Canadian Film Weekly (Aug 5, 1942)

August 5th, 1942 = Canadian FILM WEEKLY Vol. 8, No. 32 August 5, 1942 Uzekly, Address all communications—The Managing Editor, ~Oanadian Film Weekly, 21 Dundas Square, Toronto, Canada, Published by Film Publications of Canada, Ltd., 5th Floor, 21 Dundas Square, Toronto, Ont., Canada. Phone ADelaide 4310, Price 5 cents each or $200 per year. In Ottawa The Canadian motion picture industry has been occuPying considerable time during the current parliamentary session—time during which it has been attacked from several sides and defended. Mr. Esling, member for Kootenay West, British Colum ' bia, claimed that the distributors have been favored above ‘all others in the matter of taxing rental returms to nonresidents of Canada. The tax, which was raised from five per cent to fifteen, is ten per cent to the film distributor and Mr. Esling saw discrimination in it. The distributors were adequately defended by the Minister of Finance, the Hon. J. L. Ilsley, who said that they had pointed out how the ten per cent tax, applied as it is now, would yield more than the 15 per cent applied as originally intended. This indicates a willingness to be taxed fairly by the distributors. Mr. Ilsley’s own expressed opinion was that “It is away high now.” Apparently Mr. Isley’s rebuttal was acceptable, as the critic faded out and the members went on with other matters. * * * Verbal recklessness in high places is rare because of the power of words spoken by highly-regarded people. During his tax criticism Mr. Esling referred to telegrams he had received from Independent exhibitors in British Columbia protesting against high film rentals. This is nothing new. That sort-of-give-in-take has been -going on since the first days of the business. But Mr. Esling said something also that would have been very interesting had it been explored by Commons listeners. The telegrams, he said, protested against “these very agencies raising film rentals to independent theatres, apparently for the purpose of putting independent theatres out of business and: getting control of them.” We take it that Mr. Esling and his informants mean that the distributors wish to take over the control of all independent theatres in British Columbia. Such a statement would be far-fetched and ridiculous if it wasn’t spoken by a respected member of the House of Commons—one who has been a friend of the motion picture industry. Could he have meant it—or did his informants exaggerate for emphasis? We think they did. Unless the men who prompted that statement can substantiate it, they should cause Mr. Esling to withdraw it. It reflects not only on the distributors but on the entire industry. The sort of effect that statement would have on the minds of readers and listeners will not do the industry, exhibitor and distributor alike, any good. Attempts to discredit any section of the industry to that extent and in that way by another leaves a bad taste for all, outside and in, * * * The showman’s bugbear, the pass, came in for a panning during the session. The Mounties have been checking up on paper patrons who don’t pay the amusement tax and the result is a proposed amendment to the control of the tax. This very thing has been worrying theatre executives for some time and many big houses now write down the names of those who pass the doorman without a ticket on business or otherwise. With one thing and another, the motion picture industry had a big time in parliament. HYE BOSSIN, Managing Pditor Ilsley Answers Tax Critic (Continued from Page 1) as the basis of his criticism reads: “That salary and other periodic payments payable to non-residents of Canada who are residents of a country which imposes a tax of a similar nature shall be subject to a tax of 15 per centum at the source.’”’ The tax was raised from 5 per cent last year to 15 per cent this year. The member from Kootenay West had said, before Mr. Ilsley’s reply, that ‘I am emphatic in my protest against this consideration being given the film agencies. They are making enough money as it is; yet in every case since 1936 some special considerations seems to have been given to these people. Will the minister tell us why that has been done? We shall lose a half million dollars in 1942 because of our sympathetic treatment of these film agencies.” Mr. Ilsley, indicating that the film companies felt that the 15 per cent tax was too high in the light of their earnings, said that he had studied their statements and could find nothing wrong with them. He was satisfied that the higher rate would be unjust in regard to film rentals. The argument advanced by the companies “was that if this tax, which is a gross tax, were levied at the rate of 40 per cent or perhaps even 50 per cent or 60 per cent on the net earnings of these companies, it would yield much less than is paid under the ten per cent tax on the gross rentals, that is, on the proportion of the net earnings which would be allocable to the Canadian business.” When the discussion was resumed after the recess, Mr. Ilsley repeated these arguments and the Hon. Mr. R. B. Hanson, leader of the Opposition in the House, replied, ‘‘That would be a question of fact.” “Their facts, I think, are correct on that,” answered Mr. Ilsley. “They appear to be represented by reputable counsel, at any rate, they show us all the figures; and on the net basis, if we convert this into a tax on the net income, it would be at a terrifically high rate. It is away high now.” Mr. Esling, in the course of his time on the floor, made several references to a flood of telegrams received by British Columbia members, protesting against high film rentals. ‘‘Today every member from British Columbia,” he said, “has received telegrams protesting against these very agencies raising film rentals to independent theatres, apparently for the purpose of putting independent theatres out of business and getting control of them.” Indies Beef at. Freeze Prospect (Continued from Page 1) the exhibitor. That would seem to guarantee product to the exhibitor oe At the same time the exhibitor would not be allowed to buy anyone else’s product, making it work both ways. The news about the reaction of exhibitors throughout the country to the proposed freezing regulations, as it filters into Toronto, is that they are almost unanimous in their opposition. Feeling on the subject is rising since delegates and proxies have returned their reports on the draft containing the proposed rulings, which is reported to be in Ottawa for the final approval of officials. This would make it law. Some of the sub-sections suggested have exhibitors irate at the prospect, while at least one has them puzzled. If the freezing regulations offered to Ottawa become law, the exhibitor will be forced to buy the same amount of product for 1942-43 as he bought for 1941-42. Such a ruling, exhibitors point out, if rigidly applied means that not only is an exhibitor prevented from changing his source of films but he cannot buy less even if he thinks he can do with less. Exhibitors point out also that the end-season sluffing of surplus product, a regular practice where possible, is also hindered. Exhibitors who have been overbuying for the sake of a wider choice will be unable to vary or change this practice. Not that the suggested regulations would blow hot for the distributors and cold for exhibitors. The former cannot sell to anyone but the present contract holders— and at the same price. Another point bringing protests to Ottawa from different parts of Canada is the shift of the customary basic period so that 1941-42 product deals will act as the anchor of the new regulations. Prices, it is contended, will be higher under such an arrangement. Barnett Laxer, Independent member of the Advisory Council, is leaving for an extended trip across Canada and it is said that his chief interest in moving about is to talk things over with exhibitors in distant places. Theatre Equipment and Supplies COLEMAN Complete ELECTRIC CO. 258 VICTORIA ST:, Toronto, Ont.