Members of the commercial production industry and representative organizations plan to form a coalition with the goal of establishing a government tax-credit program to benefit the Canadian advertising production industry.

Organizations which deal with all aspects of the commercial industry, including actra, the Institute of Canadian Advertising, the Commercial Production Association, the Directors Guild of Canada and the Association of Canadian Advertisers, will likely comprise the alliance, together with consultant Garry Neil, who has worked for actra in the past.

Supported by individual production companies, the coalition will work toward the creation of a tax-credit program to provide added incentive to commercial producers to shoot their spots in Canada.

No specific model has been established for the proposed tax credit, but proponents initially looked toward forming a commercial tax credit under the framework of one of the existing federal tax-credit programs which support long-form tv and film production.

The current foreign services tax-credit model is equal to 11% of salaries and wages paid to Canadian residents or taxable Canadian corporations for services provided to the production in Canada.

The credit also applies to Canadian-made productions not covered under the Canadian film or video production tax credit – like talk or magazine shows.

Working within the foreign services tax-credit framework, the commercial coalition would lobby to simply amend the current exclusion of commercials from that program.

While Neil says the foreign services tax-credit model would provide the most expeditious route to establishing a commercial incentive program, the future of that model is uncertain: the advisory committee on Canadian film production spearheaded by Sheila Copps is recommending the elimination of foreign productions from the program.

Neil says the coalition is also examining ways of including commercial production in the existing Canadian film or video production tax-credit program, which represents 25% of eligible salary and wage expenditures or up to 12% of the total cost of a program.

Working within that framework would mean a more elaborate amendment process, says Neil.

‘The foreign services model may not be the one that we end up working with, but that is roughly the size of the tax credit we are looking at,’ says Neil. ‘We’ve done calculations based on that and I think it would provide a significant advantage to the Canadian commercial production sector.’

Neil says the industry alliance will use both economic and cultural arguments to sell a tax-credit proposal to the government departments involved – Heritage, Industry Canada and, ultimately, Finance.

‘We will make the argument that commercial production is an important part of maintaining the production infrastructure that is used by all tv and film producers: it’s an important part of the earnings for performers, for example,’ says Neil. ‘And we will also argue that commercials are a profoundly cultural expression; we need to have more Canadian-made commercials.’

The tax-credit initiative was sparked by meetings between actra and the ica which revealed, through an examination of the scripts going through Telecaster, that only about half of the commercials broadcast in Canada are produced here.

‘That’s a change and a surprise and a concern for all of us,’ says actra national executive director Stephen Waddell.

The figures reflect a global trend toward centralizing the creation and production of the campaigns of major advertisers. Increasingly, ads, usually created in the u.s., are adapted for broadcast in other markets rather than creating several geographically specific campaigns. Through industry discussion, a tax-credit program emerged as the most viable way of increasing Canadian-located commercial production.

‘I think a tax credit would have tremendous impact in a number of ways, as we’ve seen in the film and tv jurisdiction,’ says Waddell.

‘The way we see it, a tax-credit model would apply to the production of any tv commercial in Canada,’ says Neil.

Proponents say a tax credit would not only stimulate Canadian production for spots airing here, but would also provide an incentive for foreign advertisers to produce spots here which are destined for foreign broadcast.

‘I think that Canadian advertisers would benefit from a tax credit, which would be an incentive to produce commercials here rather than importing them,’ says Waddell. ‘But also, with the benefit of the dollar plus a tax credit, we also might see more international companies producing commercials here to air in North America and elsewhere.’

With a federal tax credit in place for commercials, Neil says the industry alliance would also seek mirror provincial credits. The industry alliance’s membership is expected to be formalized by early February, at which time it will officially begin its campaign.