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Brian Dzyak

STATE FILM SUBSIDIES: NOT MUCH BANG FOR TOO MANY BUCKS

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I don't know why you're bothering to post this? The Canadian tax credit system is not going to be dismantled any time soon. As an American you are not fully aware of how Canada operates. Again....Quebec is never in 10, 000 years going to do away with their film tax credit and as a result Ontario and BC never will either. So that fact alone makes this a dead issue in this country.

 

As for "corporate welfare." Hmmmm seems strange that the writer for the Calgary Herald conveniently forgets that the oil industry in his province receives and has received billions and billions in government funds from BOTH the federal and provincial governments. Apparently that's ok? (BTW Canada's oil industry is 70% foreign owned, mostly American).

 

He also conveniently ignored the fact that Ontario has invested billions into auto plants owned by foreign car companies. And the federal government has given billions to Bombardier of Quebec. Bombardier is a giant manufacturing business.

 

Ok so want to end film subsidies in Canada? Fine. Cut off the oil, car, and air plane industries, as well.

 

R,

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Cut through the film tax credit fiction

 


http://triblive.com/opinion/colinmcnickle/3843912-74/tax-credit-film#axzz2R4Pt0K4Z

By Colin McNickle


 

There was an interesting cluster cluck in Harrisburg Wednesday last — a joint hearing by the Senate and House Democratic Policy committees on Pennsylvania's Film Tax Credit Program.

The credit “is a glowing example” of a legislative success story that has led to jobs and economic development, said state Sen. Lisa Boscola, D-Northampton, in a news release after the session. “When we help business expand, hire more workers and invest in our economy, many of our funding and budget challenges will take care of themselves,” she wrote.

Would that it were true.

The tax credit was adopted in 2007. To be eligible, motion picture or television projects must spend 60 percent of their respective shoots' budgets in Pennsylvania. Only then is a 25 percent tax credit applied to qualifying production expenditures. Proponents claim the credit is directly responsible for the creation of 18,000 jobs and $739 million in wages. They also claim “economic activity” of nearly $2 billion.

Supporters say the current annual allotment of $60 million is not enough, evidenced by the fact that it's exhausted quickly and leaves too many productions credit-less and, thus, headed to other states with larger incentives.

Pennsylvania's cap is “damaging” and “unrealistic,” union types argue; the Keystone State must create “a competitive tax incentive” program to keep production here, they add.

Never mind the growing scholarly research that suggests the “benefits” of the tax credit are as fictional as the Hollywood efforts they subsidize. Worse, most of the reportage on the topic is cheerleading that accepts proponents' win-win claims as gospel.

One of the freshest studies to question the benefits of the film tax credit came last fall from University of Pittsburgh researcher Ashley W. Edwards. “While it is tempting to say that Pennsylvania can and should try to create economic diversity by developing and supporting a film industry until it can sustain itself without a tax credit program, a closer examination of the policy reveals three major problems,” she writes:

• It's difficult to predict the productions' actions if no tax incentive is available; many films and programs have been, are and would be produced without it.

• The “race” against other states' incentive programs to attract productions creates a never-ending battle; it's an arms race with your wallet — a “race to the bottom.”

• The film tax credit “generates a net loss of tax revenue for the state and does not create the purported number of jobs”; many are low-skilled or “shifted,” temporary and with no upward mobility; industry-generated studies claiming otherwise are biased.

Ms. Edwards also reminds that the film tax credit is transferable — “the production company may sell its remaining tax credits to other Pennsylvania taxpayers,” she reminds. And in fiscal 2011-12, 98 percent ($64.3 million worth) of film tax credits “were either sold or transferred to another entity, with just $1.4 million used by the initial tax credit recipient to reduce its Pennsylvania tax liability.”

Taxpayer wealth is transferred to “affluent third parties,” notes Edwards, who also exposes a number of transparency failures and accounting tricks by the king of such nonsense, the Pennsylvania Department of Community and Economic Development.

“The Legislature must look beyond the local media and their starry-eyed constituents and carry out more balanced studies to study the real costs and benefits of the film tax credit,” Edwards concludes.

Indeed, it's time to expose this cluster cluck once and for all.

 

 


Colin McNickle is Trib Total Media's director of editorial pages

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So Brian tell me...what's the end game or ideal in your view?

 

All state tax credits are shut down and 100% of world wide film production is carried out in the LA area?

 

Because as you've pointed out, words to the effect of, "many people in the film industry have homes in LA which are very expensive and they need jobs to support those mortgages."

 

R,

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New audit says Louisiana spent $800 million on film production tax credits over last 5 years

http://www.therepublic.com/view/story/09f3740a75ea4ea0b93590bb5647b370/LA–Movie-Tax-Credit

THE ASSOCIATED PRESS

BATON ROUGE, Louisiana — Louisiana shelled out $800 million over the last five years in tax breaks for the movie industry, according to an audit released Monday that suggests the state gets back little in direct revenue for the expense.

For example, the review by Legislative Auditor Daryl Purpera’s office said, the state spent $197 million tax credits for production projects in 2010 and received $27 million in tax revenue in return.

“The overall fiscal impact to state government is negative,” the audit says.

State law provides two kinds of tax breaks: an income tax credit for 30 percent of production expenses and an income tax credit for 5 percent of payroll costs related to Louisiana workers employed on the movie or TV production.

Supporters of the program say the industry has created thousands of new jobs and economic activity across the state. Critics question if Louisiana gets enough return for its investment.

The Department of Economic Development says a recent analysis estimated that every $1 issued in film tax breaks generates $5.71 in economic output. But the state also loses at least 85 cents in tax revenue for every $1 it spends.

The program “was designed to cultivate and sustain a thriving film production industry in Louisiana — and it’s been very successful. Louisiana is now one of the top states in the country in film production activity, and the industry supports thousands of jobs in Louisiana that previously did not exist,” DED Secretary Stephen Moret wrote in response to the audit.

