Tax Quarry

In January 2006, Saskatchewan implemented the most recent revisions to its Film Employment Tax Credit.  The tax credit now permits producers to claim up to 45% of qualified labour costs for a production shot within the provinces borders.  The previous credit was limited to 35%.  The producer may also claim another five percent of eligible labour costs for films shot beyond 40 kilometers outside of Saskatchewan or Regina.  In addition, producers can receive a five percent bonus on productions valued at $3 million or more, if at least six key-crew positions go to Saskatchewan residents.  With the new increase in Saskatchewan’s tax credits, it is considered to be on of the richest film tax incentives in Canada. 

Although Saskatchewan has not seen an immediate shift in production levels since increasing the tax credit, the government and industry observers anticipate that there will be a significant growth in this prairie province over the next year.  In fact, SaskFilm, the organization responsible for administering the tax credit and providing financial assistance to qualified production companies for purposes of developing a production, reports that inquiries about filming in the province has more than doubled since the change to the credit was announced in November.

Some industry commentators, although pleased with the increase, are concerned that the labour pool will be insufficient to support a surge in production if the change comes about too quickly.  In order to address this concern, the government is discussing the option of introducing a training program specifically focussed on growing the available talent pool.  No definitive announcement has been made about how this program will work. 

Provided the Saskatchewan film industry can meet the demands of expanded productions within its borders, it is likely that the increased credit will allow the province to compete for bigger blockbuster productions which will rival that of Ontario’s.  This could potentially be the beginning of a domino effect of increasing film tax incentives across Canada.  However, at this stage it is too soon to tell how this change will affect the rest of the provinces.  Ontario and other provinces will just have to keep their ears tuned in to any market shifts and a finger on the government lobbying speed dial line.

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