Montreal: Faced with a serious budget deficit, the Quebec government is looking closely at a cap proposal for its refundable production tax-credit program, notwithstanding many studies pointing to a net gain to government from the program.

The Quebec producers association, the apftq, is actively lobbying Quebec Finance Minister Bernard Landry and other government offices hoping to minimize changes to the program, which producers here universally deem vital.

The apftq has readied various counterproposals if government seems determined to proceed, proposals the producers intend to deliver sometime this week, says apftq deputy director general Suzanne D’Amours.

D’Amours says the core benefits for all types of certified Quebec production will de defended, ‘but producers may be asked to do their share in the reduction of the deficit.’

The overall benefit of the tax credit to producers rose to over $60 million in ’96, but the real point, says D’Amours, is that indie production in Quebec has doubled over the last five years.

Commenting on the apftq position, D’Amours says there could be some variation to the level of benefit based on content and other factors. ‘But there won’t be a credit for the English and another for the French. We don’t agree with that and neither does sodec (the agency responsible for certifying production).

The language line in the Quebec production community is increasingly being blurred, with many more French-track producers looking to export and shoot in both languages.

If there are changes, and they may only be slight, English-language production is likely to be the most affected.

A reduction in the financial cap per program would obviously impact more on larger productions. Speculation is that the percentage benefit, 18%, could also be reduced to 14% or 16%, depending on how local the production package is, although sources say the percentage may end up being less relevant than the cap per show.

Typically, certified English-language productions have at least one non-resident in the highest paid above-the-line categories – an actor, director or screenwriter.

On the other hand, producers are well aware French-language productions benefit little, or not at all, from international presales, and are much more difficult to finance.

The apftq pitched the program’s merit during last fall’s hearings on the state of the province’s public finances – amidst rumblings some highly placed sources in the Parti Quebecois government wanted to shut down the program outright.

Rumors of a shutdown pushed the Montreal film and tv production community into a state of disarray and ‘crisis’ prior to the Christmas break, but since then a majority of the 80-company apftq membership has arrived at a more or less common position, says one producer.

‘Everybody is worried. On the other hand, we know this government has problems and they are cutting everywhere,’ says another.

Currently, there’s no cap on the seven-year-old program.

The tax credit was worth $30 million a year when it was first introduced in 1990 as a replacement for a 166% tax-shelter program. The benefit rose to $51 million in ’95 and more than $60 million last year when indie production hit the $400 million level, according to data from the apftq.

If there are changes, they’ll surface formally in the next Quebec budget, typically in April or May, following the federal budget.