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Article A10 - Security for Payment

Article A10 - Security for Payment


The Guild is entitled to require a Producer to post, no earlier than thirty (30) days before the commencement of principal photography, security for payment sufficient to cover: a) the Production Fee, and b) insurance and retirement payments required under this Agreement. The said security shall take the form of a cash deposit to be held in trust by the Guild, in an interest-bearing account, and all the accrued interest shall be the property of the Producer. At the Producer’s election, the security for payment may take the form of one or more irrevocable letters of credit in favour of the Guild, drawn on a Canadian chartered bank. The face of the letter of credit shall specify that:

  1. the Guild shall be entitled, upon written notice to the Producer, to draw down on the letter of credit. The letter shall stipulate the amount claimed and that such amount is due to the Guild as a result of default by the Producer of its payment obligations as specified in the Agreement;

  2. the said letter of credit shall have a term commencing not sooner than thirty (30) days prior to the commencement of principal photography and terminating at a mutually agreed date after the completion of principal photography;

  3. in the event of a dispute involving outstanding payments due under the Agreement, the Producer agrees to reissue a letter of credit or to post a bond in an amount equal to those amounts in dispute for as long as those amounts remain in dispute; and

  4. when a bona fide dispute arises, all remedies and recourses provided by this Agreement shall be exhausted, or an Arbitrator shall rule in favor of the Writer prior to any disbursement from the Security Payment.
A1002 The provisions of A1001 (iii) and (iv) shall apply equally to a bond.
A1003 Notwithstanding Article A1001, an Established Producer as defined herein shall not be required to post as security a cash deposit, letter of credit or bond, but shall instead be entitled to provide to the Guild a corporate guarantee in the form provided in Appendix V.

An Established Producer shall mean a Producer:

  1. whom the CFTPA or APFTQ confirms by written notice to be a member in good standing;

  2. who has maintained an active production entity with established offices and staff for the previous four years, and has engaged Guild members or SARTEC members for a minimum of eight hours of completed programming;

  3. who has had a good track record for payment of Guild members excluding minor infractions;

  4. a Producer who is wholly-owned by a production entity which meets the above criteria.
A1005 The Producer shall give the Guild notice within thirty (30) days prior to the start of principal photography of its intention to provide a corporate guarantee.

Should the option for a corporate guarantee be denied, a timely request having been made, the Producer shall have recourse to the following appeal procedure:

  1. the Guild meet with the Producer within five (5) business days of denial of a request;

  2. an appeal committee shall be formed which will consist of the Director of Industrial Relations of the Guild and a representative of the relevant Associations;

  3. should there be no consensus at this meeting, the Producer shall post the cash bond required by the Guild as a gesture of good faith pending the outcome of presenting its case in front of the Joint Standing Committee as set out in Article A5 of this Agreement; and

  4. should the Joint Standing Committee rule in the Producer’s favour, the Guild will immediately return the cash bond, with interest if applicable, and accept the alternative security payment agreed to by the Joint Standing Committee.


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