Location scouts and production companies have a long list of factors to take into account as they choose filming locations, production sound stages and post-production services, and one of the most influential factors has little to do with scenery and accessibility, and everything to do with dollar signs: local tax credits. As nations and municipalities weigh the benefits of hosting film and television crews against the cost of tax breaks for non-local producers, the scale tends to tip in the producer’s favor. Earlier, we mentioned expanding benefits available in Ireland and here’s another location that producers and production companies are smart to investigate: Canada.
Together, the Canada Revenue Agency and the Canadian Audio Visual Certification Office administer the Canadian Film or Video Production Tax Credit, or CPTC, which grants productions a refundable tax credit amounting to 25% of qualified labor expenditures.
The credit isn’t available to every production, of course, and labor expenditures need to meet qualifying standards, but the Canadian government has maintained the program– so far successfully—in order to boost its domestic production sector. Clear instructions on how to apply are available through the Department of Canadian Heritage, right here.
Quick Overview of Eligibility Requirements
A 25% credit means a credit of $25,000 for $100,000 worth of labor expenses, up to 15 percent of total production costs. So in order to calculate your benefits, you’ll need to have a clear picture of your eligible production expenses. And, you’ll need to pay an application fee of 0.3% of those costs.
Production costs include development, story rights, wages, rental space, sets and production equipment, plus post-production costs like editing. You won’t be able to include existing tax credits or grants in your cost total, and you’ll need to subtract most forms of deductions and assistance. You’ll also need to own the copyright for the motion picture in order to receive the credit. For a more comprehensive list of rules and eligibility requirements, contact the department of Canadian Heritage or click here for a summary (provided by Quickbooks).
Canadian Federal and Provincial Tax Credits are “Stackable”
As an added and very substantial benefit to Canada’s national tax credit program, individual provinces also offer separate credits which don’t interfere with the 25% federal qualified labor tax credit. These credits “stack” on top of the existing credit, which can significantly cut production costs, depending on the chosen location. For example, British Columbia offers a 28% credit for projects that meet its requirements, which means an eligible producer taking advantage of both BC and federal breaks could receive a sizable 53% credit on every Canadian dollar spent. Here’s a simple interactive map; mouse over each province for a summary of available stackable credits in that region: https://www.productionincentives.com/home/production-incentives/canada-incentives/
When you’re ready to discuss the specifics of your own project and learn more about whether you may be eligible to access the available credits based on your specific production requirements, contact our team! We’ll answer your questions and help you start the application process.