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Posted: Tue., Dec. 21, 2004, 4:06pm PT
Ontario boosts local, foreign prod'n credits
Canucks offer extra credit to bolster industry

TORONTO -- The Ontario government has come to the rescue of the beleaguered local film and TV industry, upping tax credits for domestic production to 30% from 20% and for foreign production to 18% from 11%.

That percentage of the labor portion of a production's budget -- usually between 70% and 90% of overall cost -- will be tax exempt. For domestic productions shooting outside of Toronto, there will continue to be an additional10% credit.

Foreign productions lensing outside of Toronto will, however, no longer get an extra 3% credit.

Unlike similar initiatives in some U.S. states, there will be no caps on labor costs. Initiative, which the provincial Legislature is expected to pass in the spring, will go into effect Jan. 1 and is expected to save producers C$48 million ($39 million) per year.

Nurturing scene

"We are committed to creating a supportive business environment in which our film and television industry can not only survive, but thrive," provincial culture minister Madeleine Meilleur said on Tuesday.

Industry players, who had been raising the alarm for some months, expressed relief.

"It's everything that we asked for, perhaps even a bit more," Toronto Film Studios prexy Ken Ferguson said. "This makes Ontario very competitive. I know people are crunching budgets already."

Producer Don Carmody is one of them. He is reworking a French-Canada co-production, "Silent Hill," that he had considered moving to the province of Manitoba.

"I think this will allow llow us to do it in Toronto, especially with the regional tax credit," he said.

'Lucky' opportunity

On the service side, Carmody is considering moving a U.S.-financed film, "Lucky Number Sleven,"which is lensing in Montreal, to Toronto for post-production.

"Today's announcement will pay off in greater stability," said Brian Topp, executive director of the Toronto branch of the Alliance of Canadian Cinema, Television and Radio Artists co-chair of the industry lobby group FilmOntario. "It will strengthen and build Ontario's role as Canada's domestic film and television center and give greater competitiveness in the global production industry."

The severe acute respiratory syndrome scare, a chill on runaway production, increased incentives from other territories and the shrinking greenback have hit the Ontario industry hard.

Estimates put production in Ontario level with 2003, itself a terrible year due to SARS.

The foreign service tax credit will be reviewed annually, and the domestic service tax will be reviewed by Jan. 1, 2010.

The industry generates $1.6 billion a year for the province's economy and employs 20,000 people.

B.C. blues

However, Ontario's tax incentive program has placed British Columbia at a serious competitive disadvantage, according to the B.C. Motion Picture Industry Assn.

British Columbia trade groups are urging local lawmakers to match the changes.

"The British Columbia government must ensure that our industry is on a level playing field with our main competitor," MPIA chair Peter Leitch said.

The B.C. film industry receives an 11% provincial labor tax credit on foreign film and television productions and 20% on domestic film and television productions.

"B.C. is especially dependent on U.S. films and television series for a significant portion of its work, with 85% of the annual production expenditure in B.C. comes from Los Angeles," according to the MPIA.

The industry is down 30% this year.


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