Although it’s safe to assume that a dollar worth around u.s.$.70 is sufficient incentive for foreign producers to film in Canada, a plethora of recent changes, including tax credits for non-Canadian content (Cancon) productions, make for an even more attractive film site.
Late last year, the federal government announced details for a new film or video production services tax credit for non-Cancon productions. With a rate equal to 11% of the total cost of qualifying Canadian labour expenditures, this effectively replaces the former system. Meanwhile, Ontario and British Columbia, two of Canada’s largest production centers, have new tax incentives of their own for foreign companies with a base in those provinces.
However, in the non-fiction realm, location production is not nearly as important as coproduction, and non-Canadians who enter into coproduction or co-venture arrangements can access other existing incentives.
Canada Television Cable Production Fund
The Canada Television Cable Production Fund (ctcpf) operates two complementary funding programs: the Equity Investment and Licence Fee Program. Eligible applicants must be Canadian-controlled corporations for purposes of the Investment Canada Act, operated under the effective control of Canadians, and must own the copyright in the production. So-called ‘service productions’, which are controlled by non-Canadians, are not eligible for funding. Official coproductions under Canada’s international treaties are eligible only for the Equity Investment Program. The lfp can kick in a contribution equal to at least 10% of the program budget (with supplementary bonuses available), while the eip contribution caps at up to 49% of an eligible projects production costs.
International Treaty Coproductions
Canada is a party to film and/or television coproduction treaties with over 33 countries. Qualifying productions are entitled to full enjoyment of all government incentives and benefits accorded to domestic productions in Canada, and are considered to be ‘national products’ in both participating countries. These incentives and benefits include eligibility for financial support from Telefilm Canada and provincial agencies, access to federal and provincial tax credits, and qualification for the Cancon designation established by the Canadian Radio-Television Telecommunications Commission (crtc).
While the coproduction treaties provide several benefits, they do impose a series of conditions upon the coproducers, which sometimes limits their flexibility. For example, each treaty sets minimum standards for creative and financial participation (the minority coproducer must normally contribute at least 20% of the financing), and the extent of involvement by third countries.
The treaties are quite specific in outlining the creative and technical contributions which must be made by citizens or nationals of the minority coproducer’s country. For example, agreements may require minimum numbers of writers, technicians and producers who must be citizens of the participating country. Compliance with these sorts of conditions is the trade-off for enjoying the benefits accorded under the coproduction treaties. There is currently no treaty between Canada and the u.s.
A production company of a non-treaty country (such as the u.s.) and a Canadian production company can enter into a co-venture which would meet crtc Cancon purposes, but would not be eligible for certification by the Canadian Audio-Visual Certification Office (CAVCO). Co-ventures will qualify for special recognition where the Canadian company has at least an equal measure of decision-making responsibility as other co-venture partners. Co-ventures with a non-treaty country, such as the u.s., must also obtain at least 6 points as defined by cavco and meet the 75% expenditure test.
Co-ventures with treaty country producers need only attain 5 points and the 75% expenditure tests are reduced to 50%. The chief advantage of the co-venture structure is that non-Canadians may be openly involved in the production, receive producer-related credits, with no restrictions over control of distribution or even ownership of copyright. The main disadvantage is that a co-venture, while Canadian for crtc broadcast quota purposes, will not qualify for the Federal Content Credit or the Ontario Film and Television Tax Credit.
The non-Canadian who desires to benefit indirectly from Canadian government financing must become familiar with the rules regarding Canadian financial assistance and tax benefits. In many cases, an association with an individual Canadian producer may be required to gain access to funding, as in the case of the non-Cancon tax credits. By keeping up to date, non-Canadians will be aware of how to access these benefits.
In this report:
-Joining the Canadian Club: Hooking into Hot Docs and International Nominees
-The Next Generation: Canadian Docmakers on the Rise