Ontario attempts to steal BC film, tv productions with more tax credits

[mr.x]

Ontario luring film, TV productions with sweeter tax credits

By Marke Andrews, Vancouver Sun
July 15, 2009

VANCOUVER — The Ontario government’s recent move to broaden its film and television tax credits has already had an impact on the industry in British Columbia.

On Tuesday, the U.S. producers of an $11-million feature film project that appeared a lock for Vancouver changed their minds, and will now go to Toronto to take advantage of the better tax, said Shawn Williamson, producer and partner at Vancouver’s Brightlight Pictures, which was involved on the project.

After Williamson and other industry people met Tuesday with Kevin Krueger, Minister of Tourism, Culture and the Arts — who told industry officials no change was on the books — the American producers decided to go to Ontario.

“If there’s an $11-million production already gone, you only need that to happen four or five times before a big chunk of the business coming here is gone,” said Kevin Leeson, creative director of Vancouver-based Straight Line Films, whose company relies on U.S. service productions, and has two productions on hold while the producers look at Ontario.

On June 29, the Ontario government expanded its production services tax credit available to a foreign-based producer to not only 25 per cent of labour costs, but all other production costs within the province, including studio rentals, equipment rentals and set construction. This came two weeks after Quebec expanded its labour tax credits to include all production costs.

Now B.C., which give foreign productions a 25 per cent credit for labour only (plus an additional labour credit for digital effects and animation done here), lags behind the other major provinces with its credits.

Williamson said he’s mainly concerned about the change in Ontario.

“Ontario has a spectacular infrastructure,” said Williamson. “They have great actors, studios and it’s a great place to shoot.”

Williamson said the B.C. government needs to match, at least temporarily, the Ontario credits, because even his own company will go where the money goes the farthest.

Brightlight is now scouting Montreal. for the pilot episode of a remake of The Saint TV series, which was written for Vancouver and was supposed to be shot here. The company recently ruled out Toronto for this shoot, but not for others.

“As a B.C. company, the financial incentives in Ontario are too high for us to ignore,” said Williamson. “We’re certainly not going to move Brightlight to Ontario, but we will absolutely shoot in Ontario.”

Williamson and others in the industry have met with Krueger. At a meeting last week, an American executive from 20th Century Fox told the minister his studio is looking at Ontario for productions down the road.

Williamson fears that B.C. will not only lose productions to other centres, but also the province’s infrastructure. Crew members could move to where the work is, and post-production houses and sound stages could be severely affected.

“With film-making, it all comes down to money,” said Jamie Goehring, head of business development for Straight Line Films. “With a million-dollar movie, changing the tax credits doesn’t hit the budget so hard. But if its a $10 million or $14 million movie, you’re talking about a million-dollar difference to go somewhere else. It’s a very mobile business.”

Ontario, which has seen its manufacturing industry decimated by the recession, has added incentives for the entertainment industry. In addition sweetening the film and TV tax incentives, the Ontario government granted $263 million to video game giant Ubisoft to open a Toronto studio.

The current film scenario is an exact deja vu of what happened in late 2004, when Ontario and Quebec upped their film and TV labour tax credits, resulting in B.C. matching them in January 2005.

So, is this inter-provincial war something that’s going to break out every few years?

The B.C. industry didn’t want this, so we’re asking for a temporary match [of the credits],” said Williamson. “We’ve also asked for an independent task force to look at this issue.

“Let’s looks a longer-term ways to fix this without getting into a war with Ontario,” said Williamson. “If we don’t, then this billion-dollar[B.C.] industry will shrink very quickly over the next six months.”

Krueger was not available for comment Wednesday.

mandrews@vancouversun.com

© Copyright (c) The Vancouver Sun

http://www.vancouversun.com/business...504/story.html




Bah....those Ontarians at it yet again.

[NetMapel]

Not sure how they plan to sustain that given their huge deficit-budget in the foreseeable future. BC has this tax credit in the film industry but our province doesn't have a major deficit-budget and is sustainable. It's not gonna be pretty to have this tax credit war between the three provinces.

[WarrenC12]

Originally Posted by NetMapel

Not sure how they plan to sustain that given their huge deficit-budget in the foreseeable future. BC has this tax credit in the film industry but our province doesn't have a major deficit-budget and is sustainable. It's not gonna be pretty to have this tax credit war between the three provinces.

We have a giant deficit just like everybody else, I'm not sure what you're talking about.

[go_leafs_go02]

it's a free market. They can do what they want.

honestly, quit whining, and get rid of this lame hate for Ontario.

