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Quebec’s Film and TV Industry Mobilizes to Protect Tax Credits

June 19, 2014 07:58 | By

Quebec’s film, television and interactive media industries have formed a coalition to fight cutbacks to the province’s tax credit program proposed in the latest provincial budget. Quebec’s newly elected Liberal government tabled its budget June 4, which calls for a 20% cut in all tax credit programs, as well as hefty cuts to public services and a freeze on public sector hiring.

Facing a ballooning $3.1-billion deficit, ($600-million more than the former Parti Québécois government projected in their last budget), the Liberals have promised to balance the books by 2015-2016.

However, the Coalition for the Maintenance of Tax Credits in Production warns that the cuts will put thousands of jobs in immediate jeopardy, and that “Certain targeted sectors are among the most sensitive to the cutthroat competition played out on the global stage with regards to tax credits, most notably production services, digital special effects, dubbing, co-productions and animation.”

But it’s not just film and TV production that’s at stake. Martin Carrier vice-president of Warner Bros. Games Montreal, warned that the move could be devastating for Quebec’s burgeoning video game industry. “You have to understand that there are other (funding) programs in other territories in the world, whether in England, for instance, in Louisiana or even in Ontario — which have programs that are more generous than here. And jobs will be created elsewhere,” Carrier recently told The Montreal Gazette.

The coalition includes producers, directors, scriptwriters, actors, craftsmen and companies offering a range of services – production, postproduction, dubbing, visual effects and interactive media – altogether representing more than 50,000 workers.

According to a release from the group, “… a number of Quebec productions risk never seeing the light of day as a direct result of these announced cuts, while many foreign productions will set up shop outside of Quebec if the fiscal parameters aren’t quickly secured. Not only will local and foreign productions be in jeopardy, but the companies offering them a variety of services will also find themselves having to reconsider investments and, eventually, resort to employee layoffs to offset a forecasted drop in activity.”

“The trust relationship is at risk of being broken not only with the province’s investors, but also with foreign investors, especially regarding the long-term sustainability of the programs that draw them to Quebec,” said Jean Ducharme, vice president, operations at Technicolor in Montreal.

“English-language production is very mobile and risks disappearing altogether if Quebec’s tax credits aren’t competitive enough with those of other jurisdictions such as Ontario, British Columbia or the state of New York,” explained Janis Lundman, producer and co-president of the Quebec English-Language Production Committee (QEPC). “Skilled talent will go where the jobs are and will be very difficult to recover once lost.”

Sophie Prégent, president of the UDA, added, “The dubbing industry could completely topple over. It’s extremely fragile.”

The group argues that tax credits should not be seen as an expense, but rather as a profitable investment, and that every dollar spent in tax credits is not only repaid in full, but also generates positive tax revenues for the province. According to producer Nicole Robert, “Cutting back on tax credits in cinema and television won’t reduce Quebec’s deficit; it’ll increase it!”