Remember those great scenes in Blues Brothers 2000 that evoked the urban grit and soul of southside Chicago and Joliet? Well, sorry. Those scenes were actually filmed in a city that doesn’t know an el station from Wrigley Field. Blues Brothers 2000 was shot across the Canadian border, in Toronto.

The same goes for a rapidly increasing number of TV movies and feature films. Production is migrating, principally to Canada, to take advantage of labor costs that are on average 20 percent lower than in the United States. This runaway globalization of production has thrown Hollywood–and its unions–into a full-scale alert. “This issue is at the very top of our legislative and organizational agenda,” says Catherine York, director of government relations for the Screen Actors Guild.

Last summer SAG and the Directors Guild issued a joint report measuring the extent of runaway production. The report revealed that between 1990 and 1998 the percentage of US film and TV production occurring overseas doubled, to more than 27 percent of the total. A full 45 percent of generally lower-budget TV movies of the week were being shot overseas by 1998. Canada not only offers lower wages; a clause in the NAFTA treaty allows the government to give film producers a hefty tax credit subsidy for films shot on Canadian soil.

The result: a mini-recession among Hollywood craft and technical workers in the midst of the celebrated economic expansion, with an estimated 60,000 full-time-equivalent jobs lost in three years, and a cumulative economic loss of more than $10 billion.

“I started feeling the squeeze about two years ago,” says Mike Everett, an activist in IATSE Local 728, which represents lighting workers and electricians. “It’s a sort of crash. All those middle-ground movies of the week and commercials, all the bread-and-butter work, has taken off to Canada and some to Australia.” One recent press report described a monthly meeting of a set decorators’ local. Of the thirty people who showed up, only three claimed full-time employment. All were fully employed three years ago.

So the unions and other entertainment-industry groups are fighting back. At the national level, SAG, the motion picture academy, the Association of Imaging Technology and Sound, the Directors Guild, the Producers Guild, some IATSE locals and an association of state film commissions have formed the FILM US Alliance. Working with a bipartisan group of Congress members who represent districts dependent on film production, it is fashioning legislation that would offer to companies a 20 percent federal tax credit on wages paid to workers employed in domestic production. Proponents claim this would fully equalize the playing field with Canada’s cheaper labor rates. “We are taking a methodical approach to this legislation,” says SAG’s York. “We are working with the Congressional leadership, with the Ways and Means Committee, to come up with the best approach, the best solution, the best legal vehicle.”

In California, the state hardest hit by foreign production, union activists came together to form the Film and Television Action Committee. The FTAC has been pressuring the California legislature to pass a similar wage-credit bill–a caravan of honking Teamsters semitrailers encircled the state Capitol–but it has so far met the resistance of Democratic Governor Gray Davis. A tax-credit bill died in last year’s session.

Some union activists are uncomfortable with the tax-credit approach. “It’s really just about countering Canadian subsidies with our own subsidies and offering even more corporate welfare to the media giants,” says Mike Everett. Along with other more politicized activists, Everett has formed the Hollywood Fair Trade Campaign–a group fighting to strike down NAFTA’s Canadian subsidy clause. So far, that’s a long-shot strategy. But the Fair Trade Campaign is committed to working within the FTAC alliance toward solutions that go beyond corporate welfare.

As part of that strategy, Hollywood unionists plan to show up at the protest demonstrations now being planned to welcome the Democratic convention to Los Angeles this summer. “Last month we were already able to bring out some Hollywood workers to protest at both the Republican and Democratic debates here in LA,” Everett says. “And you can be sure we will be at the convention. I compare this to an issue like Vietnam–an issue that both parties agreed upon. So we need to light a fire under their feet. And until we do, we are not going to go away.”