Federal Program

In October, 1997, the federal government introduced the Production Services Tax Credit program. Modelled after the tax credit program in existence for Canadian content domestic producers, the Production Services Tax Credit program has encouraged foreign producers to both produce in Canada and to employ Canadian residents. This refundable federal tax credit is equal to 16 % of the qualifying labour paid to Canadian residents during the making of a qualified production.

Provincial Programs

Since 1997, several provinces have announced similar labour-based tax credit programs making Canada even more attractive to foreign producers. Recognizing the importance of the incentives, the federal and several provincial governments have, over the years, increased the value of the tax credits. Projects produced in Ontario or British Columbia in 2006 qualify for combined tax credits worth 31 % of eligible labour. Manitoba and Saskatchewan have the most lucrative programs; if a producer can take advantage of specific bonuses, they could qualify for combined tax credits worth up to 62 % of eligible labour.