Christmas came early for Ontario producers last month with news that the provincial government is hiking its foreign and domestic tax credits to 18% and 30%, respectively – answering months of bitter complaints from stakeholders and, it is hoped, paving the way for a turnaround in the province’s beleaguered production sector.

‘We are committed to creating a supportive business environment in which our film and television industry can not only survive but thrive,’ says Madeleine Meilleur, the minister of culture. ‘All Ontarians have a stake in the success and sustainability of this important industry.’

The Ontario Liberals will put $48 million into the credit packages, which were to take effect Jan. 1 if approved by legislature. The new credits were unveiled at press conferences in both Ottawa and Toronto on Dec. 21.

‘We see this investment as a way to stimulate economic growth and job creation,’ says Finance Minster Greg Sorbara, adding that the province and the industry will track production volumes through 2005 to see if the credits make a difference. Both hope to see 10% growth on the domestic side and 10% to 15% for foreign shoots, according to a Ministry of Finance spokesperson.

Producers were quick to cheer the move. ‘The more than 20,000 people who work in Ontario’s film and television business were given their future back today,’ said Brian Topp, exec director of ACTRA Toronto and co-chair of the lobby group FilmOntario. ‘Today’s announcement will pay off in greater stability; in strengthening and building Ontario’s role as Canada’s domestic film and television center; and in greater competitiveness in the global production industry.’

‘We are thrilled that the McGuinty government has kept its election promise to give a boost to the film and television production industry… Congratulations must go out to everyone who worked hard to make our case heard,’ says Guy Mayson, president and CEO of the CFTPA.

‘Now more than ever the industry has to stick together if we’re going to remain successful and to keep production flowing in Ontario,’ adds Scott Garvie, co-chair of the CFTPA’s panel of Ontario producers.

The Ontario Film and Television Tax Credit is jumping from 20% to 30% for five years, and keeps its 10% regional bonus, bringing it closer to the domestic credits in Manitoba (35%) and Nova Scotia (45%). In the run-up to the last budget, Ontario producers had asked for 33% but went home empty-handed. The credit applies to labor costs for shows shot and posted in Ontario.

The Ontario Production Services Tax Credit, for foreign shoots, is going from 11% to 18%, subject to review before the end of 2005.

The tax breaks have been the focus of relentless lobbying from all corners of the industry. Ontario producers have for years been losing to other, more affordable regions such as the Prairies, the Maritimes, South Africa and Australia, and lost more business in 2003 because of the high loonie and Toronto’s SARS crisis. Production spending was down 11% or $106 million in 2003.

As recently as November, Sorbara had said the province would not get into an ‘unhealthy bidding war’ by upping its credits. That remark drew some 1,000 protestors to the steps of the provincial legislature, who staged a rally despite bitter, wet weather on Dec. 1.

Days later the lobby group FilmOntario met with Finance officials and reported that the Grits were ‘seriously considering’ boosting the credit in the near future.

Now, in response, producers in B.C. are using the new credits to put pressure on their own government, calling for boosts to that province’s 20% domestic credit and its 11% break on foreign shoots.

‘The British Columbia government must ensure that our industry is on a level playing field with our main competitor,’ says Peter Leitch, chair of the Motion Picture Production Industry Association of B.C.