Following a lobbying effort spearheaded by the Ontario Film Development Corporation, the Ontario government has broadened eligibility for the Ontario Film and Television Tax Credit to include small companies which rely on some private investment and the Ontario portion of interprovincial coproductions.

Under the new terms, eligible third-party private financing for small production companies (companies for which annual production activity d’esn’t exceed $3 million for features or $1.5 million for all other production) is limited to copyright investments in the production not greater than 50% by Canadian investors and 15% by foreign broadcasters.

Eligible production budgets must not exceed $1.5 million for features or series, $500,000 for documentary or performing arts productions, and $750,000 for all other eligible types.

The new terms are effective until June 30, 1998, giving small companies two years to adjust to what the Ministry of Finance calls a ‘changing financial structure.’

Corrie C’e, director of the ofttc, says the ofdc had concerns when the provincial budget was tabled in May that many of the province’s smaller producers, particularly first-time and emerging producers, would be seriously impacted if projects with private financing were completely ineligible.

‘It was clear that many small producers did not know that private investment was prohibited,’ says C’e.

The decision comes in the wake of a post-budget consultation with the Ministry of Finance ­ a meeting attended by a cross-section of large and small producers of theatrical and television projects ­ after which C’e says it was clear that government needed hard numbers displaying need amongst the province’s producers before revisiting the eligibility requirements.

The ofdc quickly formulated a survey which it circulated to 95 production companies.

‘It was quick and dirty,’ says C’e, ‘but we needed numbers, something which couldn’t be refuted.’

Results, tabulated from the responses of 61 companies, gave a limited thumbnail sketch of the province’s production sector. Research confirmed that large companies (defined as those with annual revenues over $1.9 million) make up only 9% of the approximately 250 companies.

When asked how they financed their last production, 47% of respondents identified domestic private investment and 2% used foreign private investment. In response to how the companies intended to replace reduced or eliminated sources of government financing, 81% pegged both the federal and Ontario tax credits, 56% isolated broadcaster equity, 42% said with deferrals, and 37% indicated private investment.

C’e says the survey was sufficient proof for government that small producers do need and use private investment, and that the original rules needed changing if the ofttc was to be broadly accessed by Ontario producers.

In terms of interprovincial coproductions, the Ontario company must have a joint-venture coproduction agreement with the Canadian coproducer outlining the details including copyright ownership and allocation of control and responsibilities. The Ontario producer must also submit the production’s total final costs, detailing the expenditure split. A minimum of 75% of the Ontario portion of the budget must be payable for services or goods to Ontario resident individuals or companies.

Under the coproduction stipulation, it is possible that monies received from another province’s film agency via investment or grant will count as ‘assistance,’ reducing total production costs and, as a result, the Ontario tax credit for which the producer is eligible.