During the darkest months of COVID-19 lockdowns, the creative forces behind the animation industry were working harder than perhaps ever before. Karen Jackson, a Toronto surfacing artist and production co-ordinator, was doing work for three studios simultaneously on shows such as Maya and the Three and Bubble Guppies. Many of her colleagues in animation and visual effects were holding down at least two gigs, too. A global horde of bored viewers were looking for entertainment, and animation workers were able to pivot to remote work in a way that live-action productions could not. “There was so much work and not enough talent,” Jackson says.
For decades, Ontario, Quebec and British Columbia have tried to forge reputations as crucial hubs in the global animation and visual-effects economies. The burst of pandemic productivity brought their work into full view. In 2023, the sector drew in $1.9-billion across the country, according to Statistics Canada figures released last October – nearly triple 2015’s revenue.
Yet the numbers belied the true state of the sector. By 2023, the market for animated and digitally designed work – and workers – was starting to crash. Studios across Canada began shedding jobs by the thousands.
“There was a lot of fear and hopelessness,” says Jackson, a mother of three who was laid off twice that year – forcing her, like many others she knows in the field, to sell her home.
How decades of hard work – and the rise of Paw Patrol – sent Canadian kids’ TV to millions of screens around the world
Jackson is the chair of Toronto Animation Arts Festival International. When the industry-event organizer invited studios and animators to a job fair in June, 2024, the studios that showed up had maybe 20 total jobs on offer, her team estimated; there were more than 900 attendees. In Quebec, the sector’s full-time employment has fallen by two-thirds since 2022. While some studios have slowly begun hiring again, the jobs are often for short-term contracts.
On the surface, the resounding success of made-in-Canada exports such as Spin Master Entertainment and Guru Studio’s Paw Patrol could create the impression that Canada’s animation sector is doing just fine. It’s not. A huge portion of the industry relies on “service” jobs – that is, contract work for bigger companies and productions.
What is happening now is a historically unique bust after a historically unique boom – with what would once have seemed like an unfathomable number of factors are playing against the sector.
Nelvana’s The Care Bears Family.Youtube
Nelvana’s Babar: The Movie (1989).Nelvana
Streamers’ voracious appetite for animation disappeared after the world emerged from lockdowns, killing budgets and entire teams. Surging inflation and interest rates drove up costs just in time for the 2023 Hollywood strikes to clog production pipelines everywhere. The spectre of generative artificial intelligence software pits artistic value against shareholder-appeasing cost-cutting. And in Quebec, whose studios had a hand in half of the past decade’s best visual effects Oscar winners, the shrinking of a once-crucial tax credit has threatened the livelihoods of thousands of workers.
And then the industry was dealt a massive symbolic blow when, earlier this month, the debt-ridden media company Corus Entertainment confirmed it had halted all production at the storied animation studio Nelvana. First launched in 1971, Nelvana helped shape the Canadian animation sector, building off of the success of Care Bears to become a leader in animating others’ intellectual property – delivering the world megahits such as Franklin, Babar and The Magic School Bus. Corus bought Nelvana at the turn of the millennium; now the studio will be a zombie of its former self, focusing, at least for now, on managing and distributing its existing catalogue.
While many of animation’s afflictions are global in scope, the industry is trying to warn, as loudly as possible, that the infrastructure and reputation that Canadians have built is under threat. Matthieu Chatelier, a Quebec compositing supervisor, has already organized both a sit-in at Montreal’s city hall and a petition for the province’s National Assembly to warn of the consequences of changing the tax credit. His warning is stark: “If most of the work goes to another country, I believe most people with talent, creativity and knowledge would follow.”
Until very recently, Chatelier used to lecture on compositing – layering visuals together to inject some magic into a shot – at L’Université du Québec en Abitibi-Témiscamingue. But he recently paused his teaching after coming to terms with the brutal job market his students were entering.
