Today there are various government agencies pertained to providing financial incentives for Canadian films and television productions through tax credits, grants, and loans. At the federal level, there are two tax credit programs known as the Canadian Film or Video Productions Tax Credit (CPTC) and the Canadian Film or Video Production Services Tax Credit (PSTC), while at the provincial level, most Canadian provinces have their own film and television tax credit programs with different rates and percentages specific to the region.
From the beginning (the late 19th century), the Canadian Film industry has faced insurmountable odds against its Hollywood counterparts due to challenges such as the amount of labour, distribution logistics and exhibition capacity needed to make a successful Canadian film, but also in the accessibility of seed capital to start the production. Despite these great challenges and deficiencies, today’s Canadian film sector has become a booming industry and, as of 2020, has 9.3 billion dollars in production volume and 244,500 new jobs created within that same year. The industry’s growth is in part due to the maturation of the financial reinforcement and continued interest by the Canadian government in the production and recognition of Canadian art, film, and television.
Today there are various government agencies pertaining to providing financial incentives for Canadian films and television productions through tax credits, grants, and loans. At the federal level, there are two tax credit programs known as the Canadian Film or Video Productions Tax Credit (CPTC) and the Canadian Film or Video Production Services Tax Credit (PSTC), while at the provincial level, most Canadian provinces have their own film and television tax credit programs with different rates and percentages specific to the region.
Federal Tax Credit Programs
Canadian Film or Video Productions Tax Credit (CPTC)
The goal of the CPTC is to encourage the creation of Canadian Film and television development and work on building a robust independent production sector in Canada.
The Canadian Audio-Visual Certificate Office (CAVCO) alongside the Canadian Revenue Agency (CRA) allocates the credit by granting eligible Canadian productions a fully refundable tax credit covering up to 25% of eligible labour costs per year, with the maximum CPTC available for the cost of labour expenses of 60% of the total production cost. Therefore, the total CPTC available considering the capped labour expense (60%), becomes 15% (25%*60%) of the total cost of the production.
Who can apply for the CPTC?
Only Canadian production companies that are qualified corporations can get approval for access to the CPTC. The key eligibility criteria for CPTC is that the production must have Canadian copyright ownership. To be able to apply, eligible corporations must submit applications through CAVCO’s online application system to get CPTC certification.
To succeed as a qualified corporation, you must have a prescribed taxable Canadian corporation during a given taxation year and own a permanent establishment in Canada that conducts a Canadian film or video production business.
The key difference between the CPTC and the PSTC (information follows this section) is that:
Canadian Film or Video Production Services Tax Credit (PSTC)
Productions that do not meet the necessary requirements for CPTC eligibility (i.e. copyright ownership is not held by a Canadian company or prescribed person) may qualify for the production services tax credit program application. The PSTC offers a refundable tax credit to production corporations which amount to 16% of the qualified labour expenditure accumulated during an accredited production. The PSTC differs from the CPTC as it can be claimed by foreign producers if the film or video made is an accredited production, employs the services of Canadians, and if the corporation is an eligible production.
It is important to highlight the differences and similarities between the CPTC and PSTC, both CPTC and PSTC tax credit coverage are provided by the CRA and CAVCO and they both require the corporation to be an eligible production to qualify for the tax credit. However, they are different in the percentage of tax credit they offer, PSTC being up to 16% and CPTC being up to 25% of the costs as well as the origin of producers, for PSTC the producers can be foreign, unlike CPTC which requires Canadian producers. CPTC has much more restrictions in terms of qualifying the applicant compared to the PSTC and it is important to get support in application submission to get the maximum benefit offered by these two programs.
