A wave of fresh changes to Quebec’s film and TV tax credits is sweetening the bid for Hollywood productions — and also giving a hearty boost to virtual reality projects.
Under a provincial budget unveiled in late March, the region will throw support behind the growing virtual reality and augmented reality industries, qualifying those projects within its broader film tax incentive.
It’s part of an array of changes designed to boost Quebec’s film industry — particularly at its hub in Montreal — by making it easier for international film and TV projects to qualify for the 20% base rate tax credit that covers all expenditures.
Moreover, film productions can now qualify for tax credits for up to a whopping 43% of their spend when applying the base rate, a 16% bonus on CGI and visual effects, and the federal government’s 16% tax credit on eligible labor.
“We’re hoping to become a one-stop shop for all types of productions,” says Pierre Moreau, general manager of the Quebec Film and Television Council. “Montreal has been setting up for that reality.”
To be eligible, productions must have a minimum budget of C$250,000 ($187,291) for a single project or miniseries, regardless of length. This represents a change to the eligibility requirement for tax credits. Before the 2017 budget, the minimum required overall budget was C$1 million ($749,165) for a feature film, $74,916 per episode of 30 minutes or less, and $149,833 per episode of more than 30 minutes.
Now, according to Andree Grendron, communications director at the Quebec Film and Television Council, the minimum required overall budget is fixed at $149,833 for a feature film or a complete TV series regardless of the length of each episode. This has been put in place to help VR and augmented reality projects meet the budget requirement and also be eligible for the tax credit.
By emphasizing new technology, the province is clearly looking to the future. “Quebec has developed expertise in VR over the past five years,” says Monique Simard, CEO of Sodec cultural industry investment fund. “There are about 50 companies in Quebec that produce VR. If they stay in the front-line position, this will be a great business development.”
Local visual-effects projects also benefit under the new incentive with a 10% tax break over the 8% previously offered on eligible labor costs.
All these efforts have helped reverse the direction of the province’s production industry, which is still emerging from its crippling downturn a decade ago. Things got so bad in 2007 that barely any Hollywood projects shot there, and the provincial government’s decision to lower the tax credit in 2014 didn’t help the local film industry’s recovery either.
Change has emerged, however. Montreal’s vfx houses have shown steady growth while film shoots have seen a moderate pickup. Recent pics “X-Men: Apocalypse” and “John Wick: Chapter 2” lensed in Montreal, and the sound editing Oscar win for Quebecois helmer Denis Villeneuve’s “Arrival” is drawing more attention too.
Simard points to numerous projects that have tapped services from local effects houses.
HBO’s “Game of Thrones” put local house RodeoFX to work on its vivid imagery of Castle Black, while the Montreal office of Paris-based Buf has been working on Showtime’s update to “Twin Peaks.”
While the region has long been known for its vfx houses, now production also wants to come to Montreal, even though area has lacked ample studio space. Even when Hollywood wanted to shoot there, there weren’t enough soundstages to support the work. If it wasn’t booked at the famed Mels Cité du Cinéma studio complex in recent years, it probably wasn’t shooting in the city.
“Obviously Montreal needed a second option,” says Andrew Lapierre, president of VideoMTL, who was instrumental in finding the solution.
Lapierre’s company, the subsidiary of a local equipment rental operation, brought together financing for MTL Grandé, the second large-scale Montreal studio, which opened in November.
Rather than compete with Mel’s, the operators of the new facility hope to add to the city’s capacity for growing demand from Hollywood. The new studio offers two soundstages of 40,000 square-feet combined and one indoor backlot area of 110,000 square-feet.
Lapierre likens the idea for Grandé to the Paramount lot in Los Angeles. He says eventually the plan is to expand beyond its existing production offices and post-production services to include other amenities such as a gym and café. “We want to have this feeling that once you’re there it’s very creative,” he says.
Montreal’s expanded studio facilities already seem to be drawing more outside dollars. Foreign productions spent $223.4 million in Quebec during 2016 and projections suggest the province will soar past that figure this year, with budget spend already hitting $170 million in March, according to the Quebec Film and Television Council.
The province has locked in several big-budget Hollywood productions this year, including the next X-Men installment, Universal series “The Bold Type” and Amazon’s Jack Ryan series, currently in production.
The film and TV council hopes to see a growth rate of 30% per year with an annual target of $522 million by 2022. A push to that goal will almost certainly benefit international productions looking for attractive incentives.
Other advantages are still in development under the 2017 Quebec budget, including a pilot project devised to lure Hollywood producers looking to lower their scoring budgets.
Moreau says he sees potential for film and TV series interested in using Montreal’s Metropolitan Orchestra to add an extra punch to their soundtracks. He suggests that filmmakers could be offered a “scoring package” in tandem with larger productions planning to shoot in the province, but the details on exactly how that will roll out are still in development.
Stay tuned.
(Pictured: “X-Men: Apocalypse” was shot in Quebec.)