One of those students was Maïka Laliberté-Bazinet. She fell in love with the work of 3-D texturing, sometimes becoming so transfixed by the process that she would forget to eat for hours. The job market was insatiable for her kind of talent at the start of her three-year program. Now a recent graduate, she watches mid-career workers snap up junior-level jobs she’d been hoping for. “How can a junior compete with a senior who can accept a pay downgrade?” she asks.
Mark Jones, the dean of Sheridan College’s renowned faculty of animation, art and design, has been trying to figure out the answer to that question. He’s analyzed Statistics Canada data and figures from both the Canadian Media Producers Association and media-sector data firm Ampere Analysis, overlaying macro-developments with economic data.
He found that new streaming entrants such as Disney+ helped intensify competition by 2019, boosting the sector’s economic activity just before the pandemic. But streamers began pulling back on new projects in early-to-mid-2022. Production in Canada peaked at the end of that year. Subscriber growth, and spending, was slowing down.
Cash flow took a hit worldwide with the surging inflation and subsequent interest-rate jumps of 2021 and 2022. Then came the 2023 strikes by the Writers Guild of America and the SAG-AFTRA actors’ union. Though a separate contract for the U.S. Animation Guild wasn’t renegotiated until 2024, “we saw a reduction in investment, which means a reduction in new projects getting green-lit,” says Eddy Pedreira, president of Canada’s first International Alliance of Theatrical Stage Employees (IATSE) animation local in British Columbia.
SAG-AFTRA actors and Writers Guild of America writers on strike in Los Angeles, in August, 2023.MARIO ANZUONI/Reuters
Because the animation industry there, like much of Canada, was built in large part on “service” work shopped around by clients – rather than building on in-house intellectual property – “competition for the dwindling pool of work became fierce,” Pedreira says.
The past two years have been plagued with reports of layoffs from shops of all scopes and sizes, affecting not just animation and visual-effects workers, but video-game makers as well: Cinesite, 9 Story Media Group, DNEG, Ubisoft, even Walt Disney Animation Studios’ Vancouver office. In August, Canadian entertainment company WildBrain made a “strategic exit” from its broadcast business, ending the life of three channels, including the nearly four-decade-old Family Channel, a bastion of cartoons. Then Corus paused production at Nelvana.
Fred Lum/The Globe and Mail
Industry veteran Pete Denomme, executive producer and chief executive of the boutique Toronto studio Switch VFX/Animation, had to turn away work earlier this decade. It’s since dried up, and he had to lay off about 8 per cent of his staff a few months ago. “The only way I make my living is having artists who are incredibly talented to do this stuff,” he says. “It was the hardest thing I’ve ever done.”
The Computer Animation Studios of Ontario, an industry association that Denomme co-chairs, took an informal poll of its members this past May. In addition to finding that 82 per cent of member studios had laid off staff, with 23 per cent of them out of projects to work on and another 37 per cent expecting to run out of work by September, a tenth of them felt likely to cease operations by the end of the year.
The Quebec Film and Television Council found even starker numbers in its province. Its surveys have found the sector’s permanent jobs collapsed by two-thirds from its 2022 height of 8,037 full-time or equivalent workers to 2,603 in 2024.
On top of the factors that are walloping every other jurisdiction, the devastation hitting Quebec is also tied into tax changes. The province announced in March, 2024, that it would cap the tax credit at 65 per cent for international studios working with the province’s animation and visual-effects companies. It’s made the province’s sector much less enticing to international clients, who, Canadian leaders say, are instead eyeing jurisdictions with greater incentives such as Australia.
Both the Vancouver and Montreal offices of The Cinesite Group have seen major cuts in the past few years. Véronique Tassart, the studio group’s director of mergers and acquisitions, says it has lost millions of dollars in contracts in Quebec alone, where its headcount has fallen from about 600 to 360. “The industry hadn’t been consulted at all to come up with a new [tax] structure, so it took us by surprise,” she says.
Workers and industry leaders alike have rallied against the tax change – hence the sit-in and petition that Chatelier organized last year. In spite of the media blitz and 12,000 signatures, nothing changed. “It took a few weeks to get an answer, but they still kept their position,” Chatelier says.
