Vancouver: The West Coast post-production industry was looking for a little industry shakeup when it started lobbying the B.C. government for a visual effects tax credit.

Now, one of the first productions to take advantage of the new Digital Animation and Visual Effects tax credit, which began April 1, is the four-hour NBC miniseries 10.5, about an earthquake along the Pacific coast. Preproduction started this month, with production in June and up to 400 visual effects shots assigned to post-production house Rainmaker Entertainment in Vancouver.

‘We were waiting for the credit. It sealed the deal,’ says Lisa Richardson, president of Vancouver line producer Dogwood Pictures. ‘[The DAVE credit] makes a huge difference in keeping effects in B.C..’

Richardson says that because 10.5 is effects-heavy, it was important to have a local effects house with the production day by day.

While the DAVE ‘regs’ are still being finalized in terms of what qualifies as an eligible expense (for example, visual effects supervising and visual effects editing), service and domestic producers are generally budgeting for rebates of about 6% on every dollar spent on digital visual effects. That’s based on the 15% credit applied to eligible labor costs, which represents about 40% of the visual effects bill.

The new incentive is expected to help Vancouver’s post sector rebound from the downcast past two years, where volumes were off a conservative 15%.

‘It’s too early to predict how 2003 will turn out, but we’re up 10% over last year,’ says Rainmaker president and CEO Bob Scarabelli. ‘It has been a better start to the season.’

Some of 2003’s biggest effects features are gearing up in Vancouver, including Riddick (Universal), Paycheck (Paramount), Scooby Too (Warner Bros.) and I-Robot (Fox) – one of which may now leave its effects work in Vancouver, says Scarabelli.

On the TV side is the mini Battlestar Galactica, and rumors persist about a new Teenage Mutant Ninja Turtles series, both of which would be effects-laden. The DAVE credit is also an opportunity for Vancouver’s post sector to become more independent from the production sector, bidding on projects not even shot here.

Toybox West in Vancouver, for instance, did 39 effects shots last year for Gods and Generals, the Civil War epic exec produced by Ted Turner. Technically, though Gods and Generals was produced elsewhere and doesn’t involve a Canadian producer, it could have qualified for the DAVE credit had principal photography commenced on April 1. The DAVE tax credit, applied to Canadian corporate tax paid, can be rebated to a Canadian producer or official designee, like Toybox West, that can flow the savings through its own accounting department to the non-Canadian client, giving local post houses an added financial carrot. Gods and Generals could have saved about $60,000 on its $1-million visual effects had the credit been available.

At Vancouver’s Northwest Imaging & FX, the new DAVE credit propels the company’s HD strategy, says Alex Tkach, VP and GM, and helps it court features.

‘With HD, we are able to do [digital] business that is no longer going to the lab,’ he says, adding that Northwest has done well financially over the past couple of years with series including Andromeda. ‘This year will be a lot better. We’re continuing our investment strategy focused heavily on HD. And for the first time, we’re getting interest from motion pictures. [The DAVE credit] changes the way we think. Since January, we’ve bid on 12 features.’

-www.rainmaker.com

-www.compt.com (Command Post/TOYBOX)

-www.nwfx.com