B.C.’s Finance Minister is challenging his counterparts in Ontario and Quebec to stop allowing Hollywood studios to pit the three provinces against each other for “unaffordable” film tax credits.
“As a country, and individual provinces within the country, we are better off to stop competing to see who can send the biggest cheque to Hollywood,” Mike de Jong said Monday.
Mr. de Jong says the status quo only benefits Hollywood so he’s hoping the other provinces will join B.C. in jointly managing such tax credits.
B.C.’s Liberal government, under pressure from some in the province’s film and TV production sector as well as the B.C. NDP opposition to boost subsidies in recent months, attacked such measures as a race to the bottom. Premier Christy Clark said B.C. taxpayers were being generous enough with about $300-million in annual credits.
The Liberals went into the campaign ahead of the May provincial election with a platform commitment to “work with the provinces of Ontario and Quebec to establish a rational film incentive policy across Canada to prevent unaffordable industry support systems.”
Once the Liberals won re-election, Ms. Clark enshrined the idea in her mandate letter to Mr. de Jong, putting it on his to-do list as finance minister to “work with the ministers of finance of Ontario and Quebec to secure an agreement on a competitive film industry tax credit regime.”
Mr. de Jong, who says his department is pulling together data on the issue, says he’s not yet sure how it would work, but he’s calling for some form of “strategic oversight,” and an agreement that provinces won’t undercut each other to attract film business.
“The objective is to avoid a repetition of what has happened repeatedly where the largely foreign production sector of large studios are able to extract a richer subsidy regime in one jurisdiction to then put pressure on other jurisdictions,” he said.
B.C.’s tax credit for foreign productions is 33 per cent on labour. But Ontario and Quebec offer 25 per cent on all production costs.
“We are being played one against the other in a classic negotiating strategy that pits one part of the country against the other,” said Mr de Jong.
“For a taxpayer in Ontario hearing about the challenges their government is having wrestling against a multibillion-dollar deficit, the idea of sending $30,000 to Warner Brothers every time they blow up a Mercedes may strike them as odd.”
Ontario’s Culture Minister Michael Chan told The Globe and Mail last week that his government is satisfied with the status quo, noting Ontario has to compete with other jurisdictions around the world.
Mr. de Jong said he raised the idea before the election with his counterparts in Toronto and Quebec.
Asked about the response, Mr. de Jong vaguely said there has been “interest” as well as a desire to not compromise existing success in attracting production work to their jurisdictions. However, he said the ministers also understand the trend of having jurisdictions compete against each other has not been useful.
He said he will keep raising the issue with his fellow ministers.
Peter Leitch, president of North Shore Studios in North Vancouver and a leading B.C. industry spokesman, said the government position makes sense, calling it “counterproductive” for governments to compete on the tax front.
In any event, the chair of the Motion Picture Production Industry Association of B.C. said, taxes are only one factor in competition. Others include locations, crews and studio facilities.