Chief executive says New Brunswick puts him at a competitive disadvantage

MIRAMICHI - One of New Brunswick's upstart success stories is struggling to secure work.

FatKat Animation Studios is waging a losing battle against other Canadian firms for new contracts.

"We've lost many of the projects we've come to bid on," says Gene Fowler, founder and president of privately-owned FatKat. "We can't get our budget low enough."

In a candid interview with the Telegraph-Journal, Fowler said New Brunswick's film and television tax credits are lagging behind the rest of the country, making it difficult for his company to secure new work.

Animation studios in Toronto, Ottawa, Vancouver and Halifax have access to larger tax credits than what are available in New Brunswick, lowering their costs and making their proposals cheaper than what FatKat can put forward, he said.

Nova Scotia, for example, offers a 50 per cent rebate on labour costs for film and animation projects in its province.

New Brunswick's labour credit for such work is 40 per cent.

"There's a ton of business, a ton of work out there. All I need is a level playing field," said Fowler.

FatKat, Atlantic Canada's largest animation studio and the only one of it's kind in New Brunswick, has enough work to keep its staff of 85 employed full-time until 2009.

The Miramichi-based studio is working with U.S.-based Animation Collective to produce the half-hour long superhero cartoon Three Delivery in association with Nicktoons Network, YTV and the BBC.

"That lasts until December, January 2009," said Fowler.

But without knowing if the province will improve its tax credit, it is difficult to bid and win further work, he said.

Fowler has garnered a reputation as a rising business star.

A New Brunswick ambassador, the 31-year-old Miramichi native was named one of Atlantic Business magazine's Top 50 CEOs in 2007 and won the Business Development Bank of Canada's Young Entrepreneur Award for New Brunswick last year.

Fowler said he's not sure if the New Brunswick government realizes that his firm can't wait until December to find out about the province's plans for tax credits for film and animation projects. The province is engaged in a comprehensive review of personal and business taxes.

"It puts me dead in the water because I have to plan now what I'm going to do in January."

Fowler said he wants to continue to grow his business in Miramichi and is hopeful the province will take steps to make New Brunswick competitive.

"From what I hear, they're trying to lure big studios to the province," he said. "But we have a studio here that's bringing in millions of dollars."

Fowler said he's grateful for the support he's received from the province to date - including hundreds of thousands of dollars in funding for training and marketing.

"There is no way I could have been this successful without their help," he said.

But provincial officials may not realize how important a competitive tax credit is to FatKat or how important it is for the studio to know what the province plans to do with its film tax credits.

"I don't want to leave the Miramichi, it's my hometown. I love it here.

"A lot of the guys at the studio are buying houses, a lot of them are moving their families here. They depend on me for a job," he said. "But I depend on the government to make sure the playing field is level."

Finance Minister Victor Boudreau did not return a call for comment.