U.S., CANADA FILM-PRODUCTION BROUHAHA ADVANCES A FRAME.

Byline: Dave McNary Staff Writer

Now it's getting personal.

The bashing between the United States and Canada over runaway film production has hit new heights. It's not quite as if the ``South Park'' movie has come true and the United States and Canada are going to war; it's more like the MacKenzie Brothers have told the United States, ``You're a bunch of hosers.''

The fight has now gone from Hollywood and Vancouver - site of a growing number of TV and film productions - to Washington, D.C. Raymond Chretien, Canada's ambassador to the United States, has sent a letter to U.S. Rep. Howard L. Berman, D-Mission Hills, complaining that the Valley representative is unfairly bashing Canada for luring Hollywood productions with rebates and tax breaks.

Though couched in diplomatic phrasing, Chretien basically said Berman was wrong on several fronts:

He said Berman's criticism is baseless since Hollywood's current downturn is not due to runaway production but other factors such as the Asian crisis and cuts in big-budget studio films.

He claimed Canada captures only $573 million in yearly production, only a fourth of the $2.3 billion calculated in a recent economic study commissioned by actors' and directors' unions. That study, by The Monitor Co., estimated Canada accounted for 81 percent of all runaway production, shifting 24,000 jobs and $10.3 billion in annual economic benefit outside the United States.

Canadian provinces are entitled to use tax breaks to attract production of Hollywood movies and TV shows because Canadians are consumers of such programming.

Canada is a peripheral player, with only 2 percent of a global business. ``The United States remains the dominant force in the film and television industry,'' wrote Chretien, nephew of Canadian Prime Minister Jean Chretien. ``Hollywood's leadership is not threatened; if anything it is stronger than ever.

``But as foreign markets become ever more important elements in the growth of this industry, it is only natural that non-U.S. societies will also want to participate in the wealth they generate.''

Chretien's missive came in response to Berman's recent assertion that Canada had been duplicitous in negotiating the North American Free Trade Agreement by insisting their nation needed economic incentives to protect ``sovereign culture'' in the film business.

Berman, in a telephone interview Tuesday, took issue with some of Chretien's factual assertions such as the amount of production in Canada. ``To some extent, the letter insulted our intelligence,'' he said, adding he plans to respond in writing shortly.

Canada has counterattacked recently over complaints about runaway production, asserting it will fight any protectionist moves. And in a move that raised eyebrows across Hollywood, British Columbia announced last week it would launch a $50 million expansion of sound stages in Vancouver, backed by a $14 million loan from the province.

Berman said Canada has become increasingly defensive about subsidizing its film business to lure away productions. ``I think that Canada thought it could pluck away huge parts of this industry and the United States would sit back blithely,'' Berman said. ``My constituents think this is a very large issue.''

The skirmish comes on the heels of efforts in the California Legislature to keep producers at home. Two bills that would provide tax credits for California-based film and TV productions were recently approved by the Assembly and a Senate committee.

``We must be becoming effective if the Canadian government is making these kind of responses,'' said Assemblyman Scott Wildman, D-Glendale, who authored one of the bills. ``The situation is getting more critical every day.''

Wildman noted that the bill's 10 percent rebate was derived from extensive discussions with producers and studios as a figure that would be sufficient to turn down the lure of cheaper foreign locales. ``The 10 percent is not something that was pulled out of thin air,'' he added.

Jim Shanahan, vice president of the advocacy group Film and TV Action Committee, said Chretien was out of line for not acknowledging the job losses that Canada is creating.

``What we are looking for is a level playing field,'' he said. ``We're concerned about more than 20,000 entertainment jobs that have left the country.''