It is likely that you have run into film crews and movie sets when exploring downtown Vancouver. Film and television production has topped B.C.’s growth charts over the past five years. While it may be difficult to sustain this pace of expansion, the rise of Netflix, Hulu, Amazon, HBO and other streaming services, the low Canadian dollar, along with B.C.’s ability to morph into almost any city or town on the big screen should keep this sector steadily increasing.
As a result of this, B.C. have now started to decrease many of the tax credits within the film industry. Although it has created many jobs for the people of B.C., along with disruptions to the city it has also cost the taxpayer $391 million according to B.C.’s 2017 budget.
With this, there has been many changes to the production services’ tax credits in the last few years. The provincial government has cut the Digital Animation, Visual Effects + Post-Production (DAVE) tax credit from 17.5% to 16%. The provincial government has also cut incentives for new productions from 33% to 28% after costs reached $500 million during 2015-2016. Since then, the new provincial government has also introduced a 35% script writing credit.
Despite this and California’s booming film and TV production industry, B.C. still remains a top global film and TV hub. This is due to the investments made over the years by private companies in studio infrastructure including Langley’s new 150,000 square feet of production studio space.
Not only has there been concerns with B.C.’s tax credits for the film industry but the gaming industry has also been raising concerns over tax credits offered in other provinces. B.C.’s interactive digital media tax credit is the lowest in the country at 17.5%, Ontario’s is 40% and Quebec’s is 37%. Last year, the Alberta government also created a new 25% interactive digital media tax credit incentive to encourage growth in the province’s gaming sector. This will raise concern and risk for B.C.’s creative industry.
However, in order for B.C. to truly support film, gaming and the talent of the creative industry, it is important to support not only the big foreign production companies but the small, independent B.C. creative companies too.
Contact Hall & Company for film industry accounting by a professional with years of experience in simplifying the tax processes of local production companies.