Telefilm Tax Credit Program launched Premier Brian Tobin announced today a new Telefilm Tax Credit Program that is designed to grow the province's emerging telefilm industry and in the process generate new economic activity and create new jobs in the province. "This program will be the most competitive of its kind in Canada, and is structured in a manner to address the particular economic challenges confronting our telefilm industry," the premier said. In announcing the program at one of the locations where the documentary film "The Untold Story" is being shot in St. John's, Premier Tobin said that other jurisdictions in Canada have used their tax systems very effectively to stimulate economic and employment growth in the telefilm industry and to capture a share of the growing international market for new entertainment products. He noted that following the introduction of a tax credit program in Nova Scotia in 1996, film production activity increased dramatically in that province from approximately $15 million to $50 million in two short years. "We have an opportunity, through our relatively new industry, to diversify our economic base, attract new investment, and generate significant new employment in the private sector. Government recognizes the significant development potential of our telefilm industry, and has targeted this sector as a new opportunity for economic and employment growth in the province," the premier said. In addition to the new Telefilm Tax Credit Program, the provincial government has launched other initiatives over the past two years to spur economic activity and new investment in the telefilm industry. The first major initiative was the establishment in 1997 of the Newfoundland and Labrador Film Development Corporation, with an annual marketing and operating budget of $500,000. Another is the Telefilm Equity Program that provides critical capital financing to local film production companies to assist them in advancing significant projects. In 1997, government increased the funding allocation for this program to $750,000 from the previous level of $250,000. Today, the premier announced that this program will increase by another $250,000, bringing it to $1 million annually. Premier Tobin said that these development initiatives are starting to produce real results. He noted that prior to the establishment of the Film Development Corporation, the average annual investment in the industry was around $2 million. Last year, it was $9 million. "Clearly, the industry is responding to these incentives and is on the right track. We are confident the industry can grow even further with the proper investment environment created by government," he said. Referring to the new Telefilm Tax Credit Program, he said the tax credit that will be available to local producers is being set at 40 per cent across the board, making it "the highest tax incentive currently offered anywhere in Canada. This will more than `level the playing field' in this highly competitive business and eliminate the relative financial disadvantage local film production companies currently experience." To ensure that the benefits of the new program accrue directly to the people of this province, government has linked the tax incentive to the actual level of local employment generated by a film production company. Tax benefits will be earned by a company as Newfoundlanders and Labradorians are employed by that company, and more tax benefits will be earned as companies increase their local payroll generally. Premier Tobin said that as the industry grows, so will the local benefits. "For every dollar invested in the industry within the province, an additional $4.75 is leveraged from external sources. This brings substantial new investment to the province," he said, adding that "there are also considerable spin-off benefits to the local economies of communities where film and television productions are shot. It is estimated that for every dollar spent directly on these productions, another dollar in spin-off activity is generated." Premier Tobin said that the film industry is also an efficient job creator. Independent production companies create one job for every $36,000 received in gross revenues, compared to one job for every $114,000 for the 50 most dominant North American industrial sectors. Because the industry is labour intensive, there are also significant employment opportunities. As much as 60 per cent of a film budget is spent in salaries and fees for creative and technical workers. The premier also noted that because telefilm productions are shot both in rural and urban areas, growth of the industry will benefit all areas of the province. "Through these announcements today, combined with our earlier initiatives, government is positioning our film industry to play a key role in diversifying our economic base, attracting new investment, and creating new employment through the private sector," Premier Tobin said. The new Telefilm Tax Credit Program is effective immediately, and will be administered by the Newfoundland and Labrador Film Development Corporation, as will the Telefilm Equity Program as of January 15. Media contact: Heidi Bonnell, Premier's Office (709) 729-3564 Josephine Cheeseman, Development and Rural Renewal (709) 729-3733 ____________________ BACKGROUND NEWFOUNDLAND AND LABRADOR FILM AND VIDEO INDUSTRY TAX CREDIT GENERAL OVERVIEW
TAX CREDIT DETAIL
1999 01 13 1:50 p.m. |
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