Canadian film industry putting high hopes on low dollar, hoping to entice Hollywood projects

The Canadian dollar has hit a multi-year low against its U.S. counterpart — and while it's not great news for the economy, one industry is looking at the deflating dollar with glee. 

"A low Canadian dollar is definitely a strength. There isn't much downside to that. Just speaking for the industry, of course," said international vice-president of the International Alliance of Theatrical Stage Employees, Damien Petti. 

The Canadian dollar is sitting around 70 cents US right now and it could mean American production companies will want to take advantage of the high exchange rate by choosing to film their productions in Canada.

"The low dollar is one of the factors that drives decisions to shoot in this jurisdiction," said Petti.

He knows this because the low dollar has been an incentive before. The Canadian dollar hit an all-time low against the U.S. dollar on Jan 21, 2002, when it was worth 61.79 cents US. It was around this time that productions like Scooby Doo 2 chose Vancouver to shoot in.

"That was a very, very busy year for production, not just in Alberta, but nationally. 

"Canada tends to thrive when it has a cheap dollar, if you will. Many industries don't like that. We happen to be a servicing industry. So if it's affordable for investors to spend money here, and that's a big plus," said Petti.

In 2002, the film industry had problems — like the threat of online downloading — but the low dollar wasn't one of them. 

Michelle Wong remembers the boom that the low dollar brought in the early 2000s. Wong is the head of business affairs for Calgary film production company Seven24 Films. She also runs a TV and film business affairs and finance consulting firm, Beans and Rice. 

"When that happened, definitely we got a lot more American productions coming up into Canada taking advantage of the exchange rate," she recalled. 

"I'm absolutely expecting an increase when it comes to service production in Alberta that will rival what happened 20 years ago when the same thing happened."

Wong says it's a "quiet time," right now for the industry, and companies are mulling over which locations would work best to begin filming in the spring. But she's noticing some encouraging signals.

"We're already seeing the dollar making a shift and it does take time," said Wong. "Obviously, production companies around the world, they're always looking everywhere when it comes to places that they're going to go. The good thing about Canada is, of course, it's right next door to the U.S., we speak their language, our culture is very similar, and we're known as a hard-working country." 

Petti says the "magic number" for the Canadian dollar is 68 cents per $1 US. 

"If the dollar dips below 70 cents, that is a tipping point, he said. "We speak to producers who say that 68 cents is a magic number. If it were to go as low as 68, that would make enough of a difference that it would tip the scales on decisions being made on project shooting in Canada."

Canadian competition? 

Petti says competition is heating up in Canada and around the world, and while the low dollar could attract productions to the country, competition is growing between provinces. 

"What we're seeing in Canada is that numerous jurisdictions are upping their incentive game," he said.

Recently, B.C. announced it's boosting its tax incentive. The premier said the tax credit for international projects will be increased to 36 per cent from the previous 28 per cent. The tax credit for Canadian-content productions will be upped from 35 to 36 per cent. 

There's also a special bonus to attract blockbuster productions with budgets of $200 million or more.

In Alberta, the tax credit for international projects is at 22 per cent but it covers a wider array of production costs, according to the office of the minister of Arts, Culture and Status of Women.

A statement to CBC News pointed to Alberta's "low corporate tax rates, no provincial sales tax, trained production crews, pre- and post-production infrastructure, and the Alberta Made Production Grants and the Film and Television Tax Credit." 

Meanwhile, Quebec also elevated its credit from 20 to 25 per cent this year, while introducing a 65 per cent cap.

Season 1 of HBO's The Last of Us was filmed across Alberta, and it boosted the province's GDP as it filmed in over 180 locations, according to Travel Alberta. Season 2 headed to B.C. HBO hasn't confirmed a third season, as the release date for Season 2 has not been confirmed yet, but Wong says suspense is building around where the next season could film. She said Calgary made itself very flexible to its producers during Season 1.

"They got a lot of access from Calgary that maybe would not have happened in a larger centre in terms of shutting roads down. We actually had the (Fourth Avenue) flyover in Calgary shut down so they could use it and they could shoot with that," she said.

"But definitely there's competition all the way across the board from B.C. going into Ontario," she said.