The British Columbia government is cutting film and TV tax breaks amid an industry boom that drove the cost of the tax credits to nearly half a billion dollars in the last fiscal year – a decision that prompted some within the industry to worry U.S. producers could have second thoughts about bringing their projects to the province.
Finance Minister Mike de Jong followed through on his concerns about the cost of such tax breaks by announcing a plan to cut the basic production-services tax credit by five points – to 28 per cent, from 33 per cent. The credit compensates producers for claimed B.C. labour costs at the designated rate. At the same time, the digital animation or visual-effects tax credit will be cut to 16 per cent, from 17 per cent.
Earlier this year, Mr. de Jong said the province could no longer afford the tax credits, which have soared from an average annual cost of $313-million to $491-million in 2015-16. An increase in production, partly due to the low Canadian dollar, saw producers claiming more tax credits.
British Columbia’s decision to tinker with its tax-credit scheme comes as other jurisdictions have grappled with whether or how governments should support the industry. Saskatchewan got rid of its tax credits. Nova Scotia did the same last year, decimating its production industry. Ontario lowered its tax support last year for foreign productions. ...
The problem with giving away free money is it gets expensive for the geographic locality even as it becomes addictive for the fine entertainment conglomerate grabbing up the gobs of gratis cash.
California does it. Georgia does it. Likewise Britain and France and different Canadian provinces. But at some point the locals start to get restless watching their tax money go to big fat corporations that don't really need it, but will gladly take the moolah if some government chump offers same.
Long live free, unfettered enterprise!!