The price tag of the tax break has been growing, costing $115 million in 2008 and $223 million by last year, according to the audit.

Gov. Bobby Jindal proposed changes to lessen the generosity of the tax break when he was pushing a full package of adjustments to Louisiana’s tax structure. He’s since dropped the effort, and it’s unclear if any lawmakers will pursue proposals to shrink the tax breaks.

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So Brian tell me...what's the end game or ideal in your view?

 

All state tax credits are shut down and 100% of world wide film production is carried out in the LA area?

 

Because as you've pointed out, words to the effect of, "many people in the film industry have homes in LA which are very expensive and they need jobs to support those mortgages."

 

R,

 

You meant to write, "All state tax bribes are shut down..." instead?

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Lights, camera … and a $69 million N.C. rebate to movie industry

http://www.journalnow.com/news/state_region/article_a4060fce-b321-11e2-bf30-0019bb30f31a.html

 

 

 

 

 

J. Andrew Curliss/News & Observer

State leaders blamed each other in October 2011 after Continental Tire chose South Carolina for a large new factory that will employ 1,600 workers.

The biggest hang-up, according to documents and state officials, was $45 million in taxpayer money the tire company said it needed to locate in southeastern North Carolina. Lawmakers could not agree on that large payment in a lump sum, with some wanting to spread the money out into the next decade on top of other state and local incentives. The factory is now being built near Sumter, S.C.

 

That same month, Hollywood producers made a decision that cost North Carolina taxpayers millions and supported far fewer jobs – jobs that have already come and gone. They announced the filming of “Iron Man 3” around Wilmington.

That production, which opens nationally Friday and is expected to be a box-office smash, employed about 800 North Carolinians for seven months last year, the Motion Picture Association of America says.

North Carolina taxpayers subsidized the production with $20 million, according to state and film industry officials.

That money was the result of language in state law, embedded in the tax code, to reward companies that produce films, commercials and TV shows in the state. It is part of a tax structure quilted with special treatment for certain businesses, industries or groups, resulting in annual loopholes that have grown by $1 billion in the past four years.

Film production companies say they are owed more than $69 million from working in North Carolina in 2012, much of which will be paid in cash refunds, according to documents and interviews. That’s significantly more than what Continental Tire wanted upfront to build a $500 million factory, although other incentives to the tiremaker would have pushed the tab to nearly $100 million.

Taxpayer spending to subsidize films is on the rise following bipartisan legislation in 2010 that made the state’s incentive program more generous to filmmakers, records show. It was part of an effort to keep North Carolina competitive with other states, including Georgia, which offers an incentive seen as among the most favorable in the nation for attracting film projects.

The incentives sought in North Carolina have increased from less than $8 million four years ago to $69.2 million last year, according to the revenue department.

An examination by The (Raleigh) News & Observer of the film incentives program shows:

• Film subsidies are not tied to job creation. Instead, the program gives filmmakers a quarter back for every $1 they spend in the state, including wages to actors and crew members.

As a result, jobs numbers do not correlate with taxpayer aid to movies made in North Carolina. One film, “Hick,” in 2011 claimed $1.5 million from taxpayers and listed 600 people employed, including actors and extras. The makers of a different film, “Arthur Newman” starring Colin Firth, claimed $1.7 million, but the production employed one-third of the people: 200, including extras.

• There’s no limit on the amount of money that can be paid out each year. No single movie project can receive more than $20 million, but there is no other cap.

To compare, the state’s main job-creation grant program – the one that often gets credit when the governor announces that a company has been lured to the state – has been capped at $15 million in new grants each year, subject to General Assembly approval.

• The most powerful part of the film incentive program lies in a single word: “refundable.” The film incentive is officially known as a “refundable” tax credit, which allows production companies to receive checks from the state treasury, even if they owe little or no taxes.

That’s because film production companies are formed around a single project, such as a movie or commercial, and are structured to generate little actual tax liability, according to industry officials.

In the past 21 months, North Carolina has issued refunds totaling $61 million as the revenue department audits ongoing claims. The state will not release copies of the checks, saying they are taxpayer information protected by law.

The only other refundable tax measure in the state, the Earned Income Tax Credit, was written to assist the working poor. Lawmakers and Gov. Pat McCrory allowed it to expire this year.

• The film incentives are granted no matter how much money a film makes. The popular “Hunger Games” movie, for example, was filmed in North Carolina and grossed nearly $700 million worldwide, according to tracking service Box Office Mojo.

The production company has asked North Carolina taxpayers for $13.7 million, new records show.

Plenty of competition

The film industry says the incentive money lures lots of spending when movies and TV shows are made here, cash that cycles through the economy. In the past five years, movie companies have reported spending about $600 million on wages and goods that qualified for the film credit in North Carolina, according to the state Department of Revenue.

“Iron Man 3” spent about $110 million in the state, including $19 million in wages for North Carolinians, an average of $23,000 per job. The production spent about $41 million on goods and services with more than 700 vendors, according to the Motion Picture Association of America.

The film incentives are crucial, the industry says, in providing a steady stream of work for crew members and other workers on dozens of projects.

Various studies, funded by the film industry, state governments and think tanks, reach widely different conclusions about the special tax treatment. Some states have cut back their programs in recent years. Others are beefing them up.

But there is particular support for the incentives from lawmakers near Wilmington, which has the state’s major movie studio, a collection of stage buildings northeast of downtown owned by EUE/Screen Gems Studios.

In a recent letter to leaders in the state Senate, Screen Gems Executive Vice President Bill Vassar wrote that the tax incentive for films has become so important that it keeps the entire film industry in business across North Carolina.

