Brad Wall On the Film Industry

About 150 supporters of the film community showed up at the legislature today to show their disagreement with the government’s decision to end the Saskatchewan Film Employment Tax Credit (SFETC). Meanwhile, Saskatchewan Premier Brad Wall met with four prominent members of the film industry to talk about the cut.

After the meeting, which went about an hour longer than scheduled, Wall spoke with the press.

First off, Premier Wall clarified (as he did throughout the press conference) that the SFETC is actually a grant. “The tax credit comes as a grant,” he said. “As soon as production starts there’s a calculation on the production, on employment, and money is paid. That’s a grant.”

This is what Premier Wall described late this afternoon as a possible alternative to the SFETC:

“A tax credit, a nonrefundable tax credit will provide you a credit on taxes you paid in the province. In other words, you conduct your activities here, you make some money here, you’ve paid your taxes to the province.  Well, a tax credit takes that amount off the taxes you owe. It’s not a grant to perhaps a shell corporation you see set up for productions.”

Wall said he wants Saskatchewan companies to benefit, not productions from other jurisdictions coming to the province to set up “shell companies.”

“There are a number of these productions,” he said, “a number of existing tax credits that work like this – a production company will come from another jurisdiction. They’ll still employ Saskatchewan people to be eligible for the tax credit, but they’ll set up a temporary company, a shell company just to do that production. But when the production is over, the company’s ended. But they still receive the grant. That’s different than a tax credit which would actually provide an incentive for industry to remain here, and to put down longer-term roots, in the case of many in this province.”

In this view, film production is like manufacturing. You set up your widget factory and stay there as long as possible. But, as meeting attendee Norm Bolen pointed out, film is a transitory beast. It’s its own kind of industry. A production settles down in a region for eight months, employs a large number of local professionals- from cleaners to caterers to carpenters- spends bucket loads of cash and then returns to Toronto or LA. Yes, the company is based elsewhere, but, for many in the industry, that’s a moot point. What’s important is the resulting employment and that bucket load of cash it brings to the region (not to mention the fact that it’s a cultural product, hiring artists to be creative).

It’s estimated that the SFETC help generate $658 million worth of production in the province since its inception in 1998. The government spent $100 million. That’s cash that will dry up very soon.

12 thoughts on “Brad Wall On the Film Industry”

  1. Question: I’ve never seen any stats, from either side, on the income levels of those within the Saskatchewan film and TV industry. Is it a living wage?

  2. Wall said he wants Saskatchewan companies to benefit, not productions from other jurisdictions coming to the province to set up “shell companies.”

    First of all, who cares about shell companies? It’s not like they’re here to defraud anyone or take resources that do not belong to them. Second, why does Wall care? Seems like a perfect example of free enterprise capitalism taking advantage of the incentives on offer. This whole spiel sounds like a total red herring, talking around the issue with his cute little perfectly-practiced hand gestures and facial tics.

    Does ending the tax credit or “grant” create a better opportunity for Saskatchewan film companies to “grow”?

    I heard someone use the example that radio does not benefit from tax credits… Ah, well, radio is a long established industry that can thrive in any jurisdiction that actually benefited massively from government subsidies in that government built the airwaves with public funds back in the day, then privatised some of them. It’s the same way industry gets massive transportation subsidies by enjoying the use of publicly-funded highways.

  3. How do you define a living wage? According to a Hill Strategies study in 2007 the average income for a visual artist in Canada was $18,000, for a musician it was $16,000, for a dancer it was $14,500. The income for an average Canadian in 2007 was listed at $31,000.

    Note too that this isn’t just money earned in their profession, it also includes all the money they earn from outside employment ie working in a coffee shop, waiting tables in a bar, whatever.

    When you’re in the arts, every little bit helps. Wages paid in the film industry for work artists might do as set designers, extras, etc, I think, was generally regarded as being pretty decent. They were contract jobs, but if you had two or three in a year it would give you some solid income to help you survive as an artist, plus allow you to work in a creative environment where you were able to enhance your skills and build your resume.

