The Saskatchewan provincial government has left the local film industry reeling with the news that its latest provincial budget will terminate the Saskatchewan Film Employment Tax Credit (SFETC) program .

“The film industry itself, for all effective purposes, has been shut out of Saskatchewan today,” Ron Goetz, Saskatchewan Motion Picture Industry Association and Partners in Motion president, told Playback Daily Wednesday afternoon after the provincial government released its latest fiscal budget.

Goetz added that the province’s digital industry will also fall victim to the cut, since digital producers were eligible to access tax credits and other funding incentives.

“If you’re trying to stay competitive in the new world, you’ve just cut a program that will help you keep your projects on a digital basis,” Goetz emphasized.

Goetz told Playback that looking back, earlier signs pointed to a tax credit program very much in trouble.

In 2010, the Saskatchewan Film Industry Task Force, which was formed in response to declining local production volumes in the province in recent years, made recommendations to the Saskatchewan government to  strengthen and stabilize the provincial film industry, for implementation in 2011-2012.

Several industry groups participated in the task force, including Enterprise Saskatchewan; Innovation Saskatchewan; the Ministry of Tourism, Parks, Culture and Sport; SaskFilm; SMPIA; Saskatchewan Trade and Export Partnership; SaskTel; SCN; and individual industry members.

Top recommendations included reframing the SFETC by adding an “all-spend” designation, accelerating payment and adding a preferential series bonus.

The task force also attempted to bolster the Canada Saskatchewan Production Studios, increase development funding and maximize equity in the province, with a priority for indigenous production.

Despite the industry consultation,  Goetz said the recommendations never made it past the discussion stage.

“The sad thing about all of it was not one of those task force recommendations were ever put into practice. So I guess if there’s a hint on the wall, maybe that was it and we just wanted to ignore it,” he said.

To date, the province has invested $100 million in its tax credit program since it was launched in 1998.

Despite the tax credit’s multiplier effect, Goetz said he cannot explain how cutting a program that has generated $623 million in production volumes makes economic sense.

“The bottom line is, if you can spend a dollar and bring in six, to me, as an economic driver, this is where the confusion comes [in cutting the credit],” Goetz said.

In his budget address, Finance Minister Ken Krawetz underlined Saskatchewan’s strong economic performance and growth last year.

That recent economic strength, however, will only fuel industry shock and confusion over the tax credit cut, Goetz insisted.

“When you cut a cultural program during a good time, it’s really confusing for people. People are saying, ‘if things are so good, why would we cut a program that seems to be self-supportive and actually does bring in business?'” he said.

But the provincial government pointed to cost savings from cutting the film tax credit to explain the move.

Krawetz in his budget preamble said that restraining spending in a strong economy would keep the economy strong and maintain the “Saskatchewan advantage.”

He also added that investing in innovation is vital to the province’s growth, while leaving out mention of Saskatchewan’s digital industry.

Going forward, Goetz said the local film and TV industry will attempt to reopen dialogue with the government.

“We’re going to assume the government makes good decisions based on good information. So based on this, we feel like maybe they just got bad information, and [we would like to] talk to them about the fact that these are good things, and show the evidence,” he explained.

New film, TV and digital productions that submit applications by March 31 at midnight will receive their Saskatchewan rebates.

The provincial government said the tax credit program will be phased out by the end of 2014.