May 03, 2016 - 6:00 AM
VICTORIA - British Columbia's finance minister has yelled cut on film and TV industry tax credits.
Mike de Jong said Monday the province's film tax credit rate will be chopped by five per cent to 28 per cent and could save the province up to $100 million annually.
He said the subsidy was forecast to cost the government almost $500 million this year, up from the average of $313 million over the past three years, and the strong American dollar has made the province even more attractive to the industry.
The changes are subject to approval of the legislature and are scheduled to be implemented in October when productions of new television episodes usually start.
De Jong said the revised tax credit structure was reached after meetings between the industry and government.
"My guess is the industry would have preferred to not have this conversation at all, but I will say on their behalf they recognized we were heading into territory that was unsustainable from the point of view of fairness to other sectors in the economy," said de Jong.
He said the cut will not harm the industry in B.C.
"There are still extremely good days ahead for the film and television production sector in B.C.," said de Jong.
In California, where the film industry is worth $17 billion annually, the state offers $330 million in tax credits, said a B.C. Finance Ministry statement.
The B.C. tax credit is one of several advantages the province offers to the film industry, de Jong said. Others benefits include a talented and experienced workforce, excellent locations and being in the same time zone as California.
"Our objective here was to work with the industry to arrive at a reasonable place that recognizes the importance of the film-television production sector to B.C., recognizing the tens of thousands of jobs associated with the sector, but is fair to other sectors of the economy."
The Motion Picture Industry Association of BC said in a statement the tax changes are a result of measured revisions that address the needs of the industry and government.
"B.C.'s $2-billion film and television industry is built on three decades of collaboration private-public investment and represents thousands of B.C. jobs," said association chairman Peter Leitch in a statement. "Together we have a vested interest in its long-term growth and sustainability."
Opposition New Democrat film and TV critic Spencer Chandra Herbert said reducing the tax credit could result in film production companies choosing to work in Ontario, where the film tax structure is more generous.
News from © InfoTel News Ltd, 2016