Last week’s provincial budget shows how governments can be tough-talking, penny-pinching wise and what-were-they-smoking, real-world foolish, both at the same time.
Exhibit A: the evisceration of Nova Scotia’s film tax credit.
Finance Minister Diana Whalen argued the credit was too generous, went to filmmakers whose films weren’t shot in Nova Scotia and to companies that didn’t owe provincial taxes. (Earth to Diana: you need new advisors who understand the industry.)
While cutting the tax credit may magically make the books appear closer to balance, it will also help dismantle the yellow brick road to prosperity the government claims it’s building.
The industry not only employs more than 2,000 highly-skilled, well-paid, tax-paying workers, but it also spreads its financial, filmic fairy dust over other sectors: it rents hotel rooms, vehicles, security guards, offices, studios, locations; it spends at supermarkets, building supply outlets, furniture stores, clothing retailers, even second-hand shops…
In 1993 when the credit was introduced, Nova Scotia’s film and TV industry was worth $6 million; last year, $150 million.
The government says the credit costs taxpayers $24 million a year. Under Whalen’s new formula, that outlay will ostensibly shrink to $6 million per year — but probably closer to zero as every footloose producer flees to jurisdictions offering more generous rebates.
It’s already happening. Two producers considering filming in Nova Scotia apparently changed their minds after Thursday’s budget. DHX, the Nova Scotia-born-and-based international entertainment conglomerate, says it will shut down its animation facility — 155 jobs — and may move its head office. 22 Minutes, Mr. D., Haven all appear prepared to wave goodbye too.
If so, Whalen’s prediction of a surplus budget in 2016-17 may turn out to be as real as a Hollywood fantasy.
So too any hope (See: the Ivany Report, the future, etc., etc…) of keeping those smart, well-trained people here in Nova Scotia.
As local film industry veteran Keith Currie lamented to Metro’s Stephanie Taylor: “Once again, we’ve managed to take the best and brightest and force them to go down the road.”
All that to pretend to save $18 million — out of a budget of $10 billion.