P818 Goodmans Location Cover 10/14/09 12:35 PM Page 1 Location Canada: A Guide to Producing in Canada and Doing Business with Canadians P818 Goodmans Location Cover 10/14/09 12:35 PM Page 2 Location Canada: A Guide to Producing in Canada and Doing Business with Canadians August 2014 If you are considering producing in Canada, this guide may assist you. Please note that the discussion in this guide is confined to the laws of Canada as of August 2014. Tax credit rules and government incentives are subject to constant change and therefore it is always advisable to check the applicable websites for the latest information. The guide is very general and should not be relied upon as legal advice. We encourage you to consult us directly with specific problems or questions. © 2014 Goodmans LLP. All rights reserved. Section 1 Goodmans LLP: Canada’s Leading Entertainment Law Firm ....................... 1 2 The Canadian Film and Television Industry .................................................. 2 3 Financing Structures in Canada .................................................................... 5 4 Canadian Financial Assistance ................................................................... 10 5 Federal Credits and Incentives ................................................................... 18 6 Provincial Tax Credit Programs and Other Incentives ............................... 23 7 Direct Federal Assistance ........................................................................... 50 8 Direct Provincial Assistance ....................................................................... 60 9 Private Assistance ....................................................................................... 61 10 Important Information About Producing in Canada ................................... 64 11 The Goodmans Entertainment Team ........................................................... 70 Goodmans LLP: Canada’s Leading Entertainment Law Firm Goodmans LLP: Canada’s Leading Entertainment Law Firm Goodmans is recognized as one of Canada’s leading full-service law firms offering expertise in entertainment, mergers and acquisitions, corporate finance, securities, banking and finance, private equity, tax planning, restructurings, litigation and commercial real estate. Our lawyers are consistently recognized by leading industry arbiters, and in various client and peer surveys conducted by Lexpert, Lexpert/American Lawyer Media, Chambers and Partners, Euromoney, International Financial Law Review, Law Business Research and Best Lawyers in Canada. We have lawyers exclusively practising entertainment law, specializing in film and television, digital media and book publishing. By blending this expertise with the regulatory work of our communications practice group within the Canadian Radio-television and Telecommunications Commission, we distinguish ourselves from other Canadian law firms with comparable practice areas. Goodmans represents a large cross-section of major North American film, television, digital media and publishing companies, and many individual directors, authors and screenwriters, actors and film and television personalities. Our foreign clients include NBC Universal, Random House, Fox, Ted Rogers Company, Tornante, Little Airplane, BBC America, AMC, Universal Pictures International, Lagardère, Live Nation, Key Brand, Comcast, Black Bear Pictures, CORE Media Group, CBS, Original Productions, Argonon, Participant Media Endemol, TNT, Out of the Blue, Paramount, Showtime, Smithsonian Channel, Disney ABC Cable, Working Title, Discovery, Nickelodeon, VH1, Dreamworks, Starz, Cartoon Network, Classic Media, RH1, Spike TV, Scholastic, MTV Networks, Comerica Bank, HSBC, Natexis Banques Populaires, Imperial Capital Bank, US Bank, CIT Financial, Bank of Ireland, Citi National Bank and New Bridge Film Capital. Our domestic clients include CTV, Cineplex, Insight Productions, Frantic Films, Shaftesbury, Nelson Education, EntertainmentOne, The Stratford Festival, Canadian Film Centre, The Historica- Dominion Institute, Urban Post, Temple Street Productions, SFA Productions, Arc Productions, Toonbox Entertainment, 90th Parallel, Export Development Canada, Numedia Pictures, Rogers Telefund, Royal Bank, OMERS, CIBC, Independent Film Financing, Canadian Screenwriters Collection Society, Westwood Creative Artists and the Writers Guild of Canada. In the sports field, Goodmans represents Maple Leaf Sports and Entertainment (which owns the Toronto Maple Leafs, Toronto Raptors and Toronto FC), Insight Sports and the NHL Players Association among others. We advise our foreign clients producing in Canada on Canadian tax and legal issues such as film tax credits and Canadian withholding tax, preparing talent contracts, dealing with Canadian guilds and unions and advising on Canadian foreign investment rules and domestic regulatory requirements. For our Canadian clients, we also assist with government funding applications, negotiating international co-productions and CRTC co-ventures, arranging Canadian content tax credit applications and assisting in sales to distributors and broadcasters in Canada and abroad. 