B.C. lowers tax credit available to film industry
As of Oct. 1 industry tax credit goes from 33% down to 28%
The B.C. government announced today it will lower the subsidies available to the film industry, bringing in a projected $100 million in annual savings to the province.
As of October 1, the film industry tax credit will go from 33 per cent, down to 28 per cent.
"Our objective here was to work with the industry to arrive at a reasonable place that recognizes the importance of the film television production sector to B.C., recognizes the tens of thousands of jobs associated with the sector," said Finance Minister Mike de Jong Monday.
"But is also fair to other sectors of the economy. We think in this case we have arrived at this place and there are still extremely good days ahead."
The B.C. film industry has seen a resurgence over the past few years, with more demand than studio space available. De Jong said that boom in business — driven primarily by a low Canadian dollar — prompted the province to change how much tax is paid by companies involved in the industry.
"We think we have arrived at a place that will ensure that the industry itself continues to grow and enjoy the success that it has," he said.
There was concern initially that any drastic change to the tax credit could drive Hollywood producers out of B.C. because it would make production costs too high. But Pete Mitchell, president of Vancouver Film Studios, said the provincial government consulted with key players in the industry before making a move.
"It's from our customers in Los Angles who have been presented with a range of numbers and asked about their opinions and reaction. At the current exchange rate it seems like this won't seem to have much of negative impact on our industry and it will remain healthy."
Ruling out a cap
The province at first considered a cap system for film industry tax credits, rather than simply reducing the amount of the tax credit. In other words, after the province gave out a certain amount in credits in a year, no other company would be eligible for a break.
But Peter Leitch, president of North Shore Studios, said industry officials didn't like that option because it would have created a 'first come, first serve' model that would not allow producers to plan.
"One of the things we have had with the industry over the last 30 years is we have certainty. We have been one of those jurisdictions when you come to British Columbia where you can expect a certain quality, a very high quality."
"One of the things we were concerned about is if we put a cap on things it would create a lot of uncertainly in terms of timing of projects."