B.C. is sweetening its foreign production tax credit and effects bonus, while also offering a new video game development incentive. The B.C. government proposes to increase the Production Services labor-based credit from 25% to 33%; with the qualified labor expenditure cap rising from 48% to 60%.
In a boost for the gaming industry, a new Interactive Digital Media tax credit for video game development will be launched this fall, offering a 17.5% rebate on B.C. labor costs. The DAVE (Digital Animation or Visual Effects) tax credit will also be increased, from 15% to 17.5%.
The film industry in B.C. has been lobbying for an improved incentive since Ontario and Quebec announced wide-ranging 25% credits back in early summer 2009. Peter Leitch, chair of the Motion Picture Production Industry Association of B.C. and president of North Shore Studios, says that while he would have liked to see a more lucrative film program announced, this is a positive step.
‘Our objective was never to match Ontario, we think what they did isn’t necessarily sustainable in the long term,’ he says. ‘This is a starting point to build on.’
But not everyone in the local industry thinks the increase is enough to stop production from heading east. Shawn Williamson, partner at Brightlight Pictures, told the Vancouver Sun that he is disappointed because an extra 8% isn’t enough to give the province an edge over Ontario when you crunch the numbers. He also points out that the announcement does nothing for indigenous producers, as the basic domestic credit still sits at 35%.
B.C.’s production industry has faced a massive drop in activity in recent months as a result of more lucrative tax credits in other jurisdictions. The Winter Olympics has also kept productions away due to difficulties with shooting in the city and housing talent and crew.
Vancouver Film Studios president Pete Mitchell notes that this is the time of year when U.S. pilots and big movie projects are gearing up for production in B.C., and that hasn’t happened so far this year. ‘It’s been very quiet,’ he says.
American studios will be finalizing their summer shooting locations soon, so the local industry will quickly find out if B.C.’s tax credit increase is sweetened enough to impact their decision-making.
The B.C. tax credit proposals will be presented to the legislature in the March 2 budget for approval. The tax credit improvements are expected to become effective after Feb. 28. The video game development credit will come into effect for projects beginning after Aug. 31.