“(T)he absence or degradation of this credit will result in the severe reduction, if not decimation, of this important industry in our state,” wrote Vassar, who also heads the Wilmington Regional Film Commission.

In an interview and follow-up email exchange, Vassar said film projects inject new, out-of-state money into local economies.

“I have seen elected officials in Raleigh who were nonbelievers come over from the dark side once they did their homework,” he said.

But critics say the film incentives would be the star on a poster showing why North Carolina’s tax code unfairly helps decide which businesses – moviemakers and others – win and lose.

Brent Lane, director of the UNC Center for Competitive Economies, said film subsidies attract productions to the state but “are a bad idea if you’re measuring results on conventional economic development outcomes – you know, sustainable employment, high-wage employment and tax base return.”

“Film subsidies are like rented tuxedos,” Lane said. “You feel like James Bond for a weekend. But on Monday, you better have a real job. … Most times, we give an incentive to a company, and if they leave five years later, everybody is (upset) about that. You give an incentive to a film company, you know they are going to be gone in three months.”

Carl Davis, a senior policy analyst with the Institute on Taxation and Economic Policy, a nonprofit group that advocates for people with lower incomes, said film tax breaks are “of very dubious merit.”

“Frankly, it’s just not worth the cost of what they are demanding to bring them here,” he said. “They are not offering enough in return.”

In the past year, taxpayers were asked to subsidize a Dale Earnhardt Jr. commercial for Diet Mountain Dew with $331,000. The production company for “The Daily Show with Jon Stewart,” which filmed at the Democratic National Convention in Charlotte, asked for $190,000.

Film industry supporters are showing concern amid discussions of tax legislation in Raleigh.

Their worry swelled into a rally last month in downtown Wilmington, where area Republican and Democratic legislators and local officials stood before hundreds of film workers to profess their support for the incentives.

At one point, the lawmakers and workers all chanted together: “Film equals jobs! Film equals jobs!”

Job numbers vary widely

Sorting out exactly how many jobs is difficult.

Before she left office, Gov. Bev Perdue, a Democrat, issued a news release that said film productions created “nearly 20,000 job opportunities” in 2012 alone. Even the state’s film office acknowledges that is a “vague” description.

Film companies reported employing about 14,000 people in films here last year, although many of those were “extras.” The Wilmington Regional Film Commission says there are 4,000 “well paid, clean” film jobs in the state, based on data from the state’s film office.

Federal labor statistics put film jobs in a range from about 800 production jobs to as many as 4,000 when dozens of related classifications are counted, from riggers and electricians to ticket takers and fast food workers at theaters.

Patrick McHugh, a fiscal analyst for the General Assembly’s nonpartisan Fiscal Research Division, studied the impact of the film credits and issued a memo to Senate leaders in January.

His study looked at a reported $30 million in incentives given to film productions in 2011. (That figure was revised this week to $37.5 million.)

McHugh’s report acknowledged that it is “impossible” to know precisely how many jobs were created by the incentive. But, using an economic model, his study determined that the incentive likely attracted 55 to 70 new jobs – with a payroll of $2 million – to the state in 2011 “under the most plausible assumptions,” a range that film industry supporters dismiss as implausible.

His report put the total number of film jobs in the state at between 1,650 and 2,000.

Jeb Hardison had one of them. At last month’s rally, he printed a sign that said: “NC Films has kept me off unemployment for 3 years!”

Hardison, 29, of Southport said he has worked on a range of projects as either an extra or a “stand in,” someone who fills in for an actor while a scene is set up. The work pays mostly minimum wage to as much as $15 an hour, he said, and it has allowed him to live “outside of the standard molds.”

“I worked a corporate job and wasn’t happy,” he said. “Working in film has been great. The idea that they would want to do away with it just baffles the imagination.”

Other “extras” turned out at the rally, carrying signs or marking T-shirts with lists of movies and TV shows in which they took part.

More jobs from tax cuts?

Critics say the money that went to film production companies in a single year could be better spent.

As part of his report, the legislature’s fiscal analyst tried to answer what would happen if the film money were used differently: What if the state instead made an across-the-board reduction in business taxes equal to the reported $30 million film incentive payout in 2011?

The result was that “reducing business taxes across the board would generate more new economic activity in North Carolina than is likely generated through the Film Credit,” according to the report.

It said the film incentive “created 290 to 350 fewer jobs than would have been created through an across-the-board tax reduction of the same magnitude.”

The Job Development Investment Grant program, the state program to give cash grants to companies in exchange for permanent jobs, is credited with creating far more permanent jobs than the movie tax break. And for less money.

From 2004 through 2011, the JDIG program spent about $75 million and is responsible for 23,000 jobs, according to the state Department of Commerce.

One recent example: Linamar Corp., a manufacturer of engine parts in Asheville, announced a 250-job expansion last year. It is eligible to receive up to a total of $2.6 million over nine years.

Commerce Secretary Sharon Decker, who oversees the state’s film office and has voiced support for the tax break for movie production companies, declined an interview request.

Film supporters say cutting the incentive would mean the end of filming in the state.

That’s because other states are offering incentives, from Louisiana to Georgia to South Carolina, which last month fast-tracked legislation in trying to ensure a TV series continued filming in Charleston. New Mexico had been a leading state for filming as a result of its robust tax incentive, which was similar to North Carolina’s. But cutbacks led to a downturn in filming there and now, according to news reports, the governor and lawmakers are scrambling to lure the industry back with an even larger tax incentive.

Former Rep. Danny McComas, a Wilmington Republican who helped write the current law, said he would prefer that no states offered breaks for films. But North Carolina has to compete for them, and so he worked hard to get it through.

State Rep. Susi Hamilton, a Wilmington Democrat, has embraced the industry.

“They come to town. They hire hundreds of people. They spend a bunch of money. They go away,” she said. “And the film industry goes away if this credit goes away.”

