Exploring Tax Breaks For Film And Television Production Companies In Canada

According to the Vancouver Economic Commission, Vancouver is the third-largest film and television production center in North America. The city has gained the nickname “Hollywood North,” and its movie industry continues to grow each year. In the space of just a decade, film production in Vancouver has more than doubled. Ontario is also a major production center, generating billions of dollars and creating countless jobs each year. The Government of Canada recognizes these contributions and encourages production companies to venture up to the True North. Tax breaks make this an even more attractive location for future films and television shows. With help from an experienced tax lawyer, production companies in Canada may find it easier to understand these tax breaks – and take full advantage of them. Call (902) 403-7201 to continue this discussion with Jeremy Scott Law. 

The Canadian Film or Video Production Tax Credit

Starting on the federal level, the Government of Canada offers eligible film and television productions the Canadian Film or Video Production Tax Credit (CPTC). Note that this credit only applies to Canadian film and television programming, and the incentive encourages an “active domestic independent production sector.” Only corporations permanently established in Canada qualify, and all producers must be Canadian. Furthermore, production companies must pay 75% of production costs to Canadian individuals. Certain genres are not eligible, including news, reports, and reality television. If production companies in Canada qualify, they receive a 25% refundable tax credit on labor expenditures. Companies can only claim labor costs that do not exceed 60% of total production costs within a single year, and the tax credits are limited to 15% of total production costs. 

The Film or Video Production Services Tax Credit

For foreign production companies planning to film their next project in Canada, the Film or Video Production Services Tax Credit (PSTC) is more appropriate. The Government of Canada uses this tax credit to attract production companies from around the globe, hoping to increase employment opportunities for local Canadians. Unlike the CPTC, foreign-owned corporations qualify for this tax break. However, there are various additional requirements to consider. For feature film productions, production expenditures must be greater than $1 million within a 36-month period. For television series, each episode must have production expenditures of at least $100,000. If the episodes are longer than 30 minutes, expenditures must be at least $200,000. The PSTC has the same excluded genres as the CPTC. Eligible production companies receive a 16% refundable tax credit on Canadian labor expenditures. These costs may involve Canadian actors, directors, production staff, and so on. There are no maximum limits for this tax break. 

The Ontario Film & Television Tax Credit

There are also province-specific tax breaks to consider, and these incentives are generally “stackable” with federal credits. The Ontario Film & Television Tax Credit (OFTTC) is a clear option, offering a refundable tax credit on qualifying labor expenditures within Ontario. This tax break “harmonizes” with either the PSTC or the CPTC and can reach up to 40% for first-time producers – for up to the first $240,000 of production costs. Otherwise, production companies in Canada can receive a refundable tax break of 35%. This tax credit applies to productions in Toronto, although a bonus 10% credit applies if 85% of “location days” are outside the Greater Toronto Area. This tax credit only applies to Canadian-controlled corporations that file their taxes in Ontario, however. 

The Ontario Production Services Tax Credit

Foreign production companies planning to shoot films or television projects in Ontario should opt for the Ontario Production Services Tax Credit. This tax credit applies to foreign-controlled corporations, and it provides a refundable tax credit of 21.5% for production expenditures within Ontario. This tax credit also stacks with the PSTC, and it has many of the same requirements as the PSTC.

The Ontario Computer Animation & Special Effects Tax Credit

The Ontario Computer Animation & Special Effetgs Tax Credit (OCASE) incentivizes animation productions and similar endeavors in Ontario. It provides a refundable tax credit of 18% for labor expenses within Ontario. Foreign-owned corporations qualify, and eligible activities include audio effects, credit rolls, subtitles, animation, visual effects, rendering, lighting, and more. 

Film and Television Production Tax Breaks in British Columbia

Production companies targeting “Hollywood North” in Vancouver may benefit from a wide range of tax breaks in British Columbia (BC). These tax breaks are not only numerous, but they are also highly varied and complex. To understand them in more detail, it makes sense to speak with an experienced Canadian tax lawyer at Jeremy Scott Law. 

Film Incentive BC

Film Incentive BC (FIBC) provides refundable tax credits to production companies in Canada. Eligible corporations must be Canadian-owned and controlled, with a permanent presence in BC. The project must also contain sufficient levels of “Canadian content.” A total of six initiatives fall under this category: 

• A Basic FIBC tax credit of 35%
• Regional Tax Credit of 12.5%
• Distant Location Tax Credit of 6%
• Digital Animation, Visual Effects + Post-Production (DAVE) Tax Credit of 16%
• Film Training Tax Credit of 30%
• Scriptwriting Tax Credit of 35%

These tax credits apply to BC labor costs, and they are stackable with the CPTC. 

The Production Services Tax Credit

The Production Services Tax Credit is more appropriate for foreign production companies planning to shoot projects in British Columbia. It provides a basic 28% tax credit on BC labor expenditures, a 6% credit on regional production services, a 6% on distant location production services, and a 16% DAVE tax credit. 

Contact Jeremy Scott Law Today

There are many reasons to target Canada for future film and television projects. Aside from tax breaks, Canada features a variety of gorgeous natural landscapes to choose from. Production companies in Canada also benefit from a solid group of talented, local actors in major cities like Vancouver and Toronto. Another major plus is the Canadian loonie, which helps lower filming costs due to its near-perpetual weakness against the American dollar. Tax breaks can be highly attractive, but production companies in Canada should learn how to take full advantage of them. A consultation with an experienced Canadian tax lawyer can provide plenty of helpful insights. Call (902) 403-7201 today to book a consultation with Jeremy Scott Law.