Photo: Province of British Columbia/Flickr

Minister of Finance Brenda Bailey announces plans to increase incentives for BC's film and TV sector during a news conference in Langley on Dec. 12, 2024.

A tax credit is being restored for the animation industry in the Okanagan after it was axed by the NDP government in the 2024 budget.

During a news conference on Thursday, new finance minister Brenda Bailey announced several changes to boost the film and TV industry in BC. After an outcry from the animation sector, the government is bringing back regional and distant location tax credits for companies with a brick-and-mortar presence outside of Metro Vancouver, the Fraser Valley and Whistler/Squamish.

Bailey points out that a previous loophole allowed people working from home, but with no physical presence in places like the Okanagan, to take advantage of the tax credit meant to support regional economic development.

“Folks from a work-from-home model were accessing this tax credit and, I would say inappropriately, not the intention of the tax credit to support work from home,” she said. “So, it was an attempt to close that loophole that led to the cancellation of that tax credit.

“But we heard loud and clear from businesses in Kelowna, on Vancouver Island and elsewhere, that by closing that loophole it caused real harm to brick and mortar studios that were playing by the rules and were the target of that tax credit.”

The film and TV sector in BC is still trying to recover from the 2023 strike that halted production for six months and from studios cutting back on global spending. According to Creative BC, more than 37,000 jobs in the province were supported by the motion-picture industry in 2022, but that fell to 26,000 in 2023.

Premier David Eby announced that Budget 2025 would include increases to the Film Incentive BC (FIBC) tax credit, which supports Canadian-content productions, and the Production Services tax credit (PSTC) which provides a tax incentive for international projects made in B.C. Once the budget is passed, the PSTC will jump from 28% to 36% and the FIBC will increase from 35% to 36%.

In addition, his government is adding a new incentive for big-budget studios. Projects with B.C. production costs greater than $200 million will receive a 2% bonus.

“These projects have a particular economic kick to the province. For example, Last of Us Part II, when it filmed in British Columbia went to 20 different locations, and this really supports small businesses,” notes Bailey.

One of those who lobbied hard against the loss of the regional and distant location tax credit for animation studios was Okanagan film commissioner Jon Summerland. He says the restoration of the incentive should be a huge help for those operating brick-and-mortar locations in the Okanagan, letting them stay competitive.

"This is such great news for the province and the Okanagan!” said Summerland. “Boosting tax incentives is a big win that’ll bring more productions here and keep the industry thriving. It’s awesome to see the government stepping up to support regional areas and encourage long-term investment.

“Thanks to the Premier and everyone involved for making this happen—this is a great step forward!"