A new Telefilm fund for COVID-19 insurance exclusions will help get Canadian producers back to production.

The Short-Term Compensation Fund for Canadian Audiovisual Productions (STCF) opened on September 30, 2020, and makes as much as $50-million available to help back-stop existing production insurance.

The STCF is to be administered by Telefilm Canada and the Canadian Media Fund.

Funding will compensate Canadian independent production companies for the interruption or shutdown of an eligible audiovisual production due to confirmed cases of COVID-19.

The fund will be available until March 31, 2021, or until the depletion of the funds allocated.

While some Canadian productions returned as early as August 4, 2020, the vast majority of motion pictures and television series were facing the challenges around insurance coverage. Underwriters were putting COVID-19 exclusions into their policies. These exclusions jeopardize independent producers’ ability to close private equity investments and bank financing for their projects. Without pandemic coverage, and with an almost-guaranteed second wave, financial partners have been unwilling to take the risk.

Federal Government Confirms Temporary Program Coming Soon

“With this measure, we are responding to the needs of Canadian audiovisual producers who are severely affected by the pandemic. We will save jobs and continue to encourage creativity in this industry. Our government is proud to support the Canadian film and television industry, which plays an important role in the social, cultural and economic development of our country.”

—The Honourable Steven Guilbeault, Minister of Canadian Heritage

The fund will be capped at $50-million—half of the amount for which the CMPA lobbied—and will be administered by Telefilm Canada along with the Canada Media Fund. At the time of this release, the Government of Canada said that “information on the implementation of this new fund, including its terms and conditions, will be released by Telefilm Canada in the coming weeks.”

Telefilm Administered Fund Details Finally Announced

Let’s Review Some of the Details

In order for productions to be eligible for the STCF, the applicant must:

• Be a registered Canadian corporation;
• Be eligible for the Canadian Film or Video Production Tax Credit (CPTC);
• Hold all the copyrights in and to the project necessary for its development, production and exploitation, including control of the project;
• Develop and execute a COVID-19 safety plan this is in accordance with all federal and provincial COVID-19 safety guidelines;
• Ensure that the production and all its employees and contractor comply with sanitary and safety measures as outlined in the applicant’s safety plan;
• Ensure that the plan provides for the implementation of measures in situations where social distancing is not possible;
• Identify the individual responsible for the implementation and oversight of such a plan; and
• Keep its safety plan updated to ensure its current with any and all applicable authorities evolving requirements.

The STCF is a two-phase program that requires eligible applicants to first apply for a pre-eligibility phase prior to the start of principal photography. Upon approval at this stage, the applicants must enter into an agreement with Telefilm prior to rolling cameras. The second stage is contingent upon an applicable production delay or work stoppage, and it requires applicants to notify Telefilm in writing within 24 hours of an interruption.

Deductibles are quite hefty. Expect to pay the lesser of $100,00 or 15% of the eligible costs for a temporary interruption of production. For permanent shut-down of production, producers will be on the hook for a deductible equal to the lesser of $350,000 or 15% of the eligible costs.

The list of ineligible costs is quite lengthy and include:

• Non-Canadian costs;
• Costs incurred outside of Canada;
• Expenses related to any interruption in filming resulting directly or indirectly from an event other than those referred to in the guidelines;
• Expenses caused by interruptions related to the tightening of the sanitary protocols by the national, provincial, or local sanitary authorities and the confinement orders/decrees;
• Revenue losses;
• Expenses otherwise covered by private insurers or other public programs;
• Producers’ fees and administrative expenses;
• Costs relating to an interruption or abandonment which occurred outside of Canada;
• Costs relating to an interruption or abandonment occurring outside the filming dates declared and agreed to in the pre-eligibility agreement under the STCF between the applicant and Telefilm; and
• Expenses not directly related to production.

Because of the nature of some of these ineligible costs, certain producers may still not be able to move forward with their productions, even if the applicant and project are both eligible. I plan to speak with Telefilm about this list and clarify the reasoning behind some of these ineligible costs.

While the CMPA welcomes the launch of this fund, Mastin indicated that they are concerned about the exclusion of productions that have already begun principal photography. “The producers behind such projects took significant financial risk in resuming their productions, and they too should have access to the program.”

As an independent producer in Canada, I am grateful that the federal government has implemented this temporary measure to help mitigate the impact of COVID-19 insurance exclusions. However, I wonder if it is too narrowly focused, too limited in funds, and laden with too many exclusions to be helpful to all independent producers in Canada.

What do you think of this new fund? Does this Telefilm fund for COVID-19 insurance support help?  Will it be enough to get your latest production in front of the camera? Feel free to share your thoughts with me by email.