Canada: Saskatchewan Announces New Non-Refundable 25% Film/TV And Digital Tax Credit

On May 4, 2012, the Honourable Bill Hutchinson, Saskatchewan's Minister of Tourism, Parks, Culture and Sport announced the introduction of a new non-refundable film, TV and digital tax credit, the Film/TV and Digital Tax Credit (FTDC).1 The FTDC is intended to replace the former refundable Film Employment Tax Credit (FETC) which the Saskatchewan government eliminated earlier this year. Re: the elimination of the FETC see our Goodmans Update: The Saskatchewan Film Employment Tax Credit is Eliminated at:


On March 21, 2012, Saskatchewan Finance Minister Ken Krawetz announced in the Saskatchewan government's 2012-13 budget statement that the province would no longer offer the FETC which had been in place since 1998.2 The FETC provided a 45% refundable film tax credit on eligible Saskatchewan labour expenditures plus bonuses for rural production and budgets over $3 million. Popular Canadian television productions such as "Corner Gas" and "Little Mosque on the Prairie" were filmed in Saskatchewan and accessed the FETC. As of July 1, 2012, applications for the FETC will no longer be accepted.3

The elimination of the FETC provoked outrage in both the Saskatchewan and the Canadian film industry. The decision to eliminate the FETC was heavily criticized by both the Saskatchewan Media Production Industry Association (SMPIA) and the Canadian Media Production Association (CMPA). Representatives of the Saskatchewan film industry, including several prominent Canadian actors and directors, spoke out against the cut publicly, using social media such as Facebook to express their discontent. An on-line petition called "Save the Saskatchewan Film Employment Tax Credit" gained over 8,000 signatures.4 These protests culminated in meetings between representatives of the Saskatchewan film industry and the Saskatchewan government with a view to creating a new and comparable film incentive program which would replace the FETC.5 In his press release, Minister Hutchinson stated that the new FTDC was based on "proposals by the Saskatchewan film sector", although judging by the negative reaction of the Saskatchewan film industry to the FTDC, as described below, the industry proposals may have been misconstrued.

The New FTDC

The FTDC is a non-refundable, non-transferable, tax credit of 25% on all eligible Saskatchewan production expenses, including labour costs. There are potential "bonuses" for items such as use of Saskatchewan labour, that increase the total FTDC incentive to as much as 43%. According to Minister Hutchinson, the old FETC was not serving to develop a strong film industry in Saskatchewan and came at a high cost to taxpayers:

"Unlike the existing program, the new FTDC is a true tax credit as it is fully deductible from taxes paid in Saskatchewan and could be available July 1, 2012. We wanted to make sure that (the new program) is in fact a non-refundable tax credit program. The current program that we have is really more a grant than tax credit. Companies that produce films get the grant whether they actually pay any income taxes here in Saskatchewan or not."6

The foregoing views expressed by Minister Hutchinson were also echoed by Saskatchewan Premier Brad Wall who subsequently defended the FTDC saying that it would cost the government of Saskatchewan about $1 million a year – a large reduction from the FETC which costs the government approximately $8 million annually. Reflecting his view that a refundable tax credit is more in the nature of a "grant", Premier Wall further stated that only 2% of the money paid via the FETC was "truly a tax credit", while 98% was essentially a grant to the industry.7

FTDC is Not Refundable

The key difference between the FTDC and the FETC is that the former is a non-refundable tax credit while the latter is a refundable tax credit. In the case of the FETC, the applicant corporation filed its corporate tax return and was "refunded" the applicable FETC minus any taxes which it owed. Because single purpose companies are frequently used to produce film and TV productions, the corporation which claimed the FETC would often have no or minimal Saskatchewan tax liability.

