Lights. Camera. Action!
Canadian film and TV productions account for $5 billion in revenue, employing more than 117,000 people on a full-time basis. Ontario, Quebec and British Columbia alone make up more than 90% of total volume production in the country.
Production is growing with the support of federal and provincial governments that encourage investment in Canada with incentives. These incentives are a critical part of growth in offsetting the cost of productions in the country, allowing domestic and international productions to reduce their costs.
According to PwC’s Global Entertainment and Media Outlook, global spending on filmed entertainment is forecast to reach $113.1 billion. In North America, the world’s largest production region, spending is expected to rise to $50.3 billion—a compound annual growth rate of 5.2 percent.
CAVCO - Canadian Film or Video Production Tax Credits
What is the CPTC?
The Canadian Film or Video Production Tax Credits (CPTC) is jointly administered by the Canadian Audio-Visual Certification Office (CAVCO) and the Canada Revenue Agency (CRA). Eligible products can receive a fully refundable tax credit, available at a rate of 25% of the qualified labour expenditure. The CPTC encourages the development of an active independent production sector in Canada as well as Canadian film and television programming.
Who is eligible for the CPTC?
Taxable, Canadian-controlled production companies with a permanent establishment in Canada and primarily carry on activities of eligible Canadian film or video productions. A production must be a linear film or video production tax credits that’s non-interactive. Voting outside of the context is fine, and virtual reality (VR) productions can be eligible, if the storyline progresses in a linear way without viewer’s interaction.
What isn’t eligible for the CPTC?
- news, public affairs, current events, weather or market reports
- a game, questionnaire or contest production (unless directed primarily for minors)
- sports, event, or activity productions
- award shows and galas
- productions that solicit funds
- reality TV
- pornography
- advertising
- productions that are for industrial, institutional, or corporate purposes
- a production containing all or a substantial amount of stock footage (that isn’t a documentary)
- video games, apps, websites and similar products
PSTC - Film or Video Production Services Tax Credits
What is the PSTC?
The Film or Video Production Services Tax Credit (PSTC) is jointly administered by the Canadian Audio-Visual Certification Office (CAVCO) and the Canada Revenue Agency (CRA). Eligible companies can receive tax credits at a rate of 16% of qualified labour expenditures. The PSTC is intended to strengthen the industry, secure investment, and enhance Canada as a location of choice for film and video productions.
Who can apply for PSTC?
- Taxable, Canadian- or foreign-owned companies, with over half of their activities dedicated to the permanent establishment of a film or video production business (or services business) in Canada.
- The owner of the copyright in the eligible production throughout the period in which it’s produced in Canada (or contracted directly with the copyright owner to provide production services).
What isn’t eligible for PSTC?
- news, public affairs, current events, weather or market reports
- a game, questionnaire or contest production
- talk shows
- sports, event, or activity productions
- award shows and galas
- productions that solicit funds
- reality TV
- pornography
- advertising
- productions that are for industrial, institutional, or corporate purposes
- video games, apps, websites and similar products
Ontario Creates - Ontario Film & Television Tax Credit
What is the OFTTC?
The OFTTC is a refundable tax credit for eligible, Ontario-based corporations in the film & television production industry. Corporations receive up to 35-40% of eligible labour expenditures for productions. Regional bonuses are available for productions that are shot and animation productions if the majority of the filming / work takes place outside of the GTA.
Who can apply for the OFTTC?
A corporation must be Canadian-controlled, have permanent establishment in Ontario, and file an Ontario corporate tax return in order to be considered a qualified company. The individual producer must be an Ontario resident for tax purposes at the end of the previous two calendar years prior to commencement of principal photography.
Productions that are eligible include:
- Six Canadian content points (unless an official treaty co-production)
- Is predominantly shot and posted in Ontario (some exceptions such as documentaries, international treaty co-productions, and interprovincial co-productions)
- 75% of total final costs are on Ontario expenditures
- Is suitable for a 30-minute time slot if for television (with the exception of children’s programming)
- Has an agreement with an Ontario distributor or Canadian broadcaster to be shown in the province within two years of completion
- As with the point above, the broadcast must occur between 7 pm and 11 pm with the exception of children’s programming
What isn’t eligible for the OFTTC?
- Talk shows
- Game shows
- Current affairs
- Sports shows
- Awards shows
- Fundraising shows
- Reality television
Ontario Creates - Ontario Production Services Tax Credit
What is the OPSTC?
The OPSTC is a refundable tax credit for eligible, Ontario-based Canadian- or foreign-controlled corporations in the film & television production industry. Corporations can receive up to 21.5% of eligible labour expenditures for productions. Requirements for this tax credit are generally “harmonized” with the federal Film or Video Production Services Tax Credit administered by Canadian Audio-Visual Certification Office (CAVCO) and the CRA.
Who can apply for the OPSTC?
To be qualified, a corporation must:
- Be Canadian- or foreign-owned
- carry on a film or video production or production services business at a permanent establishment in Ontario
- file an Ontario corporate tax return
- and own the copyright of the qualifying production or contracts directly with the copyright owner
Productions that are eligible include:
- Production costs exceed $1 million CAD, (with the exception of series with two or more episodes or a pilot for such series)
- In the case of a series, the run time is less than thirty minutes and costs exceed $100,000 CAD
- If the episode has a longer running time the costs must exceed $200,000 CAD
What isn’t eligible for the OPSTC?
- Talk shows
- Game, questionnaire, or contest productions
- Current affairs
- Sports or activity shows
- Awards or gala productions
- A production that solicits funds
- Reality television
- Pornography
- Advertising
- Productions produced for industrial, corporate, or institutional purposes
- Productions that are contrary to public policy
- Productions that receive Ontario Film and Television Tax Credit (OFTTC)
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