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Sony Moving Imageworks To The Great White North

Move to Canada to Ship Jobs out of LA

By James DeRuvo (doddleNEWS)

Already, Hollywood is under siege due to the phenomenon known as “runaway production.” As we all know, this is where producers take their projects out of the city, state, and even country in order to take advantage of better tax breaks, exchange rates, and subsidies that can provide for jobs for local artists in their locations (say, Toronto or Australia), but takes them away from back here at home. Hollywood is also still coping with a visual effects crisis for many of the same reasons. So when Sony announced it was pocking up and moving its visual effects arm Imageworks up to Canada, suddenly both issues were in play, and up to 270 artists here in Hollywood may lose their jobs.

 

“Vancouver has developed into a word-class center for visual effects and animation … Expanding our headquarters (there) will allow us to deliver visual effects of the highest caliber and value to our clients.” – Randy Lake, an executive vice president at Sony Pictures Digital Productions

As the LA Times puts it, the news that Sony was headed north came out of nowhere, leaving many in an industry just barely regaining their footing, “shellshocked.” For Sony, the issue is more of “value” than it is on “caliber,” as the Times reports that Sony is taking advantage of all the traditional economic incentives that the State of California is simply unable to fully answer. And what incentives they do offer, leave big budget blockbusters out of the mix.

Canada, by contrast, offers tax breaks even if principal photography is conducted out of the country. Thanks to subsidies, exchange rates, and other incentives, Sony stands to gain up to 60% savings by hiring local Canadian visual effects artists. And Vancouver has been a prime location for production companies looking to cash in for decades, along with Toronto.

Sony says it plans to offer many of the 270 employees in its Culver City facility the opportunity to relocate. But analysts say that can place a lot of stress on families. “These subsidies are incredibly damaging to the industry here,” said Daniel Lay, author of the VFX Soldier blog. “The expectation now is that you have to keep moving around and chasing your job.”

And even though the State of California has sought to expand their existing film tax credit program, many, including Lay, say it’s not only too little, too late, but that it should be eliminated altogether. Lay is pushing for a legal challenge in the U.S. Court of International Trade to eliminate foreign film subsidies altogether. But seriously, that can’t go very far as the jurisdiction would be one-way, and could pave the way for a potential trade war against companies that stand to lose millions in overseas film jobs.

So, at the end of the day, Hollywood is about to lose even more film jobs to an old adversary. It’s a tired old tale that the industry is tired of hearing, but that other countries offering terrific tax breaks for filmmakers, simply love to tell.

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