Therefore, it would typically receive a substantial "refund" cheque from the Saskatchewan government - a receivable which could easily and effectively be used by the producer as collateral for a loan from a bank or other interim financier (i.e. in common parlance, the FETC was "bankable").8

Under the proposed FTDC, by contrast, the credit can only be applied against the applicant's Saskatchewan corporate tax liability. Unlike the FETC, any "excess" credit would not be paid by the Saskatchewan government to the applicant taxpayer as a refundable credit. Rather, it would be applied towards the future Saskatchewan tax liability (if any) of the applicant taxpayer for up to 10 years.9 Therefore, the FDTC is effectively not "bankable" and a lender would not accept the FDTC as collateral for interim production financing since there is no "refund" receivable to bank.

Criticism of the FTDC

It is this non-refundable aspect of the FTDC, which has led to severe criticism of the new credit by the film industry in Saskatchewan and throughout Canada. For example, according to Norm Bolen, the President and CEO of the CMPA:

"Over 70 per cent of a Saskatchewan production's financing comes from outside the province. Non-refundable tax credits do not trigger this inward investment: they cannot be used by the producer as proof that a production will be fully financed through expected revenues.

A non-refundable tax credit is not, therefore, workable or attuned to the industry's business and funding realities. Bigger picture, non-refundable incentives irreparably jeopardize the viability of the industry by encouraging the exodus of production activity to other provinces or even out of the country. They eliminate thousands of existing and future jobs, and therefore millions in tax revenues. They undermine Saskatchewan's ability to set the necessary foundation upon which to build a more solid economy, and to compete domestically and internationally."10

Shortly after the FDTC announcement, Ron Goetz, the President of the SMPIA, called for the removal of Minister Hutchinson, stating that his actions have placed the entire Saskatchewan film and video industry in jeopardy.11 Additional criticism has been voiced by NDP Culture critic Danielle Chartier, as well as TV and film stars, including Saskatchewan-born Kim Coates of "Sons of Anarchy" and Wes Bentley of "Hunger Games".12

Supporters of the film industry position gathered at the Saskatchewan legislature in Regina on May 14 to demand that the government reconsider its decision to replace the FETC with the FDTC.13 This rally followed other attempts to publicize the issue, including a YouTube video produced by the SMPIA. The video compares a non-refundable tax credit, such as the FTDC, to "a car without a motor" and states that a film made in Saskatchewan by a small business with a $7 million budget would require a profit of $85 million to benefit from the credit.14 Minister Hutchinson says that the profit would need to be only $14.6 million, but Mr. Goetz argues that "the bottom line is neither number is attainable for any company or production in this province or in Canada".15

More recently, John Lewis, international Vice President and director of Canadian affairs for IATSE, in a May 22 letter to Premier Wall, urged the Premier to reintroduce a refundable film tax credit "...for a two-year period to allow for more consultation." In his letter, he pointed out to Premier Wall that:

"There are few industries that are as mobile as the film industry. It is an industry capable of packing up and setting up elsewhere in a matter of days... As productions leave the province, Saskatchewan will lose thousands of jobs and millions of dollars in tax revenue." 16

Evaluating the Position of the Saskatchewan Government

One can certainly appreciate the reasonable desire of the Saskatchewan government to reduce the overall cost to Saskatchewan taxpayers of its film incentive program, given current fiscal pressures. However, the position expressed by both Premier Brad Wall and Minister Hutchinson that a refundable tax credit (such as the former FETC) constitutes a "grant" and is not "truly a tax credit" is inaccurate and out of step with existing Canadian federal and provincial tax policies.

The federal Canadian government, most Canadian provinces and over 35 U.S. states have a refundable tax credit program for the film industry.17 Many other Canadian industries are subsidized through refundable tax credits. And average Canadians receive tax refund cheques from the Canadian government on a routine basis after they file their tax returns each year.