[flight_from_kamakura]

mmm, on the one hand, "attempts to steal" is a bit tough, considering vancouver "stole" the production from california in the first place. on the other hand, seems like a pretty serious problem that'll only get solved with some sort of harmonization agreement.

[djh]

I think a few years ago, Williamson was making exactly the same speeches to the media about how the BC government need to do something NOW to prevent productions going elsewhere - I think at the time he was worried about Alberta and the prairies as well as Ontario and Montreal.

Bottom line: If the government has to regularly step in to make your business model work, your business is not a business, it's an inefficient make-work project. Change your business. See GM, Ford, Chrysler, Air Canada, etc. for examples.

[LotusLand]

Originally Posted by go_leafs_go02

it's a free market. They can do what they want.

honestly, quit whining, and get rid of this lame hate for Ontario.

Umm don't free markets operate without government intervention and incentives. It's just Toronto wanted to be the centre of the universe syndrome again. They have to be the centre of everything if they could steal the oilsands somehow I guarantee you they wood oh and our mountains, water etc... you get the idea.

[LotusLand]

B.C. will be fine, we got Tron 2.0 at $200 million, the third installment of twilight and other major productions out here and more slated, a couple of big ones I might add. We have great staff, facilities and crews that make us unique.

Brightlight has its own issues that is dealing with, these incentives are good to initially attract new industries but sooner or later they need to carry themselves.

[go_leafs_go02]

Originally Posted by LotusLand

Umm don't free markets operate without government intervention and incentives. It's just Toronto wanted to be the centre of the universe syndrome again. They have to be the centre of everything if they could steal the oilsands somehow I guarantee you they wood oh and our mountains, water etc... you get the idea.

obviously the ontario government operates with it's own priorities and issues. Why should the Ontario government personally care what is going in other provinces? it's meant to operate in it's own self-interests, and promote its economy and culture. If they can attract businesses with incentives. Good for them. BC is welcome to do the same thing.

Face it, Ontario contains 2 out of 5 Canadians, and Yes, I love BC, but as an Native Ontarian, I get annoyed with the constant whining and bickering about Ontario, just because it does get more attention because it is it the largest province population wise, and has the largest city/metropolitcan region in the country.

[LotusLand]

Originally Posted by go_leafs_go02

obviously the ontario government operates with it's own priorities and issues. Why should the Ontario government personally care what is going in other provinces? it's meant to operate in it's own self-interests, and promote its economy and culture. If they can attract businesses with incentives. Good for them. BC is welcome to do the same thing.

Face it, Ontario contains 2 out of 5 Canadians, and Yes, I love BC, but as an Native Ontarian, I get annoyed with the constant whining and bickering about Ontario, just because it does get more attention because it is it the largest province population wise, and has the largest city/metropolitcan region in the country.

fair enough but u dont see New York in the states be the centre of attention and their metro area is like 2/3 the size of our country. That is one thing I like about the US.

The only thing I hate is that Toronto always seems to be the focus. I lived in Toronto for a few years and the people out there were just as self centred as the people out in Van.

Case in point, the Leafs sucked last year, would it hurt the CBC to not air Leafs games and instead air Canadiens games out west. There are a lot of Habs fans out here as well. Also don't even started on TSN, nations sports cast my ass.

[go_leafs_go02]

NYC is in a completely separate country as us, and it is one of the media-centres in the USA..

While I don't think NYC dominates as much in the USA as much as Toronto in Canada, NYC has just over 6% of the total American population.

And yes, I will agree with you over the Leafs coverage. I'm a Leafs fan, so it doesn't bug me, and i know the Leafs did have 3 Saturday nights off last year. But case in point. there's alot of transplants out West (in AB and BC) who do cheer for the Leafs, and I think there would be more Leafs fans than Habs fans.

Toronto has the money, the ratings, it's a capitalistic marketplace. It sucks for those not in the area, but it reality.

[NetMapel]

Originally Posted by WarrenC12

We have a giant deficit just like everybody else, I'm not sure what you're talking about.

First, I believe BC was running a budget surplus before the recession hit us. Yet, Ontario was already running a deficit prior to the recession. I know not many part of Canada (or the world, for that matter) usually run a surplus, but at least it seems like our budget was well designed to accomodate our need. Lastly, looking at the 2009-2010 budget of the two provinces:

Ontario: $14.1 BILLION deficit
http://www.thestar.com/news/ontario/article/609201

BC: $495 MILLION to potentially $3 BILLION deficit
http://www.theprovince.com/business/...312/story.html

Again, I'm just saying I don't know where and how they have the money to create these tax credit incentives.

