POLITICS

Chamber says Saskatchewan film tax cut kicked industry out at the knees

10/30/2012 03:38 EDT | Updated 12/30/2012 05:12 EST
REGINA - The Saskatchewan Chamber of Commerce says the provincial government kicked the film industry "out at the knees" when it unceremoniously cut the Film Employment Tax Credit.

The chamber and Sask Film released a study Tuesday that they commissioned to look at the cost of the tax credit to the province.

The study found the government contributed $7.8 million annually to the program and got back $6.5 million in taxes — resulting in a net cost of $1.3 million for taxpayers.

But it also found film projects done under the program generated about $44.5 million in economic spinoffs, including revenue for hotels, equipment rentals companies and people who work in the industry. About 850 jobs were created each year, the report says.

Chamber CEO Steve McLellan said that's good bang for the buck.

"If you could get that kind of return on every dollar you spent, you probably would," McLellan said at the legislature.

The decision to cancel the credit was a surprise in the March budget, but McLellan said it was made without having key facts and without consultation.

"If they had the number in their hand, at $1.3 million, I think their decision would have been different," he said.

Premier Brad Wall said in March that Saskatchewan was not going to participate "in the bidding war" between provinces with respect to grants for the film industry. But he said there might be other incentives, like a tax rebate, that the two sides could talk about.

The cut left the industry reeling. Industry representatives said it would kill the industry and force workers to move away.

Verite Films, the production company behind the hit comedy series "Corner Gas," said in June that it was moving its head office move to Toronto from Regina because of the cut.

Culture Minister Kevin Doherty disputed McLellan's numbers Tuesday and said the cost to taxpayers was higher. But he could not immediately provide a figure to back up his point.

Doherty argued there could be economic activity with any tax credit that gives "preferential treatment."

"The report shows that there is an economic benefit to the province with the film industry here. I've never disputed that. I've never claimed that there wasn't an economic benefit," said Doherty.

"The report also shows is that there's a cost to taxpayers. There's a net cost to taxpayers to support the ongoing film industry in the province. What we've always argued is that this is not a sustainable model and that we had to look for a better model and that's exactly what we're doing."