Canada: Bollywood North Now Open For Business: Introducing The Canada-India Coproduction Treaty

Last Updated: July 9 2014
Article by Casey Chisick, Leonard Glickman, Stephen Selznick and Chris Hope

Canada's first-ever audiovisual coproduction treaty with the Republic of India came into force on July 1, 2014, clearing the path for an unprecedented level of collaboration between Canadian and Indian television and film production companies.

International Treaty Coproduction

The international treaty coproduction system in Canada has long served as an economic and cultural incentive program, attracting foreign investment into the production sector and thereby allowing Canadian producers to increase their capacity to tell Canadian stories and expanding international markets for the distribution of those stories.

For over 40 years, participation in international treaty coproductions has allowed Canadian producers and their international partners to share economic risk, ownership, creative control, and the benefits of their respective regulatory support systems for domestic coproduction.

From the perspective of Canadian producers, adherence to international treaty coproduction rules has allowed them to take advantage of the considerable benefits of both foreign investment and the national domestic funding programs (such as the Canada Media Fund and the Canada Feature Film Fund), fiscal incentives (such as the Canadian Film or Video Production Tax Credit payable for so-called "Canadian content" projects), provincial and territorial incentives and the CRTC's regulatory support for the broadcasting of domestic productions. Eligible "international treaty coproductions" qualify as "Canadian content" under the CRTC's Canadian content rules, allowing Canadian co-producers to take full advantage of the premium that Canadian broadcast partners place on Canadian content programming.

According to Canadian Heritage, over the past decade, Canada has produced over 700 film and television programs as treaty coproductions with combined budgets of approximately $5 billion. The Canadian audio-visual sector is reported to have generated $5.82 billion in revenues in 2012-2013 while supporting approximately 127,700 jobs.

A New Era in International Treaty Coproduction

The Canada-India Coproduction Treaty marks the 54th international coproduction treaty that Canada has signed. Significantly, it also marks the first treaty signed since Canadian Heritage implemented Canada's Policy on Audiovisual Treaty Coproduction (the "Policy") in March 2013. The objective of the Policy is to "position Canada as an audiovisual coproduction partner of choice."

The Policy consists of four guiding principles:

  • Flexibility. Contractual arrangements between co-producers will no longer be prescribed and a model treaty has been developed to anticipate evolving business practices over time. The model contains an annex that can be amended by the parties without having to amend the treaty itself.
  • Openness to Renegotiation and Negotiation of Treaties. Consulting with the Canadian audiovisual industry to develop a strategy for the renegotiation of existing treaties to build Canada's global competitive position.
  • Alignment of Coproduction Promotional Activities. Improving cooperation between the various domestic stakeholders that support coproduction activities, including levels of government, national and provincial agencies, and the production industry.
  • Simplification of Administrative Procedures. Streamlining processing and delivery mechanisms that have previously been viewed as impediments to the production industry.

Beyond the goals of developing outstanding infrastructure and talent in Canada's audiovisual industry, the Policy is significant for its recognition of the rapidly-changing nature of the global audiovisual environment and the need to assist the Canadian audiovisual industry in adapting to that change.

The Canada-India Coproduction Treaty

India is among the top film producing nations in the world, boasting an established and sophisticated film market. The Canada-India Coproduction Treaty provides Canadian producers with immediate access to that market and the option of teaming up with seasoned producers to take advantage of the efficiency of the Indian production system.

Among other things, the new treaty sets out that:

  • The co-producers must be nationals of Canada or India and each are expected to treat the treaty coproductions as their own with respect to their national production incentive programs. 
  • The financial contribution of the co-producers is to be between 20%-80% of the final production budget, with the possibility of a third-party producer from a third country contributing 10% or more of the financing.
  • Production work (with an exception for certain creative elements), copyright ownership, and revenues are to be shared in proportion to the respective financial contributions of the co-producers.
  • Each co-producer must demonstrate a national distribution or broadcast commitment for the coproduction.  
  • The location for the shooting of the coproduction must be in the territory of at least one of the co-producers.

The treaty also sets out a policy goal stating that, over a period of five years, co-producers should strive to achieve "overall balance" in the financing of works coproduced.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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