The fact is that tax credits can be refundable, transferable, non-refundable and/or non-transferable. In the U.S., for example, several U.S. states have introduced transferable film tax credits (eg. Louisiana, Georgia, Connecticut, Illinois, Arizona, New Jersey).18 Using Premier Wall's terminology, a transferable tax credit is "truly a tax credit" in that it can only be utilized by a local taxpayer to offset its local tax liability (for example, a company carrying on business in Saskatchewan with taxable income). However, it can be transferred (i.e. sold and assigned) by the taxpayer which initially applies for the credit, whether with or without the assistance of an intermediary such as a broker, to a local taxpayer in the jurisdiction. It is a shame that the Saskatchewan government did not consider this option when it introduced the FTDC. Of course, a refundable credit such as the FETC, is arguably more straight forward and effective than a transferable one, but if the FTDC had been made transferable at least producers would have had an opportunity to monetize the credit.

It remains to be seen whether the Saskatchewan government will, once again, reconsider its position vis-a-vis its film incentive. In the meantime, there is a significant risk that Saskatchewan film producers will move their business out of the province and cause potential damage to the film industry in Saskatchewan.19 In addition, foreign based producers such as the Hollywood studios will likely not view Saskatchewan as a desirable production location given that the FTDC only benefits local Saskatchewan taxpayers. Yet another concern is the potential precedent-setting nature of this proposal (i.e. Saskatchewan will be the only jurisdiction in Canada with a non-refundable and non-transferable film tax credit), and the impact it could have on the industry in Canada if other provinces were ever to follow suit.

It would be a shame if the Saskatchewan film industry were to suffer as a result of the FTDC. Hopefully, before any negative impact on production in the province occurs, the Saskatchewan government will review the proposed FTDC and consider making it either refundable or, at least, transferable, to the benefit of its domestic film industry.


1 Information, unless otherwise referenced, was found in: Government of Saskatchewan, News Release, "Government Presents Saskatchewan-Focused Creative Industries Plan" (4 May 2012) online: (

2 Government of Saskatchewan, News Release, "Budget 2012-13: Keeping the Saskatchewan Advantage" (21 March 2012) online: (

3 Ishmael N Daro, "Fight over film tax credit continues", The Sheaf (5 April 2012) online: (

4 Ibid.

5 Government of Saskatchewan, News Release, "Premier Wall to Meet with Film Industry to Discuss Tax Credit" (26 March 2012) online: (

6 Angela Hall, "Gov't unveils new film tax credit", Leader-Post (5 May 2012) online: (

7 Angela Hall, "Sask. film industry calls for removal of Minister Bill Hutchinson", Leader-Post (10 May 2012) online:(

8 Norm Bolen, "Why the film tax credit is essential", Leader-Post (19 May 2012) online: (

9 Joe Couture, "Lost? Enroll in Film Tax Credits 101", The StarPhoenix (15 May 2012) online: (

10 Bolen, supra note 8.

11 Angela Hall, "Sask. film industry calls for removal of Minister Bill Hutchinson", Leader-Post (10 May 2012) online:(

12 Joe Couture, "Film lobby takes protest to legislature", The StarPhoenix (14 May 2012) online: ( 6620422/story.html). Leader-Post; Etan Vlessing, "Film Industry Pans Canada's Newest Film Tax Credit", The Hollywood Reporter (7 May 2012) online: (

13 Couture, supra note 12.

14 "The 'New' Saskatchewan Film/TV Digital Tax Credit & Why it Doesn't Work" (video), online: YouTube (

15 Joe Couture, "NDP, film industry critical of gov't plan", The StarPhoenix (8 May 2012) online: (

16 The quotes from the May 22 letter of John Lewis are taken from the article: Etan Vlessing, "IATSE Tells Saskatchewan to Reintroduce Refundable Tax Credit, Or Else", The Hollywood Reporter (24 May 2012) online: (

17 "Minister inept with film issue", The StarPhoenix (12 May 2012) online: (

18 William Luther, Movie Production Incentives: Blockbuster Support for Lackluster Policy (Washington, DC: Tax Foundation, 2010) online: (

19 Couture, supra note 15.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions