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Tax Credits and Incentives

Contacts

Lisa Broadfoot

Vice-President, Industry and Business Affairs

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Clare Bradley-Smyth

Manager, Business Affairs

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CRA Application Policy

The Canada Revenue Agency (CRA) provides guidance for the film, video and television industry regarding the treatment of amounts received in respect of a production. Guidelines are applied by the CRA when auditing the qualified labour expenditure for the purposes of the Canadian Film or Video Production Tax Credit (CPTC) and the qualified Canadian labour expenditure for the purposes of the Film or Video Production Services Tax Credit (PSTC).

Federal Film and Video Tax Credits

CPTC provides eligible productions with a fully refundable tax credit, available at a rate of 25% of the qualified labour expenditure capped at 60% of the cost or production net of assistance. The maximum credit is therefore 15% of the cost of production (25% of 60%). A qualified corporation is one that is throughout a given taxation year a prescribed taxable Canadian corporation with a permanent establishment in Canada, and that primarily carries on the activities of a Canadian film or video production business.

PSTC provides eligible production corporations with a tax credit at a rate of 16% of the qualified Canadian labour expenditures incurred in respect of an accredited production. Eligible production corporations may be Canadian or a foreign-owned corporation.

Tax Credits and Incentives across Canada and Traditional Territories

In addition to the Canadian Film or Video Production Tax Credit (CPTC) and the Film or Video Production Services Tax Credit (PSTC), there are different tax credits and incentives available in each Province and Territory for eligible productions.

Alberta

Provided by the Alberta Government, the FTTC offers a refundable Alberta tax credit on eligible Alberta production and labour costs to corporations that produce films, television series and other eligible screen-based productions in the province. Applicants may apply for either a 22% or 30% tax credit rate (depending on the level of Alberta ownership and involvement) on their eligible Alberta production and labour costs. Principal photography must not have started before an application is submitted to the  program.

British Columbia

Administered by Creative BC, the FIBC is a refundable labour-based tax incentive available to Canadian-owned and controlled production corporations that have a permanent establishment in BC. FIBC provides refundable tax credits based on eligible BC labour costs. This tax credit is designed to encourage film, television, digital animation, and visual effects production in British Columbia. The program includes six initiatives: Basic 35%, Regional 12.5%, Distant Location 6%,  Training 30%, Digital Animation, Visual Effects and Post-Production (DAVE) 16% and Scriptwriting 35%.  The production corporation must apply to Creative BC to receive an eligibility certificate and a completion certificate for the production.

The PSTC is a refundable labour-based tax incentive available to Canadian or international production corporations that have incurred eligible labour costs in BC. The PSTC is not subject to any Canadian content requirements. In addition, there is no limit on the PSTC that may be claimed on a particular production and there is no limit that a corporation or group of corporations can claim. The program includes four initiatives: Basic 28%, Regional 6%, Distant Location 6% and Digital Animation, Visual Effects and Post-Production (DAVE) 16%. In order to claim the PSTC tax  credits, your production corporation must file a corporate income tax return, along with the certificates, with the Canada Revenue Agency (CRA).  Creative BC processes the accreditation applications and issues the certificates. The CRA reviews and audits claims and issues refund cheques where appropriate.

Provided by the Government of British Columbia, the IDMTC is a tax credit for interactive digital media (IDM) products developed in British Columbia after August 31, 2010 and before September 1, 2023, with a proposed extension to September 1, 2028. An eligible IDM product is designed to be used interactively by an individual and, consists of: a combination of application files and data files, in a digital format, that are integrated and are intended to be operated together; is designed primarily to educate, inform or entertain the user; and is capable of presenting information in at least two of the following forms: Text; Sound; Images. Corporations must register with the Ministry of Finance and pay the application fee for each tax year it wants to claim the IDMTC. The credit is calculated as 17.5% of eligible salary and wages incurred in the tax year.

Manitoba

Administered by Manitoba Film & Music (MFM), there are two options under this tax credit: the Manitoba Cost-of-Salaries Tax Credit or the Manitoba Cost-of-Production Tax Credit (see below).  For both options, applicants must have a permanent establishment in Manitoba, be incorporated in Canada (either federally or provincially), and must be a taxable Canadian corporation primarily carrying on a business that is a film or video production. A minimum 25% of the corporation’s T4 Summary must be paid to eligible Manitoba employees for work performed in Manitoba (excluding documentaries).

Producers may select whichever is most beneficial to the production.  The selection is made when an application is filed with MFM for an Advance Certificate of Eligibility or for a Completion Certificate.

