Here’s an angle on the Nova Scotia film industry debate that’s not getting enough attention: Moviemakers are vitally important to several high-growth industries that we need for economic development.
When Finance Minister Diana Whalen brought down her budget, she took several difficult measures to constrain the 2015-16 deficit to $97.6 million. It’s a tremendous achievement, given that a year earlier she had forecast a 2014-15 deficit three times that size, at $279 million.
But the benefits were lost in the tsunami of controversy that arose from the cuts to the Film Investment Tax Credit, which now covers up to 65 per cent of the labour costs in film production. Whalen is cutting the $24-million annual program to $6 million.
As you’ve no doubt heard, members of the film industry are warning the cuts would effectively kill their business in Nova Scotia. If that happens, the impact would be felt far beyond the cultural community. It would affect a range of tech startups, many of which benefit from skills and talent generated by the film industry.
The kernel of the problem is that Nova Scotia’s economic growth has rarely risen above one per cent per year in decades. The only way to solve this woeful performance is to develop high-growth businesses, preferably with local ownership.
Need some proof? Entrevestor’s survey of startups from across Atlantic Canada shows these companies increased their revenues 38 per cent in 2014 and their staffing rose 9.4 per cent. Some 78 per cent of their sales occur outside the region.
Innovative startups have the potential to transform the economy of Nova Scotia and its similarly stagnant neighbours. There are tremendous efforts being made to develop the best ecosystem to startups here: improving mentorship, access to capital, connections with key markets.
One huge component of the ecosystem is the talent in the region. The fuel for these startups is human brainpower, so to develop here they need a range of business, technical and research talent. That includes film talent.
The areas of expertise developed in the film industry, such as storytelling, digital video production and animation, are essential in the gaming industry, which is making waves in Atlantic Canada. When Halifax’s Orpheus Interactive launched its Sons of Anarchy game this year, it landed in the top five in the United States in Apple’s App Store.
Video is an essential component of other information technology ventures in the region. Spot Interactive, which allows consumer transactions during online video, is undergoing remarkable sales growth for a second-year company. Another company that’s ramping up sales is Kinduct Technologies, which owns the world’s largest library of medical animation.
Though I haven’t spoken to the heads of these companies, I’ve spoken to several entrepreneurs about this and I’m hearing the same message: The talent developed by the film industry helps Atlantic Canada compete in highly desirable sectors. Without a regional film industry, many companies would likely have to contract out work to people in other locations.
The development of high-growth companies requires a massive range of talent, including those developed in the film industry. If the Nova Scotia film industry fades away, the ecosystem for startups — our best hope for true economic growth — will be weaker.
Entrevestor receives financial support from government agencies that support start-up companies in Atlantic Canada. The sponsoring agencies play no role in determining which companies are featured in this column nor do they have the right to review columns before they are published.
