Bucking a trend of film credit one-upmanship across Canada, Saskatchewan has replaced a rich film incentive program with a reduced, tough-to-access alternative that filmmakers say could scuttle the province’s industry.
“The new incentive makes no sense and is in no way competitive with other tax credits,” Rob Merilees, president of Vancouver-based Foundation Features, told Business in Vancouver.
Merilees has shot four feature films in Saskatchewan over the past seven years, including Just Friends, starring Ryan Reynolds, and Sleepwalking, starring Charlize Theron.
When the province announced plans to end its tax credit in March, Merilees told Business in Vancouver that, without tax credits, his company would do no more filming in Saskatchewan. (See “Cancelled tax credit to eliminate bargain location for filmmakers”– www.biv.com, April 3.)
He said this new tax credit – Canada’s first non-refundable film tax credit– is no incentive for him to return.
“[The new tax credit’s] value to a production cannot be predetermined and is therefore useless to bring foreign and out-of-province productions to Saskatchewan.”
Merilees added that only film companies that make substantial revenue in Saskatchewan and pay corporate tax in the province will be able to access it.
“The value, even to those few companies, is insignificant.”
What impact could this new structure have on Saskatchewan’s film industry?
“If the government does not change this to a refundable tax credit, the film and TV industry in Saskatchewan will not continue,” he said.
In Merilees’ view, even B.C.’s more established film industry wouldn’t survive a transition to a non-refundable tax credit.
“Honestly, even with the benefits that B.C.’s film industry has with crews, cast, favourable location and infrastructure, an incentive like this would mean B.C. could not be competitive,“ he said. “The industry would not be sustainable in the province.”
Robert Wong is vice-president of tax credits and development for BC Film + Media, which administers B.C.’s film tax credits.
He said Saskatchewan’s move is more than a blip in the on-going tax credit shifting across Canada.
“It’s a significant development because it’s the first time we’ve seen this type of structure being set up in Canada,” he said.
Would Ida Chong, B.C.’s minister of community, sport and cultural development, consider shifting B.C.’s film tax credits to a non-refundable model?
“I would have to really take a look at what the implications would be by shifting it to non-refundable – and whether or not it actually increases film production in B.C.,” she said.
Part of Saskatchewan’s rationale for the new tax credit structure is to avoid subsidizing “fly-by” film and TV shoots – where film companies swoop in to film and collect tax credits, but ultimately pay taxes elsewhere.
Chong calls fly-by filming “a legitimate concern.”
But she said there are other ways to ensure economic return for a province, without turning to a non-refundable tax credit model.
“That’s why you have to develop your tax credits that are going to accomplish a number of things – that [production companies] must be in a geographic area, that you must film for a minimum of X number of days, you must do this or that –[and only] then the tax credit is applied,” she said.
“Whether it’s refundable or non-refundable may not make as great a difference as long as you make sure, in developing and devising that tax credit, you accomplish what you want.” •
