NCPA - National Center for Policy Analysis


April 25, 2005

British Columbia has enjoyed being the top Canadian destination for American filmmakers, achieved through a combination of tax credits, a cheap dollar and attractive locations, but other provinces are looking to take away some of this market share, writes Dina O?Meara of the Western Standard.

In 2003, the Canadian film and TV production industry made C$4.92 billion, almost half from foreign location shooting. Of that, British Columbia won 44 percent of non-Canadian productions, while Ontario got 30 percent. British Columbia is doing everything it can to maintain its preferred destination status among foreign producers:

  • After Ontario increased its tax credits for foreign film and domestic productions to 30 percent, British Columbia responded by raising its tax credit from 11 percent to 18 percent.
  • With growing fears of a rising Canadian dollar, Vancouver's Lions Gate Studios has responded by guaranteeing clients an exchange rate at the start of production.

It is estimated that every penny that the Canadian dollar gains against the U.S. dollar raises American production costs in Canada by C$40,000.

Jim Brander, professor of business at the University of British Columbia, says that tax competition for specific industries is usually futile: "In the past what's happened, when one jurisdiction competes business away from another, is that the entire benefit has been competed away."

Source: Dina O'Meara, "Roll Credits," Western Standard, February 28, 2005.


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