Why the plunging loonie is actually good for Canada’s movie industry

The Canadian dollar recently dropped to its lowest levels in almost five years, and it looks poised to stay there for quite some time, according to the Financial Post. A low dollar is never good for things like trade, fuel prices, or wages -- but it’s actually a very good for one sector in particular: the country’s film industry.

Though there are definitely plenty of homegrown movies and television fueling the industry these days, the Canadian entertainment business relies heavily on productions from outside Canada. The cheaper it is for those productions to shoot here, the more likely they are to come to the Great White North. The more productions that come, the more work there is for Canadian movie and TV makers.

That’s where the Canadian dollar comes in. When the loonie is worth less, multimillion dollar U.S. productions want to come here to take advantage of the savings. For a $200 million (USD) movie like Guillermo del Toro’s “Pacific Rim” (which shot at Toronto’s Pinewood Studios), you’re talking about a savings of tens of millions of dollars when that money is converted. Even when the Canadian dollar is in parity with the U.S. dollar, fluctuating values mean that it’s still cheaper to shoot in Canada since the big American banks often stick with a lower exchange rate.

The lower the Canadian dollar is, the more attractive Toronto, Vancouver, Montreal, and elsewhere look to major Hollywood studios. There’s a very good reason why big budget productions like del Toro’s “Crimson Peak,” Brad Bird’s “Tomorrowland”, and ”Zack Snyder’s “Superman vs. Batman” film are set to shoot in Canada in the coming months. It’s cheap!

The lower dollar will also have a major impact on American television shows looking for places to shoot. Why film in the U.S. when it’s about 10 per cent cheaper to shoot a TV show in Vancouver or Toronto? And the reduced cost afforded by the weaker loonie doesn’t even begin to take into account the many provincial tax incentives offered up to foreign movie and TV productions.

This is not a new phenomenon by any means. American and European productions have been shooting in Canada for decades to take advantage of Canada’s almost always lower dollar. TV shows like “The X-Files” and “Battlestar Galactica” were shot in Vancouver and the surrounding area, and countless TV movies and other productions have taken advantage of Toronto, Vancouver, and Montreal’s striking resemblance to big U.S. cities.

The trend of major U.S. movie productions shooting in Canada didn’t really start until the mid-1990s, when Renny Harlin’s big budget actioner “The Long Kiss Goodnight” (1996) was shot in and around Toronto. The $65 million flop, starring Geena Davis and Samuel L. Jackson, was the most expensive movie ever produced in Canada at the time.

Increasingly, the Canadian film and television industry has had to compete with countries like Australia and Ireland, and places all over Eastern Europe (all places where the currency is general worth less than the U.S. dollar), but Canada's proximity to the United States and cultural similarity has always given it the advantage. Low dollar? No problem for the movie business!