Last year, Hamilton helped broker a deal that extended the film incentives by a year, ensuring they are in place through 2014. She took flak at the time because she also broke with her party to support a controversial piece of legislation that advanced “fracking,” a method to extract natural gas from underground. Her vote on fracking garnered film incentives support from Republican leaders.

“I’d take that vote again,” she said in an interview.

At the time of the vote swapping last summer, she had moved out of her home. She acknowledged in an interview that a film worker took over her house in downtown Wilmington for three or four months last summer, covering her mortgage payments. She said the renter paid roughly “a couple grand” a month.

She likened the situation to when people who live near big golf tournaments give up their homes to visitors. She said she rented a place to live elsewhere.

At the downtown rally last month, she implored film workers to let lawmakers know how important the tax break is and that filmmaking “touches” many across the state.

The film incentive is like other special breaks in the state’s tax code: It has lobbyists who fight for it, lawmakers who protect it, and residents who say they depend on it.

Film workers were alarmed last month when several members of the House, including speaker pro tem Paul “Skip” Stam of Apex, filed a bill that would wipe out the word “refundable” from the tax law. It effectively would kill the incentive, film supporters say.

Other lawmakers jumped to assure the jittery film industry.

State Sen. Thom Goolsby, a Republican from Wilmington, stood in front of hundreds of film workers last month along the downtown riverfront. He said that he had made sure the film credit was protected during the sustained budget slashing of recent years.

“That money was the best money we spent in the budget, to keep you all employed,” Goolsby said.

His voice rising, he said Wilmington lawmakers would engage in “hell-raising” to make sure the tax incentive survives.

Goolsby’s colleague, state Sen. Bill Rabon, is a Republican playing a key role in discussion of tax legislation.

Rabon, co-chairman of the Senate Finance Committee, told the crowd that said he saw a movie being filmed outside his front door in Southport last year.

“I know first-hand what the film industry has done,” he said.

The StarNews of Wilmington reported that producers paid him for use of a boat slip he owns there; he said in an interview the payments also covered the use of his back yard.

Rabon said he was glad to have worked to keep the tax break in place through 2014 and said he will also fight to ensure it isn’t “tampered with.”

Rabon told the cheering crowd in Wilmington: “Count on me for my support.”

 

 

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You keep posting these, but what is the point now? You've posted 20 or more and they are all the same.

 

Plus they are all severely flawed.

 

R,

 

Merely saying they are "flawed" does not mean they are flawed.

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http://globalnews.ca/news/562658/ndps-corporate-welfare-for-film-industry-wont-save-jobs-economist/

 


 

NDP’s ‘corporate welfare’ for film industry won’t save jobs: economist

By Staff, The Canadian Press

 

 

VANCOUVER – Promises to bring the film and TV industry back to British Columbia figured prominently in the opening and closing credits of New Democrat Leader Adrian Dix’s election campaign.

But economists call it “corporate welfare,” and say B.C. should get out of what has become a “race to the bottom” with tax incentives.

“We know that we have the best crews in North America,” he said in one of his final rallies, where he was surrounded by close to a thousand supporters at Vancouver Film Studios.

“All they require is a level playing field and we will compete, and we will win, and we will bring jobs to British Columbia.”

The Liberal government under Christy Clark didn’t match the glittering tax incentives offered by provinces such as Ontario and Quebec in the past two years — dangling carrots that film industry workers claim have lured business away from B.C.

Dix has pledged to increase film labour tax credits by up to seven per cent for foreign and domestic productions, a move he said would put the province’s incentives at 40 per cent and allow competition with other jurisdictions.

An expert economist from Simon Fraser University, however, says Dix’s election promise seems to be motivated by politics rather than a desire to create lasting jobs.

“It really is a game,” said SFU economist Rhys Kesselmen in a telephone interview. “And it’s most definitely a race to the bottom.”

He added the NDP’s economic policy has so far been inconsistent.

While the party claims to have the industry’s interests at heart, Dix has come out in favour of the provincial sales tax and raising the corporate income tax rate — both policies Kesselmen said are a significant burden for the film and TV business.

The economist also cautioned that singling out one particular industry for “corporate welfare” won’t do much for B.C.’s economy in the long run.

“Why should we be spending that much of public funds for one industry, and in effect we’ve got to tax all the other industries and all households to support (it),” Kesselmen asked.

The rebates, he said, will cost taxpayers between $100,000 and $120,000 per film job.

“We do have evidence from studies in the U.S. and my own back-of-envelope figures support it … that these are very expensive subsidies, or tax credits,” he said.

Kesselmen is skeptical of NDP numbers that indicate Dix’s incentive would cost taxpayers about $45 million annually but generate $93 million.

The Liberal government under Gordon Campbell raised film labour tax credits to put the province on a competitive level, yet it’s becoming increasingly difficult to play the one-up-manship game, Kesselmen said.

He added the industry has done a good job of playing one jurisdiction off the other for tax breaks.

“They are masters of playing off Ontario versus B.C., California versus Texas versus New York,” Kesselmen said, with governments essentially being taken hostage until they meet industry demands.

“It’s kind of like the industry that cries wolf,” he said. “And apparently they’ve sold it to one political party in B.C.”

Kesselmen said he wasn’t an advocate of eliminating the full 33 per cent tax credit but couldn’t see any economic benefit to increasing it.

It’s a fallacy to assume film industry workers are going to start a mass exodus from B.C. if business isn’t booming as it once was, Kesselmen added.

 

The stakes are high for Save BC Film spokesman Wayne Bennett, 44, who has worked in the business for 23 years as a production manager on films and TV shows such as The X-Files, Alcatraz and Case 39.

He said it’s not as easy to re-train or find work to suit their specialized skill set as economists make it out to be.

