California Doubles Film Incentives Amid Rising Concerns Over Runaway Production

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Mad Men,” although it was based in 1960s New York, was predominantly shot at a studio located west of downtown Los Angeles. Among the numerous crew members, Sienna DeGovia was one. Her role involved recreating the food from that era, such as savory Jell-Os and airplane-served carrots cut into one-inch cubes. Essentially, she’s a food stylist. She began her career as an assistant 25 years ago, mastered the craft, and now serves as a lead stylist.

Once upon time, Los Angeles was teeming with peculiar job opportunities, particularly in the realm of content creation. However, by the year 2022, this sector reached its peak, and subsequently, the city known as the world’s entertainment capital has faced a harsh impact from a global economic contraction.

In early 2024, things took a drastic turn for the worse, according to DeGovia. He found himself reaching out to his former mentors, pleading for an opportunity to work as an assistant again – a situation he hadn’t encountered in the past two decades.

The scarcity of jobs in Hollywood has once again sparked demands for government intervention, echoing long-standing debates. Jack DeGovia, his father, was a set designer who contributed to “Die Hard” and “Speed.” In reaction to a slump in 1999, he established the Film and Television Action Committee, focusing on halting “runaway production,” specifically the trend at the time of shooting American films in Canada due to cost savings.

DeGovia, who is now 84 years old, said that they were essentially depriving us of our livelihood and threatening our families,” explains DeGovia. “They pretended to be America, but they weren’t; they were actually from Canada. We were ready to engage in tough negotiations with them.

DeGovia organized protests in L.A. and Sacramento, during which crowds shouted “Film in America!” and pressed for a state tax break equivalent to Canadian subsidies. However, this initiative didn’t succeed at the time. But now, about a generation later, California offers a production tax credit and is planning to nearly double it as a response to foreign incentives.

Governor Gavin Newsom emphasized on May 14th the need for increased competitiveness, using the analogy that our current state of business is similar to being on life support.

The increase in the program might not be sufficient. It’s projected that it could create between 4,000 and 5,000 jobs, as per state calculations. However, over the past two years, California has seen a decrease of about 40,000 jobs in production, based on data from the Bureau of Labor Statistics.

To be competitive or nearly so will necessitate more than just state-level efforts; it’ll also require some form of federal encouragement, Chris Bender, a film producer, suggests. He points out that at least 70 countries currently offer national subsidies in this regard. Jon Voight, who serves as a “special ambassador” appointed by President Trump, has advocated for a national incentive as part of a strategy to preserve Hollywood.

For many decades, the industry has harbored that concept in its dreams. While serving as Governor of California in 1970, Ronald Reagan advocated for a federal tax incentive to address escalating production costs. Preceding this by two decades, during his tenure as President of the Screen Actors Guild, he engaged with President Truman on the same topic.

According to Russell Hollander, the National Executive Director of the Directors Guild of America, runaway production isn’t a novel concept. However, what sets things apart today is the significant global decline in film and television production on a massive scale.

Based on DGA statistics, all significant filming hubs – California, New York, Georgia, Canada, and London – have experienced a decline over the past few years. However, this decrease has been more pronounced in the United States compared to foreign locations.

Given the current situation, jobs that move overseas for tax benefits in other countries carry greater importance, according to Hollander,” he said. “Bringing back those jobs should be made an even higher priority.

In Canada, production subsidies are seen as a crucial aspect of preserving our cultural identity. If they were removed, Canadian cinemas and television broadcasts might become dominated by content from the U.S.

According to Norm Bolen, former head of the Canadian Media Producers Association, it’s important for Canadian content to be broadcast on their airwaves, just like any other country. Bolen questions the necessity of a U.S. federal subsidy. From his point of view, such an idea is ridiculous. “Hollywood has a strong influence everywhere,” he states, “so what exactly is the problem that needs fixing?

He additionally contests the notion that Canada’s subsidies to international manufacturers led to a decrease in U.S. employment. In his words, “It wasn’t really stealing jobs from Americans; instead, they were supplying financial resources that enabled these productions to take place. Without their support, these projects wouldn’t have happened at all.