[dreambrother808]

Originally Posted by LotusLand

fair enough but u dont see New York in the states be the centre of attention and their metro area is like 2/3 the size of our country. That is one thing I like about the US.

The only thing I hate is that Toronto always seems to be the focus. I lived in Toronto for a few years and the people out there were just as self centred as the people out in Van.

Case in point, the Leafs sucked last year, would it hurt the CBC to not air Leafs games and instead air Canadiens games out west. There are a lot of Habs fans out here as well. Also don't even started on TSN, nations sports cast my ass.

whiny westerners make me want to vomit
because everything is so hard and horrible out here and it's all toronto's fault... blah, blah, blah... bullshit!! the west is doing fine and toronto/ontario are not spending every waking second trying to fuck you over. when will people get that through their heads?

case in point, the leafs games: do you think that the cbc is not making this decision based on viewers and ratings??? do you not notice that there are a lot more ex-ontarians than ex-quebecois out here???

if torontonian's are just as self-centred as vancouverites then what point does that make? it's called living in a big city, period.

[bar1967]

Originally Posted by dreambrother808

whiny westerners make me want to vomit
because everything is so hard and horrible out here and it's all toronto's fault... blah, blah, blah... bullshit!! the west is doing fine and toronto/ontario are not spending every waking second trying to fuck you over. when will people get that through their heads?

case in point, the leafs games: do you think that the cbc is not making this decision based on viewers and ratings??? do you not notice that there are a lot more ex-ontarians than ex-quebecois out here???

if torontonian's are just as self-centred as vancouverites then what point does that make? it's called living in a big city, period.

Seriously I love BC and love Vancouver and I don't know anyone here in Toronto who doesn't (at least in my wide circle of friends and family).

[LeftCoaster]

The only people who do are those who have met some of the particularly pompous west coasters... and frankly I don't blame them.

Don't get me wrong I like it a lot better now that I live out here, but some people just need to learn to shut up about it. Also I find that some of the worst offenders are those who are not originally from here... most native Vancouverites seem to keep their thoughts about the subject a bit more quiet.

[Delirium]

"Also I find that some of the worst offenders are those who are not originally from here"

that's actually quite true. i find that those people who moved here from ontario are always the first to bash to place. it's almost like they're doing it to reaffirm their descision to move out here for some odd reason.

for the most part, the BC "locals" who hate toronto haven't even been there.

i love toronto even though i'm originally from montreal and like it better. i don't want to live there anymore but it's a great city to visit and party in.

[WhipperSnapper]

Again, I'm just saying I don't know where and how they have the money to create these tax credit incentives.

I think you're a little confused. The tax credits are about maintaining or even increasing taxable revenues from this struggling industry. It's an investment without any spending.

[NetMapel]

Originally Posted by Sacamano

I think you're a little confused. The tax credits are about maintaining or even increasing taxable revenues from this struggling industry. It's an investment without any spending.

I'm aware of the effects of tax credit. My point is that that 25% incentive will lead to less revenue for the province because the tax revenue from these employment/business income will not match the 25% tax credit reduction. Furthermore, it sounded to me like the $263 million dollar is just "handed" to Ubisoft to get them to open in Toronto. In a province that is in major deficit right now that needs to find a way to increase revenue/decrease expense, I'm not sure if this is the best idea for them.

[bar1967]

Originally Posted by NetMapel

I'm aware of the effects of tax credit. My point is that that 25% incentive will lead to less revenue for the province because the tax revenue from these employment/business income will not match the 25% tax credit reduction. Furthermore, it sounded to me like the $263 million dollar is just "handed" to Ubisoft to get them to open in Toronto. In a province that is in major deficit right now that needs to find a way to increase revenue/decrease expense, I'm not sure if this is the best idea for them.

and ubisoft is investing 500 million, plus 800 staff, etc. it is really a long term investment strategy.

[jlousa]

Tax incentives are a desperation game. Ideally there would be no tax subsidies for anyone. What happens is regions begin competing with each other and raising the stakes, in the end one region loses and the winning region does not gain the full benefit as it's had to pay for it. The only real winner is the industry.

It's alot like US cities building stadiums for rich NFL owners, they pretty well have to because if they don't another city will.

The only solution if to have business subsidies stopped at the global level. But we all know that won't happen anytime soon. If it does we'll finally see market efficiencies play out and we'll all gain.