Vancouver: The B.C. Chapter of the Directors Guild of Canada is advocating sober second thought on b.c. matching Ontario’s 11% production services tax credit for foreign producers.

Crawford Hawkins, local dgc chair, says b.c. doesn’t have the infrastructure to handle the increased business which would be stimulated by a foreign tax incentive.

Hawkins would rather see investment in more soundstages and post-production facilities. ‘To just throw money at these guys is pretty stupid,’ he says. ‘What good is it to give them a tax credit if they’ve got no place to shoot?’

He predicts the Ontario tax credit will eventually fall apart. ‘It probably won’t hold at 11% or at all because Ontario doesn’t need it either.’

While b.c. is supportive of a Canadian-content tax credit for domestic producers, the union would rather see foreign producers get a waiver on b.c.’s 7% provincial sales tax. Jurisdictions around b.c., including Alaska, Washington State and Oregon, Alberta and Ontario either exempt the sales tax or don’t have one in the first place.

The eleventh-hour appeal, however, has baffled the government and producers, according to off-the-record sources, and has ground the development of a b.c.-based foreign incentive to a halt.

Says one source, ‘I’d rather get the work first and then figure out how to service it later. That’s easier than getting back lost work.’

b.c.’s new Minister of Finance Joy MacPhail said in her budget speech March 30 that there would be ‘assistance’ for foreign producers announced soon. Unveiling of some kind of foreign incentive is expected by early May and should be retroactive to April 1.

b.c. responded quickly to develop a program to match the 11% labor credit in Ontario that, in itself, matches the foreign tax credit program for foreign producers. That extra policy, however, delayed the unveiling for the domestic program in b.c., and with only a few weeks to go before the domestic and foreign programs were to be announced in April, the unions derailed the process with the new debate.

Now, while the domestic program was unveiled April 1, the foreign incentive is in limbo.

According to a Coopers & Lybrand review published in March, b.c. could lose $275 million in direct spending, $110 million in wages and 5,300 jobs if b.c. doesn’t introduce a competitive tax credit for foreign producers. Up to 65% of foreign-owned film and tv producers now working in b.c. would ‘very likely’ relocate shows to take advantage of production services tax credits elsewhere, the report states.

Alex Raffe, ceo of the Ontario Film Development Corporation, dismisses the b.c. dgc’s contentions as false rumor. ‘We have no qualms at the political level or industry level that we overdid it,’ she explains, adding that b.c. is driven by more foreign production than Ontario. ‘We are not seeing a problem with overcapacity.’