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Drew Shannon/The Globe and Mail

A cluster of black limousines gleamed in front of a sprawling warehouse near Toronto’s Pearson Airport the other day, an incongruous vision of glitz along a dull industrial stretch of road. Once upon a time, the low-slung building served as a primary distribution hub for the Canadian operation of Kraft Heinz, sending millions of tubs of peanut butter and KD mac and cheese out across the country. On this day, though, dignitaries nibbled on finger food crafted in a more refined key – braised beef short ribs with a maple-bourbon demi glaze; pan-seared cod with a Champagne yuzu sauce – while stars from the TV shows Star Trek: Discovery and In the Dark strolled a red carpet.

Bonnie Crombie, the mayor of Mississauga, stepped excitedly to the microphone and welcomed the guests to her burg on the western edge of Toronto, which she called Studio City North: “I like the sound of that!” she beamed.

Crombie had reason to be enthusiastic. In less than 12 months, workers had retrofitted the old Kraft operation with 20,000 sheets of drywall, 21,000 sound-insulation panels and 42 kilometres of wiring, transforming it into CBS Stages Canada. The state-of-the-art TV and film facility, boasting six sound stages totalling 260,000 square feet, is the first dedicated production hub in this country for CBS Corp.

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It is also the latest arrival in a galloping expansion of studio space under way in the Greater Toronto and Hamilton Area (GTHA). By early next year, Mississauga alone will have 700,000 square feet of space across five studios. “These investments will put our city on the international map for film and television, and inject a renewal of excitement in our creative industries sector scheme,” Crombie promised.

The unprecedented expansion is fuelled by an arms race among U.S.-based streaming services stockpiling an arsenal of programming to snag subscribers. Deep-pocketed combatants making TV in the GTHA include Hulu (The Handmaid’s Tale), CBS All Access (Star Trek: Discovery), Netflix (The Umbrella Academy, Titans) and Amazon (The Boys, The Expanse).

Employment in the sector is booming: Ontario Creates, a government agency which facilitates media production in the province, says the industry now supports approximately 37,000 full-time jobs, up more than 15 per cent from 32,000 jobs in the summer of 2018. Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade, declared that the CBS studio, which will employ about 300 local craftspeople when fully booked, demonstrated the province is “open for business.”

CBS Stages Canada, a state-of-the-art TV and film facility in Mississauga, is the first dedicated production hub in Canada for CBS Corp., part of an unprecedented expansion in studio space in the Greater Toronto and Hamilton Area.

GEORGE PIMENTEL/The Globe and Mail

But as foreign business floods in, Canadian creators – who already struggle to get their projects made and seen in a marketplace of slick Hollywood product – are being squeezed as never before. Local suppliers are tied up serving U.S. companies, spurring growing concerns about a branch-plant industry smothering local talent. And while more studios are being built, there is still more demand for space than there is supply, leaving local TV producers and filmmakers priced out of the market as they try to get Canadian stories in front of the cameras and out to audiences.

Even owning a studio doesn’t necessarily help. In the spring of 2018, Bell Media, which owns the CTV and CTV2 broadcast networks as well as dozens of specialty channels, purchased a majority stake in Pinewood Toronto Studios, currently the largest studio complex in the country. But Randy Lennox, the president of Bell Media, says the company is shut out of Pinewood for the foreseeable future, because the studio was already booked up before the purchase with shows such as Star Trek: Discovery, which runs in Canada on Bell’s newly rebranded CTV Sci-Fi (née Space) channel.

“We can’t get in,” Lennox told The Globe in a recent interview. “It’s a squatter’s rights situation. Star Trek: Discovery is a massive undertaking at Pinewood for us.”

“It’s great that the show keeps getting renewed,” he added. Still, he had hoped to make Pinewood “a community offering,” where both Bell Media and Canadian independent producers can make their own content. That will have to wait.

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According to data provided by Ontario Creates, the increased production activity in the province is due almost entirely to what is known as foreign location and service (FLS) productions: shows that are shot here with Canadian crews and technicians but are not considered to be Canadian content because Canadians do not occupy enough of the key creative positions, such as writer, director, producer or lead acting roles. The stories are almost never set in Canada.

