Thursday, May 26, 2016

Free Money Reductions

We've touched on this before, but here's Variety's take:

... Tax incentives have long contributed to the [province of British Columbia's] popularity, and with the Canadian dollar at new lows, goods and services are even cheaper for the Hollywood types who head north to shoot.

In fact, the economics are so friendly that the B.C. government has decided to take advantage of the situation. It announced this month that, beginning Oct. 1, it will decrease the production services tax credit to 28% — 5% lower than the previous rate — which will save the province a projected $100 million in annual payouts. ...

Acting B.C. film commissioner Robert Wong, who’s also VP of promotional organization CreativeBC, says that the more shooting there is in the province, the more money the government must pay out in incentives. “The way things have been going over the past two years, with so much production activity here, the tax burden was starting to increase.” ...

Governments subsidizing major industries has long been part of the landscape: Railroads in the 19th century; oil and sugar and sports stadiums in the 20th; banks and movie studios in the present time. It's all part of the tapestry we like to call "market capitalism" (or as Gore Vidal described it: "Socialism for the Rich, Free Enterprise for the Poor").

But sometimes handing out enticements to companies of various sizes causes red ink to flow. That's now the case in Vancouver and Toronto, and there is always the possibility that the tax-paying natives will get restless and shut off the spigot completely.

So a little preventative action is in order. As long as the exchange rates stay the way they are, everybody's good.


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