Fight over film tax credit continues: Saskatoon producer says film industry not warned about cuts in budget

Wapos Bay director Trevor Cameron on set.

When Brad Wall’s government cancelled the Saskatchewan Film Employment Tax Credit, it caught many in the film industry flat-footed.

“I was shocked,” said Anand Ramayya, owner of Saskatoon-based production company Karma Film.

“We had been in discussion with the ministry beforehand and had no indication that this was going to happen.”

The cancellation of the film credit was announced in Regina March 21 as a part of the 2012 budget. The elimination of the credit was part of an effort “to ensure provincial finances remain sustainable,” Culture Minister Bill Hutchinson said in a news release.

The tax credit entitles film productions to claim up to 45 per cent of labour costs if the money is spent in-province, and can cover up to 50 per cent of a production’s total budget.

“Those numbers are misleading because they refer to the amount of labour that you can claim,” Ramayya said. “The reality is that the amount of financing that you actually get is about 20 per cent of your budget.”

The government announced it would no longer accept applications for the FETC as of April 1, but that it would continue to honour productions that have already been approved for the tax credit.

The Saskatchewan government announced a week after the budget that it would extend the applications deadline for the FETC to June 30, but that the tax credit would still be phased out by 2014. Minister Hutchinson was unavailable for further comment.

“Eliminating the tax credit will save Saskatchewan taxpayers up to $3 million this year and $8 million once it is fully phased out by December 31, 2014,” the release concluded.

However, the culture ministry’s own documents from 2004 showed that the impact of the FETC on the provincial economy was minimal. It also predicted that as the industry continued to grow over time, there would be less “leakage” to other provinces and more jobs and money would stay in Saskatchewan.

“We want to be a good sound business investment as well,” Ramayya said, whose company produces the award-winning stop-motion animation series Wapos Bay. “Nobody wants to be perceived to be doing something contrary to that. I think when the numbers do get crunched, they always end up on our side. Basically, worst case scenario, we’re revenue-neutral. In the good years, we’re revenue-positive.”

The local film industry has claimed that since the program started in 1998, the government’s $100-million investment has generated $623 million in production.

The fight to save the FETC has drawn in various commentators, from CBC’s Jian Ghomeshi to Saskatchewan actor Kim Coates (of Sons of Anarchy) to comedian Brent Butt, whose Saskatchewan-based Corner Gas was one of the most successful Canadian productions of the last decade. CBC’s Little Mosque on the Prairie and Wapos Bay are two more examples of Saskatchewan productions that take advantage of the FETC.

“I don’t think the decade would have unfolded the same way [without the FETC] because our stories come from our communities, and if you don’t have an industry functioning in your community then… a big part of what you lose are those voices,” Ramayya said.

Ramayya’s Wapos Bay recently won Best Foreign Animation Film at the International Family Film Festival in Hollywood.

Little Mosque, Corner Gas, Wapos Bay are all really good examples of the success stories of those indigenous stories from our community making it to the international stage and doing well.”

Far from despairing, however, Ramayya sees the government’s extension as a sign for hope. The issue seems to be resonating with the general public as well. An online petition called “Save the Saskatchewan Film Employment Tax Credit” started March 23 with the goal of gaining 5,000 signatures. Currently, it has over 8,300.

“I don’t think anyone expected there to be such a public reaction to it,” he said. “Which I think means people in the province, taxpayers, actually do value film, TV and creative industries.”


Photo: Supplied

  • Bubba_einstein

    What a moronic argument.
    Yes, maybe the 100 million generated economic activity through the multiplier effect but there is an equal and likely greater de-multiplier effect.
    That 100 million came from someone’s pocket, and if it had remained in the taxpayer’s pocket they would have spent it and it would have had a multiplier effect.
    But since the money was forcibly removed from the taxpayer it is money that they could not spend, so no multiplier effect.

    At best it is a wash, when you add in the bureaucrat’s ‘shipping and handling’ of the money it is a net loss in economic activity.

    If I want to stimulate the economy with my money, I can decide that for myself, I don’t need the government to do that for me.
    Since there is no economic benefit from the government doing it, why not leave the decision up to me?

    This isn’t exactly rocket science…

    • Aj1976

      It’s a tax credit. It’s money given back to film producers not money taken from taxpayers. So many people do not understand how it works.