Ontario’s ‘made for TV’ budget turned out to be a ‘to be continued’ cliffhanger late last month, when the province postponed its decision on proposed changes to the Ontario Film and Television Tax Credit. The budget, delivered by Finance Minister Janet Ecker amid a storm of controversy to a studio audience at a Brampton, ON factory, made only one change to the province’s equity investment rules despite recent lobbying by the CTFPA and other groups for changes that include hiking the OFTTC by an additional 13%, up from 20%.

The Ontario Tories have told the CFTPA to expect word on the tax credit and other changes sometime this month. The budget will be tabled in legislature in May.

CFTPA president and CEO Elizabeth McDonald is ‘disappointed’ by the delay, but remains optimistic. ‘We are also asking them to implement a preassessment refund system, so that there is more money advanced to producers earlier,’ she says, ‘and to expand the base to include research and development costs related to literary rights, acquisitions, project optioning and script development.’

The March 26 budget did, however, remove the ‘grind’ on equity investment.

Eligible Ontario labor costs will no longer be reduced by equity investments from government agencies, starting with shoots that began principal photography after March 27.

Ontario was the only province with an equity grind. Len Pendergast, director of tax credits at the Ontario Media Development Corporation, welcomes the change. ‘Thirty to forty percent of productions that apply to the OFTTC have equity from Telefilm or other government agencies,’ such as the National Film Board, he says. ‘This does make a big difference to those projects.’

‘We feel it’s a step in the right direction… it levels out the playing field a little, but we were hoping for more,’ says Andrea Nemtin, national chair of the Canadian Independent Film Caucus. The CIFC had lobbied for a higher rate and the removal of residency requirements on labor costs. ‘You can only claim labor on people from inside Ontario and I don’t think that adequately reflects the current state of the industry. We’re seeing more and more interprovincial coproductions. We’re seeing more things that are national in theme and subject that are shooting across Canada, that are not Ontario-specific.’

One of five media development tax credits currently on the books, the OFTTC currently takes 20% off eligible labor costs for Ontario-shot and -posted projects by Canadian prodcos with permanent offices in the province. Emerging producers get a higher rate, 30%, and a 10% regional bonus is also offered to shoots in outlying areas.

Producers worry that Ontario is losing its competitive edge to provinces that offer more lucrative tax breaks, 40% in New Brunswick and 35% in both Manitoba and Saskatchewan, for example.

‘[The province has] reduced the grind on equity investment, which is of course a good thing, but… the overall level of tax credits available in Ontario make it an uncompetitive place to shoot,’ says Steven DeNure, a partner at Toronto’s Decode Entertainment.

-www.gov.on.ca/FIN

-www.cftpa.ca

-www.cifc.ca