Canada

Netflix’s commitment to invest nearly $400m in Canadian content has encouraged individual provinces to enhance their financial incentives, which will benefit all international producers.

Known to many in the global film and TV industry as ‘Hollywood North’, Canada has built its production industry — with a highly developed infrastructure and crew base and a thriving visual effects and digital animation sector — on a long-established incentive system and an exchange rate that for the past decade has worked to the advantage of producers from many other countries.

A further attraction is the country’s locations, which range from modern multi-cultural cities to quaint small towns to spectacular national parks and landmarks such as Niagara Falls and the snow-capped Banff mountains.

In the last couple of years, however, Canada has particularly benefited from the global content boom that has brought more production than ever before to its shores. According to the Profile 2017 report from the Canadian Media Producers Association (CMPA), Canadian film and TV production volume was up 24% in 2017 to $6.5bn (c$8.4bn). International location and service production was up a massive 42% to $2.9bn (c$3.8bn), with the number of visiting features jumping 43% to 183 and the number of TV series dropping 5% to 189.

Most location and service productions come to Canada from the US — CMPA logged 304 incoming US productions in 2016-17, an increase of 16% on the previous year — but many projects shooting in Canada are dual-nationality productions made under one of the country’s 50-plus co-production treaties.

Canada has two federal incentives: the CPTC credit, designed for Canadian or official co-production projects, and the Production Services Tax Credit (PSTC), geared towards foreign projects. And most of the country’s 10 provinces and three territories have their own incentives that can be ‘stacked’ with the federal breaks.

Though some of the provincial incentives have recently been trimmed, the decline in the value of the Canadian dollar (which over the past five years has fallen more than 20% against the US dollar) has helped keep the local industry humming.

Production levels in British Columbia were at an all-time high in 2016-17, with CreativeBC reporting 217 projects with budgets totalling $1.78bn (c$2.3bn) accessed the province’s production services tax credit. This was up from 170 and $1.24bn (c$1.6bn) the year before. The 90 incoming features included 20th Century Fox’s Deadpool 2, independent action drama Dragged Across Concrete starring Mel Gibson and The Walt Disney Company’s Noelle. Among the 78 visiting series were World Productions’ The Bletchley Circle: San Francisco, the History Channel’s Project Blue Book and Netflix series Altered Carbon and Lost In Space.

Ontario saw the number of international productions increase to 323 in 2017 (from 303 in 2016) but their total local spend dip from $1.32bn (c$1.7bn) to $1.24bn (c$1.6bn). A jump in TV series production could not quite make up for a decline in local spending by feature films. Features shooting in the province included Mister Smith Entertainment’s Sunny and Fox Searchlight’s The Shape Of Water, while series included Hulu’s The Handmaid’s Tale and CBS’s Star Trek: Discovery.

International productions spent $251m (c$324m) in Quebec in 2017 compared to $231m (c$298m) in 2016, according to the Québec Film and Television Council. Features such as Eli Roth’s Death Wish remake for MGM and Paramount, starring Bruce Willis, and Darren Aronofsky’s mother! for Paramount, and series including Amazon Studios’ Tom Clancy’s Jack Ryan and ABC Studios’ Quantico were among the visiting projects.

The Canadian industry is hoping for a further boost in the near future from Net­flix, which last autumn committed to invest $388m (c$500m) in Canadian content over five years and establish in Canada its first non-US production hub.

The commitment has stirred new competition among Canadian provinces hoping to attract some of the Netflix investment with enhanced local incentive programmes. Alberta, for example, which hosted Alejandro Gonzalez Inarritu’s The Revenant and FX series Fargo, has introduced a new $35m (c$45m) production grant programme that raises the province’s per production cap for non-Albertan commercial projects to $5.8m (c$7.5m).

The province is hoping the grant will stimulate further growth in a local industry centred around the city of Calgary, which already claims to be Canada’s fourth-largest filming jurisdiction.

The Lowdown

Financial incentives

On a federal level, the Canadian Film or Video Production Services Tax Credit (PSTC) is a refundable credit of 16% of the qualifying Canadian labour spend (net of provincial incentives) on co-venture projects. Minimum worldwide spend is $775,000 (c$1m) for features and $77,500 (c$100,000) an episode for TV series with episodes of less than 30 minutes and $155,000 (c$200,000) an episode for series with episodes of more than 30 minutes. No per project or annual cap.

The Canadian Film or Video Production Tax Credit (CPTC) is a 25% refundable credit on qualifying Canadian labour spend (net of provincial incentives) on projects that are official treaty co-productions or that pass Canadian content tests. Full details are available via the Canadian government.

Provincial incentives include:

British Columbia’s basic production services tax credit of 28% on labour costs, and digital animation and VFX and post-production credit of 16%, with no Canadian content requirements and no per project cap. Full details via Creative BC.

Ontario’s 21.5% refundable production services tax credit and 18% labour credit on digital animation and VFX, with no per-project cap. Full details via the Ontario Media Development Corporation.

Quebec has a 20% refundable production services credit on qualified labour and properties and services, with an additional 16% for labour costs in computer-aided animation and special effects. Full details via the Quebec Film and Television Council.

Nova Scotia offers a grant of 25% of all eligible local costs for international productions that employ at least four Nova Scotians in head of department positions. Full details via Nova Scotia Business.

Infrastructure and crews

The industry is concentrated in three regional hubs, each of which has an extensive crew base and modern infrastructure. British Columbia, with Vancouver Film Studios, Canadian Motion Picture Park Studios and North Shore Studios, has recently been the busiest centre and is the focus of the country’s VFX and post-production business. Ontario, with its Pinewood Toronto Studios — home to the nearly 46,000 square foot Mega Stage, one of the biggest sound stages in North America — and Cinespace Film Studios, is seeing rapid growth in TV production. And Quebec, with Mels Cite du Cinema studio in Montreal, is the home of the French-language film community.

A shortage of studio space has led to expansion plans at several sites. Canadian media giant Bell Media recently bought a majority stake in Pinewood Toronto and plans to add new sound stages to the 11 already available (with the UK’s Pinewood Group continuing to provide sales and marketing support). And on the west coast Martini Film Studios recently opened near Vancouver, with eight stages, and Vancouver Island Film Studios began operating with four stages and another two set to become available soon.

Producers and production companies working with international projects that need to steer through the Canadian system include David Gross of Toronto and Los Angeles-based No Trace Camping, Roger Frappier’s Max Films in Montreal and TCF Productions in British Columbia.

Size matters

Canada is the second largest country in the world, with an area of 3.9 million square miles, 40% of it situated north of the Arctic Circle. The major cities in the east and west of the country are linked by the Trans-Canada highway, but travel to the northern regions can be harder. The biggest international airports are in Toronto, Vancouver, Calgary and Montreal. Flight times from Vancouver in the west to Toronto and Montreal in the east range from four-and-a-half to five-and-a-half hours. Getting to Europe takes about 10 hours from Vancouver and seven from Toronto and Montreal.

First person to contact

Robert Soucy, Canadian Audio Visual Certification Office: bcpac-cavco@pch.gc.ca

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