Such foreign productions increased approximately 23 per cent over two years, jumping from $847-million of spending in Ontario in 2016 to $1.04-billion in 2018; domestic production, meanwhile, rose a mere $5-million over the same period, to $847-million. The foreign-domestic split has gone from 50-50 to 55-per-cent foreign versus 45-per-cent domestic in just two years.

As Star Trek: Discovery keeps getting renewed, production of the show at Toronto's Pinewood studios contributes to a squeeze that shuts out local and independent producers.

Jan Thijs/Handout

That mirrors a growing imbalance between foreign and domestic production that is even more pronounced across the country. A report issued last spring by the Canadian Media Producers Association indicated that foreign production in Canada had risen 26 per cent from 2017 to 2018, to approximately $4.8-billion, while domestic TV and film production had fallen approximately 9 per cent in the same period, down to $3-billion. (That latter figure does not include in-house production of domestic broadcasters.)

The increase in foreign spending, and the frenzy for studios, crews, locations, and other support services, is pricing Canadian creators out of the better facilities – and even Toronto itself.

“It is a bit of a bummer, in terms of certain vendors that we’re used to going to that we’ve created relationships with over the years suddenly being not available or able to help us out, because Netflix is in town shooting 15 things,” says producer Lindsay Tapscott. Last year, she and her producing partner Katie Nolan opted to shoot the indie drama The Rest of Us in North Bay, lured there by the provincial government’s Northern Ontario Heritage Fund, which rebates 50 per cent of a production’s local spending, up to a $500,000 payment.

In a sign of mounting concerns, last summer, the federal Department of Canadian Heritage initiated a study of the effect of FLS production activity on the domestic production industry. The results are expected later this fall.

Toronto-based production manager Robbie David says the squeeze is hurting his ability to do business. “I’m turning down shows right now, because I’m not going to be able to get a studio,” said David, whose credits include the Canadian TV series Mary Kills People and the feature American Woman, which premiered at last month’s Toronto International Film Festival. “This has been a problem for the last three years, and it gets worse – not every year, it gets worse every few months.”

David says the industry’s top priority should be new studios. "They’re building them in Toronto. But you can’t just concentrate on Toronto any more, it has to be all over Ontario.” That’s because the cost of studio rentals is tied in large part to the value of the underlying real estate. With the cost of land in Toronto continuing to rise, other locales are jockeying, trying to offer themselves up as legitimate alternative production centres.

Lennox told the Globe that Bell Media’s Canadian version of RuPaul’s Drag Race will shoot in Hamilton when it begins production this month. “I have four shows [shooting] in Ontario, none of which are in Toronto, for the precise reason it’s not affordable – commensurate to the level of production that I’m speaking of,” he explained.

The province hopes conditions will improve over the next few years as another dozen or so production facilities come on-stream, helping to double the studio space in Ontario from 2.3 million square feet last year to as much as 4.6 million by 2022. (Pinewood is in the middle of adding 200,000 square feet to its main campus in Toronto’s Port Lands area.) Still, there is no guarantee foreign demand won’t soak up all of the extra supply.

And even as construction continues, Canadian productions sometimes have to settle for the crumbs. Justin Cutler, the Ontario Film Commissioner with Ontario Creates, acknowledged that well-financed U.S. companies have tied up some of the highest quality studio space: Netflix, for example, has leased eight sound stages in two downtown Toronto facilities, totalling about 250,000 square feet.

“Ontario Creates has worked hard with some of the companies that have taken long-term leases, to understand when those stages are going dark [temporarily],” Cutler explained. “We’ve worked very closely with Netflix over the last month to get that stage availability back into the hands of domestic producers.”

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In the Dark (set in Chicago but filmed in Toronto) is a so-called foreign location and service production that keeps GTHA crews and technicians busy – at the expense of Canadian film and TV producers, critics say.

Handout

Looking for a longer-term solution, David joined a handful of industry players to form Aeon Studio Group, which last June announced a memorandum of understanding with the city of Hamilton to build a massive multi-use development on what are known as the Barton-Tiffany Lands. The city-owned site in the West Harbour area has a checkered history that includes heavy industry that likely left the land contaminated, requiring remediation. In 2010, the city demolished a handful of buildings there in hopes of constructing a new stadium for the Hamilton Tiger-Cats CFL team. But that wound up being built elsewhere, and the site has now sat desolate for almost a decade.

