What higher tax credits mean for B.C.’s film industry

The film industry in B.C. generated $2 billion in 2023, less than the $2.7 billion in GDP in 2022. In recent years, business in Hollywood North has slowed, starting with the COVID-19 pandemic, followed by the months-long writers and actors strike and now rising costs (including tariff threats). But productions are slowly picking back up, thanks to the provincial government’s monetary boost in the form of increased tax incentives.

But productions are slowly picking back up, thanks to the provincial government’s monetary boost in the form of increased tax incentives. “Higher amounts of tax credit refunds for using B.C. labour will help with financing productions and projects,” says Inderpreet Mand, CPA, CA, Partner, Entertainment and New Media at Baker Tilly in Vancouver. The idea is that higher tax credits will increase the incentive for production companies to work in B.C. and hire B.C. labour.

For production companies working in B.C., there are five key tax credit changes to know:

1. The Film Incentive BC (a tax credit primarily for Canadian production corporations) basic rate has increased to 40 percent for productions.

2. The Production Services Tax Credit (PSTC), a tax credit primarily for production companies that film in B.C., basic rate increased to 36 percent for productions.

3. The new PSTC Major Production Tax Credit is an additional basic rate tax credit for 2 percent of a corporation’s accredited qualified B.C. labour expenditure for a major production (a production that spends $200 million on accredited B.C. expenditures).

4. The PSTC Regional and Distant Location Tax Credits are restored for animation productions with an office in a regional or distant location if workers are in the office at least half of the time.

5. The British Columbia Interactive Digital Media Tax Credit (BC IDMTC) has increased to 25 percent for eligible salary and wages incurred after August 31, 2025, and is now permanent.

Mand emphasizes it’s important to remember that the increased rates are only effective for productions that started principal photography after December 31, 2024—or in the case of BC IDMTC, for salaries incurred after August 31, 2025.

In addition, “tax credit filings for B.C. provincial credits are due 18 months after the end of the taxation year with the respective tax credit certificate,” Mand says. Productions looking to claim the PSTC also have to submit a pre-certification form with Creative BC within 120 days after the first accredited B.C. labour expenditure is incurred to claim them in that filing.

Baker Tilly specializes in business solutions and tax credit consulting for media, film and television companies. Whether it’s determining which tax credits make sense, understanding how the changes can benefit your company or answering questions about applying and filing, advisors at Baker Tilly are here to help production companies navigate these changes.

Learn more about Baker Tilly’s audit, tax and advisory services for production companies at bakertilly.ca.

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Get in touch:

Inderpreet Mand CPA, CA.
Tel: 604-691-6815, Email: [email protected]

Gurpreet Sandhu CPA, CA,
Tel: 604-691-6883, Email: [email protected]