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Ontario Pushes for Film Credits

Leaders of Ontario's film and television industry appear confident they'll receive more tax incentives to bring American production back north.

The accelerated efforts by Ontario could provide the impetus for New York City to approve proposed film and TV production tax credits currently pending before the City Council. Canada has proved a major thorn for the New York and Los Angeles entertainment communities, drawing production away from the United States. Even the made-for-TV film about former NYC mayor Rudolph Giuliani was filmed in Montreal, drawing criticism from the New York entertainment unions and a U.S. congressman.

Leaders of Film Ontario, the region's film and television consortium, met earlier this month with Ontario government officials to urge support for tax incentives.

"We left optimistic that the government is seriously considering a favourable announcement on provincial tax credits in the near future," the consortium stated in a five-page report released last week.

Greg Sorbara, Ontario's minister of finance, led a large contingent of government officials attending the Dec. 8 meeting.

"They provided helpful insights into the industry," Sorbara said of the consortium in a statement released after the meeting. "There were some very thoughtful proposals put on the table today. I reiterated our support for the industry and committed to a timely response given the urgent nature of the situation."

"We asked the government to announce that it will implement its 2003 election platform promising domestic tax credit enhancements as soon as possible, preferably announced before Christmas," said Patrick Whitley, co-chair of Film Ontario. "We also urged them to announce improvements in incentives for foreign service productions."

More specifically, the report noted that the government's Liberal Party platform calls for increasing domestic television incentives to 33% and film incentives to 40%, subject to certain caps. The consortium also asked the government to match the federal service rate, increasing Ontario's incentive from 11% to 16%.

And the consortium is planning to keep the pressure on. The report said that future action would include companies and unions continuing "to encourage their employees and members to email, write, and fax the minister of finance, the premier, and other members of government to underline the urgency of the issue and the need for action."

While the consortium urged the government to make an announcement of new tax breaks before Christmas, the industry group also has an alternate plan. In the case of no early announcement, the report said, "An industry-wide forum will be called in the first weeks of the new year to discuss an action plan to keep these issues in the public eye and to encourage the government to address them as quickly as possible."

NYC Eyes Tax Breaks

New York City's proposed local law would provide a 5% refundable tax credit to companies filming in New York. Producers would collect the credit from the city's $12.5 million annual incentive program. Combined with state tax credits, film and TV companies would receive a 15% tax break.

"One large film that shoots here in the city can generate a hundred supporting parts and literally thousands of background jobs," Mike Hodge, a member of the Screen Actors Guild's national board of directors, told a City Council committee recently. "But when producers flee to Canada or other environs, we all lose out, and so does New York."

The Canadians have seen an increased effort in the United States to provide tax breaks that would keep runaway production at home.

In late October, President Bush signed massive corporate tax-incentive legislation that includes help to fight runaway production in the U.S. On Oct. 22, Bush signed the American Jobs Creation Act, offering tax breaks for everything from timber to television and film production.

The new law includes provisions for a tax deduction in the current taxable year for the entire cost of certain film and television production expenses, up to $15 million, or $20 million for costs incurred in a low-income community or a distressed county. The law also allows for the amortization of remaining costs over a three-year period.

In addition, the law requires that 75% of services involved in the production be performed in the United States.

The Screen Actors Guild expressed excitement at the bill's passage, noting that the guild had worked hard with others in the entertainment industry to push the legislation through Congress.

The federal law could prove a double bonus for New York filmmakers this year. The New York state Legislature this summer approved landmark tax incentives for film and television production that would help fight runaway filmmaking to other areas, particularly Canada. The state filmmaking legislation, which was a part of the budget bill approved by Gov. George Pataki, provides $100 million over four years -- $25 million annually -- to cover tax write-offs for film and TV produced in New York state. The bill also allows New York City to provide as much as $12.5 million in annual tax credits for production in the city.

SAG and AFTRA were mainstays of the state entertainment industry's effort to form the legislation and get it approved.

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