There’s finally a trickle of good news for workers in Southern California’s film and television industry who are worried about runaway production.
In Sacramento, a committee has been formed by Assembly Speaker Fabian Núñez to look at the problem of runaway production — not just abroad, but to other parts of the United States Democratic Assemblyman Paul Krekorian has been appointed to preside over the Select Committee on Preservation of California’s Entertainment Industry, which also will look into issues of piracy and violations of intellectual property.
No one should get their hopes up yet that much, if anything, substantive will happen soon. Krekorian promises only that the panel will hold hearings to study the economic impact in terms of lost jobs and how the problem may be addressed.
The Legislature and Gov. Arnold Schwarzenegger have paid lip service to the idea of incentives to make California more competitive, but have basically punted. A widely backed bill was close to passage two years ago, but was allowed to expire at the end of the legislative session.
Incentives may be getting a bad name in Louisiana, which has been providing some of the most lavish breaks to attract business. It’s been reported in local papers that the Feds at the end of May opened a broad investigation into possible flagrant abuses of the tax-credit program, which can provide breaks of up to 40 percent on allowable production costs. Louisiana’s incentives have been a powerful magnet, and a resulting boom in production has been one of the few bright spots for the state’s hard-hit economy.
However, the most significant development in the runaway production equation has been the whopping appreciation of the Canadian dollar against the greenback. Since February, the Canadian dollar has gone from 84 cents to 95 cents versus the US dollar — a whopping 13 percent. Such gains have nearly wiped out the generous subsidies that a number of Canadian cities have offered in recent years.
The Canadian dollar has been the strongest currency in the world, while the US dollar continues to decline. Given the strength of Canada’s resource-rich economy, some experts are predicting that the two currencies will soon be equal in value. The rise has been so abrupt that the impact is just starting to be felt.
Word is that as new production budgets are being drawn up, some shoots that were headed to Canada are being detoured to places like New Mexico and Hungary.
Written by Jack Egan
