British Columbia Official: Stop Juicing Tax Credits
TORONTO – British Columbia is crying uncle in its battle to stop Hollywood film and TV shoots from going east to Ontario and Quebec.
In their election platform last month, the governing Liberal Party said they would “work with the provinces of Ontario and Quebec to establish a rational film-incentive policy across Canada to prevent unaffordable industry support systems.”
Translation: The province wants an end to the race to the bottom by B.C., Ontario and Quebec to woo the Hollywood studios by juicing their film tax credits to remain competitive.
Having been rebuffed by Ontario and Quebec, which have drawn Hollywood productions to their provinces by introducing 25 percent all-spend tax credits to compete with rival U.S. states, the B.C. finance minister this week repeated the call for vigilance against Los Angeles producers looking for the biggest bang for their buck.
“As a country, and individual provinces within the country, we are better off to stop competing to see who can send the biggest cheque to Hollywood,” Minister of Finance Mike de Jong told The Globe and Mail newspaper.
The ruling Liberals are under pressure from the B.C. film industry, which backed the opposition NDP in last month’s election after it promised to consider raising the provincial tax credit.
The Canadian tussle over how to woo big-budget Hollywood film and TV shoots mirrors an earlier debate in rival U.S. states that pointed to a net loss in tax revenue from escalating tax incentives.
“The objective is to avoid a repetition of what has happened repeatedly where the largely foreign production sector of large studios are able to extract a richer subsidy regime in one jurisdiction to then put pressure on other jurisdictions,” de Jong said.
B.C. has maintained a labor-based film tax credit for foreign producers that offers less cost savings than the all-spend tax incentive on offer in Ontario and Quebec.