The mayors of British Columbia's two largest cities are reminding the provincial government of the economic benefits of film and television production and are urging Finance Minister Mike de Jong to be cautious about his plans to pare back production-sector tax credits the minister has deemed unaffordable.
The comments from Surrey Mayor Linda Hepner and Vancouver's Gregor Robertson come after Mr. de Jong said this week he's looking for options to curb the costs of tax credits worth about half a billion dollars a year.
Ms. Hepner pointed out that the Warner Bros. Television series DC's Legends of Tomorrow was filming Thursday at Surrey's new city hall – one of a number of TV productions, including The Flash and The 100, that have used the slick architecture of the facility. In 2015, Surrey issued more than 90 permits that led to 175 days of filming on such productions as The X-Files revival series. According to the city, production efforts brought more than $2-million in direct economic benefits in 2015.
"The film industry is alive and well in Surrey," Ms. Hepner said. "Will I say it's an important industry in British Columbia? Yes. Will I say it's an important industry in Surrey? Absolutely."
While Ms. Hepner said she was sympathetic to Mr. de Jong's fiscal concerns, she added that she hoped for tax measures that would, at the very least, leave British Columbia competitive within Canada. She also said she wants the B.C. government to consult affected municipalities about any measures. Ms. Hepner said she was wary about outright cuts. "That would put us in a less advantageous position." Foremost among the tax credits is a 35-per-cent refund on B.C. labour costs for productions that meet Canadian-content standards. Productions that do not meet the content standards get 33 per cent.
There are also tax credits for work done outside the Vancouver area, digital animation, visual effects or postproduction work. According to the most recent B.C. budget and fiscal plan, foreign production spending – largely linked to Hollywood – was about $1.6-billion in 2014-15, and about 20,000 people are employed in the sector.
The relatively low Canadian dollar is among the factors that make Canada appealing to U.S. producers. About 80 per cent of the film and TV productions shot in B.C. are developed for Hollywood.
Mr. de Jong has said something has to be done to hold the line on credits, which cost $493-million in 2015-16 as a result of the falling value of the Canadian dollar. That is up from an annual average cost of about $255-million. He has committed to talking to the industry, but promised some action in coming weeks.
B.C. budget documents released last week said Saskatchewan axed its credits in 2012, and that Ontario, Quebec and New Brunswick have reduced their tax credits. U.S. jurisdictions including California and New Mexico have capped the cost of their credits, said the documents.
In Vancouver, Mr. Robertson said creative industries, such as film and TV are important to both the city and province, and that the production sector has been booming. "We're thankful to see that success and very concerned if there's any shift that destabilizes the industry here," he said in an interview.
The mayor said the low level of the Canadian dollar has "skewed" the situation, boosting the spending power of Hollywood producers. This has led to increased claims for tax credits, resulting in a bigger provincial payout and prompting the B.C. government's concern.
"The tax credits have been a very important part of building and supporting the industry here in B.C. and we want to be sure the industry continues to thrive," he said.
Asked what he thought the province should do, Mr. Robertson replied: "Be cautious and stay in touch with film and TV studios; make sure they're not doing anything that will destabilize the industry here.
"We want to be a great place for them to do business," he said.
Last week, the City of Vancouver issued a statement declaring a 40-per-cent increase in production in 2015 over 2014, with 353 productions that earned the city $710,000 in revenue from film and street-use permits. Permits in January, 2016 were up 30 per cent over the previous year.
The current feature film Deadpool, a box-office hit, was filmed in Metro Vancouver over 58 days – a process that necessitated the intermittent closing of the Georgia Viaduct to allow for shooting action scenes featuring star Ryan Reynolds, a native of Vancouver. The city has noted the production hired 2,000 local cast and crew.