Vancouver: Production on the second season of Warner Bros.’ digital 2D animated series Mucha Lucha begins in May at Vancouver’s Bardel Entertainment.

While the WB network series inspired by Mexican wrestling got an early pickup from the broadcaster, the second season has an extra hold on the budget thanks to the new Digital Animation and Visual Effects tax credit.

At Bardel, which has seven of the 13 half-hour eps, 15% of eligible labor costs on digital work, including Flash animation, compositing and ink and paint, are rebated to the producer in addition to the 11% provincial and 16% federal production services tax credits.

For every $100 of eligible expenses on a domestic production, the producer gets about $51 back in provincial and federal rebates. For a service job, about $38 is rebated. Last year, without DAVE and the increased federal tax credit, domestic productions were entitled to about $30 in rebates and service productions about $21.

The new DAVE credit levels the playing field for B.C. animation houses competing with producers in Ontario and Quebec, which have similar bonuses for cartoon makers. DAVE also helps pin down digital work that might have otherwise gone to Asia, says Bardel partner Barry Ward. The credit is also providing momentum for traditional 2D animators such as Bardel to evolve and embrace more digital technologies.

‘Traditional 2D animation is still there, but Flash, 3D animation and digital manipulation are adding to it,’ Ward says. ‘And along with being more competitive, we are developing our own digital shows and repatriating animation work. When [foreign producers are] trying to keep work in-house, the new digital animation tax credit is added incentive and enticement to use Canadian services.’

Bardel’s new 13-ep proprietary series Silverwing will also qualify for the new DAVE credit, with principal photography starting later this month.

Digital 3D flourishes, including flocks of bats, backgrounds and visual representations of bat sonar, augment the mostly 2D series, based on the Ken Oppel novel about a teenage bat.

‘It’s enough to tip the scales so we can do it here [rather than offshore],’ says Ward, referring to the financial impact of the tax credit on Silverwing’s overall budget. ‘It means posting in-house and having control.’

Rob Davies, president of the Association of BC Animation Producers and VP of business development at Vancouver’s Atomic Cartoons, says most of B.C.’s 40 animation companies will benefit from the new DAVE credit.

‘It’s still not in the same realm as some provinces, but it will keep work here,’ says Davies. ‘Fifteen percent makes a big difference.’

Davies says volumes at Atomic were down in 2001 and 2002, due to the economic cycles and the impact of 9/11. However, he forecasts the DAVE credit will help revive the business in 2003.

-www.bardelanimation.com

-www.atomiccartoons.com