Boxoffice (Jul-Sep 1939)

Tax Structure Flaws See Quebec Protest Shut-Down Assailed by Press Nearing Amicable Solution Toronto — Under the heading, “Incident Illustrates Need of Tax Structure Readjustment,” the Toronto Telegram has published the following comment: “Spurred on by the increased municipal tax on moving picture theatres in the City of Quebec, Le Jour of Montreal has renewed its attack on the futility of government attempting to lift itself by its own boot-straps. It points out that when you overtax in any one part of the world, not only do you ruin business in your own section but you bonus business elsewhere which is in competition with your own taxpayers. Though this trend is most visible in the case of municipalities which are located next door to each other, it shows quite clearly even in the case of neighboring countries. And it operates with equal relentlessness internationally, though perhaps less obviously at first. “When trading or buying habits are forcibly disrupted by taxation and diverted into new channels, it is very hard to bring them back again. It takes far longer to build a clientele for a business than to lose that clientele once the business begins to slip. And getting it back again once it has left you is a serious problem. “Le Jour admits that it is the responsibility of government to provide for the destitute where private charity fails, but asks who benefits if, in serving the unemployed with excessive prodigality, the public authorities succeed only in creating more unemployed and in drying up the sources of both private charity and public assistance. It adds: “The municipality of Quebec raised the tax on theatres by 10 per cent to help it finance direct relief and relief works. In an attempt to squeeze another drop out of the theatre owners, it accomplishes just this: (1) It dried up the whole 100 per cent from which various governments had already been drawing 40 per cent in 25 different taxes. (2) It forced approximately 135 more people out of work for the city to take care of with less revenue coming in than ever before. (3) It started Quebec theatregoers looking elsewhere for their amusement and may permanently alter the spending habits of some of them. (4) It may give other businesses, now operating on an excessively narrow margin of profit, the idea of closing their doors instead of expending their time and energies making money for unwise governments to squander buying the votes of the unemployed or the shiftless. “There must be agreement with the view of Le Jour that there is a lesson in this incident which Ottawa, the nine provinces and Canada’s 4,346 municipalities — not to mention thousands of school boards — ought to meditate upon seriously. Too long, in this Dominion, has taxation been imposed haphazard, with no real understanding of how it affects the economic function of the nation’s business.” "They Shall Have Music" Hollywood — Samuel Goldwyn has changed the title of “Music School” to “They Shall Have Music.” Might Lack Product For City's Houses Quebec — It may be impossible for major film distributors of Canada to provide screen product because of existing franchises and contracts if the City of Quebec proceeds with its plan for the establishment of two municipal theatres to replace the commercially-operated cinemas which have been closed in that city because of inability to meet the high cost of taxation through the doubling of the local amusement ticket levy. This was the intimation forthcoming in film circles following receipt of news of the latest developments here. The reported decision of the Quebec administration followed a refusal of the Quebec theatre operators to reopen on the promise that the additional tax might be repealed at the end of a year if found excessive. The civic officials cannot expect to get French films to replace American and British pictures for the proposed municipal theatres because, it is pointed out, two of the 11 closed theatres in Quebec are operated by France Film Co. which imports the French-language product from France, the argument being advanced that the company would not release pictures to the city while its own houses were closed because of a tax burden imposed by the municipality. From the head office of Famous Players Canadian Corp. comes the information that the total direct taxation imposed upon theatres in the City of Quebec is in excess of 40 per cent of gross revenue. The amusement tax actually represented 24 per cent; there is an annual seat tax of 85 cents per chair and other charges on business turnover, marquee, sign and other local fees all bring the local impost to more than two-fifths of the total take. A film official suggested that the Quebec situation was the turning point in the struggle revolving around the subject of taxation and that the issue in that city was the beginning of a movement for a demand for tax reform throughout the whole Dominion, the view being taken that the point had been reached where the numerous governments could not be permitted to extract greater taxation in an arbitrary manner at will without recognition of the right for existence on the part of commercial enterprises and individuals. The warning has gone out to all branches of the motion picture business in every section of Canada to be prepared to jump into a showdown fight against unjust and unwise taxes. "Three Sons" to Twist Hollywood — “Three Sons,” a Robert Sisk production for RKO to feature Edward Ellis, will be adapted by John Twist. Montreal — Although Quebec’s 11 motion picture theatres are still closed after a month of darkness, signs are not lacking that the theatre operators and the city authorities are getting closer together. Presentation of a petition bearing 28,000 signatures of Quebec citizens protesting against the new 10 per cent tax, and arguments by local business firms that the tourist influx had been diminished by the adverse publicity the city has received, led the civic administrative committee to pass a resolution calling for repeal of the tax “within a year,” providing it was shown that general business had suffered. Premier Maurice Duplessis and Mayor Lucien Borne of Quebec are scheduled to confer on the situation within a few days. The Premier has expressed the opinion that the onus of continuing or deciding not to collect the tax lies with the city, but Mayor Borne and some of the aidermen take the view that the act empowering them to collect it is obligatory and says that the city “will” (meaning “must”) collect the tax. Quebec city already collects a tax of 121/2 per cent for the local hospitals. The closing of the theatres has, in the opinion of storekeepers and hotelkeepers, had a serious effect on tourist traffic, a situation which seems likely to become worse as the season advances, if settlement of the dispute is not quickly arranged. Suggest Suspension to Sept. 15 A proposal made by the theatre operators that the tax be suspended until September 15 for the benefit of tourists is to be considered by the City Council, Mayor Borne said. If the proposal is adopted an attempt will be made to reach a compromise in the interval. While the Mayor sticks to his opinion that the month’s trial given the tax by the theatres was not sufficient to enable them to judge of its effects, particularly as the Royal visit took place during May, the theatre operators are convinced that they cannot operate profitably under a total impost of 40 per cent. Their views were re-affirmed by Paul Vallier, manager of the Capitol Theatre who declared “We cannot open up until the new taxation is lifted.” Industrialists, hotelkeepers and store Proceed With Civic Theatre Plans Quebec — Mctyor Lucien Borne has instructed the committee in charge of the Palais Montcalm, Quebec's civic amusement center, to go ahead with plans to operate two civic motion picture theatres, one uptown and one downtown. A member of the committee has been named to proceed to Montreal to find out what films are obtainable. BOXOFFICE :: July 1, 1939 K 71