B.C. lowers tax credit available to film industry

The B.C. government announced today it will lower the subsidies available to the film industry, bringing in a projected $100 million in annual savings tothe province.

As of October 1, thefilm industry tax creditwill go from 33 per cent, down to 28 per cent.

"Our objective here was to work with the industry to arrive at a reasonable place that recognizes the importance of the film television production sector to B.C., recognizes the tens of thousands ofjobs associated with the sector," said Finance Minister Mike deJong Monday.

"But is also fair toother sectors of the economy. We think in this case we have arrived at this place and there are still extremely good days ahead."

Industry resurgence

The B.C. film industry has seen a resurgence over the past few years, with more demand than studio space available.De Jongsaid that boom in businessdriven primarilybya low Canadian dollarprompted the province to change how much tax is paid by companies involved in theindustry.

"We think we have arrived at a place that will ensure that the industry itself continues to grow and enjoy the success that it has," he said.

There was concern initiallythat any drastic change to the tax credit could drive Hollywood producers out of B.C. because it would make production costs toohigh. But Pete Mitchell, president of Vancouver Film Studios, said the provincial government consulted with key players in the industry before making a move.

"It's from ourcustomersin Los Angles who have been presentedwitha range of numbers andaskedabout theiropinionsandreaction.At the currentexchangerate it seems like this won't seem to have much of negative impact on our industry and it will remain healthy."

Ruling out a cap

The province at firstconsidereda cap system for film industry tax credits, rather than simply reducing the amount of the tax credit. In other words, after the province gave out a certain amount in credits in a year, no other company would be eligible for a break.

But Peter Leitch, president of North Shore Studios, said industry officialsdidn't likethat option because it would have created a 'first come, first serve'model that would not allow producers to plan.

"One of the things we have had with the industry over the last 30 years is we have certainty. We have been one of those jurisdictions when you come to British Columbia whereyou can expect a certain quality, a very high quality."

"One of the things wewere concerned aboutis if we put a cap onthings it would create a lot of uncertainly in terms of timing of projects."