Industry: They are wiping us out; thousands will leave. And they don’t care.
Government: We’re going broke; their tastes are too rich. And they’re exaggerating.
It’s tempting to caricature, and reduce to sound-bites, the rationale and impacts of the public policy decision contained in last week’s provincial budget on the Film Tax Credit (FTC).
This policy/tax measure defies over-simplification and was born and bred in a nuanced and shifting industry, financial and policy environment.
The long-standing position of the Department of Finance staff on the make-up of the FTC is well-known to both stakeholders and within the halls of government in Nova Scotia. Naturally, they rely on their training and experience to assess the “effectiveness” of various tax measures in an imperfect world of statistics, numbers and outputs, in an effort to meet demands to keep provincial taxes down and services intact.
Similarly, the industry has heralded its growth over the past few decades, turned its thoughts to continued success and maintained a watchful eye on its competitiveness. Naturally, they have sought the kinds of incentives, evolutions and updates that they believe helps Nova Scotia keep the proverbial credits rolling.
While you can measure taxes paid, revenues generated and associated impacts, you simply can’t reduce the contribution of artists, and the vibrancy of a culturally-rooted community to numbers alone.
This tension is at the root of the decision to significantly change the FTC in the 2015-16 budget.
Should the government – and by that, I mean the politicians who both make the decision and ultimately have to defend it – have approached this situation differently?
Should the industry, recognizing the budget challenges and with the Ivany and Broten reports in mind, have proactively sought-out government to modernize the FTC?
“Should-ing yourself” is always messy. And it is never a comfortable position from which to figure out a reasonable path forward; it inherently dwells on the past.
How realistic is a wholesale reversal of this change? The odds are longer than a Nova Scotia winter.
For the government, then, what choice but to defend the turf you’ve staked out? And for the industry, what choice but to fight for the status quo, and your livelihood?
Fighting is inevitably a temporary way to ride the cortisol train to the sinking realization that, when the fight finally ends, everybody ended up a loser.
If nothing changes, a hollow victory to both sides is all but assured. The government achieves budget reductions, and the industry fights the good fight but loses the vast majority of everything they have worked to build.
The government will test the threats and forecasts of the companies, and thousands of now-disillusioned professionals. The industry will test the resolve of the government to push through a measure that they maintain is a necessary element of a balanced economy, and budget.
But this weekend proves that from underneath even a harsh Nova Scotia Winter, Spring can emerge.
One thing I have learned, both in government and in life, is that it’s never too late to do the right thing.
And it’s never out of fashion to acknowledge and reinforce people when they do.
And I don’t think there’s one person in the province today who could be trusted to script just what that “right thing” is. Certainly no one in government, or in the industry, can lay claim to that for understandable reasons.
Cue the cooling-off period.
The industry and the provincial government have much in common – though the Spring fog that has settled in around the Legislature makes it exceedingly hard to see that. Giving them both the benefit of the doubt, it’s a safe bet that:
They both want a vibrant film industry in Nova Scotia;
They know Nova Scotia has poor demographics and a shrinking tax base;
They both want to attract and retain talented, creative people; and,
They both believe this is a great place to live and work.
That should be enough to get them in the same room and get the small talk rolling.
In order to take one of the many off-ramps, they need to put the calculators and pitchforks away, look each other in the eye and agree on a few more things:
The FTC of today can’t be the FTC of tomorrow, it needs to change – after 20 years, and a series of tweaks, it’s time to look to the future in a new way;
In order to maintain a vibrant film and television industry, and all the incredible culture, people and intangibles that go with it, the incentives in Nova Scotia need to be, and remain, competitive;
The current level of government support is comparatively high, and our ability to generate tax revenue is declining; the value of the FTC needs to be reduced; and,
A more collaborative change in three, six or nine months – all within this budget year – that has even lukewarm industry and government support, is better than a first draft today that begets white-hot anger.
Most decisions are not irreversible, but their outcomes can be. In this case, there is still time to move from a positional stand-off to a shared-interest solution.
The so-called budget bill, the Financial Measures Act , will be the place this change is actually effected. It usually comes in within a week or so of Budget day (last Thursday). Until that bill is brought in, and frankly until it passes Committee of the Whole House and receives third and final reading in about 3 weeks – the budget decision on the FTC remains a ‘statement of policy intent’, not a hard-and-fast decision.
But once it’s done it is very hard to undo. Cue the toothpaste analogy.
Speaking as an uninitiated, I suspect the process of making a film or TV episode is not unlike a place where I have a little more experience: the process of making a law or building the provincial budget.
It can be messy, complicated, and it will take hours of production to gain seconds or minutes of tape that make it to the big screen.
But just like in the movies, until the final cut is done, it always remains a work-in-progress.