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The Canadian province of British Columbia has followed the lead of Ontario and Quebec and upped its tax credit for foreign filming from 18% to 25% of eligible labor expenses.

In late December, Quebec increased its tax credit for foreign productions from 20% to 25% of labor expenditures, just a week after Ontario hiked its credit to 25%. B.C. was forced to follow suit to remain competitive.

British Columbia also increased its tax credit for domestic filming from 30% to 35% of labor expenditures. Both the domestic and the foreign tax credits apply to all pics that start production after Dec. 31, 2007, and will be in effect until Jan. 1, 2010.

Vancouver industryites said the increase was desperately needed because business has been devastated by the robust Canuck dollar, the Writers Guild of America strike and the fact that so many other places in North America, including many U.S. states, now have competitive tax credits.

“It’s great news for the industry in B.C.,” said Peter Leitch, president of North Shore Studios, Vancouver’s leading production facility.

“We’ve always advocated for a level playing field with Ontario. Every major jurisdiction outside Los Angeles is offering tax credits. So you have to be competitive if you’re going to be in the game. I think we’re well positioned now to do well when the writers strike ends.”

There are currently no major U.S. network TV series shooting in Vancouver, a blow to a city for which American TV shooting is its bread and butter. “A Night at the Museum” sequel “Another Night” is prepping to roll there in April.

Producer Shawn Williamson from Vancouver-based Brightlight Pictures said British Columbia took a while to come up with a credit because the government was surprised by Ontario’s announcement in December.

He said times were tough in British Columbia, adding that his company’s service work dropped significantly over the past year. (Brightlight also produces its own films and TV series.)

“If you look at the film lists in B.C., they’re down to 20% of what they were,” said Williamson. “The writers strike has really decimated the television shoot business. With the increase of the tax credit, if nothing else, it helps bring us back to a more competitive area.”

There is an added 6% tax credit if Hollywood filmmakers shoot outside the Vancouver area and a 15% credit on labor expenses on animation and visual-effects work.