BC’s film industry is bracing for "devastating" repercussions if the province eliminates the HST and reverts to a two-tax system in the wake of the HST referendum, which wraps up August 5.
"We’re going to be the most negatively impacted of all the industries in B.C., I would think," said Peter Leitch, chair of the Motion Picture Production Industry Association of BC and president of North Shore Studios and Mammoth Studios.
"Losing the 7% benefit that we get on goods and services that attract the HST is going to be devastating for our industry and we could see a substantial loss of jobs as a result of being not competitive."
Leitch said reverting to the old tax system would mean losing a 7% savings on the purchase and rental of goods such as lighting, grip and camera equipment as well as wardrobe items.
He noted that the industry has been fighting for a decade to recoup those costs to try to even the playing field with Ontario, which had a manufacturing exemption.
"It’s something we’ve been fighting for a long time and now we’ve got it and now we’re at risk of losing it."
Leitch said both the service work side of the industry and B.C.-based producers will suffer if the HST is eliminated.
On the service side, he said the province already faces stiff challenges in attracting American productions to town given the high Canadian dollar and Ontario’s competitive tax advantage since it introduced an aggressive all-spend tax credit last year.
In the face of those challenges, he said, the loss of the HST would be the tipping point.
"It’ll have a huge negative impact on us and it will immediately impact productions like television series that want to be here for the next five to 10 years."
According to Liz Shorten, managing vice-president of operations and member services for the B.C. branch of the Canadian Media Production Association, HST has been an important way of levelling the playing field for B.C.-based producers competing for work with jurisdictions such as PST-free Ontario.
"The loss of HST potentially means going back to paying PST, which adds to the cost of production unlike costs incurred in other Canadian jurisdictions," she said.
"In such a competitive marketplace, any additional cost to production, when combined with B.C.’s current tax credit programs, which don’t match those of Ontario and Quebec, would make it more challenging for B.C. companies."
Leitch said he’s maintaining hope that the HST will prevail, but he’s concerned that B.C. is voting "yes" – a vote to eliminate the HST – as a reaction to the poor way the tax was introduced, rather the as an assessment of the value of the tax.
"I’m still sensing that there’s anger out there that is reflecting on certain "yes" votes without people really understanding the true costs of going back to the old system."
For now, Leitch said, B.C.’s film industry isn’t losing U.S. productions as it waits for the HST issue to be resolved – "because we’re not marketing that we could potentially lose this down in Los Angeles right now."
But he noted that the U.S. will hear very quickly if the HST gets eliminated.
"We know Ontario is going to be the first ones out of the gate to let Los Angeles know that we haven’t got it anymore, so we have to prepare for that if that’s going to be case," he said.
"But we’re still hopeful that people will recognize the benefits of [HST] existing and vote 'no.'"