Provincial Tax Credits
All provinces give productions that meet the eligibility criteria an opportunity to access tax credits or other incentives, below is the list of the main funds:
|1. Screen-Based Production Grant
• Stream 1: Albertan – 50 percent or Greater Albertan Ownership
• Stream 2: Non-Albertan – Less Than 50 percent Albertan Ownership
2. Project/Script Development Grant
|1. Film Incentive BC (FIBC)
• Scriptwriting Tax Credit
• Basic incentive
• Regional incentive
• Distant location regional incentive
• Training incentive
• Digital animation or visual effects (DAVE) incentive
2. Production Services Tax Credit (PSTC)
• Basic PSTC incentive
• Regional PSTC incentive
• Distant location regional PSTC incentive
• Digital animation or visual effects (DAVE) PSTC incentive
3. Creative BC – project development fund
4. Creative BC – Passport to Markets Program
|Manitoba Film and Video Production Tax Credit
Manitoba Interactive Digital Media Tax Credit (MIDMTC)
|NB Film, TV and New Media Industry Support Program
• Development incentive
• Production incentive
|Newfoundland and Labrador
|1. Newfoundland and Labrador film and video industry tax credit
2. Newfoundland and Labrador Film Development Corporation (NLFDC)
|NWT Film Rebate Program
• Labour/Training rebate
• Expenditure rebate
• Travel rebate
|Nova Scotia Film and Television Production Incentive Fund
• Stream I: Indigenous/co-production
• Stream II: Foreign/service production
• Nova Scotia content Incentives
|Nunavut Spend Incentive Program (NSIP)
• Creative content development fund
• Market endowment program
• Industry development and training program
|1. OMDC Film Fund
2. Ontario Film and Television Tax Credit (OFTTC)
3. Ontario Production Services Tax Credit (OPSTC)
|Prince Edward Island
|Prince Edward Island Film Media Fund
|1. Refundable tax credit for Québec film and television productions
2. Refundable tax credit for film production services
3. Québec dubbing tax credit
4. The Québec production of multimedia titles tax credit
|1. Creative Saskatchewan
2. Film and Television Development Grant
3. Television Production Grant
4. Feature Film Production Grant
5. Micro-Budget Production Grant
6. Web Series Production Grant
7. Sasktel Max Equity Fund
|1. Yukon Filmmakers Fund
2. Yukon Film Location Incentive Policy
• Spend rebate
• Yukon travel rebate
• Training program
3. Film Development Fund
4. Film Production Fund
Other Federal Incentives
Canadian Media Fund CMF
Another important program to mention is the Canadian Media Fund. Their main purpose is to assist through both financial support and industry research in the creation of successful and innovative Canadian content. Their budget is ~CA$375 million and gets reviewed every year. They have two main streams of funds that focus on different areas of content creation:
Web Series Pilot Program
Commercial Projects Pilot Program
• English and French development envelopes
• Quebec French regional development
• CORUS-CMF “Page to Pitch”
• Performance Envelope program
• Francophone minority program
• Anglophone minority program
• Northern production incentive
• Aboriginal program
• English regional production program
• Diverse languages program
• Convergent digital media incentive
• English point-of-view (POV) program funding
• International co-production and co-development incentives
Telefilm is a financing partner which supports all stages of a feature film including postproduction such as marketing the feature film. Telefilm provides this financing through the Canada Feature Film Fund. They have different programs to finance different types of projects or stages of development costs.
The programs are listed below including their main purpose of financing support:
|Program’s Main Support Purpose
|The development stage of the feature film project(s)
|The production and/or post-production stage of the feature film projects
|The marketing and distribution of their feature film project(s)
|Canadian organizations active in film, television, or digital media
|Talent to Watch
|The development, production, digital distribution, and the promotion of a first feature film or web content project
|Canadian production companies looking to finance feature-length documentary projects in production and post-production
|The programming of Canadian films in theatres across Canada and to foster public access to these works
|Canadian production companies with productions officially selected at an international festival, as well as producers invited to an international coproduction forum
|Foreign companies acquiring Canadian films, with the objective of increasing the visibility of Canadian talent and productions internationally
|Canada and France have signed specific agreements to additionally support certain coproduction projects through selective financial assistance.
|Canadian production companies can now submit coproduction projects to Eurimages—European Cinema Support Fund.
|Short Term Compensation Fund (STCF)
|The Short-Term Compensation Fund is a temporary measure whose purpose is to minimize the consequences of the void created by the lack of insurance coverage for interruptions in filming and the abandonment of productions caused by the COVID-19 pandemic in the sector of audiovisual production.
The above summary of guidelines and funding incentives provides an overview of the available programs and their high-level requirements. As noted above, there are options in getting assistance to cover the costs of production through government incentive tax credits, grants and loan programs.
Getting outside help from experts in funding incentives can be key to ensuring a production is maximizing funding opportunities and efficiently managing private investments. With over 25 years of experience in all facets of government funding in Canada, NorthBridge’s turnkey solutions can help you develop funding strategies at all stages of production, from ideation to distribution. Contact us today for a free assessment.