Provides production companies with a fully refundable corporate income tax credit based on eligible Manitoba labour expenses. The base credit is 45% with additional bonuses (as they may apply): Frequent Filming Bonus 10%; Manitoba Producer Bonus 5%; and, Rural and Northern Bonus of 5%, increasing the value up to 65% on eligible Manitoba expenditures.

Provides production companies with a fully refundable corporate income tax credit based on all eligible Manitoba expenditures including labour and deemed labour, if applicable. The base credit is 30% and if partnered with an eligible Manitoba production company an additional 8% bonus may apply, increasing the value up to 38% on eligible Manitoba expenditures, including eligible Manitoba labour.

Provided by the Manitoba Government, the MIDMTC is a refundable corporate tax credit of up to 40% on qualified Manitoba labour expenditures and certain marketing and distribution expenses, directly incurred in the development of eligible interactive digital media products for market. An eligible product must be non-linear and include the development of digital media that the user interacts with by employing both software and data files. The media will include a combination of text, sound, or images. Common examples of interactive digital media products include video games, simulators and multi‑pathed, participatory e-learning products.

A company must be a taxable Canadian corporation with a permanent establishment in Manitoba and pay 25% of its company salaries and wages to Manitoba residents. A company that pays less than 25% of its salaries and wages to Manitoba residents can qualify for a 35% tax credit if it incurs at least $1 million in qualifying Manitoba labour expenses annually.

To be eligible for credit, a corporation must first apply for a Certificate of Eligibility before proposed project work on the product begins. Projects are reviewed for eligibility on a case by case basis.

New Brunswick

Provided by the Government of New Brunswick, the support program includes a Development Incentive and a Production Incentive.

Development Incentive – Only incorporated New Brunswick companies with a permanent establishment in NB, with a minimum of 50% of voting shareholders being NB residents can apply for the Development Incentive. The Development Incentive provides funds in the form of a grant to support the development of projects that have already secured intent or commitment from a broadcaster, funding agency and/or third-party financing. Financial Participation is either 50% of the approved development budget for dramatic feature films, made-for-TV movies, dramatic TV series and mini-series to a maximum of $120,000 per project; or up to 40% of the approved development budget for all other genres of projects to a maximum of $50,000.

Production Incentive – Both New Brunswick and external companies may apply for the Production Incentive. Service productions are external production companies contracting with local service providers to produce a film in New Brunswick.   Service Productions can apply for either the NB All-Spend Incentive to a maximum of 25%, or the  NB Labour-Based Incentive to a maximum of 40% of the labour expenditure.   New Brunswick companies can apply for either the NB All-Spend to a maximum of 30%, or the NB Labour-Based Incentive to a maximum of 40% of the eligible salaries paid to NB residents.  Eligible salaries and wages cannot exceed 50% of the eligible costs of production.

Newfoundland and Labrador

Administered by the Newfoundland and Labrador Film Development Corporation (NLFDC), Canadian corporations with permanent establishments in the province, may apply for a fully refundable tax credit based on a 40% rebate on eligible Newfoundland and Labrador resident labour expenditures, to a maximum of 25% of the total eligible production budget. The corporation must first apply for eligibility to the NLFDC prior to the commencement of production.

Administered by the NLFDC, the All-Spend Film and Video Production Tax Credit is a refundable corporate income tax credit that is available to eligible corporations at the rate of 40% of eligible production costs, to a maximum tax credit of $10 million annually per project.  To qualify for this tax credit, a corporation must first submit a Part I application to the NLFDC prior to the commencement of the production.

Registration in this program will not be granted where the production is registered as an eligible project under the Film and Video Industry Tax Credit Regulations or where the production has received funding under the Film and Television Equity Investment Program.

Provided by the Government of Newfoundland and Labrador, the IDM is a refundable tax credit of 40% based on qualifying expenditures, including eligible salaries and 65%  of eligible remuneration for the development of interactive digital media products during the period of January 1, 2015 to December 31, 2024 inclusive. To be eligible for the IDM credit, a corporation developing an interactive digital media product must: Be primarily carrying on the business of interactive digital media development; have a permanent establishment in the province of NL; be a taxable Canadian corporation; and hold a valid registration certificate under the IDM program.  The product’s primary purpose must be to educate, inform, or entertain, and must be achieved by presenting in at least two of the following formats: text; sound; and images. To receive the credit, a company must first apply for registration as an eligible corporation. It is recommended that applications be made through the NLFDC.

