Islanders now have a unique opportunity to invest in the production of an upcoming movie, Still the Water, which is planning to shoot on P.E.I. this year.
The company was just approved by the provincial government to sell shares — and the province is offering a tax credit of 35 per cent. It’s part of a little-used government program called Community Economic Development Business, or CEBD.
“They actually get to become owners of the movie, which is really fun because it gives them a whole new layer of ownership,” said Susan Rodgers, the woman behind Still the Water, from the movie’s offices in Summerside, P.E.I.
“And they can participate in fun things like meet and greets with the cast and get some Still the Water swag.”
The movie is a story of two hockey-loving brothers in rural P.E.I. who live under the thumb of an alcoholic father. The film picks up a decade later as one of the brothers returns home — there’s hockey, fishing and family drama. Rodgers is a successful author who’s penned a popular series called Drifters.
Still the Water is only the fourth CEDB company on P.E.I. in the seven years since the province began offering the program.
“It’s designed to keep RRSP money in the community,” Rodgers explained. “It’s kind of a win-win, in that shareholders can invest in Still the Water and qualify for a 35 per cent tax credit. So immediately, it’s a nice little return.”
‘A trailblazing thing’
It took months to navigate the government bureaucracy to achieve CEDB status, Rodgers said. Now, Still the Water is busy trying to sell shares — especially as RRSP deadline looms — just as the company is also gearing up to begin shooting at the end of next month. Shooting could be delayed until the fall, Rodgers said.
“It’s all happening at once, it’s a very busy time right now,” Rodgers said. “But it’s a lot of fun, we’re enjoying the ride.”
Shooting locations have already been scouted throughout Prince County, with actors cast and crew waiting for the green light. Plans are to have the movie ready for film festival season in the fall.
Rodgers has produced other films but notes it’s hard to get funding for a feature film — which is longer and bigger-budget — until you have a proven track record.
Aiming for $2M
Still the Water is aiming to raise $2 million with the share offering, but must raise at least $500,000 within 90 days. If it fails, any investors would be refunded and the movie would not get made, Rodgers said — but she firmly believes they’ll reach their goal.
“We trust that the community will support us in this project and that people will come on board and have some fun owning a movie,” Rodgers said.
Islanders may each invest between $1,000 and $20,000. As well as the 35 per cent provincial tax credit, investors have the additional benefit of being able to hold their shares in an RRSP, making them eligible for further income tax breaks.
Shareholders also have the option of being on camera in the movie, featured in one of several crowd scenes at a hockey rink.
‘Could be very beneficial’
“It’s to help grow a local business,” said P.E.I. Finance Minister Heath MacDonald.
He said the CEDB program has not been used often, but could be “very beneficial,” noting about 200 businesses have opened on P.E.I. in the last year.
“It could become a more utilized program in the future. People are always looking to increase their capital — so if they want to give up some equity in their businesses, there’s maybe a real opportunity to do that.”
MacDonald believes that surrender of equity to shareholders has been a barrier for P.E.I. companies, especially small ones. And, he notes, investors could be reluctant to invest in unknown startup businesses.
Providing the tax credit will indirectly cost the province, he said, but it’s worth it to create employment and grow P.E.I.’s film industry.
“I think it’s a tremendous investment for governments to be a part of,” he said.
P.E.I.’s three current CEDB companies have raised about $20 million combined by selling shares, MacDonald said.
Film industry watching closely
P.E.I.’s film industry is watching the movie, and the share offering, closely — could this be the future of film funding?
“It’s very exciting to see how this works out and whether this could be an alternative route for financing,” said Emma Fugate, president of the board of Film PEI, formerly the Island Media Arts Co-Op.
“There’s a great opportunity there for people to potentially have a financial payback,” if the movie makes money, she points out.
“At the very least, it gives local businesses and local individuals the opportunity to buy into the project.”
Traditionally, movies rely on a patchwork of federal and provincial funding along with the Canada Media Fund, broadcasters and some private investment. “It’s one of the biggest producer headaches, is putting all that financing together, because you can’t go ahead until you’ve got all your money in place,” Fugate said.
Fugate would like the province to consider tweaking the CEDB program to encourage Islanders to invest in a film production corporation rather than in individual projects. This would spread risk for investors, she posits, and reduce red tape for businesses trying to qualify as a CEDB.
“It’s something we could look at … we’re open to change,” responded Heath MacDonald. “If we can do things better to make P.E.I. more successful, we’ll certainly take a look at it.”
‘Good for the company’
Royal Star Fisheries started using the CEDB program back in 2014 and has raised $12.6 million in shares, which it has used to expand. The company currently has an offering for another $3 million in shares, the province says.
“It was good for the company,” said the plant’s manager, Francis Morrissey. Islanders liked investing in an Island company — especially one with a 90-year history in the area like Royal Star.
Morrissey speculated that some businesses may be turned off by the amount of paperwork involved in becoming a CEDB. But he said he’d “recommend it to any Island company.”
Solar Island Electric raised $1.4 million, and PEI Craft Brewery in Montague raised $326,000 with the program, according to the province.
‘They’ll be allowed to speak up’
Because Islanders will have an ownership share in the movie means they’ll have a say in the production, Rodgers said.
“We will be having meetings that shareholders will be invited to, and of course they’ll be allowed to speak up. I’m the kind of director and business owner that’s open to ideas.”
“I don’t know how many seats I’ll be able to get at the Oscars!” she joked. “My goal is just to make a really beautiful film and make investors and shareholders proud.”
The movie is also offering local product placement opportunities.