DGC urges finance committee to endorse new private sector tax incentive for film, TV, new media

The Directors’ Guild of Canada (DGC) has called on the government to create “a powerful tax incentive” to spur private investment in the film, television and new media industry. Taking the chance to add to its usual concerns—more public funding for the industry and tax credits—the DGC added the private investment tax incentive call to widen deliberations on what it says is a crucial issue that is “missing” in discussions about industry issues. “If we can encourage private investment in film, television and digital media production, that would breathe a whole lot more oxygen into the mix,” says Brian Anthony, CEO, DGC, in an interview with Tech Media Reports. The DGC says a tax incentive for private investment isn’t entirely a new idea as there is already a pattern for it in other sectors. Anthony says the DGC is seeking an incentive similar to one created to encourage private investment in oil and gas exploration and development. “There’s a precedent for it and we feel something like that would work in our sector,” he says. In the 1980s, the federal government enacted rules that allowed 100% cost allowance for investment in the film industry. Although it opened the doors for private investment in the industry, Anthony says it turned out to be “a nightmare” for everybody. “A whole lot of people threw a lot of money into the industry and a whole lot of not particularly good productions were made and it was basically for the wrong reasons that it was being encouraged,” he says. “We are not proposing anything like that.” However, details about what the incentive would look like, its percentage, and information about functionality remain to be ironed out with officials in the departments of Heritage and Finance, as well as the film industry, if approved. This year, the committee eased restrictions on the number of recommendations parties can table, increasing the number to three. The move is likely to be welcomed by various organizations because it widens the scope of discussions as opposed to last year when they were restricted to one recommendation. In its submission, the DGC also called for expansion of the federal tax credit, as Quebec and Ontario have recently done. Expansion means tax credits will also cover pre-production, equipment rental and post production costs. Currently the federal tax credit is limited to labour costs. “We feel that if the federal government were to follow that example, we could have a truly national approach—assuming other provinces will move in that direction—to making all the costs associated with film, television, and digital media production eligible,” Anthony said, in response to MP John McKay. However when quizzed on the percentage ratio the DGC was seeking in an expanded federal tax credit, Anthony said there’s still no established benchmark for determining it, adding that the Ontario government has yet to release details regarding its regime. “I think in Quebec, it’s sort of doubling the eligible costs, which is welcome news,” he said. MPs also asked Anthony to clarify what he meant by an “enhanced” public funding for the industry, to which Anthony replied that it means more direct federal investment in institutions like Telefilm Canada. The Finance committee started its pre-budget consultations on Sept. 14 and will wind up gathering information on Nov. 2. This year’s pre-budget consultations take place without the spectre of Bill C-10. The bill contained a controversial clause that gave the government free reign to deny tax credit accreditation or funding to any production deemed not to be in the public interest, a euphemism cultural groups, including the film industry, said implies productions that don’t meet the Conservative government’s ideological requirements. As well, the committee allowed mixed presentations this year. For example, cultural and education groups can present recommendations to the same panel on the same day as opposed to last year where appearances were strictly by category. Anthony welcomed the move, saying the film industry benefited from presentations from cultural groups, whose recommendations mirrored and reinforced those of the film industry. The pre-budget consultations are still going on and the committee expects to conduct hearing sessions in the following locations below: Summerside, Prince Edward Island: October 5, 2009 St. John’s, Newfoundland: October 6, 2009 Quebec City, Quebec: October 7, 2009 Regina, Saskatchewan: October 19, 2009 Winnipeg, Manitoba: October 20, 2009 Toronto, Ontario: October 21, 2009.

DGC urges finance committee to endorse new private sector tax incentive for film, TV, new media

Broadcast | October 2, 2009

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