Accessing Canadian Film & Television Tax Credits

The following article will help you navigate the Canadian Film & Television Tax Credits for film and television and film production. These includes: (i) The Canadian Film or Video Production Tax Credit (PTC), Ontario Film and Television Tax Credit (OFTTC) and Ontario Production Services Credit (OPSTC).

Take a look at the article, Top Ten Legal Pitfalls For New Producers, to understand the other legal areas of a production to watch out for.

Canadian Film or Video Production Tax Credit (PTC) is 25% of qualified labour expenditures incurred by a qualified corporation for the film production of a Canadian film or video production.

1. PTC – in order to determine whether a production qualifies as “Canadian”

1. Production company must be a Canadian controlled corporation from the start of production to its completion in order to access the tax credits.
2. The majority of the voting interests have to be held by Canadian citizens or permanent residents of Canada to be Canadian controlled.

• The activities must be primarily the carrying of a Canadian film or video production business through a permanent establishment in Canada

1. The Producer must be a citizen or permanent resident of Canada at all times during the production. All individuals performing “producer related” responsibilities must be Canadian (exceptions exists such as courtesy credits, etc.).
2. The production has to meet “Canadian creative points test” and the production must earn a minimum of six points (live action). Either the Director or Screenwriter or on of the two highest paid leading performers must be Canadian:
   1. Director (2 points)
   2. Screenwriter (2 points)
   3. Highest and Second paid lead performer
   4. Production Designer/Art Director
   5. Director of Photography
   6. Music Composer
   7. Picture Editor
3. The production company must have the exclusive worldwide copyright in the production for all commercial exploitation purposes for a minimum of 25 years commencing when the production is completed and is commercially exploitable.

 

Ontario Film and Television Tax Credit (OFTTC) is equal to 30% of eligible labour cost with no cap. First time producers are eligible to an enhanced rate of 40% on the first $240,00 of labour costs.

1. production company must have a permanent establishment in Ontario
2. production company must be Canadian controlled and must be a qualified corporation for the purpose of the federal tax credit

• film production company’s primary business must be the production of Canadian films and videos

1. a minimum of 75% of all film production costs and 9% of post-production costs must be incurred in Ontario other than in the case of co-productions
2. the film producer must be an Ontario resident for at least two years prior to the production
3. the film must be shown in Ontario within two years of completion of principal photography by an Ontario based film distributor or Canadian broadcaster during prime time (between 7 pm and 11 pm)

• the production must attain at least 6 of the possible 10 CAVCO points
• a minimum of 85% of the total number of days of principal photography or key animation must be done in Ontario unless it is a documentary or treaty co-production.

1. The Ontario Minister of Citizenship, Culture and Recreation must certify the production as an Ontario production.

Not eligible: TV programs not show in prime time other than children’s programming, non-Canadian controlled service productions, talk shows, reality TV and sports shows.

Regional bonus: of 10% on all Ontario labour expenditures available if shot outside of GTA in Ontario.

 

Ontario Production Services Tax Credit (OPSTC) is equal to 18% of Ontario labour expenditures.

• This tax credit is available to both Canadian and foreign film production companies producing in Ontario.
• No content requirements need to be satisfied
• Film production company must have a permanent establishment in Ontario (which includes a production office set up in Ontario during filming), and either owns the copyright in the production or contracts directly with the copyright owner.
• The corporation must be primarily engaged in the business of video or film production
• The film production must meet minimum budget levels of $100,00 per 30 minute episode or less of a television series, $200,00 per episode greater than 30 minutes and $1 million for all other productions.
• Cannot claims both the OFTTC and CPSTC for the same episodes of a television series.
• Ineligible genres: news shots, talk shows, game or contest productions, sports events, gala or award presentations, pornography, reality television and advertising or industrial productions.
• Clearances

Contact Entcounsel for more information.