Cash-strapped Nova Scotia has carried through on its plans to review and change its film tax credit.

The province on Thursday while releasing its 2015-16 budget said it will maintain the film industry tax credit, but change it to one that is only 25% fully refundable.

The remaining 75% of the eligible tax credit will be non-refundable, “available to film companies against the taxes they owe in Nova Scotia.” Before these latest changes Nova Scotia’s film tax credit was fully refundable, for up to 65% of eligible expenditures.

Marc Almon, chairman of Screen Nova Scotia, representing local film and TV producers, expressed shock and disappointment at the provincial government dropping the film tax credit from 100% refundable to 25% after July 1, 2015.

“This is what happened in Saskatchewan. It just meant the collapse of the entire industry. That’s what’s happening here,” Almon told Playback Daily in the wake of the government budgetary announcement.

The changes will take effect July 1, 2015, allowing projects now in the works to continue under the current tax credit regime and allow an industry transition, the province said.

But Almon warned the mostly non-refundable nature of the new film tax credit, where producers receive a rebate based on taxes paid within the province, rendered it “ineffective” for film and TV production.

“We give you any taxes you owe, and then there’s no more money,” Almon said of the unworkable model for a non-refundable tax credit.

The budget for the revamped film industry tax credit also contains $24 million to ensure no interruption for producers currently tapping the Nova Scotia incentive.

The Nova Scotia government also said it will work with the media industry to design a new $6 million program fund to support projects from the film, animation, music/sound recording and publishing sectors.

The tax credit changes in Nova Scotia follow a March 25 pre-budget speech that warned Nova Scotia aimed to generate more tax revenue, and that the province’s film tax credit, which costs around $24 million a year currently, was up for review.

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