Premier quashes calls for external review of film tax credit

HALIFAX – Screen Nova Scotia is calling for an external review of the economic benefits of the film industry, but the province said it isn’t interested.

Scott Simpson, a producer, director and member of Screen Nova, told the Global Morning News that there is a huge divide between numbers presented by the province and numbers presented by the Canadian Media Production Association, or CMPA, which oversees Screen Nova Scotia.

Watch: Scott Simpson explains why the film industry believes it is a bigger boost to the economy than the government says

CMPA said the film tax credit creates $122 million in production activity in the province. The government cites $66 million.

“Let’s get a third party, a professional third party consulting firm, with experience doing this kind of economic analysis. Let’s bring them in and have them do a full study with the cooperation of government and industry,” said Simpson.

Tweet This Click to share quote on Twitter: "Let's get a third party, a professional third party consulting firm, with experience doing this kind of economic analysis. Let's bring them in and have them do a full study with the cooperation of government and industry," said Simpson.

However, when the question was posed to Premier Stephen McNeil, he brushed it aside.

“We’ve laid out a proposal. It has to fit within our budget,” he said.

“We have confidence in the numbers we have. We have the money we believe we have as a government on the table.”

Tweet This Click to share quote on Twitter: "We have confidence in the numbers we have. We have the money we believe we have as a government on the table."

When asked whether an economic impact assessment would have any value for the province, McNeil reiterated the same talking points he has been pushing since the changes were announced.

“I don’t think anyone is disputing the fact we have the largest tax credit in the country. No one is disputing the fact. They may be disputing the output. From our government perspective, we are putting out 50 to 60 cents per dollar. We can’t afford it.”

Professors examine film tax credit

Geoffrey Loomer, a tax law professor at Dalhousie University, said there are economic benefits of film tax credits such as full time jobs and film infrastructure, as well as spin-off benefits such as other productions, hotels and restaurants.

“The amount of tax coming back in is admittedly much less than what they’re spending on the film tax credit. But there are other benefits too. So when you’re spending this money you have to ask yourself, what is the overall benefit directly and if it’s $122 million versus $66 million, that’s a big difference,” he said.

“Your return on your investment is much larger so I think which number is correct makes a big difference in terms of analyzing this.”

Tweet This Click to share quote on Twitter: "Your return on your investment is much larger so I think which number is correct makes a big difference in terms of analyzing this."

Loomer said the private sector sees a majority of the economic benefits.

“Of course they’re happy if this credit is removed. The government though has to ask itself, does it provide enough public benefit that we want to spend this money? They seem to have decided it doesn’t. I’m not sure about the numbers. I’m not sure whose numbers are correct.”

Tweet This Click to share quote on Twitter: "Of course they're happy if this credit is removed. The government though has to ask itself, does it provide enough public benefit that we want to spend this money? They seem to have decided it doesn't. I'm not sure about the numbers. I'm not sure whose numbers are correct."

The film industry has said the changes in the credit will kill the sector. But Vincent Chandler, an economics professor at Saint Mary’s University, said that is an exaggeration.

He cites the elimination of the film tax credit in Saskatchewan in 2012, which saw the credit fall from 45 per cent to zero per cent.

Chandler said the number of full time positions in the industry went from more than 1,100 to approximately 900.

Chandler said the credit gave “beneficial treatment” to the film industry, which involves seasonal work.

“Why the film industry and not the wood industry or any other industry? At least with the other industries, we would be certain the money is actually staying in Nova Scotia. In that sense, the money spent by the government would actually stay in the province, would actually benefit the economy more than simply giving money to a corporation that will pay out people who may leave the province,” he said.

Tweet This Click to share quote on Twitter: "Why the film industry and not the wood industry or any other industry? At least with the other industries, we would be certain the money is actually staying in Nova Scotia. In that sense, the money spent by the government would actually stay in the province, would actually benefit the economy more than simply giving money to a corporation that will pay out people who may leave the province," he said.

Screen Nova Scotia said the industry includes approximately 2,700 jobs. According to Statistics Canada, total employment in Nova Scotia in 2014 was 447,600. The total number of film jobs then equates to 0.6 per cent of the total labour force in the province.

Chandler said it is more important for the province to act in the best interests of the other 99 per cent of the population.

He said other provinces are moving towards slashing their film tax credits as well so he predicts the impact of businesses moving out of Nova Scotia will be negligible.

“If they were to go somewhere else, they would not get the 50 per cent because no one else is offering the 50 per cent other than Nova Scotia,” he said.

The industry and the province have a meeting scheduled for Friday.