In 1986, Stephen J. Cannell was creating an action series set in Los Angeles for NBC titled “Stingray.” Struggling with dwindling network payments, he came up with a cost-saving strategy by shooting scenes in Canada instead.

Michael Dubelko, former president of Cannell’s company, stated, ‘Our options were limited. Being a small business, we made the decision out of necessity.’

Initially settling in Vancouver, a city scarcely known for its industrial production at that point, the company found a way to transform a disused distillery into a television manufacturing facility. Under Cannell’s leadership, this facility began producing hit series such as “21 Jump Street,” “Wiseguy,” “The Commish,” and many more.

“We didn’t know what we were doing when we started,” Dubelko says. “It was crazy.”

According to him, shooting movies on-site in Los Angeles had become excessively costly. Homeowners often asked for $5,000 or even $10,000 to let their house be used for a day. Once the film crew arrived, a neighbor would frequently start the lawnmower and demand payment to stop it.

He remembers that when we visited Vancouver, people would invite us warmly, saying something like, “Feel free to come inside and shoot without any charge.” This suggests that we were not constantly being taken advantage of or cheated.

With a beneficial currency conversion, Dubelko approximates they saved at least $100,000 per episode, which adds up to over $2 million per season. However, moving away from L.A. did not come without controversy; they faced criticism and received backlash for their decision, as he acknowledges, “We faced some negative feedback for it.

But soon, others followed.

In British Columbia, the film industry currently provides work for numerous individuals. Dubelko recalls an occasion in Vancouver with Cannell several years prior to his demise. “As we walked down the street,” Dubelko explains, “people would approach us, exclaiming, ‘Oh my goodness, we’re in this business because of you!'” It wasn’t just a couple of people; perhaps 20 came up to express their gratitude. They credited him for his significant contributions. Indeed, he was the driving force behind it all. He was truly a forward-thinker.

Recently, Vancouver has been experiencing a significant slowdown, as indicated by the local union of workers. They report that just a quarter of their workforce is currently employed.

Tonya Hartz, a location scout with 28 years of experience in Vancouver, remarks that the industry has essentially come to a standstill in 2025, stating it as if production activity has ceased entirely.

Hartz knows people who have lost houses and are struggling to afford groceries.

The additional threat from Trump to apply a 100% tariff on movies produced outside the U.S., combined with existing tariffs on Canadian products and hints of annexation, has increased tensions further.

Crystal Braunwarth, a business representative for IATSE Local 891 in Vancouver, received around 50 concerned phone calls following Trump’s statement. She described the widespread anxiety among our members as palpable.

Although a tax on movies might not be feasible, there are concerns that American production companies might avoid filming overseas as a result, potentially worsening the current decline.

According to Spencer Chandra Herbert, British Columbia’s Minister of Tourism, Arts, Culture, and Sport, this is an international sector. Attempting to restrict its global nature overlooks the way the business functions on a global scale.

Gary Lam, an editor based in Canada whose work includes “District 9” and “Terminator: Dark Fate,” notes that a busy Hollywood isn’t detrimental to their industry. He explains, “If Hollywood slows down, we do too. We hope Hollywood thrives. When they become overwhelmed and struggle to find enough crew, that’s when we often receive calls.

Many professionals within Vancouver’s industry concur that business trends follow cycles, and they anticipate the current lull won’t persist indefinitely. Lam also emphasizes the role of local administrations in offering assistance. “In my opinion,” he notes, “tax reductions and government aid could be effective strategies.

Indeed, the B.C. government has indeed boosted its production incentive, as stated by Chandra Herbert. He emphasizes, “We’ve placed a high emphasis on this matter.” He’s referring to the same issues that everyone else is dealing with. The major studios have cut back on their spending, which has been particularly challenging for our workforce.

Dubelko expresses doubts about the effectiveness of a U.S. incentive. In his experience with television production, there were approximately 50 shows running simultaneously. They would receive Nielsen reports that fit on a single page. Today, there are around 500 shows. He explains, “The amount of content being produced now couldn’t have been managed within one city or even one state.” He adds, “The business began to grow more mobile in the mid-’80s. It was only natural that production would start happening outside Los Angeles.

“How do you get that business back?” he says. “I don’t know. I don’t see how that happens.”

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2025-05-28 19:51