Okanagan film commissioner says B.C. budget has killed local animation industry

Death knell for animation

The Okanagan film commissioner says it took 17 years to build up Kelowna's thriving animation industry and just one decision by the provincial government to kill it.

Jon Summerland, in attendance for Finance Minister Katrine Conroy's address to the Chamber of Commerce Tuesday, says elimination of a regional and distance location tax credit has had a detrimental affect on that industry across the Central Okanagan.

"This has killed it, it's done. This is horrendous because it took 17 years to build it and the government invested in that 17 years. It's a real shame," said Summerland.

Conroy told those in attendance, when asked about the tax credit, that it was removed in this year's budget as a way to "close a loophole" created by companies taking advantage of the tax credit for individuals who were working from home.

"The original intent of the tax credit was so when companies were based out of Vancouver and they were staying there to do all their filming, it was an incentive for them to move into other parts of the province," said Conroy.

"What we found in the animation industry was people were using the tax credit because they had employees who were working from home. It wasn't being utilized in the way the tax was intended."

"For the people it affects it's a tough one, but at the same time it's a tax credit going primarily to people working in their homes, so they are not working in an office with the costs that come with that."

Unfortunately, she recognizes there were some unintended consequences.

"We recognize it could affect some people but we need to close the loophole. It wasn't being utilized in the way it was originally intended."

Summerland, while understanding why the the government made the move it did, says the impact is still real.

"We have brick and mortar companies here that live here with bums in the seats and they are unable now to collect a tax credit," he said.

"She said for movies, they have to bring in trucks and bring in people (at a large expense), but for animation we have to bring them in from other countries.

"We have to invest in them for a year before we can collect tax credits...and now we can't.

"We can't bid on jobs because we don't know how much it is going to cost us anymore."

The industry, however, remains massively subsidized by tax dollars.

Conroy did say the animation and movie industry still qualifies for 51 per cent in tax credits from the province and, when combined with the federal government, it works out to 58 per cent tax credits.

"There isn't another industry in B.C. that can access 58 per cent tax credits toward their payroll," says Conroy.

She did say the government will monitor the situation and make adjustments if it's warranted.

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