Canadian Provinces Boost Incentives for Foreign Producers

Before 2004 closed out, Quebec and Ontario each made moves to make themselves better targets for runaway productions by increasing the tax credits they provide to foreign producers who take their shows to the Great White North.

On Dec. 23, Ontario's provincial government announced that it would boost its foreign tax credit from 11 percent to 18 percent. "We need to be competitive in a North American environment," said Ontario finance minister Greg Sorbara. He also suggested an increase in the tax credit for domestic productions from 20 percent to 30 percent for five years.

On Dec. 30, Quebec's finance minister Yves Seguin reported that the provincial production services tax credit will jump from 11 percent to 20 percent. "This rapid intervention reflects the government's firm desire to maintain Quebec's position as an ideal film-shooting location for foreign producers," Seguin said.

The two year-end hikes follow the February decision of the federal government to raise its own tax credit for foreign producers from 11 percent to 16 percent.

The rise of the Canadian dollar compared with the value of the U.S. dollar has caused a steep reduction in the Canadian industry's ability to attract U.S. producers as they opt instead for rival foreign locales like Eastern Europe and southern U.S. states offering even more generous tax breaks and other lucrative incentives.