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TORONTO — Canadian actors on Monday applauded the U.S. government for denying a bid by Hollywood below-the-line workers to open a federal probe into tax incentives to lure Los Angeles producers to Canada.
“The decision doesn’t surprise us. We expected the U.S. Trade Representative to reject the application on the basis it has no merit,” said Stephen Waddell, national executive director of Canadian performers union ACTRA.
The Los Angeles-based Film and Television Action Committee in September filed a 301(a) petition of relief with the U.S. Trade Representative, calling for an end to Canadian subsidies based on labor costs offered to U.S. studios and producers (HR 9/5).
FTAC alleged that Canada had violated international trade agreements by offering Hollywood producers subsidies to shoot here.
But Gretchen Hamel, a spokeswoman for U.S. Trade Representative Susan Schwab, on Friday said that her department decided not to approach the World Trade Organization to dispute the Canadian tax credit system.
“Based on a thorough review of the economic data, other facts, and legal arguments set out in the petition, the interagency committee unanimously recommended that the USTR not accept the petition because a dispute based on the information and arguments set out in the petition would not be effective in addressing the Canadian subsidies,” the statement said.
“Ambassador Schwab has accepted this recommendation, and has decided not to initiate a Section 301 investigation in response to the petition,” Hamel added.
The FTAC action was especially nettlesome for ACTRA as it had backing from the Screen Actors Guild, its U.S. counterpart.
Waddell said the USTR decision proves that Canada, other foreign countries and about 40 U.S. states have a right to offer production incentives to woo Los Angeles producers.
He added that the U.S. government ruling should help ACTRA and other Canadian industry players lobby the federal government in Ottawa to sweeten its current tax credit for foreign producers to offset the impact of a rising Canadian dollar.
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