Northwest Territories

Administrated by Northwest Territories Film Commission, the film rebate program provides incentives to productions filming in the Northwest Territories (NWT). It includes three (3) rebate incentives:

NWT Labour and Training Rebate – 25% rebate on eligible NWT labour, plus an additional 15%  for recognized positions or NWT resident candidates receiving on-set training;

NWT Expenditure Rebate – 25% rebate on all goods and services that qualify as NWT spending purchases and consumed in the NWT, plus an additional 15% for goods and services for productions shooting outside of Yellowknife; and,

NWT Travel Rebate – 10% rebate for travel to and from the NWT from anywhere in the World, and 35% for travel within NWT.

The NWT Film Rebate Program budget is subject to annual Government of the Northwest Territories budget allocations

Nova Scotia

The Digital Media Tax Credit is a refundable tax credit for costs directly related to the development of interactive digital media products in Nova Scotia. Tax credit amounts are the lesser of: 50% of eligible Nova Scotia labour expenditures; or 25% of total expenditures made in Nova Scotia.  A 10% geographic area bonus on labour expenditures (5% bonus on total expenditures) is available for products developed outside the Halifax Regional Municipality. Corporations may also be eligible to receive a credit on marketing and distribution expenditures.

Provided by the Government of Nova Scotia, the DATC is a refundable corporate tax credit that can be claimed for qualifying labour expenditures directly related to the development of eligible digital animation productions by eligible corporations in Nova Scotia. DATC is the sum of the basic tax credit and the animation bonus.  The base tax credit is the lesser of: 50% of the eligible NS labour expenditure less the value of any assistance received; or, 25% of eligible NS labour expenditure plus eligible overhead expenditure (calculated as 65% of the eligible NS labour expenditure) plus 65% of eligible remuneration less twice the value of any assistance. The animation bonus is 17.5% of eligible NS animation labour expenditure.

Producers are to submit a mandatory Part A application to apply for an Eligibility Certificate. Part A applications must be submitted to the program administrator before you begin principal photography or key animation of the digital animation production.

Note – Productions eligible to receive the Nova Scotia Film and Television Production Incentive Fund are NOT eligible for DATC.

Provided by the Government of Nova Scotia, the Incentive Fund provides funding for projects with a Nova Scotia spend of at least $25,000 (before HST). Eligible corporations must have a permanent establishment in Nova Scotia and be engaged primarily in the creation of film or video productions for public viewing.

Stream I – for Nova Scotia-owned and controlled productions with a base amount of 26% of all eligible Nova Scotia costs, with a minimum of 50% of head of department positions held by Novia Scotians; and,

Stream II – for companies that do not meet the definitions of Nova Scotia ownership and control of production (less than 50%) with a base amount of 25% of all eligible Nova Scotia costs, where 8 or fewer head of department positions are filled by NS residents . The base will be reduced by 0.5% for each head of department below the minimum requirement.

NOTE – Productions eligible to receive the Nova Scotia Film and Television Production Incentive Fund are NOT eligible for DATC.

Nunavut

Administered by Nunavut Film Development Corporation, provides a rebate on the total eligible costs for production goods and services purchased and consumed in Nunavut. Only those eligible productions which spend more than $25,000 on goods and services consumed in Nunavut are eligible to apply for a rebate. This program has been founded to support the development of a strong film, television and digital media industry while cultivating local production expertise and nurturing local talent. An eligible company may apply through one of the two Spending Streams: Majority Nunavut Ownership; or Equal or Minority Nunavut ownership.

Majority Nunavut Ownership – 27% of total eligible costs of production goods and services purchased and consumed in Nunavut, from a production owned and controlled by residents of Nunavut, registered head office in Nunavut; and at least two of the eight key creative positions are to be filled out by residents of Nunavut. (Alternatively, one of eight key creative positions and two

trainee key creative positions.)  Different requirements for non-profits companies.

Equal or Minority Nunavut Ownership – 17% of the total eligible costs of production good and services purchased and consumed in Nunavut, from a production equal or minority owned, controlled and creatively directed by residents of Nunavut, where the applicant company maintains a registered office in Nunavut; Officers and Directors of the applicant company, who are resident in Nunavut, participate in the management of business activities; and, at least two of the eight key creative positions are filled by residents of Nunavut, (Alternatively, one of eight key creative positions and two trainee key creative positions.)

Both Streams – Employing additional key creative personnel who are resident in Nunavut a bonus of 1% for every individual hired to a maximum of 3%. An additional 5% or 10% if the completed production is produced or versioned into Inuktut Language.