“I tried to get out of the industry last year,” Bennett said, adding recruiters advised him that he’d have to go back to school and re-train — something he couldn’t afford to do mid-life, with a wife and kids relying on him as breadwinner.

He said the province is already starting to lose cast and crew because of jobs going elsewhere.

“If you’re not in the game on a financial level, all the other things that we have to offer — in time zones, in location, in infrastructure, in people … really take secondary placement,” Bennett said.

“They’re going to go where they can get the best deal.”

He said this election is a chance to show the province how important the industry is to the well-being of B.C.’s economy.

“We just wanted our government to realize the … value of what it actually brings to the province, in terms of 15,000 direct people who work on film and television sets every day,” Bennett said.

Between 1,400 and 1,600 other retail, hotel, car rental and other businesses also benefit from spin off of what Bennett calls “new money,” he added.

Bennett said the industry has already invested more than a billion dollars to establish physical infrastructure — sound stages, rental houses and equipment.

“Once we start losing that it’s incredibly difficult to get back,” Bennett said.

B.C. lost 3,500 direct and spin off film and television production jobs between 2011 and 2012, reported the Canadian Media Production Association in February. At the same time, Ontario gained 7,900.

Vancouver-based actor Jerry Wasserman has had a job in the industry since he came to the province from New York more than 40 years ago.

He’s one of the lucky ones with a long “Vancouver resume” spanning decades, that includes films with Johnny Depp, Kirstie Alley and Will Smith and a teaching career in theatre at the University of B.C.

“The opportunities have been so rich,” Wasserman said.

He argued that investing in film and television is similar to investing in events such as the Olympics or the Times of India Film Awards — while they cost significant amounts of money, they also arguably promote the “B.C. brand” and bring in profits in the long run.

You hope it’s going to generate some kind of return in terms of tourism, in terms of investment,“ he said.

Wasserman has seen the positive impacts that come with a thriving film industry.

“It’s clean, it’s glamorous, it’s brought a real cache to Vancouver,” he said. “I’ve been a Vancouverite since 1972 and so I’ve seen what a difference it’s made in the reputation of the city.”

Currently, Ontario and Quebec offer 25 per cent tax credits on every dollar spent on TV and film production, in contrast to B.C.’s 33 per cent incentives that apply only to labour.

 

 

 

 

Edited by Brian Dzyak

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The NDP lost Brian, so BCs tax credit system will stay as is.

 

Plus in all of this you have failed to grasp that Canada has a unique federal tax credit that applies to all of the provinces on top of the provincial tax credit.

 

The idea that either Ontario or BC will get rid of their tax credit system is preposterous.

 

R,

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Should I waste my time doing the math and pointing out the obvious again or should I just bang my head against the wall. That economist is just sabre rattling and throwing out figures that Joe Six pack would find outrageous, but in reality only represent something like .0001% of the budget. Also love the babble about giving corporate welfare to one industry. You don't really believe that load of hooey do you, Brian?

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Merely saying they are "flawed" does not mean they are flawed.

 

I've pointed it out with facts, so it's not more than just saying they are flawed. They are flawed. They are also working on the false premise that governments are for profit entities. There is a reason why we separate profit from non-profit, public funds from private funds.

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Also love the babble about giving corporate welfare to one industry. You don't really believe that load of hooey do you, Brian?

 

I have pointed out to Brian many times that the agricultural subsidies in the USA are off the charts!!

 

There are a 100 plus industries in the US getting "corporate welfare". Big oil famously makes big profits, and still gets big subsidies.

 

Why pick on the film tax credits alone?

 

R,

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Movie subsidies lure Hollywood stars, but is it worth it?

 

http://realfilmcareer.com/movie-subsidies-lure-hollywood-stars-but-is-it-worth-it/

 

 

http://www.abc.net.au/unleashed/4722746.html

BRENDAN SWIFT

The Australian Government is spending millions on subsidies to encourage international film production companies to shoot their movies in Australia. Is it worth it? Brendan Swift argues for more transparency.

Marilyn Monroe once described Hollywood as a place where they’ll pay you a thousand dollars for a kiss and 50 cents for your soul.

The Australian Government is paying somewhat more than a thousand dollars: what started as a $12 million offer for Disney to shoot its blockbuster remake of 20,000 Leagues Under the Sea in Australia quickly escalated to $21.6 million. That better be some kiss.

While the 20,000 Leagues shoot has now been delayed until next year, the federal government has also set aside a further $20 million to attract more foreign productions although there is no clear mechanism to trigger it.

Does this represent value for taxpayers, let alone the struggling Australian film production industry?

The concept is one applied to a number of sectors: provide a sweetener for companies to set up in Australia before reaping the benefits through job creation and new expenditure in the economy.

Local films, which rely on a strong cultural argument for subsidy, receive a hefty 40 per cent government rebate on qualifying expenditure called the Producer Offset. Foreign films, where the argument is entirely economic, receive a 16.5 per cent Location Offset, which the industry would like to see raised to 30 per cent to help offset Australia’s strong local currency.

Transparency is not a strong point of the film industry. Rather than raise the Location Offset, the government has chimed in with a series of one-off payments.

The Wolverine received $12.8 million to shoot in Sydney last year although sci-fi film Jupiter Ascending was knocked back (and is now being made in London). But while the government acknowledged that The Wolverine’s one-off payment raised its total subsidy to the equivalent of 30 per cent of local expenditure, it made no such statement when announcing the 20,000 Leagues grant.

Trying to assess the value of such payments, and their economic impact, is impossible for the public in such cases.

The government did say that the 20,000 Leagues grant “could” create up to 2000 jobs and thatThe Wolverine did create over 1750 jobs – but then a single day’s work by an extra counts as a job. There is never any mention of full-time-equivalent positions, let alone how long those jobs last (they are almost all temporary).

