Vancouver production company calls foul on film and TV tax credit change

Jan 20 2023, 7:02 pm

A Vancouver-based film production company says it’s out millions after the provincial government made a quiet administrative change to a tax credit early in the pandemic that incentivizes hiring locals.

Charles Cooper with Front Street Pictures says the company had expected “single-digit millions” in funding from the BC Production Services Tax Credit, which gives studios back nearly a third of the salary of employees who are BC residents.

The tax credit has existed for many years, but in the spring of 2020, as COVID-19 was roaring into our lives, the provincial government added a new hurdle to be eligible for the tax credit. A new pre-certification form had to be filled out to receive the credit, and it had to be submitted in a 60-day timeframe.

Cooper said neither the new administrative step nor the tight deadline was adequately communicated with studios, and his company ultimately missed the deadline — and didn’t receive money even though it meets the criteria to be eligible for the tax credit.

“If we had known that we weren’t going to have these incentives to support these productions, we wouldn’t have hired all those people when we were at a very vulnerable time,” Cooper said.

He said information on the new process was buried deep within the provincial budget and alleges he wasn’t told by Creative BC or government representatives during the “regular communication” they had with Front Street.

However, a spokesperson for BC’s provincial government said it worked closely with industry stakeholders, and that the change was announced on CreativeBC’s website in 2019. CreativeBC posted notices about it twice more, and the Production Services Tax Credit webpage was also updated, in addition to the Canada Revenue Agency’s what’s new for corporations page being updated.

Front Street was one of the first to implement strict COVID-19 screening measures to start working again in the pandemic, Cooper said, and the company signed on many new employees to tackle projects in the months after the tax credit changes. Only later did they realize they wouldn’t be eligible for the government contribution toward the BC residents’ wages.

Now, he’s asking for a resolution from the government.

“We focused everything on keeping the cameras rolling,” Front Street says in an online petition about the situation. “Don’t penalize local BC businesses for keeping people working and safe during the pandemic.”

Cooper cautioned that difficulties receiving the tax credit that incentivizes hiring locals could drive productions away to markets elsewhere in Canada and the US — and that’s the last thing BC’s film industry needs.

The government spokesperson acknowledged that the pandemic was disruptive for many businesses and said it’s now allowed studios to claim up to four months before their pre-certification form submission date — no matter how late it was filed — for expenses incurred between July 1, 2020, and February 22, 2022.

Film tax credits are BC’s largest corporate tax expenditure, and the pre-certification process was introduced to better forecast the money needed for the programs. The government said it couldn’t comment on whether any other film production companies have received funding even though they missed the pre-certification deadline “due to confidentiality.”

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