Nova Scotia: The Long Lasting Effects of Cutting a Film Tax Credit Program

 

Will Nova Scotia Politicians Feel the Sting following Cutting Successful Tax Credit?

 

 
The Honorable Stephen McNeil, the 28th premier of Nova Scotia, has come under fire for cutting Nova Scotia’s once successful Film Tax Credit program. There are red flags for Nova Scotia Liberals in next provincial election.

As background, McNeil’s government submitted an April 2015 budget proposal with a plan to eliminate of the Crown Agency Film and Creative Industries – Nova Scotia, as well as an overhaul of the long-standing Nova Scotia Film Tax Credit. This move appeared to some to break a pre-election promise made by McNeil in October 2013 and resulted in an outpouring of protest from the creative community.

Under pressure from the public and political foes, McNeil tabled some of the changes in the budget and The Liberal government created a new incentive program for the film and television industry: the Nova Scotia Film Production Incentive Fund.

Local Business Feel the Sting

Not everyone agreed that this solution was a viable program. Gary R. Coates of Halifax, founder of Special Effects Atlantic Ltd., moved his company to Nova Scotia based on the provinces once thriving movie business.

“By April 2015, Nova Scotia was recognized as a centre of excellence in an international industry and as a place where producers from around the world felt confident to do business. This was the result of the efforts of the entire film industry,” he said in a letter to the editor of the Chronicle Herald.

But that’s where Coates story changes. In April of 2015, the provincial Liberals, under the direction of Stephen McNeil eliminated the tax credit system, essentially crippling Coates business and the film industry in the province.

Coates bemoans “His (McNeil’s) reckless changes to the film tax credit system and abrupt closure of the film office have resulted in a total collapse of the industry. None of the silly talking points repeated by him or his ministers will change that.”

Union Cites 82% Job Loss

According to the opposition party, the New Democrats, the number of film and TV jobs in Nova Scotia has plunged since the elimination of the tax credit.

The NDP cited statistics from the film and TV worker’s union in Nova Scotia, indicating an 82% per cent drop in film jobs between September and December when compared with the same period last year.

Local 849 of the International Alliance of Theatrical Stage Employees produced statistics that showed 510 unionized cast and crew jobs for productions last fall, and there were only 90 positions this year.

“What we are seeing is a very tangible decline in the number of people working in our screen industry as a result of (Premier) Stephen McNeil’s reckless decision to slash the film tax credit,” NDP critic Marian Mancini said in a statement, “The loss of 420 jobs in a small province like ours is significant.”

Union spokesman Gary Vermeir said the screen industry has tried to work with a new film production fund, “but our industry was given no time to transition to the changes” in the middle of the production season. “Our industry was thrown into chaos and the productions that were lined up for the summer and fall went away.”

Impact on Tourism

Colin Mason, a former chairman of the marketing committee of the Tourism Industry Association of Nova Scotia claims the impact of the film tax cuts are far reaching and also affect the tourism industry. “…And still our political leaders continue to alienate the film industry and deconstruct their relationship with that sector. The protests and recent closures become further testament to the naiveté of this government in ignoring the evidence for embracing the motion picture industry as a partner in tourism marketing.

He recommends that the tourism industry and the film industry need to align, to iron out some mutually exclusive goals. Mason sees integrating and displaying Nova Scotia’s many “scenic wonders, diverse cultural gifts and unique culinary experiences” in TV and Film as a key to reaching and encouraging potential tourists to visit his Province.

Nova Scotia Business Minister, Mark Furey, understandably counters all of this doom and gloom by saying “We don’t need to offer the highest level of support to attract film productions,” Furey said in a statement. “We have talented workers, beautiful scenery and a long history of success in this industry. These assets add to our competitiveness internationally.”

Perhaps an editorial in the Truro Daily News sums it up best: “We have to start looking at things from a new 21st Century lens if Nova Scotia is not to be left far behind by the rest of the world.

This government already blew the opportunity to make billions this year from the film and television industry after their fatal and ill-advised decision to cut the Film Tax Credit. Meanwhile the rest of Canada made huge profits.”

KPMs Take:

Nova Scotia, the only province without a fixed election date, will face an election some time before October 18th, 2018 and we’ll see if McNeil’s liberal party feels the effects of their decision. In regular election cycle, support for the liberal party in Nova Scotia (and among Atlantic Canadians) hovers around 70% and locals seem to have lost their ire over the spring’s budget snafus. It would take a significant change in policy to disrupt the continuity established by the Liberals and therefore the future of movie making in Nova Scotia seems bleak.