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Posted: Thurs., Jan. 20, 2005, 7:25pm PT
B.C. gov't agrees to up tax credits
Proposal also affects local production

VANCOUVER -- British Columbia's liberal government has agreed to hike the tax credit for foreign production from 11% to 18% to match Ontario's credits after the film and TV production industry here threatened to move projects out of the province.

The proposed new B.C. tax credits also rise from 20% to 30 % on local production, effectively neutering Ontario's December increases.

"This will immediately trigger up to C$200 million ($162 million) of work in B.C. and will provide stability to the industry in 2005," said Crawford Hawkins, vice chair of the Motion Picture Production Industry Assn. of B.C. "We will be working closely with the government to study the benefits of the tax credit program, and we are confident that the revenue generated from these credits will far outweigh the costs."

Under the proposed legislation, which is certain to pass because of the liberals' huge majority in the provincial legislature, the higher tax credit rates will be backdated to Jan. 1 and will continue until March 31, 2006.

Over this period, the B.C. government said, it will review the longer-term impacts of using tax credits to encourage film production. It also will consult federal, provincial and municipal governments to explore opportunities for a more coordinated effort to attract film and TV projects to Canada.

"If we continue to make tax decisions in isolation, we may simply end up shifting productions between provinces, with no real gain for the country as a whole," said Colin Hansen, B.C. finance minister.

The government has warned the industry that its success cannot depend solely on provincial tax incentives, and needs to be more competitive in labor, location costs and service levels.


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