antithesis of the kind of public policy we need to move the Province forward… as so many other jurisdictions in Canada, the United States, and Europe have recognized. The mandarins at the Department of Finance, who have been pushing for the removal of the film funding system for years, can only see trees in the form of “cost certainty,” with the result that they miss the forest that is economic opportunity and growth. But no-one ever really expected that they would find a government so bereft of common sense that their narrow view of the creative economy would prevail, given that all previous provincial governments (Tory, NDP and Liberal) had not only resisted Finance’s efforts to curtail or do away with the film funding infrastructure, but actually enhanced it.
And then the Liberals and Stephen McNeil got elected – ironically after having been the only party to specifically commit to extending the existing film funding infrastructure past 2016.
Stephen McNeil is on the wrong side of history on this issue, and has been since he dismantled the film financing structure in Nova Scotia last April. Don’t take my word for it, although as a former civil servant once charged with administering the tax credit and film funding programs, I know the numbers a lot better than the Liberals do. Instead, you can look directly to McNeil himself, who told us just how important the film tax credit and the financing system in place in Nova Scotia was when he was campaigning in the last election:
The decision to cut the film tax credit, as well as FCINS and the equity investment and development loan programs, in April 2015 was bad policy-making at its worst, particularly given that it was made without consultation and without real, objective and transparent analysis. As Progressive Conservative Party leader Jamie Baillie correctly observed back in April 2015 in the House of Assembly, “We learned today that the government did no meaningful analysis about the value of the film industry before moving to wipe it out. In fact, it turns out that the last time a comprehensive review of the value of the film industry was done was in 2004. This is no way to run a government.” [see: Hansard, 15 April 2015]
Bad governance invariably has a negative impact on the Nova Scotian economy, and this has been the result with the decision to destroy the successful government film financing structure in Nova Scotia – not that Stephen McNeil, in his current austerity-driven incarnation, will ever admit it and reverse course. Instead, he’s just “moving on,” either unaware or uncaring as to the damage his mistaken policies have caused to a once thriving industry specifically, and by extension to the Nova Scotian economy in general. Meanwhile. more and more highly skilled and creative film industry professionals are moving on as well – to jurisdictions that respect and value their contribution to not only the economy, but to the commonweal of the entire province.
The true cost of the myopic vision of the “cost certainty” implemented by the Liberals and the Department of Finance?
The further impoverishment of all Nova Scotians, both culturally and economically.
Paul Andrew Kimball
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Dump “Lurch” Mac Neil.
Thanks for starting this blog Paul. Yes, there is so much more going on in the arts and culture scene than is ever reported in the traditional media. Bring it on!
Regarding this article, it seems that the NS finance department is only able to consider one side of the financial equation: costs. They know what costs they can cut, but don’t seem to have any idea about what revenues will be impacted. This was definitely the case with the changes in film, but also hitting other areas as well. We need more sophisticated data, thinking, and analysis from George McLellan and his team.
Hi Erika,
Glad you like the site.
As for the Finance team, the only way we’ll get new thinking is with a new team, one that understands how an economy works in the 21st century, and one that also understands their job is to serve all of the people and not just a select few.
Best,
Paul
Better yet Erica – I’d prefer to just get rid of George McLellan and his team AND McNeil & his team too! 😉
Amen!
I don’t like the term “tax credit”. It was an incentive and clearly a successful one. The analogy I used was from a Canadian Tire flyer I saw for a specific date, “Spend $200 at the store and receive a $50 coupon” This was the film incentive in a nutshell.
Of all the different sorts of economic development the government could do, the film industry pays off on many fronts. It brings money into the province which is spent quickly and broadly in the communities production worked out of. It supported a creative community. It had spin offs that impacted on tourism. It supported all or part of support industries and companies. Unlike the grants and investments the government has made in various successful and unsuccessful businesses, in the case of the film production, the money had to be spent by the companies before those companies qualified- like the Canadian analogy.
The finance department clearly had elements who have for years been campaigning against the industry and finally found a receptive government. They had been obfuscating and delaying the process taking years to pay out the credit. Just this fall, an MLA said that they were being told that the governement had already spent $25 million this year to date (2015). Absurd, I thought until I realized that that possible in that it could be cheques going out from projects dating back three or four years; costed to three or four budget years but reported to the MLA’s that this was $25 million for this year.
What surprises me is that the government has not purged a department that so clearly led them into this disastrous situation.