Canadian Film Tax Incentives – Still In The Game

As mentioned in The Importance of Film Tax Incentives Today, tax incentives are a key component to independent film budgets. This is a fact for all filmmakers. For those of us in the USA, we have the ability to rely on several state governments to secure portions of our films’ budgets. But we don’t have a monopoly on the idea, and our friendly neighbors above us bring competitive incentives. With nearly 100 productions currently shooting [at the time I write this] throughout Toronto and Vancouver, more and more production companies are looking north for their locations and services.

Canada offers one of the best tax incentives in North America by not only providing a great tax percentage, but factoring in the currency exchange rate allows both large and small productions to shoot for a reasonable price. Canada’s dollar usually steeps below $0.80 USD, allowing the hard earned American dollar to actually save you money in Canada. Most production companies utilize the weak Canadian dollar to increase the amount they can spend on their shoots. And depending on the province of choice (usually Ontario, B.C., or Quebec) and project requirements, you could qualify up to 40% tax incentives to cover your budget. Between Vancouver and Toronto, they have been known to be stand-ins for iconic cities like New York and Chicago. Although used for location services, Toronto, Montreal, and Vancouver also have professional sound stages, VFX studios, and other post-production houses you could take advantage of. The best part: Canada will give you an extra tax percentage for each and every one of those items!

In late 2015 to early 2016, British Columbia noticed that it was receiving an exponential amount of business from out-of-state productions that they couldn’t handle, causing a fluctuation in the provinces annual budget. In B.C., the Finance Minister publicly stated that they are “not prepared to see payouts grow at the rate they have. We have a balanced budget, but we have other priority areas that we feel we need to address on behalf of British Columbians.” With these statements, the Minister was contemplating placing a cap on B.C.’s tax incentive. While this does not seem like a major problem on its face, this is concerning because much of the regions success in attracting large quantities of film productions has been predicated on the no-cap policy. Further, one province adopting such a startling policy shift could have been enough to encourage other provinces and states to follow suit; such a shift could easily cripple the northern filmmaker community.

Since the discussions were released back in February, an industry-government group of representatives from film and television reconstructed the tax credit to benefit both the film industry and the people of the province. Starting Oct 1, 2016, “the basic production services tax credit rate will be set at 28%, down from 33%, and the digital animation or visual effects (DAVE) tax credit rate will be set at 16%, down from 17.5%.”– (news.gov.bc.ca). In other words, despite a slight decrease in credit rates, the province will continue to attract the filmmaking industry by standing by their no-cap policy. And of course, the low Canadian dollar is still an attractive added benefit that state-side territories cannot offer. At least for the time being, the no-cap policy paired with a favorable exchange rate should keep Canada at the top of you location list.