Wednesday, October 15, 2008

Canadian Tax Credit system, grrrrr...

I'm trying to encourage some discussion over on the Facebook Group page (if you aren't already a member, you should be!) The current bee in my bonnet is the Canadian Tax Credit system inn general, and the Provincial Tax Credit system in particular.

This, to me, is the most pressing issue in our industry at the moment. If you've ever wondered why the job posts you come across say things like: Ontario Residents Only, here's the answer.
Years ago, the Canadian government offered lots of programs that would fund Canadian productions. Producers got used to it. Then the funding was cut. People complained. It was felt, however, that much of this funding amounted to government hand-holding, and without it, our industry would grow more competitive and self sufficient. (arguable, but a discussion for another day). Over time, a system of federal tax breaks came into play as a reward for those productions that employed Canadian artists, the same also occurred on the provincial level. As I understand it, these tax credits were intended as rewards, as after-the-fact bonuses to encourage the industry's growth at home. Unfortunately, producers began budgeting around them. Today, provincial and federal tax credits are budget lines going into productions. Productions are then forced to only employ resident artists and crew and superior studios often lose out for projects at the bidding stage to companies in neighboring provinces with higher tax credits. It's a system that is being abused and it's effects are felt across the country. I'd love to crew a show with the right artists for the job. That's always the fantasy, but if the right artist didn't live and pay taxes in the right province as of December 31st of the right year, I'm outta luck, and so is that artist.
Thoughts? Experiences?
Please share.


LanceLeFort said...

Hey Mike, I can't agree with you more.
The provincial and federal tax credits would be a lot better for Canadian workers if they were all federal. That way, at least workers could stay inside Canada if there was work here. As it stands now, if they leave the province, they end up having to stay where they land until someone is willing to pay a premium to hire them away.
I know there are tax credit systems in other countries -- I'm curious to see if they have exceptions or if their systems are as restricted as the one currently in place here.

murrayb said...

howdy Mike, I think the person should have to move; hence the benefit of provincial tax incentives.I feel the purpose of provincial funding is to grow the film communities.

As long as they are living in the province during the production(hence paying for goods, services and rent locally) then it shouldn't matter if they were there the previous year. *most* productions fall across 2 calendars, so the first year for which they are doing the work is paid in province.(unless they try to send it home to dad to file, ARRGH!)

If they leave dec 31 and then file in their new province as if they lived there the whole previous year that shouldn't be up to businesses to track.(hey, the animator is lying on their taxes not the producer)

It's a huge headache to get the paper trail for residency in order, and everybody splits the province end of year to get eligible, sometimes even if work is still going, so they don't get "trapped".

You also should mention that it was cinar's transgressions that caused the government to be more stringent:

basically Americans were writing Arthur and Cinar slapped some Canadian names to get Canadian content funding. "authorship" is a huge thing when it comes to federal telefilm funding (scripts, direction and boards)

Morena P said...

I think that the government should help studios to have tax credit in the moment the best person for the job is not a resident. That because the studio should pay an higher salary for allow the new fellow a smooth relocation and to right compensate such a skilled worker.
Also, a good professionalism get easier gained having experience in different productions/locations.


blogger templates | Make Money Online