Tax Moves Help Industry: Film Corp.

Measures introduced in the provincial budget earlier this week will stimulate even more growth in the province's film and new media industries, said the CEO of the Nova Scotia Film Development Corp.

Ann MacKenzie said the extension of the film industry tax credit, which was due to expire in December, means the province will remain a highly competitive location for television and feature productions. And the new five per cent regional bonus for production in the "Enterprise Zones" outside of the Halifax area will bolster activity in Cape Breton, the South Shore, Shelburne County and other rural areas of the province.

"Once more, the provincial government is demonstrating its support of Nova Scotia's film industry," said Ms. MacKenzie. "Film and television production has been growing faster here than anywhere else in the country, and the improvements announced in the budget virtually guarantees strong, continued growth."

Film production in the province was valued at $120 million in fiscal 1998-99, up from $97 million the year before. In 1993, Nova Scotia's film industry was worth just $14 million. The vast majority of the spending is on local productions.

The budget also enables Nova Scotia production companies to claim, for the first time, the film industry tax credit for work on offshore productions.

"This means that local companies can go head to head with competitors in other provinces where similar tax credits are in place," said Ms. MacKenzie. "Until now, they'd been at a considerable disadvantage."

New media producers, who create CD-ROMS, computer animation, video games and Internet applications, also benefit from the budget with a 15 per cent tax credit on labour expenditures.

"This is a dynamic and fast-growing segment of the industry," Ms. MacKenzie added. "This tax credit will provide a real stimulus for expansion within the province."

The new media tax credit is effective April 1, 1999; the other proposed changes affecting the industry should be effective the date of the budget, June 1, 1999.