B.C. trims film tax credits for foreign firms

Subsidies for film, digital productions were reaching 'unsustainable' levels, says Finance Minister Mike de Jong

Ryan Reynolds and Tim Miller on the set of Deadpool in Vancouver.

The B.C. government is trimming its film tax credits for foreign movie, TV and game makers after warning the annual costs for taxpayers to subsidize their work was threatening to grow exponentially to unjustifiable levels.

The province’s payout to the industry through the tax credits was forecast to reach $491 million for 2015, up more than 50 per cent from an average of $313 million in the previous three years, and $182 million for 2007-11.

The basic production services tax credit drops from 33 to 28 per cent and the digital animation or visual effects credit dips from 17.5 to 16 per cent.

“We think we’ve arrived at a place that will ensure the industry itself continues to grow and enjoy the success that it has but also there is fairness for other sectors of the B.C. economy,” Finance Minister Mike de Jong told reporters.

He predicted there are still “extremely good days ahead” and said the changes were made after a two-month review and close consultations with the film industry.

“They recognized that we were heading into territory that was unsustainable.”

About 25,000 B.C. jobs depend on the film industry.

Government subsidies refund between $33 and $71 out of every $100 spent by a film company on eligible labour – equivalent to an average of $25,000 for each B.C. worker in the sector.

Because the credits are refundable, companies get them even if they pay little or no tax to government.

De Jong’s move to rein in the tax credits was telegraphed in the February provincial budget, when the review was announced.

That was shortly after the swooning loonie bottomed out around U.S. 68.5 cents, fueling predictions of a record film production year for Hollywood North – and even higher tax credits paid out – because the currency gap has made B.C. even cheaper for U.S. studios.

The dollar has since rebounded to nearly 80 cents, but remains considerably lower than it was from 2010 through 2014.

De Jong said his staff are watching the currency movements and are prepared to take a more flexible approach to adjusting the tax credit rates in future years, if necessary.

He said there’s no question a lower loonie than a couple of years ago is continuing to attract productions, but added so are B.C.’s skilled workforce, spectacular locations, infrastructure and proximity to Hollywood.

A cap on the total credits B.C. would pay out was considered, but rejected. De Jong said studios did not want the uncertainty of not knowing if the cap would be reached and their production would be denied the credit.

The rate changes for foreign producers take effect Oct. 1 but productions or series that at least start shooting by then are grandfathered in at the old rates.

Separate tax credit rates remain unchanged for domestic productions that meet Canadian content guidelines.

Just Posted

Victoria woman accesses healing Burn Fund resources 45 years after injury

Stasi Manser was burned when she was five years old and now works as an adult burn survivor advocate

Fate of accused in Saanich couple’s 1987 killings in jury’s hands

William Talbott’s lawyer says DNA doesn’t prove murder

PRIDE on the Barge caps off last Friday of Pride Month

Starting at 5 p.m. with music from Rocksteady

Local grocery store steps up to help resident after Saanich jams her stand

Pepper’s Foods will start selling jams previously sold through roadside stand

Brentwood Bay fruit stand plundered on first day of season

Leeanne and Jack Guthrie dismayed to find money and fruit stolen from roadside stand

VIDEO: Killer whale steals fisherman’s catch off North Coast

Fishing duel results in eager orca snagging salmon in Prince Rupert

POLL: Do you think the penalty should be increased for tossing a burning cigarette from a vehicle?

With grasslands and forests around Vancouver Island and across B.C. reaching tinder… Continue reading

Greater Victoria wanted list for the week of June 25

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

PHOTOS: North Island home gutted in fire deemed ‘suspicious’

No injuries reported; firefighters prevented blaze from spreading

Child killed after being hit in driveway on Vancouver Island

The driver of the vehicle remained at the crash scene and is fully cooperating

Eating sandwiches, putting on makeup behind the wheel could land you a fine

RCMP say if you cause an accident while eating you could be penalized

Cat badly hurt in animal trap was likely stuck for days, B.C. owner says

Blu, a three-year-old house cat, suffered severe damage to his hind leg after being stuck in trap for days

Vancouver Island woman assaulted after confronting thief

RCMP warn residents to call for police assistance

40 cats surrendered in apparent hoarding at B.C. home

Officers found the cats living among piles of garbage and feces, suffering from fleas

Most Read