Alberta’s recently announced increase in film incentives has reignited Canada’s inter-provincial competition to attract Hollywood production work.
Hollywood productions in Alberta will now be eligible for taxpayer subsidies covering 25% of all Alberta-based production costs up to a maximum of $5 million. Alberta previously offered a 20% subsidy.
The province has also lowered Albertan ownership requirements for its higher, domestically targeted grants. Foreign companies consequently need only a 30% local partner to receive production cost subsidies of up to 29% to a maximum of $5 million.
According to Alberta film commissioner Jeff Brinton, the changes will put Alberta on an even footing with Ontario and Quebec, both of which offer 25% production subsidies for small to mid-sized projects.
“For an overall budget of US$35 million, we’re fairly competitive, because that would translate to about a $20 million maximum Alberta spend,” he said. “And then the cap kicks in, and we’re not so attractive to larger productions.”
But B.C.’s film industry is not expecting any serious impact from higher taxpayer subsidies for film productions in Alberta.
B.C. Film Commissioner Susan Croome told Business in Vancouver that B.C.’s more established film infrastructure and crews give it a key competitive advantage over Alberta.
“We’re always concerned in British Columbia about remaining competitive in the national and international marketplace; however, Alberta has a very different product that they’re offering to the marketplace than B.C. does.”
Peter Leitch, Motion Picture Production Industry Association of BC chairman and president of North Shore Studios and Mammoth Studios, voiced a similar view.
“We don’t look at Alberta as a major competitor.”
But Leitch said film incentives across Canada remain a key concern for B.C. – particularly those offered in major film-production jurisdictions like Quebec and Ontario.
Ontario’s subsidies for all production costs jumped to a 25% in early 2010. B.C. responded by hiking its film tax credit on labour to 33% from 25%, but projects still headed east to take advantage of the higher overall government incentives.
“There’s a lot more U.S.-based work going to Ontario [since the all-spend tax credit was implemented] than there has been in the last five years,” Leitch said. “So it’s been a big boon to them, and we just want to make sure it doesn’t erode our competitive advantage any further than it has already.”
Leitch said the looming loss of the HST in B.C. will give Ontario another advantage over B.C. But Leitch added that he’s not advocating for a tax credit to cover all production costs in B.C., and he emphasized the importance of having a sustainable incentive program, which he believes the labour tax initiative is.
As to Alberta’s hopes for its new incentives, Brinton said the province isn’t looking to do battle with other provinces – but rather to reverse a talent drain brought on by recession, incentive disparities and industry woes.
“We had a couple of fairly significantly bad years recently, and people did what they needed to do and went to where the work was,” he said. “This was an attempt to try to provide enough work opportunities so people felt comfortable maybe looking at Alberta again.” •
