03/26/2012 12:45 EDT | Updated 05/26/2012 05:12 EDT

Saskatchewan Premier Brad Wall tells industry that cut to film tax credit stands

REGINA - Saskatchewan Premier Brad Wall is standing by a decision to cut the Film Employment Tax Credit, despite vocal opposition from the industry.

"We're not changing our position of wanting to eliminate the grant. We're not going to participate in the bidding war that is happening between provinces with respect to these grants," Wall said Monday after meeting with industry representatives at the legislature.

"But there are perhaps some other things that we can do in terms of innovative policy."

Wall acknowledged that the industry would like the film tax credit reinstated, but he said there might be other incentives, like a tax rebate, that the two sides could talk about.

"We want to be flexible, but we are moving away from the film tax grant, the way it is structured," he said.

"If it's a bidding war in the country, we're out of the bidding war because it's not our money — it's taxpayers. And we don't think it's the best economic policy in this sector or others."

The Film Employment Tax Credit was cut in the provincial budget last week.

The province said the move will save up to $3 million this year and $8 million annually after existing credits are paid out by the end of 2014. The government said the tax credit has cost the province $100 million since its introduction in 1998. It said total government assistance to the film industry exceeds $200 million during the period, representing a 30 per cent subsidy.

The province also said that production volume in Saskatchewan has fallen nearly 70 per cent during the last four years and employment in the industry has declined 54 per cent during the period.

No new productions have been scheduled for 2012-13 even with the tax credit in place, according to the government.

The cut left the industry reeling. More than 100 workers and supporters gathered in the legislature Monday.

Industry representatives argue that $100 million worth of provincial investment has reaped $600 million in economic activity. They said the cut will kill the industry and force workers to move away.

Ron Goetz, president of the Saskatchewan Motion Picture Association, said it was a good meeting with the premier.

But Goetz said it is the tax credit system helps Saskatchewan stay competitive with the rest of the world.

"He made it very clear that that's not a system they want to be in any more and we appreciate that he did leave the door open, say there was possibilities that we could work on together as industry and government," said Goetz.

"We said, 'well, that's great, we'd love to be able to participate in that.' But unless we are concerned about what happens now for this season for the next few weeks and months, there won't be much left to talk about in the months to come."

Goetz said an extension of a deadline to apply for the tax credit would be a good first step. The deadline is the end of March, but he'd like to see it extended to at least June.

Goetz said the premier has indicated he'll get back to industry on that request.

Norm Bolen, president and CEO of the Canadian Media Production Association, was disappointed after the meeting with Wall. Bolen said the province could lose out on hundreds of millions of dollars.

Bolen said productions are like a highly mobile ecosystem and can move to another jurisdiction.

"And by holding to this decision to not participate in that ecosystem, to basically withdraw from the competition, we are dooming the film and television industry in Saskatchewan to oblivion. It will no longer continue to exist if there's not a resolution found to this," said Bolen.

"These other kinds of solutions, while they're worth discussing, will not address the fundamental problem and that is, that if you're not part of the competitive ecosystem, you're not in the game and if you're not in the game you don't have an industry."