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ONTARIO IMPROVES DOMESTIC TAX CREDIT FOR PRODUCERS

After a year of stalled growth, Ontario Finance Minister Greg Sorbara delivered a welcome incentive to the production industry today. Qualifying labour expenditures covered in the domestic production tax credit will no longer be reduced by equity investments from Canadian government film agencies (this covers productions that commenced principal photography after March 27, 2003). That same tax credit will also extend the commencement time of a production to include qualifying labour expenditures that are incurred as early as two years before principal photography begins.

An allowance was also made allowing a person other than the production company to hold an interest in a film or television production unless one of the investors is associated with a tax shelter. The elimination of the so called "grind" and the other adjustments to the domestic credit is worth $8-million.

"This is a step in the right direction," said Laszlo Barna, Canadian Film and Television Production Association Chair. "After SARS, a high dollar, and tax incentives from other provinces, Ontario needs to stay ahead of the game to stay competitive. This will definitely help, but we need to continue to fight for an increase in the tax credit rate."

2003 was a difficult year for Ontario producers. There was a 36% drop in foreign service production in the province.

The CFTPA is a non-profit, trade association representing almost 400 companies in the Canadian production industry. The association promotes the general interests of Canadian producers by lobbying government on policy matters, negotiating labour agreements, and offering mentorship programs and copyright initiatives.

To read budget backgrounder: http://www.ontariobudget.fin.gov.on.ca/bud04e/pdf/bke7.pdf (p.3)

To read the budget document in full: http://www.ontariobudget.fin.gov.on.ca/bud04e/pdf/papers_all.pdf (pp. 117, 118)

To read the budget speech: http://www.ontariobudget.fin.gov.on.ca/bud04e/pdf/statement.pdf (p.21)

For more information on this, please contact:

Jane L. Thompson
Director of Communications
Canadian Film and Television Production Association

Tel: 613 233 1444 ext 227