ANIMATION WORLD MAGAZINE - ISSUE 5.05 - AUGUST 2000

Scandals, Smokescreens and a Golden Age?: Canadian Animation in the 21st Century
(continued from page 2)

Big Scandals
The past year in Canadian animation has been fraught with turmoil. First, Walt Disney announced that they were closing their studios in Vancouver and Toronto. Some 400 plus people were layed off. The official word came in March 2000, but insiders had known since late summer 1999. Publicly, Disney said that they no longer felt pressure to meet production deadlines. In the end, no one cared. Nelvana and other studios picked up the jobless and Disney walked away with minimal damage thanks to a tax break that eased any possible financial pains. Everyone won except the Canadian taxpayer.

Franklin. © Nelvana.

On May 29, 2000, Canada's national newspaper, The Globe and Mail, published a biting portrait of Vancouver's animation industry. As if scripted from Dickens, an anonymous animator told of the long hours, mundane work and the fear of losing one's job. "Work is so desperate that people will do anything to stay on. People are working themselves to death." In typical Canadian fashion there wasn't a whole lot of reaction to this article (the hockey playoffs were on), but one animator did say: "It's possible that the industry's in a slump at the moment, but why make it look so awful and smell so bad?" Another responded that this was the first time the media had portrayed the industry in a negative light and that it was about time truths be told. And despite threatening this person with a banana tree while sipping some god awful herbal tea in Hollywood, I agree with him. For too long, we have heard about the wonders of the animation industry. It has become akin to the Klondike Gold Rush of the 1800s when desperate men from across the continent traveled to the far reaches of cold Northern Canada in the hopes of finding gold. Some did, most didn't. In animation, the rush is very much over, but schools continue to churn out 'factory workers;' where they go nobody knows. One thing is for certain, they are not going to animation studios. Animation schools continue to boast about their high job placement rates, but these kids are working briefly on a project before donning the blue fat guy bib and greeting prospective consumers at the doors of Wal Mart. The animation industry, at least in Canada, has become a disillusioned illusion of prosperity, diversity and opportunity.

But wait, things get worse. The biggest scandal since Canada held off the U.S. attacks of 1812 occurred when it was learned that Cinar Animation was not only fudging their credits to gain federal tax credits, but that some $122 million was invested in a Bahamas investment fund without the board's knowledge. The controversies resulted in Cinar stock dropping some 70% in one day, the removal of Cinar from the stock market, and the resignation of the company's blissfully married founders Micheline Charest and Ronald Weinberg.

The first scandal appeared last fall when a Canadian politician accused Cinar of falsely crediting Canadians for the work of Americans in order to receive government subsidies. We're not talking chicken feed either: over a five-year period in the mid-1990s, Cinar received over $50 million in tax benefits. It was eventually determined that Charest's sister, Helene, was listed on over 100 episodes she didn't write. Given that there are many loud whispers that this is common practice one would think that a less obvious name could have been invented. At times, the absolute idiocy and arrogance of power and wealth is truly astonishing. Since this time, the federal funding organization, Telefilm Canada has stopped all transactions with Cinar (strangely one of the Cinar board members is from Telefilm Canada!) and Cinar is still dealing with the federal tax department to negotiate a repayment of misused funds.

The second scandal arose less than six months later when it was determined that there was improper use of company funds. Initially the stories reported that Senior Executive Vice-President, Hasanain Panju had made offshore dealings without board knowledge, but the scapegoat tune soon changed when it was discovered that Weinberg had actually signed some of the transfers. This internal scandal has evolved into an intricate web of lawsuits and accusations that has seen Cinar banned from the Toronto Stock Exchange. Needless to say, private investors are thinking long and hard before investing in the animation industry. As one observer tells it: "What if the production I invest in doesn't even get their funding because they don't qualify for government subsidies? My investment will have crashed without ever having left the ground."

Martin Rose's Trawna Tuh Belvul. © National Film Board of Canada.

For our purposes, the alleged misuse of tax credits is the bigger story. The Cinar scandal erupted during another government department screw-up and opposition politicians began accusing the government of lazy tax policies. Fueling matters was not only the presence of a Telefilm Canada executive on Cinar's board but also Cinar's close relationship with the governing Liberals. The scandal re-opened the whole issue of cultural funding and tax incentives to business and brought the loud, ugly voices of the right wing to the forefront again calling for a dismantling of tax subsidies to the Canadian film and television industry. As one insider points out: "With all the cuts to other public sectors -- health, education, welfare, etc. -- there is a public outcry over funding large wealthy companies. The film funding institutions are having an even harder time justifying funding film production, when there are so many more popular worthy causes demanding attention."

Right wingers were not alone in their complaints; in the U.S., members of the Motion Picture Screen Cartoonists Union went out in full force this spring to complain about jobs being lost to Canadian companies because of generous tax subsidies. It's always interesting to hear complaints from people within a culture that has generally numbed and overtaken most of the world with its crass disposable culture which has thrived off cheap labour and exploitation. So a few American animators are out of work; welcome to the world the rest of us have been living in for decades.

Montreal in particular has been hit hard by the scandal. Cinar has laid off many employees and studio morale is at an all time low. With the exception of CineGroupe, Montreal studios are not hiring. Montreal is now losing a lot of talent to competitors like Nelvana and Funbag.

Big Time Business
Despite these minor annoyances, this is probably one of the most successful periods in Canadian animation history. Cinar is expected to rise from this crisis stronger then before and it seems unlikely that the rest of the industry will suffer too much because of the actions of one company. The industrial reality remains that Nelvana, and Cinar continue to lead the pack and produce a barrage of successful international children's entertainment, while Ottawa's Funbag Animation Studios, which recently expanded their operations to Halifax, is growing by the day and will likely rival Nelvana and Cinar in the near future.

Canada remains a pioneer and leader in computer animation. Softimage, Side Effects, C.O.R.E. Digital, Alias|Wavefront, and most recently, Nelvana have all established themselves as prominent players in the digital animation and special effects industry. In Montreal, a flurry of f/x companies have started including Hybride Technologies, Tube Images, Big Bang F/X Animation, Buzz Image Group and Voodoo Arts. While most of the work is service orientated, Toronto's Alias|Wavefront, thanks in part to Chris Landreth, has turned their tools toward the production of a pair of test shorts, The End (1996) and Bingo (1998), which became award winning films. Landreth's work combines stylish computer graphics with an intelligent, absurdist point-of-view to create two masterpieces of self-referential cinema. Landreth is one of the few computer animators to take the medium beyond technical experiments and into challenging, thoughtful critiques of human existence. In April 2000, Landreth moved on to Nelvana where he now heads up a new computer animation division.

 

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