If the city and Aeon can agree on terms of a land purchase, the company hopes to build up to 500,000 square feet of studio space in what it is calling the Hamilton Studio District, a development that would include housing, retail, and offices, and that councillors hope would help spur the city’s creative renaissance. Aeon intends to open its first studio space, converting an existing building for 150,000 square feet, by next summer. By the time the development is complete – in anywhere from five to 20 years – Aeon expects it will support about 1,000 direct and spinoff jobs.

“We believe the quality of the facility we plan to build will make this attractive for productions, even if they have to spend an extra 20 minutes driving [from Toronto],” said Jeff Anders, one of the partners of Aeon.

After all, he explains, while studios are essentially commodities – landlords build and then rent out large, empty shells on a series of short-term leases – the quality of spaces can differ enormously. They depend on such quotidian factors as ceiling height (which can proscribe lighting possibilities and the size of sets) and the spacing of structural pillars: a restriction which can frustrate production designers.

“When we analyze the full stock of space [in Ontario], we think that half of the capacity is forgettable. It’s either too low-ceilinged, there are pillars throughout, sound attenuation isn’t there, vibration control isn’t there,” he explains. “As a province with about one per cent of the global [TV and film production] market, I’m saying we could have and should have more.”

He admits there may be some insurmountable hurdles, including the cost and logistics of site remediation. “There are still a lot of unknowns on the financial side of things. We believe this is a viable project. But it remains to be seen.”

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Back in Mississauga, Armando Nunez, the president and chief executive of CBS Global Distribution Group, downplayed concerns that Canadians might have about the explosion of American content swamping Canadian creators and their stories. “Hasn’t that ship sailed?” he asked rhetorically, in an interview with The Globe and Mail. “I mean, through technology, you can be swamped by any content from any place in the world.”

“We’ve always been sensitive to the idiosyncrasies of Canada as a market, and Canadian cultural sensitivities," he added. "That is something over the years we’ve had conversations with our broadcast partners about. But at the end of the day, the fact is that Canada has warmly and enthusiastically embraced American content – irrespective of where it gets made.”

Director Atom Egoyan’s latest film, Guest of Honour, is set in Hamilton, where restaurants were more readily available as set locations.

Courtesy of TIFF

Vic Fedeli, the Ontario minister and MPP for the riding of Nipissing, in Northern Ontario, says it doesn’t bother him if this country’s creators have to go outside of the major centres to make Canadian stories. He sees Toronto as a place where Canadians get trained on foreign productions and then work on smaller, domestic stories in places such as Parry Sound or his hometown of North Bay. “For Toronto, you really need this big horsepower of CBS,” he said, during an interview with the Globe on the Chicago-set CBS sound stage of In the Dark.

Still, he added, “In the North, from our perspective, we really like to see the more homegrown productions." He pulled out his phone and flipped through photos of the new outdoor set in the municipality of Powassan of When Hope Calls, a spinoff of the Hallmark Channel series When Calls the Heart, which is being made for Hallmark’s streaming service. “They’ve built an entire town!” he marvelled.

Certainly, places such as Powassan and Hamilton seem eager for the attention and business, prompting some Canadian creators to adapt their stories to the new locales. Filmmaker Atom Egoyan set his new film in Hamilton in part because he says he believed it would be logistically easier than if it were to take place in Toronto. Guest of Honour, which premiered at the Toronto International Film Festival last month, centres on a restaurant inspector who sometimes creates false health infractions in order to exert leverage over restaurateurs.

“On a very practical level, we needed access to a lot of restaurants, and in Toronto, a lot of those restaurants would not want to be identified with a food inspector who’s coming in and finding faults: things that are not up to code,” Egoyan told the Globe.

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In Hamilton, however, “there was an openness. People were just so excited we were shooting there, so they weren’t so stuck up on that. The places we went to in Hamilton were able to see: It’s a story. They were just very open to us being there.”

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