Canadian film, television, and digital media industries have a significant impact on the economy every year, generating $20.4 billion in GDP. There is no denying the importance of the creative and visual arts to performers and to society, even though science often dominates this discussion.
Film and television production in Ontario is seriously big business, contributing $1.29 billion to the provincial economy in 2014 while supporting almost 28,000 full-time direct and indirect jobs. Most of this number comes from domestic and foreign television series production, accounting for 81% (or $1,048.8 billion) of the overall results. Domestic television series productions comprise roughly half of the $1.29 billion.
Ontario is a growing hotbed for film and television production. The Ontario Media Development Corporation (OMDC) reports a continuous level of growth and investment into the sector over the last twenty years. An important driving force behind this growth is the continued investment by the provincial government into the industry: productions from the aforementioned study received facilitation services and/or applied for tax credits from the government-funded OMDC.
One such Ontario tax credit offered by the OMDC is the Ontario Production Services Tax Credit (OPSTC). This refundable tax credit initiative covers eligible labour and production expenses incurred by qualifying corporations for eligible film or television production. The OPSTC is typically harmonized in line with the federal Film or Video Production Services Tax Credit.
Qualifying Canadian or foreign-owned corporations are eligible who conduct film or video production, or a production services business, at a permanently situated location in Ontario. They must file an Ontario corporate tax return and hold the copyright in the eligible project, or be in direct contract with the copyright owner to provide production services to an eligible production.
Production costs must exceed CAD $1 million, with the exception of a series comprised of two or more episodes, or a pilot for that series. For series with a pilot episode, costs per episode that are shorter than thirty minutes must exceed CAD $100,000, and costs for longer episodes must exceed CAD $200,000.
Eligible productions cannot be in an excluded genre, such as a weather or market report, talk show, public affairs program, current events, questionnaire or contest, sports event or activity, awards show or gala presentation, productions soliciting funds, reality television, advertising, pornography, or productions in the nature of a game. It also does not support productions associated with industrial, corporate, or institutional purposes. The OPSTC does not provide public financial support dollars for productions contrary to public policy.
Finally, any production already receiving support from the Ontario Film and Television Tax Credit (OFTTC) cannot apply.
Qualifying production expenses must take place within the province of Ontario, and be paid to companies or partnerships with a permanent establish in the province, or to Ontario-based individuals. This Ontario tax credit defines an Ontarian as an individual residing in the province at the end of the calendar year prior to the start of major shooting.
Common expenses cover eligible wages, service contracts, and appropriate property expenses such as equipment, studio rentals, or computer software. Expenses should be incurred during the taxation year in question, pad for services provided in-province, and paid during the taxation year (or within sixty days of year’s end).
These expenses should all be reasonably attributable to the film or television production in question, and incurred between the final script stage and the end of postproduction.
Tax credit amounts
The OPSTC is calculated as 21.5% of all qualifying production expenditures incurred in the province. There are no per-project or annual corporate tax credit limits to consider.
Qualifying expenditures incurred on or before April 23, 2015 are calculated at a 25% rate. A qualifying corporation’s Ontario labour expenditures must be at least 25% of the qualifying production expenditures claimed for taxation years that start after April 23, 2015: this also includes Ontario labour paid under an eligible service contract.
Eligible applicants can combine this tax credit with the federal Film or Video Production Services Tax Credit of 16% of qualified Canadian labour expenditures.
The OMDC and the Canada Revenue Agency jointly administer this tax credit. All eligible applicants must first gain approval from the OMDC by applying directly to this organization.
The time is now to get Canada’s next big media sensation started. To learn more about this exciting tax credit opportunity for your television or production company, get in touch with our team at INAC today. We have the knowledge and expertise to get your cameras rolling!