British Columbians might be concerned about the fate of the harmonized sales tax, but one of the province's cabinet ministers says uncertainty over the HST's future isn't much of a worry for U.S. film producers.
Stephanie Cadieux, B.C.'s minister of cultural development, met with Warner Bros., Sony Pictures, and Columbia Pictures, among others, earlier this week in Los Angeles. In a teleconference with reporters Thursday, Ms. Cadieux said the fact the HST might be wiped out by a referendum wasn't something the studio executives expressed any consternation about.
"We did leave it very open for the studios to discuss with us any concerns that they had going forward. They are aware that B.C. is in a leadership race ... which may change any number of things," she said.
"We are having discussions, we are having open dialogue with the companies. Overall, they are very positive on British Columbia."
While Ms. Cadieux painted a somewhat rosy picture, her teleconference came the same day that a mainstay of the Lower Mainland production scene announced it would shut down. The Stargate television franchise, which has been shooting in Burnaby since 1994, is believed to have been cancelled because of low ratings.
The film industry generated about $1.3-billion last year in B.C. and has been one of the province's most vocal supporters of the HST.
Before the HST was introduced, film producers paid the provincial sales tax on goods and services. But because production companies were not viewed as manufacturers, that money could not be recovered from government.
The HST, like the GST, is recoverable, reducing many production costs by seven per cent.
Industry leaders have said abolishing the HST would lead to job cuts. They've also warned a number of projects could be diverted from B.C.
Ms. Cadieux said the HST is only one of the elements that lures film productions to B.C. She pointed to the tax credit the province provides, as well as B.C.'s economic stability.
"We are in the same time zone [as Hollywood] We are the third-largest production facility in British Columbia. We have fantastic locations that can pretty much simulate any part of the world," she said.
Ms. Cadieux said the HST didn't go unmentioned by studio executives. They were quick to point out the positive effects on their budgets.
Ken Peacock, director of economic research for the B.C. Business Council, said no matter what the industry, uncertainty about the future is far from a good thing.
"I think there's elements of what the minister's alluding to that are true, about B.C. having good capacity, labour force, and high-quality studios," he said.
"The higher cost could in theory steer away some productions."
Peter Leitch, chair of the Motion Picture Industry Association of B.C., said there's no doubt wiping out the HST would hurt film producers. The uncertainty about the tax's future, with voters scheduled to vote on its fate in September, also isn't helping.
"We went out and marketed the HST and told them it existed, and we're not in a position right now to tell them that it's going to go away," he said. "We think it's a good economic policy and it's better than the alternative and so we're going to work hard to make sure that people get educated and understand the tax and hopefully see the benefits of it."
With a report from Marsha Lederman