Thursday, September 20, 2007

Whither Hollywood North?

The growing strength of the Canadian dollar, which briefly reached parity with the US dollar today and may soon stay at or surpass parity, may be good news for consumers. But its a major problem for export oriented industries, such as the motion picture and television industries.

The weakness of the Canadian dollar versus the US dollar prompted a huge growth in the filming of projects by American studios in Canada from the mid '80s onward. Not only did they gain the advantage of each US dollar going that much farther in Canada they had a access to a workforce that spoke English with an accent that could pass for American and filming locations that could be transformed into American settings with just a bit of prop work. But the rising Canadian dollar has chopped those advantages in recent years, and the industry is already seeing a slowing down of American projects. With the Canadian dollar reaching parity the fear is that existing projects won't be replaced by new ones.

It also has the potential to hurt production for the Canadian domestic market as well. American programs tend to generate the highest ratings in the Canadian market, and are cheaper to buy than a Canadian production. The strengthening Canadian dollar will exacerbate this problem, as American programs become even cheaper for Canadian networks to buy, and this is likely to strengthen the resistance by Canadian broadcasters to putting money into more Canadian made programming. It is also likely to hurt foreign sales of material originally made for the Canadian market.

Some connected with Hollywood have in recent years complained about Canadian productions taking work from them, often accusing Canadian jurisdictions of unfair subsidisation. But the hit Canadian production may take from the strong dollar may not benefit them as it might have in the past, as there are more American jurisdictions making their own efforts to attract productions.

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