The era of peak television means that Toronto is experiencing a golden surge in production as film crews descend on city streets and studio spaces. But could the boom lead to a potentially disastrous bust?

This year, there has been a spate of announcements from developers and studios, heralding the massive expansion of studio space across the Greater Toronto Area, as Canada’s largest city lives up to its unofficial title as Hollywood North.

It doesn’t hurt that two of the Oscar winners for Best Picture in the last three years — Guillermo del Toro’s The Shape of Water and newspaper drama Spotlight — were filmed in the region.

Among the recent headlines: Pinewood Toronto Studios’ groundbreaking this month on a major expansion; CBS Studios’ new production hub to open in Mississauga in March; the Markham Movieland studio that will boast North America’s largest sound stage; and an expansion of the privately owned Cinespace with a new location in Toronto’s Port Lands.

According to Altus Group in an exclusive analysis for the Toronto Star, that means there will be an estimated 1.15 million square feet of new studio space — equivalent to about 11 Walmarts — coming online within the next 24 months.

That’s in addition to the 2.21 million in studio space currently available, which gives the industry an astonishing rate of growth of 50 per cent in a short time span.

“This is definitely unprecedented. We have never seen this kind of activity before in the Toronto market, especially in such a short period of time,” says Raymond Wong, vice-president of data operations for Altus Group. “There has been pent-up demand for some time and they are rushing to fill the void.”

Imagine what would happen if the number of hotel rooms in Toronto increased by half in two years. Without a corresponding increase in tourist demand, hoteliers would be slashing room rates to fill space.

Such a prospect is not unimaginable for the film and TV industry. But studio owners might be forgiven for having a short memory. It was only eight years ago that Toronto was still reeling from the effects of a global recession and a meltdown in the credit markets. Overall production in 2010 was $726 million, down significantly from a previous high of $928 million in 2001.

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Just two years earlier, in 2008, Pinewood Studios Toronto opened for business in the Port Lands, including its 46,000-square-foot mega-stage, at the time North America’s largest, which took inspiration from the James Bond blockbuster-sized stages used at counterpart Pinewood in London. But in the early days it was a bust.

Instead of landing James Bond, it ended up with CBC’s reality show Battle of the Blades. They were lucky to fill the space. Like an empty hotel room, any day not occupied in the studio business is wasted revenue.

Things eventually turned around, of course, helped by tent-pole movie Total Recall, starring Colin Farrell and Jessica Biel, in 2011, followed the next year by del Toro’s Pacific Rim. But it wasn’t a sure thing then and it’s not a sure thing now.

Could we have another replay of 2010? The IMF warned recently that investors are underestimating the risk of another global shock that could impact markets significantly.

Stable tax credits are also not a given: Ontario cut its film tax credit from 25 per cent to 21.5 per cent for foreign production spending in 2015, which gave many producers pause. And it remains to be seen whether the new Conservative government of Doug Ford will remain Hollywood friendly.

And the warnings of peak TV may actually come true: some streaming companies may wake up and discover they are spending billions on new TV series and not making a dime. They could cancel productions as the industry consolidates.

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But so far, things look robust. Toronto studio owners say the tight market has meant that they have had to turn away customers to other jurisdictions such as New York or Atlanta, resulting in lost business and economic growth for Toronto.

Production in Toronto hit $1.8 billion in 2017 as film and TV companies spent on hotel rooms, catering and film crews, and pumped money into the local economy. That is down, however, from the 2016 level of $2.01 billion, which was a record year.

Much of that is due to the ramped up production of streaming companies such as YouTube, Netflix, Hulu and Amazon — broadcasters that were only recently created in the digital age.

There are more than 500 new scripted shows being produced in North America this year, a record number not including reality, sports or returning series. Many of those shows are filmed in Toronto; currently shooting in the city are Season 8 of Suits, and the second seasons of Star Trek: Discovery and American Gods.

Netflix alone says it expects to sign up a record 28.9 million new customers this year, even as it released a historic 676 hours of original programming in the third quarter, marking the first time it had exceeded 500 hours in any quarter.

Toronto’s growth and expensive real estate have also had an impact in the scramble to find good studio space with industrial vacancy rates down to record lows.

That has made producers look outside the downtown core. Currently that Pinewood mega-stage is expected to be dwarfed by Markham Movieland’s 70,000-square-foot monster stage that is touted as the largest in North America.

Not to be outdone, Pinewood broke ground on its new 200,000-square-foot expansion last week, literally with a bang and an explosion with Mayor John Tory in attendance.

“I think we’re all aware of the risks and it’s certainly something you think about when you take something like this on,” says John Weber, the prolific TV producer (Star Trek: Discovery, The Handmaid’s Tale) who, along with partner Frank Siracusa is taking on the job of building a 260,000-square-foot TV studio for American broadcaster CBS in Mississauga which is set to launch next March. “But yes, there is no such thing as a sure thing.”

Producers, of course, prefer to concentrate on the more positive scenario: that movie and TV work will continue to flock to Canada, and that more studio space will attract more productions in a kind of virtuous circle. That concentration is what created the Hollywood we know today.

“You already see that happening with the big tech companies that come to Canada; Amazon and Google sort of clustering around each other and that attracts talent,” says Altus’s Wong.

“No one can really predict whether we’re going to have another SARS hit us or another recession. But companies are certainly realizing that Toronto is an exceptional place to do filming and they are flocking here. And that creates excitement and opportunity, and it attracts more talent and more opportunity. What might be surprising is that it took this long to get going.”

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