The auditor general says Alberta’s $43-million film and TV grant program has been abused because the rules are so loose, they are almost unenforceable.
Merwan Saher said grant recipients have been violating the aim of the Alberta Production Grant by hiring people and buying services from out of province. He said one person claimed multiple salaries on the set for three jobs.
Saher stated the government was aware of the problem almost two years ago, rewrote the rules to tighten them up in early 2016, but then never implemented the changes.
And he said the government has continued to hand out grants to producers deemed to have broken the rules.
“The management has been substandard,” Saher told a news conference Thursday after the release of his latest report.
He said he was particularly concerned about the government continuing to give more grant money to companies that were already abusing the program.
“I apply a very simple test: If that was your own money, would you do that?” said Saher.
The grant is given to film and TV production companies to encourage them to spend money in the province and hire local talent.
It dispensed $43 million in the last fiscal year. Projects are eligible for up to $5 million or 30 per cent of eligible expenses, whichever is lower. The auditor said the program is over-subscribed and is in high demand.
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In late 2015, the Culture and Tourism department, acting on anonymous complaints, found some companies were hiring people and paying for services in B.C., Ontario and the United States.
Neither the auditor nor the department would name the production companies involved.
The department has since been trying to recoup $1.2 million in ineligible expenses and has gone to a collection agency for help.
The auditor noted the department has had to abandon some claims “because the unclear guidelines made it difficult for the department to enforce compliance.”
The department crafted tighter guidelines in early 2016, at the same time that the current minister of the department, Ricardo Miranda, took over.
But under Miranda, the new rules were not put in effect for a year-and-a half, until they were introduced by him last week under a revised grant program, titled the Screen-Based Production Grant.
Miranda, in an interview, said the majority of the grant applicants followed the rules. He said the year-and-a half delay was because the issues were complex.
“It’s not something you can fix overnight,” said Miranda.
“We needed to figure out how the program needed to be structured in a way that we captured some of the issues that were being raised (while) being responsive as well to the needs of the industry, because you could easily damage the industry if you create uncertainty.
“It’s highly mobile.”
Asked why the government continued to give money to perceived rule breakers, Miranda said it was difficult to disentangle individuals from numbered companies from production companies that were forming and dissolving from season to season.
“(Under the old rules) you couldn’t deem them to be ineligible,” he said.
Miranda said the new rules will have tighter controls and oversight to make sure money is spent in Alberta to benefit Alberta.
He wouldn’t say whether producers who filed ineligible claims in the past will have that used against them should they apply under the new program.
“They will be evaluated on the merits of the job creation and economic diversification (from the project),” he said.
Saher said they will be looking at the guidelines and checking to see if they are effective down the road.