Stéphane Cardin, the Quebec Film and Television Council’s CEO, noted that the figures his group put together may not reflect as dismal a situation as it appears at first glance. He, and many others interviewed for this story, described a structural shift happening among streamers, networks and other buyers of Canadian studios’ services: they’re still hiring, but for shorter-term projects. So while full-time jobs might be disappearing, contract work appears to be filling some of the gaps.
“There is still a significant level of activity happening,” says Cardin, who adds that discussions between industry and government are continuing. But he worries about how much Hollywood is willing to seek talent abroad in the age of Trump 2.0. “There clearly is increased protectionism in the U.S. right now to keep productions at home,” he says.
None of this is ideal for stability. The number of shows being commissioned is falling at the same time as the length of projects is shortening, too. “It used to be three or four seasons at 24 episodes; now a single season of eight episodes is a big ask,” Denomme says.
Spin Master’s Paw Patrol, beloved by young viewers around the world, first launched as a TV series more than a decade ago.Courtesy of Spin Master / Paramount via Elevation Pictures
Depending on the optimism of whom you ask, the future of Canadian animation and visual-effects shows more promise, or even more disarray, than today’s scrambled market.
“This is a time of disruption, which also means it’s a time of reinvention,” says Jones, the Sheridan dean. He tells students not just to have reels ready for job applications, but to learn skills to enable entrepreneurship. Platforms such as YouTube can earn artists side-hustle income streams or, if they’re lucky and talented enough, a chance to turn their own intellectual property into a full-fledged show.
(Of course, not even Sheridan’s renowned arts school can escape the macro-forces shaping its fate: it cut a half-dozen programs after international-student caps were introduced, including game-level design and its advanced diploma in visual and creative arts.)
New threats are lurking just around the corner. Even if the job market is levelling out, much of the sector is worried about the threat of generative AI. The full shape of that threat has yet to become clear. There are industry-wide debates about how to harness generative AI tools without using training data that violate copyright. And the sheer cost of computing power required to use them, too, is keeping many producers cautious.
But because of the full-court-press AI hype-cycle, there are short-term threats, too. Emily Gossmann, a Titmouse animator-turned-senior-steward with the Canadian Animation Guild (IATSE Local 938), says it’s already very easy for a studio to buy into the hype, rerouting money for new animation projects towards automation tools instead.
Members of the fictional K-pop group Huntr/x in a still image from the film KPop Demon Hunters from Canadian director Maggie Kang. The movie, produced by Sony Pictures Animation and released by Netflix, became a global hit.Netflix/CP/The Canadian Press
In fact, all of this is weighing on the leaders of Canadian animation’s burgeoning labour movement. This decade, IATSE Local 938 helped B.C. workers at studios such as Titmouse and WildBrain organize for better working conditions. But the issues that originally prompted the movement may be far less existential than the issues it’ll need to deal with in the future. “We got into this to make sure we got paid overtime, man,” Gossmann says, briefly laughing before turning serious. “Grappling with AI is such a mess.”
Management is trying to grapple with it, too. Laurence Cymet, the head of technology at the Toronto visual-effects studio WeFX and chair of the local section of the Visual Effects Society, adds that “the danger isn’t necessarily the AI itself, but the chaos and confusion the hype around it causes.”
There should still always be work for creative vision and technical skills of Canada’s animation and visual-effects artists, Cymet says, since those traits can also be ported easily to other industries. And Jones, the Sheridan dean, believes that animation is resurging in the public imagination.
“Suddenly we find ourselves in the summer of KPop Demon Hunters,” he says. “South Park just came back in the zeitgeist. It continually shows itself as accessible, relevant, and can appeal to so many broad audiences.”
The question remains whether the work will remain in Canada. Fresh out of school, Laliberté-Bazinet now is sending applications all around the world: “If there’s nothing here, I’m just going to go where there’s jobs.”