The recent decision by Ford Australia to jettison 1200 workers’ jobs when it closes its Broadmeadows and Geelong manufacturing plants again spurred a debate about the benefits of economic subsidies: last year, the Federal Government gave $34 million to Ford to maintain its local production until at least the end of 2016.

But the short-term job commitment of Disney for $21.6 million (which does not include the 16.5 per cent Location Offset and state subsidies) is largely overlooked. The situation was double-edged for the battling local industry; desperate for work, they agreed to cut their award overtime rates at the behest of Disney (although it should be pointed out that crew would almost certainly still earn more working on 20,000 Leagues than on a typical Australian film).

Such is the nature of entering the battle to win footloose Hollywood productions, where the location is decided on a film-by-film basis, with subsidy often the determining factor.

Another common economic refrain is to quote the total expenditure that the grant triggers. For example, The Wolverine generated more than $80 million of investment in Australia according to the government.

It’s a big number but assessing the downstream impact relies on economic multipliers, which effectively measure the increase in incomes that flow on from the initial boost in film expenditure. They help governments decide where to commit limited resources among competing sectors, such as the much-maligned car manufacturing sector or film sector for example.

And yet Australia applies one of the most aggressive film production multipliers (2.67), well above the average of 2.34 and countries such as New Zealand (2.55), South Africa (2.50) and the United Kingdom (2.0), according to a recent study by UK consultancy Olsberg-SPI.

None of this is to say that subsidising offshore film production is not a worthy goal – many local cast and crew benefit from such work and large-scale productions support many disparate skills in the arts sector.

But one-off multi-million dollar payments cloud an already opaque film industry.

A soul may be worth only 50 cents in Hollywood, but taxpayers and the industry have a right to evaluate the cost.

Brendan Swift is the publisher of online screen content publication, Picha. View his full profilehere.

 

 

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I have pointed out to Brian many times that the agricultural subsidies in the USA are off the charts!!

 

There are a 100 plus industries in the US getting "corporate welfare". Big oil famously makes big profits, and still gets big subsidies.

 

Why pick on the film tax credits alone?

 

R,

 

 

Because this site is called "cinematography.com" not farming.com.

 

 

The entire idea of Corporate Welfare is basically wrong and anti-thetical to the so-called "Free Market" advocates who whine like babies about any other government intervention into the markets. Typical hypocrites, those sort, though, so nothing new there.

 

The purpose of "government" is to establish and maintain a stable society/civilization and a stable viable economy. It accomplishes that goal by regulating basic human behaviors too ensure that the most selfish and greedy and reckless are not permitted to misbehave in ways that threaten that stability. (Traffic laws are one of the most basic and relatively uncontested examples of this. Economic regulations on banking and trade are necessary but very contested examples of this.)

 

Part of that mandate includes taking appropriate steps toward the long-term progress and security of civilization and the environment. To THAT end, government SHOULD be investing in new technologies, such as alternative non-fossil fuel energy production and distribution, because we know that human activity in terms of carbon emissions is threatening the ability of life itself to survive on this planet. So subsidies and other financial "incentives" are more than appropriate in these cases, just as government should be financing basic rights like education and healthcare.

 

The film industry doesn't fall into the category of "necessary to human survival" so should be exempt from receiving tax-payer funded welfare from people who see zero direct financial benefit from such welfare...and more to the point, these tax payers are typically LOSING out on much needed tax revenue which is necessary for the things that society does require, such as infrastructure and education funding which can only be paid for with taxes from business and labor. ALL reputable studies/audits on film tax "incentive" programs show a direct LOSS as governments hand out more money than the locality takes in with wages to workers. Their fallback excuse is "well, we generate lots of ancillary economic activity which makes up for it," but as of yet, again, no reputable studies have proven this at all. So the Corporation taking the tax breaks and/or subsidies walks away with cheaper manufacturing costs while sticking their employees with the tax bill and the locality that handed out those tax breaks and subsidies are left with a net loss on their tax revenue vs what they handed out. This has a ripple effect on economies as workers are the major drivers in consumer good consumption (buying things) while Corporations and their CEOs consumer far far less. And less consumer spending means less demand which means less employment across the board which only adds to the loss of tax revenue necessary for government to fulfill its mandates.

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ALL reputable studies/audits on film tax "incentive" programs show a direct LOSS as governments hand out more money than the locality takes in with wages to workers. Their fallback excuse is "well, we generate lots of ancillary economic activity which makes up for it," but as of yet, again, no reputable studies have proven this at all.

 

Where is the study showing that the tax credit system has had a negative net effect on the economy of Ontario?

 

There is no call here to get rid of the tax credit system for film. 250, 000 people are directly employed in the film and TV industry in Ontario. All of those people buy stuff and consume, the very people you insist we need to run the economy.

 

Ontario gives way more money to the auto industry. And Quebec and the federal government have given billions to Bombardier. If it's ok for other industries to receive subsidies in this province, then it's perfectly fine for the film industry as well.

 

R,

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Where is the study showing that the tax credit system has had a negative net effect on the economy of Ontario?

 

There is no call here to get rid of the tax credit system for film. 250, 000 people are directly employed in the film and TV industry in Ontario. All of those people buy stuff and consume, the very people you insist we need to run the economy.

 

Ontario gives way more money to the auto industry. And Quebec and the federal government have given billions to Bombardier. If it's ok for other industries to receive subsidies in this province, then it's perfectly fine for the film industry as well.

 

R,

 

So, you're in favor of mandating that "Joe Six Pack" be solely responsible for the tax burden which pays for schools, roads, bridges, national defense, etc, while Corporations and their CEOs walk away scot-free? Because that's precisely what the Tax Bribe system is doing. And the reason why the wealth gap has grown exponentially in the last thirty years since "Reaganomics" has taken hold over most of the world. What you're saying, Richard Boddington, is that Corporations or their Management, should not be responsible in any financial respect for the nations that care and feed them to allow them to operate and succeed. You just want Corporations to operate with impunity, no financial or other responsibility to the PEOPLE who cough up the financial sacrifice that makes their "for profit" enterprise possible. In other words, what you're saying is "I owe them NOTHING!"

