Overcoming Canadian Movie & Digital Media Finance Challenges – Let Film Tax Credit Financing Be the Final Piece of the Puzzle!

Looking for one of the biggest understatements in town? How this … Financing move, television and digital media productions is a challenge. Can you beat that one?!

Rather than talk about the challenges, clients tell us they want solutions! No surprise there. So let’s talk about one of the most obvious solutions – utilizing film tax credits for your projects in movies, TV and digital media.

Canada continue to be the beneficiary of what many industry pundits call ‘ Runaway ‘productions … simply speaking … they are shown all over the world but made and financed here in Canada for some great reasons.

Film tax credits reduce the cost of your project. It’s as simple as that. Call it a government subsidy, call it a non repayable grant, but call it! There are a number of factors that make Canada a great place to product and finance your production – our focus today is the film tax credit but clearly things like foreign exchange, our geography, skilled media labour… etc all fall into place with respect to Canada’s current success .

It’s quite obvious that film tax credit financing in movie, TV and digital media has played a large part in the growth of the industry, aka ‘ Hollywood North. In the real Hollywood, aka California there is even a movement afoot to abolish film tax credit s.

So why are these tax credits available? Simply because the combined federal and provincial government authorities have made a long germ commitment to the industry… they might call it strategic… we’re just grateful.

Film tax credits are available in 9 out of the ten Canadian provinces. New Brunswick, one of Canada’s ten provinces is phasing out the credit.

Unlike the U.S. the Canadian structure and types of credits do not vary significantly… they vary somewhat but we wont quibble about a few per cent here and there. The bottom line is that the Canadian film tax credit is non repayable, and generous.

In British Columbia alone the film TV and digital media industry is a solid 1 Billion dollars of the gross provincial economy. Naturally the better known centres of production in Canada are Vancouver, Toronto, and Montreal. Using Vancouver as an example the B.C. tax credits reimburse over 35% of your labour cost. Productions that qualify for Can Con (Canadian content) receive 25% of labour costs from the federal portion of the tax credit. Over 200 Millions dollars has been awarded in recent times.

Ontario as an example has a 20% computer animation and special effects tax credit and a 40% interactive digital media credit.

We hate to be called ‘ game players ‘ but guess what, digital media tax credit financing is growing, and quickly. The industry is predicted to grow 20% a year for the next few years! Canada is the third largest digital media and game producer of talent in the industry. Financing of the Digital Media Tax Credit is a key factor in the growth of the industry.

The maximum tax credit for film and TV in Quebec is 65%!

One key element of the industry that is growing rapidly is the digital animation and special effects via interactive digital media content.

Another noteworthy trend is that European and Canadian co productions are growing. Many U.S. and European producers find funding in Canada to round out the financing of their projects.

As independent film productions continue to grow… in budget size! it of course makes more sense to use the generous Canadian film tax credits. England, France and Germany have long had co production treaties with Canada. Producers are well encourage to further investigate co production treaties in place, allowing them to access valuable an solid Canadian funding for their project via the film tax credit .

Bottom line; consider both investigating and financing your film tax credit and digital media credits. Financing can be achieved via a financing of your approved credit, or in many cases an accrual type of financing can be utilized to accelerate the cash flow during production of your project. And in our experience that tax credit financing enhances your ability to complete the debt and equity portions of your project. Speak to a trusted, credible and experienced Canadian business financing advisor for tax credit finance assistance… today!