Leverage Canadian tax credits for film finance success via film tax credit financing

Is there a better way of leveraging your film, TV or animation project other than utilizing film tax credit financing on Canadian projects? We don’t think so, but we will let you decide.

Canadian tax credits for film continue to grow in popularity and make a strong case for many projects to be shot, produced, or post produced in the Canadian environment.

Difficult to understand? Not really... Canada's stable political and financial environment, coupled with a very generous and straight forward non repayable tax grant system for productions drive new interest to Canada every day.

Naturally Canada competes with major cities and geographies all over the world for its share of media production in film, tv and animation .These days its more often than not about cost , and Canada has a positive statement to make in the area qualified crews, great geographies, and the cost effectiveness . No one area takes Canada over the top, but when you add the aforementioned facts on top of the Canadian film tax credit system you have a strong power play .

Even the strong Canadian dollar, which seems to be approaching par in 2010-2011 is no longer a concern - previously the lower value Canadian ' loonie ' was a weak currency and a key benefit of shooting in Canada was quite simply, the Canadian dollar.

But the real kicker in all this is the Canadian governments film tax credit financing policy which now plays a key part in most decision to film or produce in Canada

Simply speaking Canadian tax credits for film refund to Canadian and foreign owned products a very large portion of their production costs. The ten Canadian provinces augment that program by adding in their own credits, further increasing the generosity of the program.

An interesting historical point is that in recent years may political regimes in the U.S. and elsewhere lobbied hard to compete against the Canadian film tax credit system. In 2003 the federal authorities increased the tax credit, and the provinces jumped on board again.

Certain of the tax credits were even increased in areas of non labour, i.e. your other below the line production expenses.

How could you not want to take advantage of any system that offers in the percentage range of 30-45% as a non repayable refund on your project? It makes no sense to not consider that option. And as long as the Canadian government feels that benefits outweigh cost who are we to disclaim the program - instead simply take advantage of it.

It's more often than not all about cash flow and working capital for your project. so owners of projects should strongly consider monetizing , i.e. financing their tax credits . Your ability to receive financing on a future tax credit receivable can great improve the confidence of your debt and equity investors, and enhance the overall returns on your project.

The entire process can be completed in a manner of weeks and involves a basic financing application, ensuring your tax credits are legitimate and vetted, and requires that you can properly demonstrate good accounting and financial controls re the preparation and filing of financial statements for your project. Naturally this sort of fiscal responsibility makes sense even if you weren’t going to finance your Canadian tax credits for film, TV, and animation.

Speak to a trusted, credible and experienced film tax credit consultant. Monetize or cash flow your claim if it makes sense. That a solid entertainment finance strategy.


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Stan Prokop - founder of 7 Park Avenue Financial - http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/film_tax_credit_financing_canadian_tax_credits.html