Ottawa: The state of domestic TV production provided producers with one of few sources of optimism in Profile 2006, the economic study of the Canadian film and TV industry unveiled at CFTPA's Prime Time conference (Feb. 15-17).

According to the report, presented by CFTPA president and CEO Guy Mayson and his APFTQ counterpart Claire Samson to a sold-out crowd of 625 at the Westin Ottawa, domestic TV production was up 3% to $1.7 billion in the 12 months ending March 2005.

The overall health of production in 2004/05 looks bleaker, however, with total film and TV production spending in Canada down 9% to $4.5 billion, following a decline of 2% in 2003/04. One of the chief causes of the drop was a 54% decline in foreign shooting in B.C. to $567 million.

However, B.C. service numbers were misleadingly high in the previous cycle due to a few Hollywood guest projects with inordinately high budgets, such as I, Robot and The Chronicles of Riddick. And after B.C. upped its production tax credits in early 2005, the West Coast enjoyed a healthy summer of service production, and as the province recently renewed those credits, the prospects for summer 2006 are also promising.

More troubling in Profile 2006 is the fact that the volume of domestic feature film production was down 31% to $253 million, and treaty coproduction was down 39% to $405 million.

Meanwhile, the situation for Quebec TV drama is a mixed bag. While the province's audiences have by and large embraced domestic shows, average budgets remain small and are getting smaller ­- $259,000 per hour in 2004/05, down from $300,000 - compared to $1.3 million in English Canada.

The problem, according to Samson, is the limited export appeal of Quebec TV. While English-Canadian shows often get cancelled due to low ratings at home, they do have a shot at other markets, as witnessed by the syndicated success of Da Vinci's Inquest, Cold Squad and Tom Stone in the U.S.

"Foreign broadcasters have no appetite for [French-Canadian] product," said executive producer Vincent Leduc of Montreal's Zone3, in a follow-up panel. "And the Telefilm pointing system is not helping."

Mayson and Samson are, unsurprisingly, asking government for more production funding, along with new coproduction policies to better compete internationally and new incentives for private funding. The latter couple of points could be interpreted to mean lowering Cancon requirements and bringing back aspects of the Capital Cost Allowance ­- or tax shelter - era.

Such moves would no doubt bring with them controversy, as the tax shelter era - which had its heyday in the 1970s and '80s - has been much maligned for its films of questionable Canadian cultural value, although some see its advantages.

"[The tax shelter] had the benefit of building production infrastructure," said panelist Alexandra Raffé, president of Savi Media.

Meanwhile, Telefilm Canada executive director Wayne Clarkson acknowledged that 51% of film and TV funding in Canada comes from public sources. "This is not a healthy state of affairs," he told the crowd in the lead-off speech on Feb. 17.