SOME PROVINCIAL FILM AND TV INDUSTRIES SEE NEW TAX INCENTIVES, OTHERS LEFT IN LIMBO

Bul­letin 3/05

Ottawa, Jan­u­ary 12, 2005 — The past few weeks have been filled with competing

announce­ments of new tax incen­tives to bet­ter sup­port the film and tele­vi­sion production

indus­try in sev­eral provinces.  On 21 Decem­ber, Ontario’s Cul­ture Min­is­ter Madeleine

Meilleur announced a $48 mil­lion pro­gram of tax enhanced cred­its fol­low­ing a successful

advo­cacy cam­paign aimed at con­vinc­ing the province of the grow­ing need to draw audio­vi­sual pro­duc­tions cur­rently shoot­ing else­where with attrac­tive eco­nomic incen­tives.  The

Ontario pack­age includes:

 

• increas­ing the Ontario film and tele­vi­sion tax credit for domes­tic pro­duc­tions from

20% to 30% for five years

• main­tain­ing the 10% regional bonus credit for pro­duc­tions based in Ontario, but

out­side the Greater Toronto Area

• increas­ing the tax cred­its for for­eign pro­duc­tions from 11% to 18% (to be reviewed

by the end of 2005)

 

On 30 Decem­ber, the Québec Min­is­ter of Finance Yves Séguin fol­lowed with his own

announce­ment, rais­ing the rate of the Québec Refund­able Tax Credit for Film or Television

Pro­duc­tion Ser­vices (a labour tax credit for for­eign pro­duc­tions) from 11% to 20%.  This credit

is 2% higher than Ontario’s new rate and a 31 Decem­ber CBC piece reported that while it will

cost the province about $5 mil­lion in lost tax rev­enue, it could bring mil­lions of dol­lars worth

of new film pro­duc­tion to the province.

 

Mean­while, the pres­sure is on in British Colum­bia for the gov­ern­ment to act, as the foreign

pro­duc­tion credit remains at 11%.  There are media reports that Bright­light Pic­tures, the

province’s largest pro­duc­tion com­pany, will leave for Toronto later this month in order to

“take advan­tage of bet­ter incen­tives” offered in Ontario.  This could mean the loss of a $50

mil­lion film cur­rently in pre-production, as well as other big bud­get shows that Brightlight

has on deck for shoots in 2005.  BC Finance Min­is­ter Colin Hansen is quoted in the 10 January

Van­cou­ver Sun as say­ing his province will not have a “knee-jerk reac­tion” to the changes in

Ontario and Que­bec, and that the industry’s con­cerns will be dealt with in the 15 Feb­ru­ary BC

provin­cial budget.

 

THE FEDERAL PICTURE: WHAT WILL THE GOVERNMENT DO NOW?

Many in Canada’s film and tele­vi­sion indus­tries will now likely direct greater advocacy

ener­gies towards the fed­eral gov­ern­ment and the 2005-06 Bud­get that is antic­i­pated in late

Feb­ru­ary or early March.  The recently released report of the Stand­ing Com­mit­tee on Finance,

Mov­ing For­ward: Bal­anc­ing Pri­or­i­ties and Mak­ing Choices for the Econ­omy of the Twenty-First

Cen­tury (see CCA Bul­letin 01/05), out­lines sev­eral rec­om­men­da­tions that, if acted on, would

allow for bet­ter fis­cal sup­port of the audio-visual pro­duc­tion sec­tor.  Chief among these are

that:

 

• “The fed­eral gov­ern­ment pro­vide sta­ble, long-term fund­ing to… the Canadian

Tele­vi­sion Fund.”

• “The gov­ern­ment should increase the Cana­dian Film or Video Pro­duc­tion Tax

Credit to 30%.”

 

On the last point, it should be noted that the 2003 fed­eral Bud­get increased the rate available

under the Film or Video Pro­duc­tion Ser­vices Tax Credit, a refund­able credit for the cost of

Cana­dian labour engaged in for­eign films and videos pro­duced in Canada, from 11% to 16%.

 

Mov­ing For­ward observes how dur­ing the recent pre-Budget con­sul­ta­tions, wit­nesses noted that in the 2003 fed­eral Bud­get no cor­re­spond­ing increase occurred in the credit rate for the Cana­dian Film or Video Pro­duc­tion Tax Credit, as the max­i­mum achiev­able is cur­rently 15% of a production’s total budget.

Accord­ing to the report “Con­se­quently, the rate dif­fer­en­tial between the two tax cred­its was changed, and wit­nesses urged the fed­eral gov­ern­ment to increase the tax rate under the Cana­dian Film or Video Pro­duc­tion Tax Credit in order to restore that differential.”

 

At the same time, a 22 Decem­ber announce­ment con­firms that the gov­ern­ment will act on one of the 97

rec­om­men­da­tions from the June 2003 Stand­ing Com­mit­tee on Cana­dian Her­itage report Our Cultural

Sov­er­eignty: the Sec­ond Cen­tury of Cana­dian Broad­cast­ing (avail­able at:

http://www.parl.gc.ca/committee/CommitteePublication.aspx?SourceId=37522.).  The House of

Com­mons Stand­ing Com­mit­tee on Cana­dian Her­itage will be hold­ing pub­lic hear­ings on the Canadian

fea­ture film indus­try in Ottawa, Van­cou­ver, Toronto, Mon­treal and Hal­i­fax in March 2005.  Accord­ing to

the release:

 

“(The Com­mit­tee) pro­poses to con­duct a com­pre­hen­sive study on the evolv­ing role of the fed­eral gov­ern­ment in sup­port of the Cana­dian fea­ture film indus­try.  In par­tic­u­lar, the Com­mit­tee will exam­ine the following:

• The influ­ence and effec­tive­ness of the Gov­ern­ment of Canada’s Cana­dian Fea­ture Film Pol­icy (2000).
• The struc­ture and effec­tive­ness of exist­ing direct and indi­rect sup­port mech­a­nisms (e.g. Telefilm

Canada, the National Film Board, Cana­dian Tele­vi­sion Fund, tax credits.)

 

The objec­tive of this study will be to iden­tify the extent to which the Gov­ern­ment of Canada’s Cana­dian fea­ture film pol­icy has helped to: develop and retain tal­ented cre­ators; fos­ter qual­ity and diver­sity of Cana­dian film; build larger audi­ences at home and abroad; pre­serve and dis­sem­i­nate our col­lec­tion of Cana­dian films.  The Com­mit­tee intends to make its Report to the House of Com­mons no later than 23 June 2005.”

 

CCA encour­ages mem­bers and mem­ber orga­ni­za­tions who wish to appear as wit­nesses before the

Com­mit­tee to sub­mit their briefs by 4 Feb­ru­ary 2005.  Sub­mis­sions should be lim­ited to ten pages in

length, accom­pa­nied by a one page exec­u­tive sum­mary, and pro­vided in elec­tronic form whenever

pos­si­ble.  For more infor­ma­tion, please con­tact Jacques Lahaie, Clerk of the Stand­ing Com­mit­tee on

Cana­dian Her­itage, at CHPC@parl.gc.ca or (613) 995‑9566