Capping or reducing tax credits for the film and television industry could clip the wings of an economy that’s just taken flight, said the head of the Vancouver Island South Film and Media Commission.
Kathleen Gilbert asked why, when the industry is coming off a record year, would the government consider making changes to one of the key components that drive it.
Gilbert said in some respects the industry is fragile and has evolved from being location-driven to being driven by finding jurisdictions with the best incentives.
She noted after Victoria got the distant tax credit for areas outside the Lower Mainland two years ago, it saw the number of shows filming in the region jump from two or three a year to 24. Those shoots directly spent $18 million last year.
“And they will continue to come as long as the dollar is low, even if we reduce or cap tax credits, but my concern is changing tax incentives because of something [the dollar] that can change quite quickly,” she said. “It could be a real problem.”
While the budget delivered Tuesday by Finance Minister Mike de Jong did not lay out a plan to cap or limit existing tax credits, it did note that with a weak Canadian dollar there is fiscal pressure on the provincial coffers. This year, the province expects about $500 million in film and television tax credits. In previous years, the subsidy cost the government between $150 and $350 million.
De Jong said government is working with the industry to find an answer.
On Wednesday, he told reporters the sector had a record-breaking year, which is good news. But the way the tax credit is structured, the amount the government is paying out is “increasing exponentially.”
The government has to ensure equity for taxpayers and other sectors of the economy, he said. “The subsidy can’t continue to grow at the rate that it has.”
De Jong said the pace at which work is arriving in B.C. is breathtaking and the slumping Canadian dollar has had a big impact. “When the rates were last set, the dollar was at par. The dollar is not at par today.”
Gilbert said if B.C. does act, she hopes it stays away from the regional and distant tax credits.
Productions shooting in B.C. are eligible for a standard 33 per cent tax credit on labour expenditures. The regional credit provides another six per cent for productions filming outside of Vancouver and the distant credit adds another six per cent for productions in places such as Vancouver Island and the Interior.
The film commission is working on landing nine productions this spring and summer. A tenth is now shooting in Victoria. “The nine we’re working on are not so far in that they couldn’t change their minds if tax incentives change.” — With a file from Les Leyne