1 The Canadian Film and Television Industry The Canadian Film and Television Industry The Canadian film and television industry has quickly grown to represent $5.82 billion of business annually. In 2012-13, the film and television production sector alone accounted for 127,700 full-time jobs, including 77,500 full-time jobs directly in the industry.1 Only a few years ago, Canada’s largest film and television companies were small privately held corporations relying heavily on government financing and subsidy programs to finance production. Since 1993, however, many of Canada’s most prominent film and television companies have, through a combination of public offerings, private equity financings and consolidations, grown to become commercially successful integrated entertainment corporations often with significant broadcasting assets. At the same time as the domestic industry has grown, Canada has become a key location for internationally originated productions. Hollywood studios, European Film Companies, American television networks and US cable services have all come to Canada to film their productions, attracted by stable and lucrative Canadian film incentives and first-class Canadian casts and crews, locations and facilities. Major U.S. film studios such as Warner Bros., Paramount, Walt Disney, Fox, and Universal, leading U.S. TV studios such as ABC, NBC, CBS and Fox, American cable services such as NBCU, CABLE, AMC, BBC America, Showtime, TNT, Discovery, Disney ABC Cable and HBO and film companies such as Lionsgate and Media Rights Capital, have a strong presence in Canada. European producers such as BBC Worldwide, Endemol, Working Title, Atlantique, Lagardere and Universal International have also found Canada to be an attractive location and have taken advantage of Canada’s numerous international film and television co-production treaties to access Canadian benefits. The majority of foreign location and service production is made by producers based in the United States. Foreign location and service production accounted for over $1.74 billion in production volume in 2012-13.2 There are a number of factors accounting for this continuing interest in Canadian film and television production. Geographic Proximity Canada’s geographic proximity to the United States and shared North American values and interests have led to the establishment of close professional contacts between Canadian and American studios, independent producers, distributors and buyers. Toronto is a short flight away from New York and Vancouver is just up the coast from Los Angeles. American television is readily accessible and widely disseminated throughout Canada. 1 “Profile 2013: Economic Report on the Canadian Film and Television Production Industry,” a report produced by The Canadian Film and Television Production Association and l'Association des producteurs de films et de télévision du Québec, in conjunction with the Department of Canadian Heritage with production facts and figures provided by Nordicity Group Ltd. 2 Ibid. 2 Lower Production Costs Production costs in Canada are generally lower than in the U.S. and other countries, and therefore attract U.S. and other foreign productions. In addition, generally lower guild and union minimums encourage production in Canada by non-Canadian producers. First-Class Canadian Performers Popular Canadian performers include Ellen Page, Michael Cera, William Shatner, Jim Carrey, Keanu Reeves, Sarah Polley, Mike Myers, Tom Green, Kim Cattrall, Eric McCormack, Carrie-Anne Moss, Hayden Christenson, Neve Campbell, Brendan Fraser, Jill Hennessy, Will Arnett, Matthew Perry, Christopher Plummer, David James Elliot, Rachel McAdams, Colm Feore, Scott Speedman, Kate Nelligan, Donald and Kiefer Sutherland, Catherine O’Hara, Eugene Levy, Tatiana Maslany, Ryan Gosling, Ryan Reynolds, Sandra Oh, Jay Baruchel, Michael J. Fox, Evangeline Lilly, and Seth Rogen. For Canadian productions, performers are commonly represented by guilds whose collective agreements are often more favourable to the producer than non-Canadian collective agreements. First-Class Canadian Crews Canada now boasts a very large number of highly trained and professional crews, technicians and production personnel. In Toronto, the Canadian Film Centre established by Norman Jewison, provides intensive training for Canadian directors, writers and producers. In addition, Canadian