Tax Credit Overview
Canada’s federal government introduced the labour-based Production Services Tax Credit program in 1997. Modelled after the tax credit program in existence for Canadian content domestic producers, the Production Services Tax Credit program has been very successful in attracting foreign producers to Canada. The refundable federal tax credit is equal to 16 % of the qualifying labour paid to Canadian residents during the making of a qualified production, net of any “assistance” which includes the various provincial tax incentives.
After the launch of Canada’s federal program, many provincial governments across Canada also introduced labour-based and spend-based tax incentive programs making Canada an even more attractive destination for foreign producers. Recognizing the significant economic impact of the film and television production industry across Canada, the federal and many provincial governments have continued to support programs and have in many cases, increased the value of the tax credits to remain competitive. Depending on the Canadian province, foreign producers can access combined federal and provincial tax credits ranging from 32 % to 70 % of eligible labour, as well as tax incentives on local qualifying spend ranging from 20 % to 30 %. Many provinces offer various bonuses, and these details can be found under ‘Learn about Tax Incentives’.
Visual Effects and Animation Tax Credits
British Columbia, Ontario and Quebec are the 3 provinces in Canada which offer very attractive tax incentives for visual effects and animation. Further details can be found under ‘Learn about Tax Incentives’.