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You're so full of BS Brian. You know absolutely nothing about Canadian economic policies, taxation, or how our tax credit system works. You are completely unqualified to speak on this subject.

 

"Reaganomics?" Excuse me but I can't find a Canadian Prime Minister that went by the name of Reagan.

 

Canada has always used a hybrid economic system that combines private industry with government. It started way back when we built the national railroad and the federal government, not private industry, took the lead.

 

Now here's something that will really get you steaming mad....the Canadian corporate tax rate is only 15.5%, the USA is 35%.

 

And yet, here's the amazing part....our country has a AAA credit rating, the USA does not. Canada provides health-care to all of its citizens, the USA does not.

 

Now tell me Brian how is all this possible in a place you seem to think is run by evil corporations?

 

You really don't know what you're talking about.

 

R,

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Film tax credit is a raw deal for taxpayers

By Antony Davies & James R. Harrigan

 

Pennsylvania Senate Majority Leader Dominic Pileggi has announced that he will introduce legislation to uncap Pennsylvania's Film Production Tax Credit (FPTC) in an effort to entice production companies to film in the commonwealth.

To justify this sweetheart tax break for the film industry, Sen. Pileggi cites a “detailed report from the Independent Fiscal Office” that “concludes that ‘uncapping' the film tax credit would have a significant positive impact on Pennsylvania's economy with a minimal cost in the coming fiscal year.”

This is partially true. The Independent Fiscal Office (IFO) did release a report. The rest of the senator's statement, like most of what the film industry produces, is pure fantasy.

On page 2, the IFO clearly states that “(the report) does not address the fiscal or economic impact of the FPTC in general, nor does it evaluate the overall effectiveness of the credit.” In fact, the report can be summarized in two points: The tax credit will cost us money and the tax credit will be good for the film industry. The report goes on to say that “for every one dollar in tax credit awarded, the Commonwealth recoups $0.14 in tax revenue from the associated economic activity.”

Put another way, the tax credit sells our tax dollars to the film industry for 14 cents each.

Pileggi's bill would uncap this giveaway, allowing the film industry to buy as many of our tax dollars as it likes at this bargain price.

Granted, these are tax credits — meaning that we aren't exactly giving away our tax dollars so much as failing to collect them. But the IFO admits in its report that it doesn't know how many films would have been made in Pennsylvania if the tax credit didn't exist.

If the answer is “all of them,” we really are giving away our tax dollars. Even if the answer is “only half of them,” we're selling our tax dollars for 28 cents each, not 14 cents each. That's still a raw deal for taxpayers.

Don't get us wrong — cutting taxes spurs economic growth. But to avoid favoritism, tax cuts need to be across the board.

When government picks winners, as Pileggi is doing, it invariably fails because politicians don't put their own money on the line. They put our money on the line. If the bet pays off, they win. It it doesn't, we lose.

If Pennsylvania has $130 million to throw around, then let's cut taxes across the board. Then taxpayers could decide for themselves which industries deserve their hard-earned money.

The job creation would be the same; the economic growth would be the same. What would be different is that the new jobs would be producing things that the people want, not things that the politicians think we should have.

The film tax credit is a slap in the face to the hardworking people of Pennsylvania, delivered by Pileggi as he woos one industry at the expense of the others. If lower taxes mean economic growth, then let's lower taxes for everyone.

And if Sen. Pileggi wants to invest in the film industry, let him do it with his own money.

Antony Davies is associate professor of economics at Duquesne University. James R. Harrigan is a fellow of the Institute of Political Economy at Utah State University.

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B.C. wants truce with Ontario, Quebec on film tax credits

http://www.theglobeandmail.com/news/british-columbia/bc-wants-truce-with-ontario-quebec-on-film-tax-credits/article12626487/

 

 

 

 

 

IAN BAILEY

VANCOUVER — The Globe and Mail

 

 

 

B.C.’s Finance Minister is challenging his counterparts in Ontario and Quebec to stop allowing Hollywood studios to pit the three provinces against each other for “unaffordable” film tax credits.

 

“As a country, and individual provinces within the country, we are better off to stop competing to see who can send the biggest cheque to Hollywood,” Mike de Jong said Monday.

 

 

Mr. de Jong says the status quo only benefits Hollywood so he’s hoping the other provinces will join B.C. in jointly managing such tax credits.

B.C.’s Liberal government, under pressure from some in the province’s film and TV production sector as well as the B.C. NDP opposition to boost subsidies in recent months, attacked such measures as a race to the bottom. Premier Christy Clark said B.C. taxpayers were being generous enough with about $300-million in annual credits.

The Liberals went into the campaign ahead of the May provincial election with a platform commitment to “work with the provinces of Ontario and Quebec to establish a rational film incentive policy across Canada to prevent unaffordable industry support systems.”

Once the Liberals won re-election, Ms. Clark enshrined the idea in her mandate letter to Mr. de Jong, putting it on his to-do list as finance minister to “work with the ministers of finance of Ontario and Quebec to secure an agreement on a competitive film industry tax credit regime.”

Mr. de Jong, who says his department is pulling together data on the issue, says he’s not yet sure how it would work, but he’s calling for some form of “strategic oversight,” and an agreement that provinces won’t undercut each other to attract film business.

“The objective is to avoid a repetition of what has happened repeatedly where the largely foreign production sector of large studios are able to extract a richer subsidy regime in one jurisdiction to then put pressure on other jurisdictions,” he said.

B.C.’s tax credit for foreign productions is 33 per cent on labour. But Ontario and Quebec offer 25 per cent on all production costs.

