Decision may spark another round of tax subsidies
VANCOUVER — Bowing to pressure from the province’s film and TV production industry, British Columbia’s Liberal government said it will extend for two more years the labor tax credits that benefit U.S. producers who bring runaways here.
Decision may spark another round of tax subsidies by the states of Oregon, Montana and Washington and by the Canuck provinces of Ontario and Quebec, all hotly pursuing work from Hollywood.
News came on the eve of Monday’s Canuck federal election, an affair littered with generous promises to special-interest groups by the reigning Liberals and by the opposition Conservatives, who are expected to form the next government in Ottawa.
The provincial government said the timing of the announcement was meant to help producers who are making budget decisions about projects for the year.
B.C. industry is expected to report production revenues topping C$1 billion ($860 million) in 2005, mainly from service work for Hollywood.
British Columbia Finance Minister Carole Taylor said extending the 18% labor tax credit for foreign-based production will “bring certainty” to the industry here and help it become more efficient.
“We appreciate B.C.’s film sector faces some stern challenges next year, including intense competition from other locations,” said Taylor, a former TV personality who resigned as chair of pubcaster the Canadian Broadcasting Corp. last year to join the Liberal cabinet in Victoria.
Taylor said B.C. will review progress in 2007 to decide whether to continue the credits beyond March 31, 2008.
The current extension also includes the 30% labor tax credit for domestic B.C. production.
The film and TV industry plays a relatively small part in the province’s economy, lagging far behind revenues generated by forestry and mining.
“The decision sends a strong signal to B.C.’s film industry that the provincial government believes this industry has a promising future and a role to play in B.C.’s robust economy,” said Peter Leitch, chair of the Motion Picture Industry Assn. of B.C. “It gives us the stability required to grow and become competitive in every area of production.”
The news was welcomed by unions, which are negotiating long-term contracts.