The British Columbia provincial government announced their budget yesterday. While the news getting the headlines is their moves to cool down their sky-high home prices, they have quietly also announced changes to their film tax credit. You can check the budget here, but I'll print some of the relevant text (added emphasis is mine):
Chart 2 shows the cost advantage for an American production in British Columbia due to the tax credits and the exchange rate. The first bar shows that the net cost to the producer of $100 in spending on British Columbia labour was $58 US from 2010 to 2014. With the Canadian dollar at $0.71 US, the net cost to the producer is only about $40. As an example, at the current exchange rate, the provincial tax credit rate could be reduced by over 50 per cent and still ensure a net cost of British Columbia labour that is less than during the period from 2010 to 2014.
Other jurisdictions have addressed the cost of film tax credits in various ways. Saskatchewan eliminated its tax credits in 2012. Ontario, which noted its increased tax credit cost due to the low Canadian dollar, as well as Quebec and New Brunswick, have reduced their tax credits in recent years. In the US, jurisdictions such as California and New Mexico cap the cost of their tax credits, while North Carolina eliminated its film tax credit altogether in 2015. When industry size is taken into account, British Columbia offers very generous credits, given that the British Columbia industry accounted for approximately $2 billion Canadian in productions in 2014/15, with a tax credit cost of approximately $343 million Canadian. California’s industry is about $17 billion US annually, and the state spends $330 million US on tax credits.
Representatives of the film industry have recognized the pressure the rising cost of film tax credits are having on the government’s fiscal capacity and have approached the government to work together to seek ways to address this pressure. The government has accepted the industry’s offer and will work collaboratively to develop solutions that can be implemented this year. With input from the film industry, the government will limit the growth of film tax credits across 2016/17 through 2018/19, but the cost of the credits will still be the highest amount ever budgeted.
There's no wording that goes into detail about exactly what the changes will be, but it seems likely that there will be cutbacks to some degree. It will be interesting to see how this impacts the multiple VFX studios that have set up shop there.
Ontario's provincial budget will be released next Thursday
Government set to announce changes BC film tax credits in the next few weeks. #bcpoli— Richard Zussman (@richardzussman) February 16, 2016
I was surprised when a politician I met admitted to me that he read my blog. This sounds like something I've said. pic.twitter.com/cQcpuhOPmQ— VFX Soldier (@VFXSoldier) February 17, 2016