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Canada/ 5.3 Sector specific legislation  

5.3.6 Film, video and photography

Two laws apply to film at the federal level in Canada: the National Film Act (1985), which applies to the National Film Board, and the Telefilm Canada Act (1985, amended 2005), which applies to Telefilm Canada. The Standing Committee on Canadian Heritage in Parliament recommended that the mandate of Telefilm Canada, the National Film Board and other federal cultural agencies be better aligned toward common objectives while clearly delineating their respective roles and responsibilities. The government is reviewing the Acts of the NFB and Telefilm Canada and will make legislative changes in the coming years as required.

In 1995 the government of Canada established the Canadian Film or Video Production Tax Credit (CPTC) and in 1997, the Film or Video Production Services Tax Credit Programme (PSTC). The CPTC Programme comprises a fully refundable credit of up to 12% of the net total cost of assistance of an eligible production. The PSTC is equal to 11% of salary and wages paid to Canadian residents or taxable Canadian corporations for services provided to film production in Canada.

In February 2005, amendments to the Income Tax Act (1985) were approved concerning the CPTC Programme which supports film and video production in Canada by providing a tax credit equal to 25 per cent of qualifying labour expenditures, valued at approximately CAD 185 million in 2006. The intent of the modifications is to simplify the credit and ensure that tax assistance is appropriately targeted. The amendments include the following:

  • the limit on the base of qualifying labour expenditures was raised to 60 per cent of the total cost of a production from the previous 48 percent rate;
  • labour expenditures in respect of non-residents of Canada (other than Canadian citizens) are no longer eligible for the credit;
  • the holding of an interest in a film or video production by a person other than the production corporation no longer disqualifies the production from eligibility for a tax credit, unless the production or one of the investors is associated with a tax shelter. However, the credit continues to be available only with respect to production expenditures made by the production corporation; and
  • if a government entity is an investor, that investment will be treated in the same manner as other forms of government assistance.

In 2003, the PSTC tax credit was raised to 16 percent from 11 percent of salary and wages paid to Canadian residents or taxable Canadian corporations (for amounts paid to employees who are Canadian residents) for services provided to the production in Canada. This refundable tax credit has no cap on the amount that can be claimed. The Department of Canadian Heritage also announced the results of public consultations through the Canadian Audio-Visual Certification Office in regard to copyright ownership, acceptable share of revenues, format, programmes and screen credits and production control guidelines.

In March 2008, the Minister of Canadian Heritage, Status of Women and Official Languages issued a public statement indicating that under a proposed amendment to the film or video tax credit regime, the current rules of the Income Tax Act will be changed to disallow "extreme or gratuitous" films. The government contended that the proposed Bill C-10 "has nothing to do with censorship and everything to do with the integrity of the tax system...The modifications in question will affect a very small number of the over 1 000 productions that receive tax credits annually."

Chapter published: 24-11-2008

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