Regional tax credits lure productions

Vancouver: When actor Jennifer Lopez sashays into Kamloops for the Miramax feature An Unfinished Life, the B.C. taxpayer will pay for one out of every seven days of hotels and per diems for the drama’s 150 crew members.

That’s how much the new 6% regional tax-credit bonus, which came into effect April 1 as part of the B.C. government’s new provincial budget, means to the production and its 10-week shooting schedule that begins April 21, says veteran production manager George Chapman.

‘It’s a very nice bonus,’ he says from his production office in Kamloops, five hours’ drive from Vancouver. ‘It primes the pump. A dollar saved is a dollar earned, and the producers are plunging it right back into the movie. It means we can put more on the screen. And we’ll hire 50 people from Kamloops.’

A foreign production such as An Unfinished Life can collect the 11% production services tax credit from B.C. as well as up to 6% for shooting outside of Vancouver – before they collect 16% from the federal PSTC. The complicated part is that the 6% provincial bonus is prorated by the proportion of principal photography days shot in the regions compared to those shot in Vancouver. At a minimum, there have to be five days of production in the region and they have to represent more than 50% of overall production. So a foreign production with 100% of its B.C. production in the region will get the full 6% boost. A production that does 75% in the region gets a 4% boost.

For every $100 of eligible labor expenses, then, a foreign feature with 100% of its shoot in the region will effectively get back $30 once all the math is done. Had the production stayed in Vancouver, it would have recouped about $26.

An Unfinished Life, costarring Robert Redford, is about a woman and her daughter who move in with the woman’s ex-father-in-law.

Recent productions that would have qualified for the new regional tax credit include the Morgan Freeman-starring Dreamcatcher (Castle Rock), which shot in Prince George, and Al Pacino’s Insomnia (Warner Bros.), which spent 40 of its 63 days of production in ‘distant’ locations such as Port Alberni, Squamish and Stewart, B.C.

Even though Miracle, the Disney feature about the 1980 U.S. Olympic hockey team, will shoot in Prince George in May, it doesn’t qualify for the regional credit because principal production in Rossland began in March.

Chapman says the choice of location for An Unfinished Life was driven more by artistic needs (backgrounds that look like Wyoming, for instance) and the overall cost savings of shooting in B.C. than by the regional tax-credit bonus alone. After all, it is still more expensive to shoot in the regions than downtown Vancouver, because crew and equipment have to be relocated, fed and housed during production.

However, the new regional credit is now a topic of conversation for U.S. producers looking north, says Chapman, which seems to bode well for increased regional production. ‘We’re going to see more shooting in these areas,’ he says.

Since the tax-credit system was introduced in B.C. in 1997, there has been a regional bonus – but only for domestic producers (up to 12.5% on top of the 20% Film Incentive B.C.) and restrictive enough to not have the intended effect of marked increases in production in the regions outside of Greater Vancouver.

The seven B.C. regions are the Sea to Sky/Fraser Valley area, Vancouver Island, Prince George/Northern B.C., Okanagan, Thompson Nicola/Columbia Shuswap, Cariboo Chilcotin and Kootenay Columbia. To date, 90% of all filming in B.C. has been done in Greater Vancouver.

‘We’re hoping to attract a lot of new production [with the regional tax credit],’ says Sara Shaak, the Okanagan region’s film commissioner, and VP of the Regional Film Commissions Association of B.C. and VP of the Association of Film Commissioners International. ‘That includes projects made to be ‘on the road,’ projects that may not have considered us before. We have seen an increased interest in scouting and production from projects budgeted for other provinces and the western states.’

She says that Kelowna, which is hosting commercial production and, potentially, two unnamed U.S. network reality shows this summer, offers some crew – people who live in the Okanagan but mainly work in Vancouver – to offset the cost of regional production, but other infrastructure including soundstages are not available.

Whether the new tax credit inspires investment in film assets is still up in the air, says Shaak. ‘The smart answer is that we’ll have to see what happens over the next few months,’ she explains. ‘The exciting part will be to see us when the ’emerging’ market becomes the ’emerged.”