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India and Canada renew co-production treaty talks

With India's burgeoning animation industry poised to soon come into its own, the Canadian government has signed a letter of intent to begin negotiating an audio-visual treaty between the two countries. Two previous attempts at finalizing an agreement in the late '80s and late '90s broke down because of government interventions and sanctions against India's nuclear program. But when the red tape lifted two years ago, a handful of Canadian animation producers joined their film and live-action colleagues to lobby for a return to the negotiating table.
January 1, 2004

With India’s burgeoning animation industry poised to soon come into its own, the Canadian government has signed a letter of intent to begin negotiating an audio-visual treaty between the two countries. Two previous attempts at finalizing an agreement in the late ’80s and late ’90s broke down because of government interventions and sanctions against India’s nuclear program. But when the red tape lifted two years ago, a handful of Canadian animation producers joined their film and live-action colleagues to lobby for a return to the negotiating table.

Rob Simmons, CFO at Studio B in Vancouver, Canada, says many Canuck animation producers want to work with Indian studios because of their maturing digital animation and CGI capabilities. But without a treaty, a Canadian-Indian co-pro project does not have access to Canada’s considerable financial benefits – namely tax credits, broadcast license fees for Canadian content and media funds.

Beth Stevenson, partner and VP of production at Toronto’s Decode Entertainment, expects animation budgets to come down as a long-term result of this proposed treaty, which would allow Canadian producers to inexpensively farm out more animation to India’s growing pool of talented animators. ‘We’re now having to do layouts in Canada, but there’s a really good talent base that could do them in India.’

Ottawa’s Funbag Animation Studios is currently working on a second series of King with Decode and India’s EscoToonz as a non-treaty production, but VP of business affairs Frank Taylor says Funbag hasn’t been able to tap into everything its Indian partner has to offer. ‘There are many other things we would have done in India,’ he says. ‘A treaty would be beneficial to Canadian producers because there are a number of Indian companies that are prepared to invest in our productions. From an Indian studio’s perspective, it opens the door for them since straight service deals are harder to come by. Most producers now look for some form of investment from their overseas service facilities.’

If the Indo-Canada treaty goes through on this third attempt, industry players expect it to mirror Canada’s 68 other treaties, with a minimum 20% investment requirement from the foreign studios.

Nelvana’s executive VP of production and development Scott Dyer maintains that the treaty should also include mechanisms to help India meet these funding requirements: ‘I think we need to investigate the possibility of providing a minimum investment threshold and a minimum services threshold that are not the same thing. So potentially, you could co-produce with an Indian studio but use a distribution advance or some other resource to top up their funding.’

Rajiv Marwah, CEO of Bangalore, India-based animation studio jadooWorks, agrees, adding that some Indian producers may initially balk at the 20% investment cap. But he believes that in the long run, it will help his country’s animation industry get in line with the rest of the world. ‘We don’t have a structure set up in India where the broadcasters have to fund a certain amount of indigenous programming or Indian content, and that’s what makes the 20% tricky for some of us,’ he says. ‘But hopefully, pressure will build from this treaty, and some of those rules may change as a result.’

Firdaus Kharas, founder of Ottawa’s Chocolate Moose Media (formerly UTV International Canada), has participated as an industry representative on all three treaty negotiation attempts. He believes Canada will need to educate India’s audio-visual industry after the agreement is signed to help dispel some disillusions. ‘One myth floating around India is that once we get the treaty, Canadian dollars will start to flow to India in the millions. People don’t realize that to comply with the treaty, the requirement is to put up at least 20% of the financing.’

In addition to education, Studio B’s Simmons says the treaty should include a detailed account of what should be expected by each government. ‘Signing the treaty is a great first step, but the journey isn’t finished when the treaty is signed,’ he warns. ‘There needs to be a distinct clarity about what’s expected from the Indian side with respect to minimum participation levels creatively, financially and so on.’

The Canadian Heritage Ministry has confirmed that discussions are continuing with new Minister of Canadian Heritage the Honorable Hélène Chalifour Scherrer and Indian representatives, but Chocolate Moose’s Kharas says it’s hard to predict how soon the treaty will be signed and passed.

Editor’s note: The electronic version of this article has been edited from the original print version in order to correct or clarify some information that it contained.

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