B.C. film industry invests big in new studio infrastructure

Sony, DHX Media and Ironwood are launching new studios in Vancouver as provincial tax credits, low Canadian dollar send L.A. productions north 

A studio being built at the corner of Fifth Avenue and Yukon Street is part of a major B.C. spending spree by film and television production companies | Chung Chow

No matter what the Canadian dollar is trading at, Alex Godfrey is confident the B.C. film industry will always be drawing productions from Los Angeles like birds that eventually return north.

But last year it was evident to Godfrey and business partner Kyle Hou that Vancouver was losing productions because there wasn’t enough space available at local studios.

Existing facilities were already at capacity while the dollar sat at about US$0.73 and provincial tax credits enticed foreign productions.

“It spelled out to us that we had to put something in place and now was the right time to do it,” said Godfrey, president and co-founder of Ironwood Studios.

The new studio officially launched in mid-December and is already the home base for film director Barry Sonnenfeld’s new TV show, A Series of Unfortunate Events.

While Ironwood is adding to the square footage available to productions, “pop-up studios” are taking over warehouses or empty facilities like the Canada Post building on Georgia Street.

“We’re certainly not a pop-up but … without those little pop-ups we’d be losing a lot of the little shows that are coming in, which is also very good for our workforce and revenue in B.C.,” Godfrey said.

Ironwood leased 177,000 square feet of space, gutting a warehouse and building seven stages, two workshops, office space and storage for its studio on Southeast Marine Drive near Fraser Street, according to a 2015 report from Avison Young.

Godfrey said Ironwood isn’t competing with the pop-ups; its main competition, he said, is the other studios looking for large film productions or long-term tenancies offered by TV shows.

And it’s not only film and TV studios like Ironwood investing big in new Vancouver facilities.

Visual effects house Sony Pictures Imageworks moved its headquarters from California to an expanded 74,000-square-foot facility at Pacific Centre in downtown Vancouver last summer.

Meanwhile, Halifax-based children’s and family entertainment producer DHX Media (TSX:DHX.A) is building a 75,000,00-square-foot animation studio on Fifth Avenue and Yukon Street.

DHX’s new Vancouver facility, which is set to open by the end of 2016, will combine its two other local studios employing about 700 workers. DHX will add another 100 workers to its Vancouver payroll in the coming months to work on TV shows including Cloudy with a Chance of Meatballs (based on the film), Slugterra and Supernoobs.

DHX Studios’ chief content officer, Ace Fipke, said provincial tax credits and the low Canadian dollar might catch the initial attention of foreign productions looking to set up shop in B.C. But it’s the city’s reputation for top-level talent that is making the industry more stable.

“We’re really putting roots down here because we feel this is where the talent is,” he said. “All of those factors [low dollar, tax credits, talent] make it one of the most desirable places to produce video games, special effects and animation.”

Photo: Ironwood Studios officially launched in South Vancouver in December 2015 | Chung Chow

In the lead-up to the 2013 provincial election, the local film industry launched the Save B.C. Film campaign to pressure Victoria into introducing additional tax credits to compete with jurisdictions like Ontario. New tax credits never materialized as Premier Christy Clark pointed to B.C.’s burgeoning post-production and visual effects sector as the future of the industry.

But the film and TV industry began to bounce back by the end of that year.

Victoria paid out an average of $255 million annually in tax credits between 2010 and 2014 when the Canadian dollar was at near parity with the greenback, according to the provincial budget released on February 16.

Film production activity increased from $1.1 billion to $1.6 billion in the 2014-15 fiscal year. The province now estimates it will pay out $493 million – nearly double the average from previous years – in tax credits during the 2015-16 fiscal year.

The government now says it will put those credits under review.

But Godfrey said limiting the growth in tax credits would have a big impact in the infrastructure he and other studios are investing in.

In addition to the studio space, Ironwood has also built a green screen facility and outfitted its building with a 10-gigabyte fibre optic network to instantly connect VFX crews, camera crews and art departments with remote offices.

“The dollar, tax credits,” Godfrey said, “if you take away one of those things, it would obviously affect the business that is coming into B.C.”