Ontario budget proposes digital content amendment to film, TV tax credit

The government also pledged to review the tax credit's regional bonus, as well as location fee eligibility for the Production Services Tax Credit, but no changes will go into effect before the June general election.

A  change to Ontario’s Film and Television Tax Credit to extend eligibility to digital-exclusive content is among a handful of tax credit amendments proposed as part of the province’s 2022 budget.

Announced yesterday (April 28), the amendment to the Film and Television Tax Credit would allow digital content productions to tap into the tax credits as long as they have a budget of $250,000 or more, have an “eligible exhibitor service” attached with an agreement to release the production in Ontario within two years of the production completion date, and not include content such as “opinion, advice or how-to instructions.”

The government did not give a date for when the proposed changes will go into effect, stating that more details on the eligibility requirements will be provided in the fall.

Whether the current Conservative government, led by Premier Doug Ford, will continue to be the majority party in Ontario remains to be seen, pending the results of the provincial general election on June 2.

The budget also mentioned plans to review other provincial tax credits. Among them, a review of the Ontario Computer Animation and Special Effects Tax Credit to untether them from the Film and Television Tax Credit and the Production Services Tax Credit to simplify claiming and processing the credits; a look at the 10% regional bonus for productions primarily filmed outside of the Greater Toronto Area to ensure the tax credit is “providing effective and appropriate incentives” in all regions; as well as a review of the Production Services Tax Credit to potentially add location fees to eligible expenses.

Additionally, the government included a clarification that remote work is considered eligible under the Computer Animation and Special Effects Tax Credit and the Interactive Digital Media Tax Credit, as long as the individual is based in Ontario.

The amendments are part of a planned modernization of the province’s tax credits, first announced in the 2019 Ontario budget, and based in part from recommendations from the film and TV advisory panel established in February 2020.

The panel, led by chair Jim Mirkopoulos and vice-chair Christina Jennings, submitted a final report to the government in November 2021, which has not been made public as of press time.

The proposed tax credit changes around digital content and location fee eligibility were included in the published recommendations from not-for-profit industry consortium FilmOntario, which had also recommended increased funding to Ontario Creates and continued government assistance for industry workforce training programs.

“Modernizing and streamlining the film and television tax credits, and especially extending eligibility to online productions, will keep Ontario competitive and help us beat 2021′s record-breaking $2.88 billion in production spending,” wrote FilmOntario via Twitter in response to the budget announcement.

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