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Toronto Fam Tour-Tax Credit System sidebar

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The Ontario Government offers three main tax incentives to encourage production and post in Ontario: the Ontario Film and Television Tax Credit (OFTTC) , the Ontario Production Services Tax Credit (OPSTC) and the Computer Animation and Special Effects Tax Credit (OCASE). These are administered by the Ontario Media Development Corporation, which also oversees tax credits for sound recording, interactive digital media development and book publishing.The tax credit system has been heavily criticized in the US by unions, guilds and organizations like the Film and Television Action Committee (FTAC), and has been a sore point in Canadian-US relations for years. The system has certainly had a huge impact on the size of the Toronto production industry, arguably even more so than the value of the Canadian dollar. With financial analysts predicting that the Canadian dollar will rise to 90 cents US this year, the currency difference is eroding. But in December, the province increased its tax incentives to keep pace.Under the new regulations the OPSTC, which is available to Canadian or foreign productions, increases from 11 to 18 percent of labor expenditures. It can be combined with the federal Film or Video Production Services Tax Credit of 16 percent for a combined credit of up to 34 percent of eligible labor expenditures for production services in Ontario.The province dropped a 3 percent regional bonus designed to encourage productions to branch out from Toronto and shoot elsewhere in the province.The OFFTC, which is designed to support domestic production, increased from 20 percent to 30 percent for labor expenditures.OCASE, which is designed to promote the computer animation and special effects industry, covers 20 percent of eligible Ontario labor expenditures.The system is often confused with the Canadian Content system, which imposes a series of quotas for CanCon on TV and radio broadcasters as well as satellite specialty channels.Under the CanCon system, productions that will be broadcast in Canada are rated on a system of points for each key role filled by a Canadian citizen or landed immigrant. Broadcasters are required to report the CanCon number of each show they air to the federal regulator—the CRTC—as a means of showing that they’re living up to their CanCon obligations.

Written by Scott Lehane

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