Ontario

Administered by Ontario Creates, the OFTTC is a refundable tax credit based upon eligible Ontario labour expenditures with respect to an eligible Ontario production.  The base rate on Ontario labour expenditures is 35%, with an additional enhanced rate of 40% for first-time producers on the first $240,000 of qualifying labour, plus a regional bonus of 10% for productions that are shot in Ontario entirely outside of the Greater Toronto Area (GTA), or that have at least five location days in Ontario (or in the case of a television series, the number of location days is at least equal to the number of episodes), and at least 85% of the location days in Ontario are outside the GTA.  To be eligible companies must be a Canadian corporation which is Canadian-controlled, has a permanent establishment in Ontario, and files an Ontario corporate tax return. In addition, the individual producer of the production must have been an Ontario resident for tax purposes at the end of both of the two calendar years prior to commencement of principal photography.  Eligible productions must spend at least 75% of total final costs on Ontario expenditures, and must have an agreement with an Ontario-based Canadian distributor or CRTC-licensed broadcaster for the production to be shown in Ontario within two year of completion. Application is made to Ontario Creates for a certificate of eligibility, which the production company files with the Canada Revenue Agency together with its tax return in order to claim the OFTTC.

Administered by Ontario Creates, the OPSTC is a refundable tax credit based upon Ontario qualifying production expenditures (labour, service contracts and tangible property expenditures) with respect to an eligible film or television production. The OPSTC is calculated as 21.5% of all qualifying production expenditures incurred in Ontario. A qualifying corporation’s Ontario labour expenditures, including Ontario labour paid under an eligible service contract, must be at least 25% of the qualifying production expenditures claimed. An eligible company can be a Canadian or foreign-owned corporation which carries on a film or video production, or production services business, at a permanent establishment in Ontario. The production cost must exceed $1 million CAD, except in the case of a series consisting of two or more episodes, or a pilot for such a series. In the case of a series or pilot, the cost for each episode which has a running time of less than thirty minutes must exceed $100,000 CAD and the cost for episodes with a longer running time must exceed $200,000 CAD. Application is made to Ontario Creates for a certificate of eligibility, which the production company files with the Canada Revenue Agency together with its tax return in order to claim the OPSTC.

Administered by Ontario Creates, OCASE is a refundable tax credit calculated at 18% of eligible Ontario labour expenditures incurred by a qualifying corporation during a taxation year with respect to eligible computer animation and special effects activities. There is no cap on eligible Ontario labour expenditures. A qualifying corporation is a Canadian corporation that is Canadian or foreign-owned, has a permanent establishment in Ontario and files an Ontario corporate tax return. Qualifying corporations may include animation or visual effects houses, post-production houses and film and television production companies which perform eligible computer animation and special effects activities. The production must also have received an OFTTC or OPSTC certificate to be eligible for the OCASE tax credit. Eligible computer animation and special effects activities include designing, modelling, rendering, lighting, painting, animating and compositing but do not include activities that are scientific research and experimental development. Application is made to Ontario Creates for a Certificate of Eligibility for the taxation year, which the qualifying corporation files with the Canada Revenue Agency together with its tax return in order to claim the OCASE Tax Credit

Administered by Ontario Creates, the OIDMTC is a refundable tax credit based on eligible Ontario labour expenditures and eligible marketing and distribution expenses claimed by a qualifying corporation with respect to interactive digital media products. There are four types of products that can be claimed under the OIDMTC: non-specified products 40%, specified products 35%, eligible digital games developed by a qualifying digital game corporation 35%, and eligible digital games developed by a specialized digital game corporation 35%. There is no limit on the amount of eligible Ontario labour expenditures which may qualify and there is no per-project or annual corporate limits on the amount of the OIDMTC which may be claimed. Eligible marketing and distribution expenses are capped at $100,000 per non-specified product. A qualifying corporation is a Canadian corporation that is Canadian or foreign-owned, which develops an eligible product at a permanent establishment in Ontario operated by it, and files an Ontario tax return. Application is made to the Ontario Creates for a certificate of eligibility, which the qualifying corporation files with the Canada Revenue Agency together with its tax return in order to claim the OIDMTC.

Prince Edward Island

Administered by Innovation PEI on behalf of the Province of Prince Edward Island, the film production fund supports the development and growth of the private-sector film and television industry in Prince Edward Island.  The fund provides a rebate base of 32%-35% of eligible Prince Edward Island expenditures for work completed in PEI, to make it a competitive location for productions and encourages the development, training and hiring of PEI’s film personnel. Applications must be submitted prior to the beginning of production. Productions must be new productions with budgets of at least $25,000 and have a commercial license agreement. The fund provides a base rebate of 32% of eligible costs for work completed in PEI, with  a 1% point for productions by PEI producers, or co-productions where the PEI producer has at least 25% control; and a Series Production Bonus of 2% for series productions completed in PEI.

