I Love Show Business and Business is Good!

It was a few short months ago when it looked like the film and TV business in Nova Scotia was going to roll up and die but hold on naysayers, business is booming!  Hi, just catching up after the Atlantic Film Festival which I did not attend (ed.  But some sweetheart memories roll through your head, I bet.)

For sure!  That's my editor Lunchmeat Harold. (ed. Howdy)

So in  April the two wonderkins of fiscal responsibility Stephen MacNeil (ed. Premier) and Diana Whalen (ed. Finance Minister) thought they could do a quick and easy fix of the budget by cutting the Nova Scotia Film and Television  Tax Credit.  Zing, press the delete button and save the taxpayers $24 Million dollars.

All the Liberal MLA's applauded at their wisdom.  However, they weren't expecting the backlash and organizational skills of the "elite" filmmakers.  Which they could have weathered, because it was for the greater good of the province.

But what they neglected to take into account was the wrath of the biggest company.  From his 3rd home in the "elite" section of London, England Michael Donovan (ed. DHX) made it know he wasn't happy.  His various companies over the years had grown over the years because of the helping hand of the tax credit.  And his company was about to get listed on the New York stock exchange.  Tinky-Winky even rang the stock exchange bell!  DHX was going to go from  being a company worth a few hundred million dollars to one that was worth over ONE BILLION DOLLARS!  But how could he go out and raise that kind of cash if the tax payers of Nova Scotia weren't going to chip in with their no-conditions, not-entitled-to-any-sort-of-return-on-investment, investment.  (ed. After all that is the Nova Scotia way!)

But they couldn't give to one company and not allow other companies the tax credit.  That wouldn't be fair.  Until someone in the group of Department of Finance/Government brainstormers (ed. - could be an employee, could be someone on a contract, will we ever know?)  came up with a solution.

DHX produces mostly animated TV shows.  These are different from "live action" TV and movies that everyone else made.  They decided DHX could qualify for a special *wink* *wink* "digital" tax credit which was already in place.  It was supposed to be for "interactive" new media projects but with a little trimming the square peg was made to fit in the round hole.  And it was exactly the same as the old tax credit.  And making a TV show with animated people is a much better industry than making a TV show with real people.  Somehow.  (ed.  Don't ask.  Oh look, no one did.)


Meanwhile live action TV and movie people were making such a fuss the government looked to shut them up with some lipstick on a pig.  They came up with a new "tax incentive" which was different, yet , the same but not quite as good as the old tax credit.  Plus it would be limited, somehow (ed. "the cap") but, not really, to $10M a year.  And you had to apply for it in advance and wait to see if you qualified for it and...well that was enough for "guest" productions to give the province a pass.  (ed.  maybe next year get your ducks in a row!)  And most other home-grown productions weren't going to happen as planned as the provincial funding agency had also been swept away so no equity.  (ed.  Wouldn't it be great to have a chunk of equity in DHX projects and not just, nothing).  

So while most of the film and TV business will die like a deformed pumpkin on a vine by the winter, Tinky-Winky is clanging away at his bell in a frenzy of $$$$$$$.  And that's good for business.  Allnovascotia reported today that profit if up 150% at DHX.  So, BAM!

(ed. Note:  The author owns 1000 shares of DHX stock.)

It was left to me by my father and in no way influences what I write here.

A few other notes:

 (1)  One of the only (ed. I think only) live action shows that DHX produces was out doing their "principal photography", (ed. You are going to run out of exclamation marks soon.) before July 1st so they would still qualify for the old, more beloved tax credit.  But apparently some in the Department of Finance are not amused by this little walk around the rules, principal photography is supposed to be the first day of regular production.  Sorry DoF guys and gals, it's just another phone call so let it go.

 (2) Some info is trickling in about Egg Films and apparently if they do shut down, people will be more forthcoming about their experiences working for the company.  Apparently it wasn't all unicorn kisses.

Sometimes You Gotta Break a Few Eggs

Anyone have any scoop on what's really happening at Egg Films.  Did they just give up, give in give out or what?  Seems odd to spend all that money on legal fees, fire 20 people and close down a successful business rather than pay into CPP, WC etc.