  4. “a living wage is the minimum hourly income necessary for a worker to meet basic needs”

    Conflicted thoughts and emotions – film credit appears to make sense financially, and it is the overall right thing to do to support culture and the arts within our province.

    However, the wages being earned are decently high, but only for a limited time. And with less and less productions, more and more people are leaving the industry. Bringing back the credit is the rally cry, but why bring back an apparently broken system? How about bringing back something worth fighting for? A new system needs to be in place that works for both sides (no clue what that would be…), not just the same old or even higher credits, because the Government is not interested in that.

  5. After also listening to Brad Wall on JG live this morning, I’m still mixed about his reasons behind ending this film tax credit.

    If Brad Wall keeps his word about finding other “innovating” alternative incentives such as a tax rebate, then I sure hope this does work as he says it will.

    In the meantime, the end of the SFETC should be extended from March 31 until end of June as requested by those involved for upcoming summer movie projects.

  6. In terms of living wage, the amount earned by people in the industry varies, on level of expertise, job title, experience etc etc, just as it would in any business.

    The wages earned by people in the industry are probably on par with most other industries – Construction, teaching, etc etc. They are livable, but not extravagant. The people on the film that receive the “extravagant” wages – Directors/Actors, their salaries aren’t being credited via the tax rebate, which is a common misconception.

    The wages are also significantly less than that of a head job at potash corp.

    Brad Wall’s attempt at spinning this story has become blatant lies, it’s irresponsible leadership.

  7. I am confused and or baffled. How can Mr Wall say the following when it is entirely false?
    ““The tax credit comes as a grant,” he said. “As soon as production starts there’s a calculation on the production, on employment, and money is paid. That’s a grant.”

    This is NOT how the SFETC has worked in my experience. Our company, plan9films, has benefited from the tax credit but NO ONE gets a penny from that tax credit until months, perhaps over a year, after the production is DONE. The money is spent long before the tax credit certificate is issued. THEN, we can file income tax to the CRA and apply the tax credit certificates to that, waiting another 3 or more months before seeing renouncement of the money already spent on the production.

    I have to wonder why this statement would be made if Mr Wall claims to fully understand what the film tax credit is and how it works. How can you cancel something and not understand what it truly is?

  8. I am also completely perplexed. His innacurate statements about the SFETC and a potential alternative undermine the credibility of the claim that this is a ‘sound economic decision’. The whole argument for its termination was purely an economic one, yet there is little evidence of an understanding of how tax credit works.
    This is an ill-supported ideological move cloaked as an economic necessity. Perhaps he thought he would never have to substantiate his claims.
    I’m thankful for the public and media uproar on this one, though I can’t help but question how many other unilateral policy changes have rested on such weak foundations.

  9. More Orwellian ‘newspeak’ from the premier?

    The “shell companies” that Mr. Premier alludes to are actually single-purpose corporations that are required to be set up for each individual large-scale production. This is a required by the following:

    – the Film Completion Bond company – an international risk assessment agency designed to protect all parties: private investors, Banks/lending institutions, distribuors/international sales agents – from having a shady producer run off with the production’s money.

    – Canada Revenue Agency – to help clarify and track the Labour Tax Credit which is payable after the production has been through an audit.

    Mr. Premier clearly does not understand the business of the film industry and would be embarrassing himself to no end if the media were on their toes.

  10. Wall’s a smart guy, he gets how the industry works. This is all smoke and mirrors (and lies) to avoid talking about the real reasons why the SFETC is being cut.

  11. #7 I heard that the SFL wants a minimum wage to be 75% of typical trades-persons/ starting white-collar wage. The 75% would be about $18/hr.

    When you live on the Canadian prairie, bread of any style shouldn’t be $3.50 a loaf.

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