Provided by the Government of Prince Edward Island, the rebate supports the growth of Island businesses through a refundable labour rebate on incremental job creation.  Employment growth must be linked to the development, expansion and/or commercialization of new products, processes, and services that will be sold primarily beyond the borders of PEI.  Provides a rebate up to 25% of eligible salaries and wages.

A full-time position receiving labour cost funding from another government source is ineligible to receive funding for the same from the PEI Labour Rebate

Quebec

Administered jointly by the  Société de développement des entreprises culturelles (SODEC) and the Ministère du Revenu du Québec (Revenu

Québec), the refundable tax credit applies to all-spend production costs, which corresponds to the total of the qualified labour costs and the costs of qualified properties at 20% of the qualified expenditures incurred for services provided in Québec. In addition, eligible expenditures that relate to computer-aided animation and special effects including the shooting of scenes in front of a chroma-key for use in an eligible production can get an additional rate of 16% of the qualified labour cost. For each eligible production, SODEC issues an Approval Certificate which identifies the owner of the copyright and attests the eligibility of the production throughout the period during which the production is carried out in Québec. A copy of the Approval Certificate must be transmitted by the copyright owner or their official designee to any eligible corporation who intends to submit to SODEC an application for an Advance Ruling with regards to the eligible production.

For each production, the QPSTC cannot be combined with any other Québec tax credit except for the Québec Film Dubbing Tax Credit as long as the dubbing expenditures are not included in the QPSTC production costs.

Administered jointly by the  Société de développement des entreprises culturelles (SODEC) and the Ministère du Revenu du Québec (Revenu

Québec),  the refundable tax credit for Québec film or television production applies to labor expenditures incurred by a corporation that produces a Québec film (or program) calculated at 40% of eligible labour expenditures for original French language or giant screen productions, capped at 50% of production costs.

Administered jointly by the  Société de développement des entreprises culturelles (SODEC) and the Ministère du Revenu du Québec (Revenu

Québec), the refundable tax credit for film dubbing applies to labor expenditures incurred by an eligible corporation that consists of providing dubbing services at 35% of eligible labour expenditures capped at 50% of eligible dubbing costs.

For more information on Quebec Tax Credits please visit SODEC or the Association Quebecoise de la Production Mediatique (AQPM)

Saskatchewan

Administered by Creative Saskatchewan, this grant invests in television and feature film projects with commercial intent that shoot in Saskatchewan and/or employ Saskatchewan-based crew during production and post-production. Provides financial support for feature film and television productions that have secured a relevant market trigger or distribution agreement of fair market value. There are two streams within this grant: Saskatchewan Stream and Service Production Stream.

Saskatchewan Stream: eligible applicants may apply for financial support equal to a maximum of 30% of all eligible Saskatchewan expenditures up to a maximum of $5,000,000.

Service Production Stream: eligible applicants may apply for 25% of all eligible Saskatchewan expenditures up to a maximum of $5,000,000.

Both streams: applicants might be eligible for the following bonuses (to a commitment not exceeding a maximum of 40% of eligible Saskatchewan expenditures for Saskatchewan Stream, or maximum of 35% for Service Production Stream):

10% frequent filming bonus (where applicants complete 3 or more eligible productions per year in Saskatchewan)

5% rural bonus (where majority production takes place a minimum 50km outside Regina or Saskatoon)

5% Saskatchewan post-production bonus (where majority post-production is taking place in Saskatchewan)

Yukon

Provided by the Government of Yukon, the purpose of the program is to encourage production companies from outside Yukon

to film in Yukon and hire and train Yukoners. Eligible companies are production companies filming in Yukon and using Yukon labour.

Recipients under this program are not eligible to apply under the Yukon Film Development Fund or the Yukon Film Production Fund.

There are three components to this incentive program: Travel Rebate; Yukon Spend Rebate; and Training Program.

Travel Rebate: available to companies from outside the Yukon

Yukon Spend Rebate: available to productions with a broadcast license or distribution arrangement and shooting on location in Yukon using Yukon Labour. The production is eligible for a rebate of up to 25% of Yukon below-the-line spend. Productions accessing the Yukon Spend Rebate are not eligible for the Travel Rebate.

Training Program: available to production companies shooting on location in Yukon who undertake pre-approved training of Yukon labour. The production company may apply for a rebate of up to 25% of a trainer’s wages for the period during which they are actively transferring skills to a Yukon trainee. This must be at a rate no more than that of the position next more senior to the one being trained.

Find out more at Filming in the Yukon