We are being played one against the other in a classic negotiating strategy that pits one part of the country against the other,” said Mr de Jong.

“For a taxpayer in Ontario hearing about the challenges their government is having wrestling against a multibillion-dollar deficit, the idea of sending $30,000 to Warner Brothers every time they blow up a Mercedes may strike them as odd.”

Ontario’s Culture Minister Michael Chan told The Globe and Mail last week that his government is satisfied with the status quo, noting Ontario has to compete with other jurisdictions around the world.

Mr. de Jong said he raised the idea before the election with his counterparts in Toronto and Quebec.

Asked about the response, Mr. de Jong vaguely said there has been “interest” as well as a desire to not compromise existing success in attracting production work to their jurisdictions. However, he said the ministers also understand the trend of having jurisdictions compete against each other has not been useful.

He said he will keep raising the issue with his fellow ministers.

Peter Leitch, president of North Shore Studios in North Vancouver and a leading B.C. industry spokesman, said the government position makes sense, calling it “counterproductive” for governments to compete on the tax front.

In any event, the chair of the Motion Picture Production Industry Association of B.C. said, taxes are only one factor in competition. Others include locations, crews and studio facilities.

 

 

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http://harveyoberfeld.ca/blog/film-industry-community-contributors-or-corporate-welfare-bums/

 

 

 

Film Industry: Community Contributors or Corporate Welfare Bums? July 29th, 2013 · 7 Comments

It’s probably the best line that I have ever heard from an NDP Leader: David Lewis introduced his ”corporate welfare bums” characterization of Canadian big business during the 1972 election campaign, referring to the widespread corporate federal take through tax breaks, grants etc.

That phrase is now an oft-repeated denunciation of corporate greed, not only in Canada, but throughout the world … so much so it has its own listing in Wikipedia: ”The term is often used to describe a government’s bestowal of money grants, tax breaks, or other special favorable treatment on corporationsor selected corporations, and implies that corporations are much less needy of such treatment than the poor.”

There is something ugly about corporate greed … companies that measure their PROFITS in BILLIONS demanding, taking, being awarded MILLIONS in tax breaks and publicly subsidized free services … especially at a time when the public purse is so depleted that seniors who can’t afford fancier private care homes and live in fairly basic public facilities are being billed $25 a month for their wheelchairs!!!

These are indeed tough times for public programs and should be for those corporate welfare bums pushing for publicly-paid privileges.

But there in the Legislature late last week was NDP MLA George Heyman portraying the BC government as the villain for failing to cough up enough of a public bribe to prevent the Fantastic For movie production from moving to Louisiana.

“This government has succeeded in doing what no other super villain has, and that’s to scare away the Fantastic Four,” Heyman complained. “Will the government’s message continue to be it’s clobbering time for the BC film industry?”

Awwwww! Poor BC film industry … those corporate welfare bums that will ALREADY receive an estimated THREE HUNDRED AND EIGHTY MILLION DOLLARS this year alone in public subsidies.

The BC film industry …that fought tooth and nail against removal of the HST … because it poured millions more each year into its HUGE publicly-stuffed pockets.

The film industry … those corporate blackmailers who play one community against the other, one province against the other, one country against the other … contributing as little as possible to those places where they operate, soaking up as much as they bleed from those same communities … while measuring their own profits in the BILLIONS .

And even that’s after hiding as much of their income as they can behind all those tax breaks, write-offs, free services and expense accounts that would make any NORMAL person or business (not just those billed for their wheelchairs) blind with rage.

How much of a public giveaway to those corporate welfare bums would be enough for Heyman and today’s NDP?

David Lewis would not be amused … and neither should we!

I know there are the arguments that the giveaways to the film industry are offset by the wages, personal income taxes, local spending and other benefits due to the industry’s presence in our midst.

Well, why not cancel taxes, fees and provide freebies for a whole slew of companies that can prove they could operate somewhere else?

And nowhere in Heyman’s NDP plea on behalf of this production did I see any figures showing the net benefit we’d all enjoy by PAYING them to stay here.

Just pretty shallow grandstanding on behalf of another corporate welfare bum.

Or maybe the NDP wants BC to be transformed into the type of non-union, heavily armed, socially backward society they have in Louisiana?

Just to keep The Fantastic Four happy … while the rest of us pay to support them in the luxury to which they feel entitled.

Harv Oberfeld

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Watch out Richard! Someone trying to steal your lead:

 

 


Independent feature film “Jingle Doggie” is slated to begin shooting in May.

Edited by Freya Black

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...And frankly I was the one that started it all. I shot the Dogfather in Parry Sound in 2009. I know none of you have ever heard of Parry Sound, it's a small town, a one hours drive North from my house.

 

Since then there has been a staggering number of features shot there because of it's only 2 hour drive from Toronto airport, and availability of funds from the NOHFC, mentioned in the article. The NOHFC funds are NOT a tax credit, or bribe (as you like to call them) they are an equity program available to Ontario residents only.

 

Would you believe that while I was shooting Against The Wild in Parry Sound last October there were TWO other features shooting there at the same time! And this is a town of only 7, 000! One of the others starred Meatloaf and you'll see the pic of him in the attached magazine article.

 

As I write this there is a Hallmark Channel Christmas movie shooting in Parry Sound right now, called Pete's Christmas. Starring Bruce Dern and Zach Gordon. ..

 

 

Sorry to interrupt the normal flow of this thread but I just wanted to know more about this! Is it true that Dogfather led to other films being made there? How did this come about? I notice the other movies sound like they might be made for cable movies and I'm wondering if there is a bit of a scene around that sort of thing and you got talking to other people about what a great place it was, or even that people saw the dogfather and were asking about the locations? How did it come about do you think?

 

It definitely looks like a lovely place! :)

 

Freya

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