$100 million backstop needed
By Greg O’Brien
OTTAWA – No matter what Canadian provinces and territories do to re-open the economy and get back to work, Canada’s independent film and TV producers won’t be mobilizing for one expensive reason.
“I have one word for you,” said Canadian Media Producers Association president and CEO Reynolds Mastin (above) in an interview, “insurance, insurance, insurance.”
Simply put, production companies can’t return to action without new agreements with their insurance companies over potential coronavirus impacts and so far, those companies “are not planning on extending Covid-19 insurance coverage in their new policies,” he said. “So, while we’ve been juggling many, many priorities, it is absolutely urgent that we resolve this issue because it will prevent a number of Canadian productions from starting up again and getting people working.”
It’s not that the producers don’t recognize higher insurance premiums are going to be a fact of life (especially for big-budget productions with dozens of people on sets, which causes risk to climb) until the medical community figures out Covid, a vaccine is developed and the risks abate, it’s that the production companies need to find affordable insurance premiums that allow them to get back to work.
Behind the scenes, Mastin and the CMPA have been working with the insurers and the federal government to try to come to a solution. “We’ve developed a proposal that we’re hopeful will provide confidence to the insurance companies that they can issue policies for Covid-19 by asking government to serve as a backstop to those policies,” Mastin explained.
Of course, production companies carry insurance all the time which kicks in for various reasons – for example if the main star breaks her leg and production has to shut down for a period of time. The worry about Covid though is what could happen if it sickened multiple people, how long productions might be shut down as well as any new litigation arising from that.
“Producers would pay a premium for Covid-19 coverage, but where the government would come in is if the pot of the money generated by those premiums wasn’t enough to cover the amount of the claims, that would be dependent which government would get directly involved.”
“We are modeling as best we can, how to ensure that we do have a deep enough pot while at the same time making sure that premiums are reasonable. Because if they’re unaffordable, there’s no point in going down this path in the first place.” – Reynolds Mastin, CMPA
Mastin estimates the dollar amount of premiums, plus government backstop, needed in order to get insurers on board and producers back to work would be approximately $100 million. “We are modeling as best we can, how to ensure that we do have a deep enough pot while at the same time making sure that premiums are reasonable. Because if they’re unaffordable, there’s no point in going down this path in the first place.
“We need that backstop to be high enough to provide confidence to the insurance companies that they will have the ability to pay out Covid-19 claims in the event, for example, that there is a surge of claims and the pot of premiums isn’t enough to cover the cost of that surge,” he added. “It’s just the potential scale of it that is creating this challenge now.”
Insurance won’t be the only challenge getting film and TV production back in action, however, since each province will have new health guidelines producers (and to be fair, all businesses) will have to follow, which will drive up costs. Daily pre-work health screenings, a requirement for personal protective equipment, new hygiene practices and other changes will simply cost more. Producers may turn to more CGI and fewer locations, which may be safer, but could also inflate budgets.
All of this will require more money from funding agencies, broadcasters and government, said Mastin. Budgets which were set pre-Covid for productions which have not yet begun will have to be revisited and going forward costs in general will increase, so CMPA has been talking with government and the industry to “find the dollars in order to make sure that we can implement all these measures and at the same time, not compromise what’s seen on screen. The bottom line there is additional funding is going to need to be found,” he added.
“There’s probably going to be a combination of different steps that are taken. But I think we can say at this point that we are going to need dedicated government financial support to help cover some of these costs,” he said.
As well, producers who don’t regularly obtain Canada Media Fund or Telefilm funding were left out of the Heritage Canada Covid-19 cultural aid funding because that $115 million was distributed by those organizations to companies which they normally disburse. Mastin said a survey of members showed 37% were ineligible for that funding, therefore are hurting, and need more help.
The silver lining in all this is that demand for new content has never been greater. There were lots of series and movies in the pipeline when the pandemic hit North America, so new shows have premiered on all platforms and audiences, for the most part, have strongly increased. “There is an unprecedented appetite for content,” said Mastin, which makes it so much more frustrating a lack of insurance might keep cameras from rolling.
That demand for content, he added, underlines the still-needed changes to the Broadcasting Act, which were outlined in the Broadcast and Telecom Legislative Review panel report (a.k.a. the Yale report). Mastin said he hopes the federal government will get back to integrating that report into a new Act. June was the original deadline to see proposed legislation but that of course was pushed back.
“Our assumption is that sometime in the fall legislation will be introduced,” he said. “What we’re hoping to see are changes to the Broadcasting Act that foster development of monetization of Canadian IP (intellectual property) by Canadians, because what we’ve seen in the past three months is the companies which own or control their IP have been best positioned, not only to weather the Covid storm, but in certain cases thrive.
“That’s a blueprint we should be following as a matter of national policy for our industry for any changes to the Broadcasting Act.”
Perhaps Heritage Minister Steven Guilbeault will address it when he speaks Tuesday at the Banff International Media Fest virtual conference on Tuesday.
